Engineering news
Global engineering business GKN has reported a 21% increase in sales to £6.9 billion, including organic sales growth of 2%, for the nine months ended 30 September 2016.
The increase in sales comprised £151 million (2%) organic growth, acquisitions of £587 million and beneficial currency translation of £474 million.
The company said its automotive businesses continued to perform well against the market and the aerospace division grew in line with its expectations. However, land systems’ markets remain tough, it added.
Nigel Stein, chief executive, said: "GKN has continued to make progress. Organic growth was 2%, whilst we also benefitted significantly from the successful acquisition and integration of GKN Aerospace Fokker as well as from favourable currency translation due to the weakness of sterling. As expected, our organic profit performance was down primarily due to one-off items, including the costs of the restructuring, which will position us better for the years ahead.
“In line with the global economic outlook, we see growth rates easing in our major markets. The automotive market is now forecast to see a 1% increase in light vehicle production in the final quarter. New commercial aerospace programmes continue to ramp-up, although at a slower rate than expected. Our military aerospace programmes and agricultural equipment markets look set to continue their decline. Despite the slightly tougher macro-economic environment, the Group continues to expect 2016 to be another year of growth.”
On 21 October 2016, the group announced that it had agreed to sell its Stromag business – which supplies brakes, clutches and highly flexible couplings to the agricultural, construction, industrial and renewable energy markets – for €198 million (£177 million), with completion expected in the first quarter of 2017. It said that from 1 January 2017, GKN Land Systems will no longer operate as a division, with Shafts and Services being reported within GKN Driveline and Wheels and Structures moving to Other businesses.
Earlier this month, GKN announced plans to cut jobs at its Somerset helicopter factory. The company said the factory might be closed after Leonardo-Finmeccanica, owner of AgustaWestland, decided to bring in-house the fuselage work done by GKN on the future AW159 Wild Cat military helicopter.
GKN said: “The removal of a significant part of GKN Yeovil’s business puts at risk the long-term viability of our Yeovil site, which is situated inside the Leonardo Helicopter campus.
“Having completed a thorough assessment of the business, including our ongoing order book, capabilities and cost base, we have regrettably concluded that GKN Yeovil, as it stands today, is no longer a sustainable business and will have to be significantly downsized or fully closed.”
GKN will hold discussions with unions, and a decision on closure of the site is expected by the end of the year.