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27 Jul 17. Would Rheinmetall MIV win with Boxer trigger a bid for BAE UK Land Systems? BAE Systems remains tight lipped about its aspirations in the UK’s MIV 8×8 Requirement. Initial suggestions were that it was considering teaming with Patria, but this does not appear to be the case. Sources suggest that BAE has a right to build Boxer thru the AlvisVickers deal as AlvisVickers was a partner in the original ARTEC Consortium. Thus a Boxer win would increase the value of BAE UK Land Systems which would not require such a large write down as when the talks were suggested about 5 years ago. Rheinmetall would buy BAE UK Land Systems, without the Radway Green and Glasoced ammunition plants. That would also put Rheinmetall in line to win the Challenger 2 C2 Life Extension Programme (LEP). Other sources suggest that the explosion in the Challenger 2 which killed two soldiers may have been caused because the crews had to use one tank as the others were unserviceable. The same source suggested that the whole fleet is unserviceable having been left to rot for some years thus the final number for the LEP may be more than 154.
26 Jul 17. GKN plc Results Announcement for the six months ended 30 June 2017 Group Highlights(*) • Another period of growth delivering earnings momentum
o Sales up 15% (organic sales up 5%) and management eps increased 14%
o Profit before tax (management basis) up 14% to £393m (2016: £344m), helped by currency
o Reported profit before tax £559m (2016: £182m)
o Free cash flow of £116m (2016: £40m)
o Interim dividend increased 5% to 3.1 pence per share
o UK defined benefit pension closed to future accrual, £250m lump sum payment planned to address the deficit and reduce future deficit recovery payments
• Continued investment in technology
o Strong technology pipeline; innovation recognised by customer and industry awards
o Focus on electrified drivetrains and additive manufacturing (3D printing)
o Industry 4.0 – expect to reduce cost and increase margin Management basis
Commenting on the results, Nigel Stein, Chief Executive of GKN 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.”
• Headline sales growth of 11%, reflecting a benefit from currency translation and organic growth in line with the market
• Organic sales growth of 1%, comprising slower commercial sales (-3%) more than offset by an increase in military (+15%)
• Margin of 9.3% (2016: 9.9%), primarily impacted by higher UK pension costs, lower profits resulting from asset write-downs at SABCA (equity accounted investment) and programme transitions and operational challenges in North America, partly offset by a benefit from programme pricing adjustments
• New and replacement work packages won of c.$2.3bn over contract lives GKN Driveline
• Organic sales growth of 8%, significantly ahead of global auto production, helped by our broad geographic footprint and increased content per vehicle
• Trading margin of 7.8% (2016: 7.9%, restate