GKN profits rise despite tough year for Land Systems arm
Bosses at vehicle and aircraft engineering group GKN have hailed a year of 'progress' as its aerospace and auto driveline operations provided fresh growth.
But it was a different story for its Land Systems division, which comprises the bulk of the group's operations in Shropshire, with sales on the slide with worse to come amid tough agricultural and construction equipment markets.
Sales at Land Systems fell 6% to £693 million last year, GKN revealed today, while the division's operating profits slumped by almost half to £24m. At the same time it spent £11 million on restructuring "to right size the business for the future".
But the Land System woes were countered by the performance of GKN's other divisions, particularly the strong growth at its driveline auto engineering operation which includes factories in Birmingham. And its aerospace arm was boosted by the £480 million takeover of German group Fokker.
Overall sales were up 3% to £7.69 billion while pre-tax profits edged up £2m to £603m.
Chief executive Nigel Stein said today: "GKN continued to make progress in 2015 and delivered on our expectations.
"We performed well against our key markets, overcoming some demand weakness and demonstrating once again the strength of our businesses, strong market positions and leading technology.
"Highlights of the year were GKN Aerospace's acquisition of Fokker Technologies, strong market-beating growth by GKN Driveline and good margin advances by GKN Powder Metallurgy. Looking forward, we expect 2016 to be a year of good growth, helped by the contribution from Fokker."
Looking ahead, GKN said the aerospace market was 'in transition' between aircraft programmes and the overall market would be slightly down
In automotive, growth in global vehicle production is expected to be around 3%, boosting GKN Driveline and GKN Powder Metallurgy.
But GKN Land Systems sales are expected to fall further due to 'softer' agricultural and construction equipment markets.
GKN employs around 800 people in Telford at Hadley Park making car parts such as brakes and gearboxes for cars and heavy machinery including tractors.
The Hadley Park plant is also home to GKN Hybrid Power, the division it acquired from the Williams F1 team in 2013, which is aimed at providing energy saving technology for vehicles such as buses.
During the last year, GKN Hybrid Power delivered its innovative fuel-saving solution for 45 buses.
But in October GKN revealed it was looking to cut job numbers by 110, blamed on JLR's decision to stop making the Land Rover Defender. Hadley produces chassis for the car maker, as well as parts for Toyota and Ford.
