Car industry boosts GKN profitability

CAR parts and engineering firm GKN yesterday surged back into the black, bolstered by an increasing demand from the car industry.

Pre-tax profits during the first half of the year rose to £175m compared to the £6m loss the group posted in the same period last year.

GKN said its business was boosted by upward levels of demand from the car industry, including a 47 per cent hike in sales within its driveline division, which makes parts for brands such as Volkswagen and Audi.

Powder metallurgy sales rose by 65 per cent, which GKN attributes to an increasing trend towards fuel efficiency.

Total sales for GKN during the first half climbed by 25 per cent to £2.7bn, despite a five per cent fall in aerospace sales.

“[Our] recovery has moved into another gear and we are continuing to build on our global market-leading businesses,” said chief executive Sir Kevin Smith.

Meanwhile, GKN’s civil aircraft production is likely to stabilise through the remainder of the year, according to the group, with manufacturing of the Airbus A400M, Boeing Dreamliner and 747-8, and the joint strike fighter already underway.

Shares in GKN closed 5.9 per cent higher yesterday at 144.6p, boosted by the group’s decision to restore dividend payments.