GKN flies past forecasts

Analysts are reassessing forecasts, but Investec Securities currently expects full-year adjusted pre-tax profit of £567.9m, giving adjusted EPS of 27.4p (from £497m and 26.2p in 2012). That's likely to change. For chief executive Nigel Stein, the numbers were "very much as expected". A £98m paper loss on foreign exchange contracts halved reported profits, and well-flagged restructuring costs of £25m, mostly redundancies, affected every division bar aerospace. Two-thirds fell on the driveshafts unit, Driveline. Still, strip that out and both margin and profit there improved despite a tough automotive market.

GKN's enlarged aerospace business was the biggest profit generator for the first time, making £118m - up 37 per cent thanks to £37m from Volvo - which offset declines on military programmes. And that trend should continue, given that commercial aerospace now generates 71 per cent of divisional sales, and both Boeing and Airbus have thousands of planes to build. Even Driveline and fellow automotive business Powder Metallurgy are tipped to do better in the coming months, and lower costs will help the bottom line.