A 3% increase in sales at its aerospace division, which has a major presence in Bristol, helped engineering group GKN increase third-quarter revenues and profits.
While pre-tax quarterly profits were virtually flat – up just £1m to £89m – its aerospace division proved a bright spot. It is heavily involved in Boeing’s new 787 Dreamliner and is expected to benefit from more business now deliveries of the airliner have started.
The engineering group has created a global centre of excellence in composite aircraft wing structures at Filton following its acquisition of Airbus’s manufacturing interests.
Its new site at Avonmouth, known as Filton-West, is a state-of-the-art automated composites manufacturing operation incorporating production techniques that represent the future of composites manufacture in aviation. Initially it will manufacture wing spars and trailing-edge assemblies for the Airbus A350 XWB aircraft.
The group has 1,500 employees at Filton and expects to add up to 250 jobs in the coming decade at Filton-West.
GKN also said increases in demand for civil aerospace work fully offset revenue reductions on the F22 and C17 US defence projects
An explosion at GKN’s atomised steel powder production plant in Gallatin, Tennessee, has created a total charge for the year so far of £34m of which £23m was accounted for in the first half results.
GKN says the plant returned to normal operations last month but investors will have to wait until January 2012 to see "pre-incident levels" of output and profitability return as customer demand is fully restored.
Market conditions have been broadly as expected at the time of GKN's half year results announced in August and the group says performance has remained strong through the seasonally weaker third quarter and order books support further progress in the fourth quarter. However, due to the Gallatin charge, trading margins fell from 7.5% to 6.9% in the third quarter.
Group sales rose 11% from £1.336bn to £1.483bn as GKN maintained the same rate of growth seen in the first six months of the year.
The group said: “Macroeconomic uncertainty has increased in recent months although no significant deterioration has been experienced in GKN's order books.”
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