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A FTSE-100 company with a narrow bid-offer spread. Manufactures and supplies components and vehicle
structures to automotive, aerospace, mining and agricultural industries. Approximately 39,000 people work
in GKN companies and joint ventures in more than 30 countries

GKN corporate website - GKN investors website - Company history


(previous thread title no longer relevant, hence new thread)

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GKN sales and profits rise

StockMarketWire.com

GKN's sales and profits rose in the year to the end of December.

On a management basis sales rose by 22% to £9,414m and operating profits were up 14% at £773m.

Pre-tax profits were up 12% at £678m and earnings per share rose by 12% to 31.0p.

On a reported basis, sales were up 22% at £8,822m, operating profits were up 4% at £335m and pre-tax profits rose by 19% to £292m.

The dividend of 8.85p per share is up 2%.

Chief executive Nigel Stein said: "This is a good set of results with GKN continuing to make underlying progress in line with our expectations.

"We performed well against our key markets, overcoming some demand weakness and demonstrating once again the strength of our businesses, strong market positions and leading technology.

"Strategically we made good progress, including smoothly integrating Fokker and completing the disposal of Stromag - evidence of our sharper focus on capital allocation towards Aerospace and Automotive markets.

"We expect 2017 to be another year of further growth, helped by the benefits of the actions taken in 2016 and GKN's constant focus on continuous improvement."





Story provided by StockMarketWire.com

StockMarketWire.com
GKN's reported pre-tax profits rose to £559m in the six months to the end of June - 207% up on a year ago.

The group said it was another period of growth delivering earnings momentum with sales up 15% (organic sales up 5%).

Other highlights:
- Profit before tax (management basis) up 14% to £393 million (2016: £344 million), helped by currency

- Free cash flow of £116 million (2016: £40 million)

- Interim dividend increased 5% to 3.1 pence per share

- UK defined benefit pension closed to future accrual, £250 million lump sum payment planned to address the deficit and reduce future deficit recovery payments

Chief executive Nigel Stein said: "We made progress in the first half and are on track for the full year.

"We are performing well against our key markets, demonstrating once again the strength of our businesses, strong market positions and leading technology.

"We continue to invest for growth and have made significant progress to address our UK pension deficit.

"Our focus on innovation in key areas such as electrified drivetrains, additive manufacturing and Industry 4.0 is paying dividends and underpins our confidence in the longer term.

"2017 is expected to be another year of growth. Our reputation for technological leadership in our key markets, our focus on driving flexibility and productivity through our manufacturing plants and our market leading position in all three divisions mean we are well placed for the future."

HSBC today downgrades its investment rating on GKN PLC (LON:GKN) to reduce (from hold) and cut its price target to 595p (from 680p).

With the sp currently 322p and the tp at 595p, ie 84% upside it's got to be a resounding REDUCE---------the mind boggles

Profit Warning. With record car sales this year. Order book must not be as healthy going forward I would think.

Must be the weather!!!!

It has had two claims made against it , some £40 million is charged against it . Thought it would drop a lot lower .

Unsolicited bid for GKN from Melrose.

StockMarketWire.com
GKN has rejected a preliminary and unsolicited proposal from Melrose Industries and described it as 'entirely opportunistic'

The 405p per share proposal - which was received on 8 Jan - comprised 80% in new Melrose shares and 20% in cash.

GKN said the board considered the proposal together with its financial advisers, Gleacher Shacklock, J.P. Morgan Cazenove and UBS, and had unanimously rejected it, having concluded that it was entirely opportunistic and fundamentally undervalued the company and its prospects.

GKN said that in addition, the proposal would materially dilute the exposure of shareholders to the meaningful upside opportunities that the board believed were present within the company.

GKN also announced that interim chief executive Anne Stevens had agreed to become the group's new CEO with immediate effect.

Chairman, Mike Turner said: 'The Board believes that Anne Stevens has the track record to transform GKN.

'After a successful turnaround of The Ford Motor Company's businesses in Mexico, Canada and South America, she was appointed as chief operating officer for the Americas where she developed the transformation plan for Ford's US business.

'Subsequently, Anne became chairman, CEO and president of Carpenter Technology.

'She was a non-executive director of Lockheed Martin from 2002 until she stepped down at the end of 2017 to take up her executive role at GKN.

'Her operational and strategic skills are ideally suited to GKN and the Board is very impressed with the contribution she has made so far in setting out plans for a significant improvement in the group's performance.'

GKN said Q4 trading was in line with forecasts and the group continues to expect 2017 management profit before tax to be slightly ahead of 2016 (which was £678 million) before the additional working capital write-off in North American Aerospace announced on 16 November 2017.

