Plane and car growth boost profits at GKN

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AND plane parts maker GKN posted a 34 per cent rise in third quarter profit as strong growth at its automotive and commercial aerospace units made up for sluggish demand in military and industrial markets.

The FTSE 100 firm yesterday reported a pre-tax profit of £131m in the three months to the end of September, on sales 16 per cent higher at £1.87bn.

GKN, a major supplier to planemakers Airbus and Boeing and car companies such as Volkswagen, said its trading margin rose to 8.2 per cent during the period, up from seven per cent in the same quarter a year ago.

“The third quarter showed good progress, supported by automotive demand in China and North America and sustained high output levels in commercial aerospace,” said GKN’s chief executive Nigel Stein, adding that last year’s purchase of Volvo’s aero engine unit also helped boost profits.

The company expects auto and commercial aerospace markets to remain robust for the foreseeable future but sees softness continuing in industrial and military markets.

Global light vehicle production increased four per cent in the third quarter of the year, with especially strong growth in China and North America, and Europe and Japan improving slightly.

Airlines will buy more than $3.5 trillion of aircraft over the next 20 years to meet demand for travel and renew ageing fleets in the West, according to the world’s big two planemakers, helping suppliers such as GKN, which makes parts for the Boeing Dreamliner and the Airbus A350 XWB.