GKN owner Melrose sees sales take significant hit from Covid-19
GKN owner Melrose Industries said sales in the first four months of 2020 were down about 20 per cent year-on-year as the coronavirus pandemic hit its business.
In the period from January to mid-March, the industrial turnaround specialist said trading was in line with internal expectations.
But the Covid-19 pandemic caused "significant disruption" thereafter and forced many factories to shut or remain only partially open, it added.
GKN has a wheels and structures plant at the Hadley Castle Works in Telford as well as other factories dotted around the Midlands, with about 1,000 workers.
In aerospace, sales were down eight per cent year-on-year in the four-month period.
"Actions have been taken to reduce the cost base of this division and detailed plans are being drawn up to position the business appropriately for future demand," Melrose said.
In automotive and powder metallurgy, sales slipped 31 per cent as factories in Europe and North America have largely been shut since mid-March.
Nortek air management and other industrial sales dropped 12 per cent.
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Melrose said its headroom at the end of April was about £1.1 billion, and this is not expected to change over the remainder of the first half.
CEO Simon Peckham said: "Our divisional management teams and head office employees have responded brilliantly to these unparalleled circumstances, which are likely to remain challenging for a while.
"During the next few months we will put in place plans to position our businesses to achieve their future potential in different market conditions. Melrose has a track record of managing its businesses successfully in all market environments and crucially our recent cash generation performance shows we have been able to maintain the strength of the balance sheet to position the group's businesses in the best way for the future."
Melrose's takeover of GKN in 2018 drew intense union and political anger.
Its victory brought to a close a bitter battle that had raged for months, with unions and MPs warning over job cuts, asset-stripping and national security concerns throughout the takeover saga.
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