GKN posts strong quarterly profits

Automotive and aerospace parts maker GKN has announced pre-tax profits of £71 million for the first three months of 2010 - its strongest quarterly performance since the start of the recession.

The group posted first-quarter revenues of £1.3 billion, two-thirds of which came from its car components business. GKN has an automotive manufacturing unit in Birmingham and supplies parts, such as as drive shafts, to nearly half of all new cars.

However, the company said the outlook for the automotive market remains uncertain and sales for the second half of the year could be lower than in the first half.

Underlying group sales, after adjustments for currency impacts, were up 26% compared with the first quarter of 2009.

The group also warned of a temporary squeeze on margins due to delays in passing on the rising cost of raw materials, such as scrap metal, on to customers.

GKN's off-highway business - which supplies equipment to industrial sectors - was hit hard by the global slump but also reported continued improvement in the first quarter driven by demand for mining and heavy construction gear.

The firm has around 6,000 staff in the UK, with aerospace sites at Filton near Bristol, Yeovil, and the Isle of Wight.

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