GKN slides as it warns currency movements could hit outlook
GKN’S share price fell more than one per cent yesterday, after the engineering firm warned that adverse currency movements could hinder its performance this year.
The market reacted negatively despite the FTSE 100 firm reporting a 17 per cent rise in pre-tax profit for 2013, thanks to strong trading from its automotive business, due to demand from China and North America.
“Overall, 2014 is expected to be another year of continued progress,” said the FTSE 100 firm. “While adverse currency could provide a significant translational headwind, this should be outweighed by the benefits of the group’s diverse exposure to global markets, strong customer positions and healthy order books.”
GKN’s aerospace division also performed well, boosted by its acquisition of Volvo’s aerospace business in 2012, but offset by lower demand for military parts as governments cut back on defence spending. Profit in the land systems division fell 15 per cent due to weaker construction and agricultural markets.