UK-based supplier GKN said in a trading statement it had "made good progress in the three months ended 30 September 2013" after sales rose 16% year on year to GBP1,865m.

Third quarter trading profit increased from GBP113m last year to to GBP152m "as a result of improved profitability in the underlying business and a GBP21m contribution from GKN Aerospace Engine Systems". Pre-tax profit rose 34% to GBP131m.

"Market conditions and the group's performance in the third quarter have been consistent with expectations at the time of our 30 July 2013 statement," GKN said. Noting that its aerospace results had been mixed, GKN said global light vehicle production increased 4% "with good growth in China and North America whilst Europe and Japan improved slightly". Weakness in construction and industrial markets continued while agricultural equipment demand remained broadly flat.

Outlook

"Automotive and commercial aerospace markets are expected to remain robust with industrial and military aerospace markets soft," the supplier added. "As previously stated, the group expects 2013 overall to show another year of good progress helped by the contribution of GKN Aerospace Engine Systems."

Chief executive Nigel Stein said: "The third quarter showed good progress, supported by automotive demand in China and North America and sustained high output levels in commercial aerospace."

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GKN plc, the global engineering business that serves the aerospace, automotive and land systems markets, today issues the following Interim Management Statement covering the period since 1 July 2013.

Overview

Market conditions and the Group's performance in the third quarter have been consistent with expectations at the time of our 30 July 2013 statement. Commercial aerospace was strong while military aerospace and spares showed a continuation of the weaker demand evidenced in the first half. Global light vehicle production increased 4% with good growth in China and North America whilst Europe and Japan improved slightly. The weakness in construction and industrial markets continued while agricultural equipment demand remained broadly flat.

Group Results

GKN made good progress in the three months ended 30 September 2013. Sales totalled £1,865 million, a 16% increase over the comparable period in 2012, including 6% organic growth. The increase in sales from acquisitions less divestments was £145 million.

Third quarter trading profit increased to £152 million (2012: £113 million). Trading margin increased to 8.2% (2012: 7.0%), as a result of improved profitability in the underlying business and a £21 million contribution from GKN Aerospace Engine Systems. Group profit before taxation increased 34% to £131 million.

There has been no material change to the Group's financial position with net debt at 30 September 2013 of £973 million (30 June 2013: £928 million), following the payment of the interim dividend and the final payment for GKN Aerospace Engine Systems.

Outlook

Automotive and commercial aerospace markets are expected to remain robust with industrial and military aerospace markets soft. As previously stated, the Group expects 2013 overall to show another year of good progress helped by the contribution of GKN Aerospace Engine Systems.

Summary

Nigel Stein, Chief Executive, GKN plc, commented:

"The third quarter showed good progress, supported by automotive demand in China and North America and sustained high output levels in commercial aerospace. GKN Aerospace Engine Systems made a strong contribution to the Group's 34% growth in profit before tax."

Original source: GKN