FIRM OFFER BY MELROSE INDUSTRIES PLC FOR GKN PLC

· Having commenced its meetings with GKN shareholders this week, Melrose Industries PLC ("Melrose") announces the terms of its firm offer to acquire the entire issued and to be issued share capital of GKN plc ("GKN") (the "Acquisition").

· Under the terms of the Acquisition, which will be subject to the Conditions and further terms to be set out in the Offer Document, GKN Shareholders will be entitled to receive:

1.49 New Melrose Shares and 81 pence in cash for each GKN Share

· Based on Melrose's Closing Price of 234.3 pence per Melrose Share on 16 January 2018 (being the last Business Day before the date of this Announcement), the Acquisition:

‒ values each GKN Share at 430.1 pence;

‒ values the entire issued and to be issued ordinary share capital of GKN at approximately £7.4 billion; and

‒ represents an attractive immediate premium of:

* approximately 29 per cent. to the Closing Price of 332.70 pence per GKN Share on 11 January 2018 (being the last Business Day before commencement of the Offer Period); and

* approximately 32 per cent. to the Closing Price of 326.30 pence per GKN Share on 5 January 2018 (being the last Business Day prior to the approach made by Melrose to the GKN Board in connection with the Acquisition).

· GKN Shareholders would own approximately 57 per cent. of the Enlarged Group, and would become major participants in the potential future value creation in both the GKN and Melrose businesses.

StockMarketWire.com
Melrose Industries went hostile in its £7.4bn takeover offer for engineering group GKN after meeting with the target's shareholders.

GKN shareholders would be offered 1.49 new Melrose Shares and 81p in cash for each GKN share.

The offer now valued the shares at 430.1p, up from a previous value of 405p, Melrose said

"Since our approach was announced, the Melrose share price has risen as the market digests the attractive opportunity our proposal represents," Melrose chief executive Simon Peckham said.

"As a result the implied premium has grown from approximately 24% to approximately 32% since our approach."

GKN said the terms of the offer were effectively unchanged from Melroses original approach.

"We believe GKNs current owners should retain all the benefits of the clear upside potential in GKN, rather than handing almost half of this upside to Melrose and its shareholders," GKN chief executive Anne Stevens said.

"We have already stated that the terms of Melroses offer fundamentally undervalue the company and we are actively engaging with shareholders to explain how our transformation plan will provide value.

Statement regarding offer
GKN notes the publication today of a letter from the Chairman of Melrose Industries PLC (Melrose) to GKNs shareholders announcing the posting of an offer document containing the full terms and conditions of its unsolicited offer to acquire the entire issued and to be issued share capital of GKN for 1.49 new Melrose shares and 81 pence in cash per share (the Offer), which follows Melroses announcement on 17 January 2018 pursuant to Rule 2.7 of the City Code on Takeovers and Mergers (the Code).

The terms of the Offer are unchanged from those contained in Melroses announcement of 17 January 2018. The Board of GKN (the Board) continues to view the Offer as entirely opportunistic and believes that its terms fundamentally undervalue GKN and its prospects.

I reckon 475p with a bit of luck (and an additional bidder).

Strategy and transformation plan

Key points
· GKN already has world class businesses and technology and now intends to move towards world class financial performance

· GKN has a new strategy, new leadership team and new execution engine

· There are three components in the new strategy:

o Deliver distinct strategies for different product segments with rigorous capital allocation and focused performance targets

o Establish a delivery culture based on greater accountability, capability and pace, supported by aligned incentives

o Separate operationally now and formally when it maximises shareholder value - operational separation of the Aerospace and Driveline divisions has already begun

· The Board expects Project Boost to deliver a recurring annual cash benefit of £340m from the end of 2020

· The Board is targeting up to £2.5bn cash return to shareholders over the next three years, with a significant part expected to come from divestments executed within the first 12 - 18 months, including the sale of Powder Metallurgy

· GKN's progressive dividend policy will be to target an average payout of 50% of free cash flow over the period of 2018-2020

· GKN expects to distribute surplus cash to shareholders, subject to maintaining an investment grade credit rating

http://www.moneyam.com/action/news/showArticle?id=5855171

StockMarketWire.com
GKN advised shareholders not to accept Melrose's hostile takeover offer as it was 'not a good deal' and represents 'low price and high risk.'

'The Board unanimously recommends that you should take no action in relation to the offer and that you should not sign any document which Melrose or its advisers send to you,' GKN said in a letter to shareholders.

GKN said that the premium Melrose is offering is 'very low,' and added that Melrose's stated premium of 22% is 'misleading' as its market capitalisation is significantly smaller than GKN's, the offer is 80% in shares, representing an actual premium of 10%.

GKN also highlighted Melrose's lack of relevant experience and said its short term business model is 'inappropriate' as the latter's three-to-five-year exit strategy is not compatible with the long-term investment and technology horizons that are essential in GKN's markets.

GNK called on shareholders to trust in the company's new strategy which aims to deliver returns to shareholders of up to £2.5bn over the next three years.

