Engineering giant GKN has posted a 14 per cent rise in sales for the first quarter – but revealed it was set for a £3 million hit as a result of the Japanese earthquake.
The Redditch-based firm saw sales rise to £1.49 billion in the first three months of the year, compared with £1.31 billion in the same period last year.
That helped the company to increase pre-tax profits by more than 50 per cent, to £107 million.
The improvement came despite its automotive division taking a hit from the tragic events in Japan, where 27,000 people died after an earthquake and tsunami flattened communities.
That meant its Driveline division was set for a hit of about £3 million.
However the automotive arm of the firm still managed to increase sales by 16 per cent in the first quarter, to £673 million, and trading profits rose by more than a third to £50 million.
The group said, in a statement: “Global light vehicle production increased by around four per cent in the first quarter to 19.4 million vehicles, with good growth in the European premium vehicle segment and the Indian, North American and Chinese markets.
“Production in Japan was severely impacted by the earthquake and tsunami and some disruption has also been experienced in Europe and North America as a result of component supply problems from Japan.
“Japanese OEMs (original equipment manufacturers) are planning to resume volume production through April and May, although it will be some time before the industry is in a position to catch up on production lost through the first half.”
Elsewhere, the group saw sales rise by 21 per cent in its powder metallurgy arm, to £217 million, and trading profits rose 82 per cent, to £20 million.
Revenue remained flat in the aerospace division, at £352 million and profits were in line with 2010 at £32 million.
The land systems arm saw sales rise by more than a quarter, to £220 million, and profit trebled to £18 million.
The group said: We expect GKN to continue to make good progress. The strength of our market positions and healthy order books give confidence in our prospects for 2011 and beyond.
Chief executive Sir Kevin Smith added: “GKN made good progress in the first quarter and I expect this to continue. GKN has excellent new products and technologies which are aligned with our customers’ desire to have smaller, lighter and stronger components and systems, offering improved efficiency, lower fuel consumption and greater environmental benefits.
“Our four divisions are well placed to achieve a period of sustainable growth and margin improvement.”
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