Engineering firm says it grew profits last year

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ENGINEERING firm GKN has announced its annual profits and says it continues to benefit from a recovery in global car production.

The company, which has bases in Portsmouth and the Isle of Wight, has reported a four per cent rise in pre-tax profits to £601m for the year to December.

Chief executive Nigel Stein said: ‘We have continued to outperform our key markets and report good underlying financial results in spite of sterling’s strength.’

It said global car production increased 3.1 per cent to 87.4m vehicles, boosted by rises in output in China, the US and Europe.

The firm has around 10 per cent of its 50,000-strong workforce in the UK, said its commercial aerospace unit grew by four per cent while its military aircraft sales were broadly flat.

It forecasts commercial aircraft production will be strong, although military markets will decline.

Mr Stein said: ‘We expect 2015 to be another year of growth.’

Despite reporting a positive year GKN has seen a decline in its Land Systems business which was 10 per cent down due to challenging agricultural equipment markets.

The group expects Land Systems sales will be lower in 2015 than last year and that lower agricultural sales will offset a slight improvement in industrial markets.

Due the decrease in sales this section of the business will undergo a £8m restructuring charge.

The group’s statutory pre-tax profit fell 54 per cent to £221m.

Shares slumped by three per cent as Cantor Fitzgerald broker Andy Chambers added: ‘The outlook for the current year errs on the side of caution in our view.’