CAR and aeroplane parts maker GKN yesterday warned of a sluggish European car market this year, as profit jumped 19 per cent over the full year.
While GKN – which operates across four divisions – expects 2013 to be “a year of good progress” for the group, it expects another bleak year for European car demand.
As a result, the driveline and powder metallurgy units – which both have exposure to car manufacturers – were hit by a restructuring charge of £21m to reduce costs.
Profit at the driveline unit, which makes products such as driveshafts, chassis and axles, rose 21 per cent, boosted by demand outside Europe.
The bulk of growth is expected to come from the US and Asia this year, continuing a strong year in 2012, which boosted GKN’s profits.
The warning came as FTSE 100-listed engineer GKN posted a pre-tax profit over the year of £497m, up from £417m in 2011, on revenues 13 per cent higher at £6.9bn.
Chief executive Nigel Stein called 2012 “another strong year”, with “record profits in all four divisions”, as GKN lifted its payout by 20 per cent to 7.2p a share.
The market reacted well to GKN’s results, as the engineer closed up 3.57 per cent yesterday, making it the biggest riser on the FTSE yesterday.