* H1 pretax profit 266 mln stg vs forecast 259 mln
* Group sales up 16 pct to 3.46 bln stg
* Interim dividend up 20 pct to 2.4 pence
* Profit at driveline autos unit up 29 pct, aero up 8 pct
* Shares rise 1 pct
By Rhys Jones
LONDON, July 31 British car and plane parts
maker GKN Plc said first-half profit rose by a third,
driven by strong growth at its automotive business on the back
of robust luxury car sales.
The group's Driveline unit, which makes products such as
driveshafts, chassis and axles, reported a 29 percent rise in
profit in the six months to the end of June.
The division, whose biggest customers include Audi
, BMW and Volkswagen, accounts
for around half of group sales and has been boosted by the
contribution of Getrag Driveline Products, which it bought last
year, and continued growth in luxury car sales.
"The premium end of the market is the area that is doing
better, especially in China and Europe, though in south Europe
small cars are still not doing so well," GKN's chief executive
Nigel Stein told reporters.
European car sales fell almost 7 percent in the first half
of the year. However, sales at Fiat, Seat, Renault
, Opel and its British equivalent Vauxhall have
all tumbled by about 15 percent.
Luxury car makers such as Britain's Jaguar Land Rover
have benefited from robust sales growth in China, the
world's largest auto market, where demand for premium vehicles
has continued to surge despite fears over slowing economic
"In China the market is up about 6 percent but premium has
done much better than that," said Stein. "Between 6 and 8
percent is where growth in China is running and we don't see
that changing this year."
GKN said global light vehicle production rose by around 9
percent during the period but it expects this to fall slightly
in the second half.
The FTSE 100 company on Tuesday said group pretax profit
rose 33 percent to 266 million pounds in the six months to the
end of June, while revenues rose 16 percent to 3.46 billion
GKN was expected to report an average first half pretax
profit of 259 million pounds and is forecast to deliver annual
profit of 491 million pounds, according to Thomson Reuters data.
"We sense that sentiment towards GKN is still being heavily
swayed by caution about global light vehicle production, but GKN
is likely to be able to generate at worst a robust performance
in the second half of 2012 and 2013, in our view," said
Jefferies analyst Sandy Morris.
Shares in GKN, which have risen 14 percent in 2012, were 1
percent up at 212.75 pence by 0800 GMT, valuing the business at
around 3.4 billion pounds.
GKN, which earlier this month bought Volvo's
aerospace division for $990 million, increased the interim
dividend by 20 percent to 2.4 pence.
The company said its aerospace unit, which makes airframes
for Airbus and Boeing, delivered an 8 percent
rise in profit during the period, helped by the ramp-up of
several civil aerospace programmes, which have offset falling
Europe's Airbus and U.S. rival Boeing are ramping up output
to meet a surge in demand for fuel-saving jets and are targeting
more than 1,100 deliveries this year, in response to growing
demand from airlines for new fuel-efficient planes.
Airbus last week announced a three-month delay to the A350
following a glitch in wing production.
"On the A350 we have overcome difficulties and are doing
well," said Stein. "We are able to satisfy Airbus' demand on the
A350. The effect is minimal in terms of the slight delay they
announced last week and I don't think the financial impact will