Engineering giant GKN has defied "increasing headwinds" in European car markets today by hiking its dividend 20%.
A Redditch-based firm, which makes driveshafts for almost half of all new cars, said the move reflected its strong performance and confidence in the future.
It forecast another "good year of progress" in 2012 after figures for the first half showed a 19% rise in pre-tax profits to £266 million.
Chief executive Nigel Stein flagged the impact of economic conditions on European car markets and said that while overall vehicle production is likely to be lower in the second half it will still be 5% higher across 2012.
GKN, which increased its interim dividend by 20% to 2.4p a share, gave a major boost to its aerospace components division earlier this month when it signed a deal to acquire Volvo's aircraft business.
The operation makes the RM12 engine for Saab's Gripen fighter jets, used by the Swedish military, as well as supplying engine components to the three main engine manufacturers, including Rolls-Royce.
GKN's aerospace arm, which is a supplier of aircraft components to both Airbus and Boeing, increased trading profits by 8% to £86 million, helped by continued growth in the civil aircraft market.
The business makes fuselage, fan blades and cockpit windshields from sites including Yeovil, Luton, Derby, Portsmouth and the Isle of Wight.
Half-year profits in the automotive business increased 29% to £121 million.