Car parts firm GKN back in profit

Improving conditions in its major markets helped car parts and engineering firm GKN boast its recovery, which it said had "moved into another gear".

Shares climbed 4% after it restarted dividend payments and reported it had surged back into the black with forecast-beating pre-tax profits of £175 million for the first six months of 2010, compared with a loss of £6 million last year.

The company's land system business servicing heavy industry, its driveshafts division for cars and its powder metal technology arm were all on the mend, said chief executive Sir Keith Smith.

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GKN, which supplies components such as drive shafts to almost half of all new cars, forecasts a dip in global production in the second half after the end of scrappage schemes, but sales should still be ahead of a year earlier.

Sir Keith said: "GKN's recovery has moved into another gear and we are continuing to build on our global market-leading businesses."

Group sales were up 25% to £2.7 billion after a 47% sales leap at its driveline division, reflecting a 40% jump in global production during the first half of 2010.

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