GKN Share Discussion Threads

[jbarker5555] 20/12/2011 19:06

Needs to be nearer 2 quid before Gumberr comes out to play! :)

[ignoble] 20/12/2011 17:35

Where's GUMBERR ?

[valedo] 20/12/2011 17:01

very quiet here recently. here's a lengthy bit of reading to compensate.

PRESS RELEASE: Fitch Affirms GKN Holdings at 'BBB-'; Outlook Stable

The following is a press release from Fitch Ratings:

Fitch Ratings-Frankfurt/London-20 December 2011: Fitch Ratings has affirmed UK-based GKN Holdings plc's (GKN) Long-term Issuer Default Rating (IDR) and senior unsecured ratings at 'BBB-'. The Outlook on the Long-term IDR is Stable. The agency has also affirmed GKN's Short-term IDR at 'F3'.

The Stable Outlook reflects Fitch's expectation that GKN's financial performance will continue to improve modestly, with effective cost management offsetting rapidly increasing raw material prices and the effect of a potential toughening environment in 2012, as well as achieving stronger EBITDAR margins and stronger positive free cash flow.

GKN managed to improve its EBIT margin to 8.3% in H1 2011 from 7.5% in H1 2010, excluding one-off charges, despite a significant rise in raw material costs since 2010. Fitch expects that the acquisitions of GETRAG (automotive drive line segment) and STROMAG (land systems segment) for GBP450m in September 2011 will further contribute to enhanced group EBITDAR margins of 14% by 2013.

Fitch considers GKN's automotive driveline segment with a 11% EBITDA margin as the most volatile in GKN's portfolio and most exposed to any economic slow down in 2012. However, this risk is mitigated by the Driveline segment originating 35% of its 2010 sales in Asia, a region that continues to show high growth potential in 2012. The recovering late cycle European agricultural sector is likely to be the main driver for GKN land systems' continuing profitability improvement in 2012 with EBITDA margin likely to exceed 14%. Powder metallurgy products are in high demand, especially in North America, both by automotive and industrial clients. Fitch expects that even with an automotive industry slow down, this segment will maintain its EBITDA margin at 11 - 12%.

Fitch expects the CFO margin to increase above 9% in 2012, and assumes that the company will maintain an increased capex margin of about 5% of revenues for 2012 and 2013. Fitch expects a positive group free cash flow margin of 2% or better in 2012 and after, considering a dividend outflow of about 40% of the previous year's earnings.

The near-term growth prospects for aerospace, GKN's most profitable and stable segment, are curtailed by limited defence spending in GKN's key markets. This limitation may be mitigated by strong growth in the commercial airline business after 2012. GKN Aerospace has an order back log of GBP10 bn, with new orders of GBP1.5bn in nine months YTD 2011. Fitch expects that the EBITDA margin of about 14% achieved in FY10 is sustainable.

After fully drawing on a previously committed facility of GBP80m by EIB in June 2011 and after negotiating a new GBP502m five-year bi-lateral revolving facility in September/November 2011, GKN now has sufficient headroom to finance any foreseeable liquidity bottle necks in 2012 and 2013. The expected end-2011 cash balance of around GBP200m is sufficient to finance any intra-year operational needs of the group. Fitch expects FFO based lease adjusted gross leverage to decline to 1.8x and to 1.6x following the repayment of two debt facilities maturing in 2012 and 2013, respectively.

Fitch believes that positive rating pressure within the coming 12 to 18 months could result from a successful resolution of the eurozone crisis, confirmation of the successful integration by GKN of the two newly acquired companies and increasing exposure by GKN to the emerging markets. In particular, positive rating action may occur if a sustained EBITDAR margin of 13% or better, minimum FCF of 2% of revenues or better, FFO based lease adjusted gross leverage sustained at comfortably below 2.0x, and cash flow from operations to sales of 8.5% or better is achieved. Negative rating pressures may result from FFO based lease adjusted gross leverage increasing above 2.5x, negative FCF and large debt-funded acquisitions and/or aggressive shareholder returns weakening GKN's financial flexibility.

[jon827] 15/12/2011 08:43

:) nice director buy the other day 30k

[ignoble] 15/12/2011 08:32

Well spotted , lol ...

[jon827] 15/12/2011 08:30

1500 is a nice number

[ignoble] 08/12/2011 10:38

Now that would be nice !

[valedo] 07/12/2011 09:58

you mean back above 240

[ignoble] 07/12/2011 08:26

C'mon me Beauty ....back above 200p please ...

[valedo] 04/12/2011 17:45

E, sunday times business section. Will probably impact share price a bit tomorrow.

[electronica] 04/12/2011 17:00

valedo

Got a source & a link for that story?

[valedo] 04/12/2011 16:23

Airbus deal threatens 800 jobs
Britain's GKN was favourite to win a parts contract for the planemaker, but it now looks set to be handed to a South Korean rival
A plan by one of Britain's biggest engineering firms to create 800 jobs in Bristol has been scuppered after losing a key contract to build parts for a new Airbus jet to a South Korean rival.

GKN, the £3 billion aerospace and car parts manufacturer, had been favourite to land a contract to make high-tech wing components for Airbus's revamped A320 at its plant in Filton.

Despite frantic last-ditch negotiations between GKN and Airbus over the weekend, the planemaker now looks set to hand the lucrative deal to Korean Aerospace Industries instead. The lost contract deals a heavy blow to the ambitions of the coalition government, which has pledged to boost the importance of engineering and manufacturing to the economy.

