Qioptiq logo Raytheon


01 Aug 10. Rolls-Royce has become one of the first companies to produce an audit of how its activities add value to the UK economy, in findings that will add impetus to the debate about the wider impact of high-value manufacturing and engineering. An analysis by the Oxford Economics consultancy found that output linked to activities by the aero-engine company last year added up to 0.56 per cent of UK GDP – a huge amount given that its workforce accounts for only about one in 3,000 of the UK population. The analysis – which says the total impact of Rolls-Royce in 2009 came to £7.8bn of value-added output, out of Britain’s total GDP of £1,400bn – was paid for by the company as a way to stimulate debate about the role of UK technology.
Sir John Rose, chief executive, who has a good relationship with David Cameron, wants the prime minister to sanction an industrial strategy that involves government support for technology-based enterprises, though he concedes that money for new initiatives is likely to be tight. Last year the Labour government courted controversy by announcing a £151m “advanced manufacturing programme” in which more than 80 per cent of the money was channelled through Rolls-Royce. The study was welcomed by Hermann Hauser, a venture capitalist who advised the last Labour government on how Britain could maximise its technological potential.
“It’s crucial to convey that £1 spent on designing a novel kind of aero engine is worth a lot more [to the UK economy] than £1 spent employing a hairdresser or digging up coal,” he said. Mr Hauser recently briefed Vince Cable, business secretary, on how government technology programmes could help the economy. A key point of the analysis is that of Rolls-Royce’s total impact on the economy, only a fifth is attributable directly to its British workforce, with much of the rest coming from “multiplier” effects linked to its technology ideas entering the rest of UK economic activity. These ideas can range from former Rolls-Royce workers leaving to start their own ventures to suppliers working with the group learning about new processing techniques. The study’s methodology has its critics: some economists say Oxford Economics over-estimates the “multiplier” effects of technology, though they concede these connections exist. (Source: FT.com)

03 Aug 10. GKN plc Results Announcement for the six months ended 30 June 2010. Group results reflect the strong recovery in Driveline, Powder Metallurgy and Land Systems sales relative to a weak first half of 2009, a good performance in Aerospace and the on-going benefits from restructuring:
– sales up 25% (£536m) to £2,701m.
– trading profit of £202m, up £177m, and trading margin of 7.5%.
Driveline sales up 47% and 6.9% trading margin.
Powder Metallurgy sales up 65%, with 6.9% trading margin.
Aerospace sales 5% lower, trading margin, however, increased from 10.3% to 10.9%.
Land Systems sales up 9% and 5.3% trading margin.
New business:
– more than $1bn of long term contracts for aero engine products;
– major driveshafts capacity expansion to meet growth in demand.
Positive free cash flow of £107m (2009: £23 m).
Net debt down £98m to £202m (31 December 2009: £300m).
Actions to provide certainty to pension contributions and a reduction in benefits reduces UK pension accounting deficit.
Dividend payments restored with an interim of 1.5p per share (2009: no interim dividend).
Sir Kevin Smith, Chief Executive of GKN plc, commented: “GKN’s recovery has moved into another gear and we are continuing to build on our global
market-leading businesses. The first half trading environment has seen an improving trend for GKN’s Driveline, Powder Metallurgy and Land Systems
businesses whilst the Aerospace market has continued to hold up well. The benefits of our restructuring actions have enabled us to improve our margins and the continued focus on cash generation has resulted in a significant improvement in the net debt positi

Back to article list