GKN faltering as demand drops
THE downdraught from GKN's troubled helicopter joint venture with Italian group Finmeccanica and a fall in demand for its automotive and aeronautical parts will leave earnings grounded in the first half of 2002, chief executive Marcus Beresford has warned. However, he is expecting a recovery as the year progresses and North America slowly recovers.
Restructuring costs at its AgustaWestland helicopter division were higher than expected when job losses were announced in January, despite orders worth £5.2bn on its books.
Following the parting of the ways with its Brambles distribution business, GKN's pre-tax profits fell 37% to £245m in the year to December. The rebased final dividend is 7.5p a share, the equivalent of 11p for the full year on a pro forma basis.
US military orders soared to $4bn (£2.9bn) following GKN's acquisition of Boeing aerospace subsidiaries last year. The automotive parts division in the US has been doing better than expected although Europe has slipped behind. However, Beresford believes the 'outlook for automotive markets is uncertain'.
The shares put on 8 1/4p to 312 1/2p.
