From AFX News Limited W
LONDON — Automotive and aerospace group GKN PLC said it is trading in line with hopes, although the North American automotive market remains risky and raw material costs have risen more than expected.
Redditch, England-based GKN said in a statement accompanying its annual general meeting that trading conditions in the first four months of the year had been in line with the broadly stable outlook it reported in February.
The group said trading profits to April were slightly above the level of the equivalent period last year.
GKN said risks remained, particularly in its North American automotive markets. It added that raw material and energy costs had increased in recent weeks to levels somewhat above those anticipated in February, with little signs of any easing in the short term.
However, the company added: “Our expectations for the year as a whole remain as reported in our February outlook statement. 2006 should be a year of continuing progress for GKN, with the further benefits of the on-going strategic restructuring program still expected in 2007.”
GKN has been undertaking a restructuring program to move production capacity from high cost and low growth mature markets to relatively lower cost and higher growth emerging markets in Asia, South America and Eastern Europe.
As part of the restructuring, the group expects to shed around 4,000 jobs by the end of this year, close 11 plants and restructure another 12.
It said today that it had seen a solid start to 2006/7 despite absorbing charges for redundancies announced earlier this year in its UK cylinder liner business.
In its automotive business, North American and European production volumes have run at a similar level to last year, with growth seen in Asia Pacific markets, particularly China, benefiting our joint ventures in the region, it said.
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