GKN plc has issued a trading update with organic sales growth of 2%, in line with expectations.
Management sales for the nine months ended 30 September 2015 were £5,683 million, compared with £5,617 million in 2014). Group trading margin was slightly below last year principally due to GKN Land Systems including the previously announced restructuring costs.
GKN Powder Metallurgy sales in the nine months were £694 million, down from £696 million in 2014. Organic sales were flat, reflecting the negative impact on powder sales of a direct pass through of lower raw material prices and a slowing in European sales that are exported to China, the company said. GKN Powder Metallurgy margins were slightly higher than those achieved over the comparable period last year.
GKN Aerospace sales in the nine months were £1,756 million (2014: £1,642 million). Commercial sales were helped by the ramp-up of new aircraft which more than offset lower A330 production. Military demand declined, as expected, with the ending of C17 production.
Good result
GKN Driveline delivered a good result with sales in the nine months of £2,665 million (2014: £2,594 million). Organic sales increased 4% against global industry production rates that were up 1%. GKN Land Systems sales in the period declined to £535 million (2014: £602 million), including a 7% organic decline principally due to demand weakness for agricultural equipment.
Sales for GKN’s other businesses fell to £33 million (2014: £83 million) reflecting the disposal in 2014 of the Group’s share of the Emitec joint venture.
The company predicts a slight softening to the rate of growth in its major markets in the fourth quarter, in line with the global economic outlook. The automotive market is forecast to see a 1% decline in the final quarter, while military aerospace and agricultural equipment markets look set to continue their declines whereas commercial aerospace markets remain robust. However, the group continues to expect 2015 overall to be a year of further growth.
‘We have maintained our progress reporting 2% organic growth, in spite of the tougher economic environment,’ said Nigel Stein, chief executive, GKN plc.
This story is reprinted from material from GKN, with editorial changes made by Materials Today. The views expressed in this article do not necessarily represent those of Elsevier.