It is understood that a falling out between GKN and Airbus is at the heart of the move to hand the work to Korean Aerospace Industries.

One source described the relationship between GKN and Airbus as "adversarial" amid suggestions that the planemaker was not happy with some of the work GKN had done on the A350 mid-range plane.

GKN and Airbus UK declined to comment.

[bluebelle] 01/12/2011 09:31

RogerRail - 1 Dec'11 - 08:43 - 1492 of 1492
Forget TO talk

I did. A long time ago !

[rogerrail] 01/12/2011 08:43

Forget TO talk - the most likely source of TO of UK engineers is from US but just look a the valuations of GKN's peers such as Axle and Dana over there and there is no incentive to takout GKN. Even in Germany, I heared the other day that PE for Porsche is 4.9.

[bluebelle] 30/11/2011 14:14

Given the length of time there has been bid talk you'd think that if there was any substance to it, it would happen soon : likely bidders flush with cash; plenty of institutional cash available also, and, on any meaningful assessment, GKN seriously undervalued relative to its benchmark stocks.

[valedo] 30/11/2011 09:00

yes I can see this going higher on bid rumours. It'll happen sooner rather than later I suspect. Mind you these bid rumours have been flying around for quite a while

[thorpematt] 30/11/2011 00:42

Bid rumours doing rounds :



P.S. Ridiculously cheap now, almost forgot by how much - almost worringly so. Another UK company bites the dust?

[electronica] 24/11/2011 18:33

Some sense from Evolution published in the UK Analyst's newsletter today .....

"Evolution Securities reiterated its "buy" recommendation for GKN (GKN), with a target price of 310p. The engineering group has seen no material change in trading conditions since 19th October, but the broker notes that the shares have fallen by around 15% since then. Evolution attributes this to the market assuming a slump in global car production similar to 2009, while the industry expects demand to grow by 5%. Additionally, accelerated growth in aerospace leads the broker to believe that the shares are materially undervalued. The shares grew 3.6p to 168.9p."

[nickperry68] 23/11/2011 11:51

Anyone else think/hope that 170 might just be the bottom?

[rogerrail] 14/11/2011 15:33

Report in Telegraph , Wheels division for sale.


Suppose it makes sense, GKN may be looking to reduce borrowings following recent purchases.

[lyntwyn] 31/10/2011 16:35

another fall like this tomorrow will make a neat little trade back up,-again

[electronica] 27/10/2011 11:29

powerpack

Takeover of Italy!

S&P downgrades Italy rubbish but upgrades GKN debt ........

"S&P Revises GKN Outlook To Positive; 'BB+' Ratings Affirmed

The following is a press release from Standard & Poor's:

-- Credit metrics at U.K. engineering group GKN Holdings PLC (GKN) have
been at the strong end of the range we consider commensurate with the 'BB+'
rating for the past 12 months.
-- In 2011, we believe demand in the global auto and civil aerospace
markets should offset a moderate decline in military business, enabling GKN to
generate EBITDA margins of about 10% and positive free operating cash flow of
at least GBP50 million.
-- In our opinion, recent acquisitions demonstrate GKN's continued
aggressive financial policy. However, we believe that the group's focus on
cash flow management adopted in the downturn should allow GKN to maintain its
improved credit metrics.
-- The positive outlook reflects our view of a one-in-three possibility
of a rating upgrade in the next 12 months.

LONDON (Standard & Poor's) Oct. 27, 2011--Standard & Poor's Ratings Services
said today that it revised its outlook on U.K. engineering group GKN Holdings
PLC (GKN) to positive from stable. At the same time, the 'BB+' long-term
corporate credit and unsecured debt ratings on GKN were affirmed.

The recovery rating of '4' on GKN's unsecured notes is unchanged.

The outlook revision reflects our opinion that GKN's efficiency has improved
and that this should support the group in 2012 when growth among most of its
end markets is likely to slow compared with 2011. In addition, we believe that
GKN's financial policy is now more focused on maintaining stable cash flows,
albeit it still aggressive in terms of acquisitive growth. We continue to view
GKN's business risk profile as satisfactory and its financial risk profile as
significant.

We believe that the ratings on GKN could be raised if the group posts a steady
improvement in credit measures supported by structurally higher profitability
and a more conservative, cash-flow focused financial policy. We believe that
although GKN's markets will likely grow at a materially slower pace in the
next 12 months than seen in 2010 and the first half of 2011, the group should
be able to leverage its strong market positions in driveline end markets, and
benefit from the pick up in civil aerospace production schedules. Against a
backdrop of modest growth in its land systems division, this should allow GKN
to more than offset mildly deteriorating performance in the defense segment.

We could revise the outlook to stable or lower the rating should GKN fail to
sustain profitability high enough to allow cash generation to offset its
higher debt burden resulting from recent acquisitions. This could occur if the
sales growth we anticipate does not materialize, or if GKN is not able to
control its cost base at a sufficiently low level. The rating could also come
under pressure if the group's financial policy were to revert to its
aggressive pattern, leading to a generous dividend policy, further
acquisitions, or share buybacks that push debt materially higher than the GBP1.8 billion we estimate GKN would have by the end of 2011."

[powerpack] 27/10/2011 09:48

Takeover by Italy??