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Automotive success drives GKN's shares up

Acquisitions and strong demand for the engineer's automotive components drove first-quarter sales up 12 per cent
April 20, 2016

Shares in GKN (GKN) climbed 3 per cent after sales at the maker of plane and car components rose an impressive 12 per cent in the first quarter. Recently acquired Fokker Technologies was responsible for the majority of this growth, with just 1 per cent being generated organically.

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Organic civil aerospace sales stagnated, as longstanding programmes ended and demand for military aircraft remained soft. That backdrop, coupled with a lower revenue mix from Fokker and further weakness in the agricultural equipment business, hit the group's trading margin.

But the market was already aware of these issues, and took heart from the continued strength of GKN's automotive operation. A 4 per cent rise in organic revenues means appetite for the engineer's market-leading parts once again easily surpassed global industry production rates.