'Your Board strongly believes that GKN's new leadership team and strategy can maximise shareholder value and that, as a GKN shareholder, you should receive 100% of the benefit of this strategy.

this isn't a stock i have ever followed, but certainly the 5-year chart shows a pretty pathetic sp performance

it certainly concerns me that melrose apparently talk of a 3/5 year exit plan ..... does that smell a bit like good old-fashioned asset-stripping?

motly fool leave alone BB

StockMarketWire.com
GKN reported underlying profits before tax of £572m down 16% from a year ago while organic sales grew 6% to £10.4bn.

Profits were reduced by £145m, primarily due to the £112m balance sheet review charge and associated costs in North American Aerospace and claims of £38m. The group has announced a full year dividend of 9.3p per share, up 5% on a year previously.

The company said it expects the separation of its aerospace and driveline businesses to be completed in the middle of 2019.

"A demerger represents GKN's base case separation structure for a number of reasons, including that the timetable is within GKN's control, it allows GKN to allocate liabilities appropriately and it is tax efficient," GKN said in a statement.

GKN's aerospace division reported 2% organic sales growth but trading margin fell to 7.8% in 2017 from 9.9% the previous year. Underlying trading margin is expected to show a slight improvement in 2018, despite some further contractual price downs and increased investment in new engine programmes.

GKN's driveline division saw organic sales growth rise 9% in 2017 as its eDrive order book extended to over £2bn. The division reported a trading margin of 7.1% versus 7.2% the prior year. GKN said it expects trading margin improvements in both 2018 and 2019 as the division works toward achieving its core segment trading margin target of at least 9.5% in 2020.

Powder Metallurgy's organic sales growth was 5% for the year while trading margin fell 10.6%, reflecting higher raw material surcharge and investment in high-end powder capability in China. The division is expected to show steady progression in 2018 and 2019 as it works towards achieving its 2020 target of at least 11%.

The group said revenue expectations in the short term are unchanged.

Commenting on the results, Anne Stevens, Chief Executive of GKN said: 'GKN has fantastic businesses which have grown organically above our key markets, demonstrating once again our strong positions and leading technology.'

'However as I set out two weeks ago, we now need to change our emphasis and ensure that those orders deliver world class financial performance with a renewed focus on strong margins and cash generation.'

'With Project Boost, I have laid out how we plan to achieve this, through detailed product segment strategies and an emphasis on manufacturing and functional excellence. We are excited about delivering these plans.'

StockMarketWire.com
GKN confirmed that it has been in talks about a potential combination of its automotive business with Dana that would be 'effected mainly in equity.'

GKN said a possible combination of its automotive Driveline business with Dana could provide greater value to shareholders and should therefore be explored alongside the demerger.

StockMarketWire.com
Takeover target GKN said it had agreed to merge its Driveline automotive business with Dana Incorporated in a deal that would give the combined business an enterprise value of $6.1bn (£4.4bn).

GKN said the transaction, together with the prospects of its aerospace business, provided 'significantly greater value' for its shareholders than Melrose Industry's £7bn hostile takeover bid for GKN.

Under the terms of the deal, GKN shareholders would receive 47.25% of the fully-diluted share capital of Dana, equivalent to $3.5bn (£2.5bn), based on Dana's closing share price on 8 March.

GKN would also receive $1.6bn (£1.2bn) in cash after deducting for the transfer of $1.0bn (£0.7bn) of GKN's pension deficit to the combined group.

'This combination of GKN Driveline and Dana will create a US and UK led global market leader in vehicle drive systems,' GKN chairman Mike Turner said.

'The synergies between these two businesses and our complementary product portfolios make this a great deal for GKN shareholders.'

StockMarketWire.com
Melrose Industries sweetened its takeover bid for GKN to £8.1bn and said it would not increase its offer again 'under any circumstances'.

Melrose raised its offer to 81p in cash and 1.69 new Melrose shares for every GKN share, which it said equated to 467p per GKN share, up from a previous bid of 416p.

The new bid would also increase the proportion of ownership that GKN's shareholders would hold in Melrose from 57% to 60%, Melrose said.

GKN on Monday reiterated that Melrose's original bid 'fundamentally undervalues' the UK engineering firm.

On Friday, GKN announced that it was merging its Driveline automotive business with US-bawed Dana to form a company with an enterprise value of $6.1bn.

'The combination of GKN Driveline with Dana will result in GKN shareholders owning 47.25% of the enlarged Dana and GKN receiving net cash proceeds of £1.2bn,' GKN said.

Melrose, however, said its sweetened offer was more attractive.
'The potential transaction with Dana, if it is allowed to go ahead in the last quarter of this year, would leave you with a minority stake in a foreign listed group run by a Dana management team based in Ohio,' Melrose said.