Shares in GKN (LSE: GKN) shot up by more than 6% in early trade this morning, following largely positive half-time results from the global engineering group.
Pre-tax profit improved by 6%, or £18m, to £296m in the six-month period to 30 June, despite the strong pound affecting sales, which came in at 1% lower after a £247m currency translation impact although organically they increased by 6%.
While recognising the currency headwinds, management remained confident due to GKN’s “diverse exposure to global markets, strong customer positions and healthy order books”. Chief executive Nigel Stein went on to say:
“This is another good performance, particularly in GKN Driveline which delivered 11% organic sales growth. We have continued to outperform our key markets and report good underlying financial results in spite of sterling’s strength and some end market weakness – we expect these trends to be maintained in the second half. GKN is continuing to make encouraging progress against its strategy.”
Today’s hike in the shares goes some way to offset the 10% decline in the price over the last six months. Shareholders will also be pleased with the 8% increase in the interim dividend, lifting it to 2.8p per share, putting it on a current yield of 2.3%.
