Adjusted pretax profits rose 17pc last year to 578m on sales up 10pc to 7.6bn, with aerospace turning in a record year. Its profits rose 56pc to 266m on sales 26pc higher at 2.24bn. The main factor was a full year from Volvo Aero, the Swedish maker of parts for aircraft engine turbines that GKN bought for 633m in July 2012. Organic profits growth was 9pc. <\/p>\n
Despite Airbus and Boeing delivering a record 1,274 aircraft last year, GKN is flagging modest sales growth in aerospace in 2014, partly due to the programmes it's on. <\/p>\n
It has a far stronger presence with Airbus than Boeing, with the A350 promising plenty of growth. But the production rampup for Boeing's 787 Dreamliner should also see GKN sales for that aircraft rise from 200m to 300m this year. <\/p>\n
Stein is well aware of one gap in the portfolio no presence on Boeing's popular 777 model. So, partly with a view to getting closer to the US aircraft maker, GKN is sizing up Spirit AeroSystems' plant in Tulsa, US, which was spun out of Boeing and produces wing components for the 737, 777 and 787. <\/p>\n
The one concern is GKN's exposure to military aircraft, where sales are likely to fall again this year due to defence spending cuts though such planes now account for only 27pc of aerospace sales. <\/p>\n
As for cars, the driveline arm's 7pc organic sales growth to 3.42bn outstripped the 4pc growth last year in global production volumes to 84.8m vehicles. Strong demand from China and North America kept GKN rolling and a looming 60m investment in US production highlights confidence there. <\/p>\n
GKN's prowess in making complex components from metal powders a division in which underlying profits rose 7pc to 94m brings technical innovation and higher margins, up another 0.1 of a point to 10.1pc last year. The only real disappointment was GKN's land systems arm, where organic trading profits fell 16pc to 75m, hit by weaker construction activity. But nobody invests in GKN for that division. <\/p>\n
Despite some headwinds from the stronger pound, Numis is forecasting 605m profits this year for a forward multiple of 14 times, yielding 2.1pc. <\/p>\n
That looks an unjustified discount to IMI, Weir, Smiths and Melrose given the growth prospects. Buy. <\/p>\n
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GKN ready for take off amid aerospace bull run<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Adjusted pretax profits rose 17pc last year to 578m on sales up 10pc to 7.6bn, with aerospace turning in a record year. Its profits rose 56pc to 266m on sales 26pc higher at 2.24bn. The main factor was a full year from Volvo Aero, the Swedish maker of parts for aircraft engine turbines that GKN bought for 633m in July 2012 Continue reading