05 Aug 08. GKN, the automotive and aerospace supplier, is close to finalising a deal to acquire the Airbus manufacturing site at Filton, near Bristol, increasing to more than a third the proportion of group sales to the aerospace sector. There were concerns that the talks, which have been going on since December, had run into difficulties but Sir Kevin Smith, GKN chief executive, said on Tuesday he expected an agreement in the next two weeks. GKN had also secured important work on the rear spar or spine of the wing of the new Airbus A350 long-range, medium-capacity jet, he said. GKN will spend about £150m on the takeover and plans to invest another £120m over five years to develop the site.
The company is in talks with the government about receiving £60m in repayable launch investment for the programme. Sir Kevin said that, although GKN would sign a contract with Airbus without this support, it would be “helpful”. The Filton purchase will add about 1,500 jobs and revenues of about £400m to GKN’s aerospace business. News of the impending deal came as GKN reported robust sales and profits for the first half. Sales rose 17 per cent to £2.4bn and pre-tax profits from £101m to £118m. Earnings per share dipped from 14.2p to 13.8p.
Sir Kevin sounded a note of caution about civil aerospace, warning there could be some delays or cancellations of orders by airlines from Airbus and Boeing.
GKN’s outlook, however, remained positive, thanks in part to its participation in several defence programmes. The company was hit by rising raw material costs, especially for steel, but is talking with its big customers about ways to recover some of these increases. The interim dividend is raised 5 per cent to 4.5p. The shares rose 20¾p to 229p.
FT Comment: The past 12 months have been unhappy for GKN’s share price, which has fallen from more than 350p to 229p largely because of worries about its exposure to the struggling US automotive market. Tuesday’s results show, however, that the auto business has held up relatively well as GKN continues to prosper from aerospace. These are uncertain economic times but the shares trade at less than seven times 2008 earnings, a discount to peers. With the Filton purchase further bolstering the aerospace business, this appears unwarranted. (Source: FT.com)
05 Aug 08. Mubadala, Abu Dhabi’s increasingly active state investment vehicle, is expecting to announce new deals in the next four to six weeks as it looks to take advantage of the continuing financial turmoil in global markets, including
opportunities in the depressed US real estate market. Waleed Ahmed Al-Morkarrab Al-Muhairi, Mubadala’s chief operating officer, told the Financial Times the company was looking at heavy industrial type deals, as well as real estate. “I think this is a very defining moment right now. Debt markets are a little thin, capital markets are very volatile and so there is opportunity there, and we are spending a lot of time making sure we deploy wisely and that we build the right businesses and partner with the right businesses,” Mr Muhairi said. “We have so many deals on the screen right now that it is very difficult to say from a sequencing perspective what we are going to hit, but we are looking quite heavily at the industrial space, so heavy industrial type of deals [and] real estate, especially in the United States.” He declined to provide further details, but said any new deals would be done through a “very particular lens” that tied in with Mubadala’s mandate of helping to diversify oil-rich Abu Dhabi’s economy. (Source: FT.com)
07 Aug 08. Cobham Interim Results. Implementation of growth strategy is driving results.
* Revenue growth of 14.3% across Technology Divisions
* Underlying EPS growth of 22% (19.% at constant translation exchange)
* Cash conversion at 107%
* 10% increase in interim dividend
* Operating performance continues to improve
Distinctive technologies and capabilities provid