* FY pretax profit 497 mln stg vs forecast 475 mln
* Revenues up 13 pct to 6.9 bln stg
* Total dividend up 20 pct to 7.2 pence/share
* CEO sees 2013 European auto sales flat at best
(Adds CEO, analyst comment, further detail)
By Rhys Jones
LONDON, Feb 26 Car and plane parts maker GKN
predicted another gloomy year for Europe's recession-hit
autos market, saying the company would have to rely on the
United States and Asia for growth again this year.
The British firm beat forecasts on Tuesday with a 19 percent
rise in 2012 pretax profit helped by demand for luxury cars from
makers such as Jaguar Land Rover and Audi in China, the world's
biggest autos market.
"I don't see the European small car market recovering this
year, the best we can expect is flat sales," Chief Executive
Nigel Stein told reporters, adding that profits in the first
half of this year would be hit by a 21-million-pound ($32
million) charge to help lower costs at its autos businesses.
"But the U.S. and Asia should continue to grow and more than
offset softness in Europe," he added.
Demand for new cars has slumped in Europe as governments
drive through austerity measures to reduce their debts. Asian
and U.S. markets, in contrast, have bounced back strongly from
the global financial crisis.
U.S. car sales rose 13.4 percent last year to their highest
level since 2007, while European sales slumped to a 17-year low.
Car sales in the United States are forecast to grow 4.9
percent in 2013 while European sales are expected to decline 1.7
percent, according to industry data.
"In 2013, GKN will have to take the rough with the smooth.
We envisage most of the rough in the first half and the smoother
part in the second half," said Jefferies analyst Sandy Morris.
Shares in GKN, which have risen 17 percent over the last
three months, were flat at 252 pence by 1025 GMT, valuing the
business at around 4.1 billion pounds.
GKN, which makes about 55 percent of profits from its
Driveline autos business, said group pretax profits climbed to
497 million pounds ($751 million) last year, beating analysts'
average forecast of 475 million in a Reuters poll.
Revenues rose 13 percent to 6.9 billion pounds last year,
while it increased the total dividend for the year by 20 percent
to 7.2 pence per share.
Profits at Driveline, which makes products such as
driveshafts, chassis and axles, rose 21 percent, helped by
demand for vehicles outside Europe.
Margins at the division, whose customers include Europe's
Volkswagen and Renault as well as U.S.
carmakers General Motors and Ford, improved to 7.3
percent from 7 percent a year earlier.
GKN said its aerospace unit, which makes airframes for
Airbus and Boeing, delivered a 2 percent rise in
2012 profit, helped by the ramp-up of several civil aerospace
programmes, which have offset falling military sales, and last
year's purchase of Volvo's aerospace unit.
Global airlines will buy $3.5 trillion of aircraft over the
next 20 years to meet demand for travel to and from emerging
markets and renew ageing fleets in the West, according to the
world's big two planemakers, helping suppliers such as GKN.
GKN said it did not expect last month's worldwide grounding
of the 50 Boeing Dreamliner jets in commercial service to dent
profits. GKN makes many structures and systems for the
Dreamliner, including its thermal wing ice protection system and
"There is no impact from that (grounding) and we continue
running the line and getting parts out," said Stein.
($1 = 0.6618 British pounds)
(Editing by Christine Murray and Mark Potter)