GKN’s strong interim results this week and a big defence contract have put it in a strong position in the UK and European defence industry, but analysts still believe it will sell its Telford armoured vehicles business if the price is right.
GKN announced a 13% rise in pre-tax profits from £203m to £230m for the six months to 30 June. And Aviation Training International, the joint venture between GKN Westland and Boeing, has won a 30-year, £650m contract to train British Army Apache attack helicopter crews.
But despite the good news, Charles Burrows of HSBC Securities said he expected that GKN will move out of the non-core armoured vehicle business eventually.
GKN is a member of a European consortium which earlier this year won the contract to build ‘battlefield taxis’ for the British, French and German armies. The UK element is worth £800m.
GKN has indicated that the Multi Role Armoured Vehicle consortium is the most logical centre around which a future European armoured vehicles business could be built.
In an interview in this issue, Sir Colin Chandler, chairman of GKN rival Vickers, hints that he might bid for GKN’s armoured vehicle business ‘at the right value’.
Interview, page 17