GKN's (GKN) first-half results were overshadowed by news of its €706m (£499m) acquisition of aerospace supplier Fokker, funded by a £200m placing. The deal, which expands the engineer's global presence and technological capabilities in commercial aircraft markets, triggered a 7 per cent rise in the share price.
Although GKN was hit by a reduction in Airbus A330 production, healthy orders for business jets and the A350 were enough to send commercial organic sales up 2 per cent. Those gains offset a 4 per cent organic fall in military sales, which continue to suffer the impact of tightened defence budgets in Europe and the US.
Elsewhere, GKN's core auto division shrugged off slowing car sales in Asia to outperform global production once again. Management reckons growth in China will quicken in the second half thanks to a strong order book and new programme launches. Robust demand for premium vehicles in Europe was also encouraging, sending divisional organic sales up 4 per cent.
Trading in GKN's small Land Systems business put a slight dampener on these results, as challenging agricultural equipment markets sent organic sales spiralling 8 per cent.
Broker Liberum expects adjusted EPS of 26.9p this year, rising to 29.1p in 2016 (from 28.7p in 2014).
| GKN (GKN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 314p | MARKET VALUE: | £5.2bn | |
| TOUCH: | 313.8-314p | 12-MONTH HIGH: | 389p | LOW: 281p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 35 | |
| NET ASSET VALUE: | 94p* | NET DEBT: | 45% | |
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 3.57 | 224 | 11.2 | 2.8 |
| 2015 | 3.62 | 212 | 9.9 | 2.9 |
| % change | +1 | -5 | -12 | +4 |
Ex-div: 13 Aug Payment: 21 Sep *Includes intangible assets of £1.4bn, or 85p a share | ||||
