Automotive sales lift GKN and TI

Both GKN and TI Group increased interim profits due to a strong performance from their automotive business, despite the effects of the strong pound.

GKN achieved sales of almost £2.5bn in the first six months of the year, up 13% on the same period in 1999.

Growth was fuelled by GKN’s automotive businesses, which turned in a record first half performance, with profits up 16% to £162m on sales of £1.4bn.

The Automotive Driveline business performed particularly strongly, gaining ground in the US, Europe and Japan thanks to major investment in research and development, GKN said.

The company’s industrial services division also had a good six months, with operating profits up 20% to £78m.

But things were less rosy in aerospace, where profits fell to £46m from a 1999 figure of £64m.

GKN Westland Helicopters’ sales were ahead of last year and profits held steady, but Westland Aerospace suffered from delays to a number of projects in the US.

Westland anticipates better results in the second half of the year, due to its merger with Agusta of Italy, and greater operational efficiency in its aerospace structures business.

Meanwhile, TI’s interim results showed pre-tax profits up 12% at £146.5m, with turnover rising 35% to £1.68bn, prompting analysts to raise full-year forecasts to £290m.

TI Group Automotive Systems led the surge, with sales up 76% to £847.7m in the six months to 30 June this year, and operating profits up 52% to £90m.

The automotive division makes fuel storage and delivery systems for vehicles, and with the acquisition of Walbro last year the division now has the facilities to develop, design and supply complete integrated systems for vehicle manufacturers. This has brought in new orders worth around $1bn during the six-month period, with a client list that includes 87 of the top 100 vehicle platforms in the world.

TI’s Aerospace business outperformed the cycle, while the polymer products division saw sales and profits grow. However, the John Crane engineered sealants business was hit by delayed investment in the oil and gas sector.

The group has spent £1.5bn on acquisitions over the last two years, but further additions are likely to be small. Chief executive Bill Laule said the target was to increase its market share to beyond 20% in all its sectors.

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