GKN back in black as recovery steps up a gear

CAR parts and engineering firm GKN has seen its recovery "move into another gear" after reporting improving conditions across its major markets.

The firm surged back into the black with a better-than-expected 175 million pre-tax profit for the first half of 2010 - against a 6m loss last year - and also restarted dividend payments.

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

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.

The group has stripped out costs with a major redundancy programme since November 2008, boosting profits and cutting net debt by a third to 202m. This saw 15 factory closures and 7,000 of its 42,000 staff go - including 560 in the UK - although GKN added to its UK staff in 2008 after buying Airbus's Filton site.

Smith 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 per cent to 2.7 billion after a 47 per cent sales leap at its driveline division, reflecting a 40 per cent jump in global production during the first half of 2010.