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GKN prelims

Practical discussions about equity High-Yield Portfolios (HYP) for income
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Davidsb
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GKN prelims

#35055

Postby Davidsb » February 28th, 2017, 10:53 am

Group Highlights

Another year of growth delivering earnings momentum
o Sales up 22% and management eps increased 12%
o Continued market outperformance with organic sales up 2%
o Strong performance from Fokker Technologies ("Fokker") in first full year of ownership
o Profit before tax (management basis) up 12% to £678 million (2015: £603 million), including £39 million restructuring charge
o Reported profit before tax £292 million (2015: £245 million)
o Free cash flow of £201 million (2015: £370 million), lower due to the absence of a significant customer advance that benefited 2015
o Momentum of new business wins continues to support growth ahead of markets
Sharpening the focus
o Group-wide fixed cost reduction programme resulted in a restructuring charge of £39 million - annualised savings of £30 million
o Disposal of Stromag completed; GKN focused on three core divisions and two end markets
o Capital allocation to be progressively directed towards productivity improvement in core aerospace and automotive divisions
Continued investment in technology
o Strong technology pipeline; innovation recognised by customer and industry awards
o Primary focus - electrified drivetrains and additive manufacturing (3D printing)

Commenting on the results, Nigel Stein, Chief Executive of GKN 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."


And, getting to the important part:-

Dividend

The Board has decided to recommend a final dividend of 5.9 pence per share (2015: 5.8 pence per share). The total dividend for the year will, therefore, be 8.85 pence per share (2015: 8.70 pence per share). The Group's objective is to have a progressive dividend policy reflecting growth in earnings per share and free cash flow generation. The final dividend is payable on 17 May 2017 to shareholders on the register on 7 April 2017. Shareholders may choose to use the Dividend Reinvestment Plan (DRIP) to reinvest the final dividend. The closing date for receipt of new DRIP mandates is 25 April 2017.


I have held GKN since October 2006, and took up my allotment in the July 2009 rights issue, ending up with 1.1% of my portfolio's value. The company is bumping up against my lower limit of dividend acceptability at 2.4%, because the share price has more than doubled against my weighted average cost.

Breelander
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#35081

Postby Breelander » February 28th, 2017, 12:06 pm



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