Technology and engineering company GKN said that it expects full-year 2008 pre-tax profits to be higher than earlier estimates.
The company previously placed profits before tax for the financial year in the range of £150m to £170m. Its revised forecast places the group’s performance closer to £170m with revenues expected to be 12 per cent up on the same period last year.
Activity in the automotive business was down by approximately 30 per cent over the last two months due to worsening conditions in the global car manufacturing market. However, the group’s aerospace business continued to perform steadily with year-on-year sales showing strong growth.
The company said its off-highway markets were in line with expectations, with robust sales and profits for the year. Construction and industrial markets had been weakened by the economic climate, but demand for agricultural equipment remains strong.
The company reported that it has cut around 2,800 of its workforce globally since October 2008. This figure includes temporary, agency and permanent employees.
In addition to staff cuts, the last two months have seen all of GKN’s automotive plants operating for shorter intervals and implementing additional shut-down periods.
The effects of this will mean that the company’s 2008 results will be impaired by around £150m with around £10m in cash-based restructuring charges.
The company has announced further restructuring action to be implemented this year. This will include additional short-time working, job cuts and plant shutdowns, although details remain under review. The company hopes that the programme will generate cost savings of around £120m.