This year is likely to be even tougher than last for the UK's few remaining auto parts manufacturers as the global crisis deepens and car sales continue to fall rapidly. Manufacturers can expect to see further falls in sales and profits, but the US bailout of the auto industry and its forced restructuring should benefit GKN.
GKN's shares have risen by over 60 per cent since hitting a 16-year low in November on hopes that the slump in the automotive industry may be starting to bottom out after a temporary reprieve was granted to General Motors. This is despite recent figures showing a 35 per cent slump in American car sales in December. The main hit from GM will be to GKN's Driveline and powdered metallurgy division with potential for a significant asset impairment to that business when the company next reports results in February. On a plus note, the integration of the newly acquired Filton aircraft factory - which makes wings for aircraft including the A380 superjumbo - will open up new non-European markets in the US and South America for when the recovery in the aviation industry eventually arrives.
| Company | Price p | Mkt. value £m | PE ratio | Yield % | 12M price chng % | Last IC view |
|---|---|---|---|---|---|---|
| GKN | 101.5 | 716 | 3 | 13.5 | -64.1 |
