Midland engineering firm GKN cheered investors by revealing a nine per cent rise in pretax profits and announcing the capture of two American companies.

The firm beat forecasts to report pretax profits, which strips out restructuring costs, of £112 million for the six months to June 30 - up from £103 million a year earlier.

Analysts had predicted average profits at around £108 million.

GKN, also said it had bought Rockford Powertrain, a producer of high-speed drive-shafts for the mining industry, and Stellex Aerostructures, which makes metal structures for aircraft.

The two acquisitions would jointly contribute £107 million to 2007 revenues, it said, while it could be on the look out for further acquisitions.

GKN still has £400 million in cash left from the £1 billion pound sale of helicopter maker AgustaWestland.

"We have still got plenty of firepower to continue to develop the group. The real focus is on aerospace and also the Driveline business," Chief Executive Kevin Smith said.

The firm also wants to expand in high-growth markets. Mr Smith said it expected the number of its employees in China to grow from 2,000 to 6,000 in the next four to five years. Its workforce in India was tipped to double in the next few years.

GKN, which has its corporate HQ in Redditch, also has plants in Telford and Birmingham, employing around 2,000 people.

It makes about 20 per cent of its sales from aerospace and 80 per cent from automotive, although car production has been flat in North America and Western Europe.

GKN makes components used in cars and light vehicles, steel wheels and driveline systems for agricultural, construction and industrial machinery and aerospace structural components and propulsion systems.

The company has been making sweeping changes to its operations in North America and Western Europe, where it has closed 11 plants and restructured another 12, eliminating about 4,000 jobs.

The firm saw its shares rise seven per cent - or 18.75p to 281.25p - following the results announcement.

Mr Smith said the company was trading in line with expectations, boosted by a 12 per cent increase in aerospace sales and strong order books.

He said: "The benefits of two years of hard work to restructure the business and improve competitiveness are now clearly showing through in results.

"The two new US acquisitions will help create new leadership positions for aerospace and off-highway and will make a good contribution to revenues and profits."

During the period the company also secured deals to work on the fuselage for the Future Lynx for AgustaWest-land and the F22 for Lockheed Martin.

Mr Smith said: "The group expects to continue to make good progress, notwithstanding higher raw material and energy costs which are currently running above levels we had anticipated."

However, the firm warned delays in the production of Airbus's A380 super jumbo - for which GKN is providing parts - were likely to dampen sales growth in the second half of the year.

GKN said earnings were driven by stronger aerospace sales as demand for civil aircraft increased, higher orders for its Driveshafts unit and a return to profits for the US operation of its Sinter Metals unit.

However, soaring steel, copper and nickel prices hit costs.

GKN expects raw material costs in the second half to be £5 million to £6 million above the same period last year.

Energy costs were expected to be £5 million pounds higher in the second half.