LONDON: Car and plane parts maker GKN said a strong performance from its autos business was behind a 15 percent rise in 2011 profit, as sales of luxury cars rose and demand in China remained strong.
GKN on Tuesday reported pre-tax profit of 417 million pounds ($660.57 million) on revenue 13 percent higher at 6.11 billion pounds.
"Demand for premium autos remains strong and we feel that will be the case in 2012 China is the biggest driver of that but North America has come back strongly too," GKN Chief Executive Nigel Stein told reporters.
"Global car production should rise about 5 percent this year and we expect to deliver more growth on the back of that."
GKN's auto unit makes products such as drives-hafts, chassis, axles and lighter auto components.
Revenue at the automotive business, which makes up almost two-thirds of group sales, rose 10 percent to 2.68 billion pounds in 2011.
BMW, Audi and Volkswagen, who are among GKN's biggest customers, said 2011 sales were boosted by demand for luxury cars in China and expect this trend will persist.
BMW expects the global market for premium cars to grow at more than 8 percent this year, more than twice as fast as the overall car market.
Shares in GKN, which have risen 13 percent in the last month, were 3 percent lower at 223 pence by 0840 GMT, valuing the company at around 3.5 billion pounds.
Jefferies analyst Sandy Morris said "there may well continue to be quite different assumptions made about global light vehicle production " in 2012 but added that "sales growth in its automotive businesses exceeded that in global light vehicle production (3 percent) last year, which should continue to work in GKN's favour in 2012."
GKN, which also makes airframes for plane-makers Airbus and Boeing, said its aerospace unit delivered a 4 percent rise in annual sales.
Analysts expect GKN will benefit in the long term now deliveries of Boeing's new 787, in which GKN is heavily involved, have started, while production of the Airbus A350 has also kicked off.
"The overall aerospace market remained positive in 2011 driven by a recovering civil aircraft market and a generally stable defence sector," said Stein.
GKN was expected to report an average 2011 pre-tax profit of 412 million pounds, according to a Thomson Reuters I/B/E/S poll of 12 analysts. The company increased the total dividend by a fifth to 6 pence per share.
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