Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Jefferies has maintained its 'buy' rating and 220p target price for engineering giant GKN, saying that the shares could be in for a 'significant' jump. "We sense that sentiment towards GKN is still being heavily swayed by caution about global light vehicle production, but GKN is likely to be able to generate at worst a robust performance in 2H12 and 2013, in our view," Jefferies said. "Our simple logic is that if earnings come to be viewed as robust, attention could switch to how earnings might increase against a stable or more positive backdrop. We believe that could lead to significant share price performance."
Investec has raised its target price for engineering group GKN from 225p to 245p and maintained its 'buy' rating for the stock, saying that the shares are 'flying into a re-rating'. "With almost 40% of profits now derived from higher-quality aerospace markets, the £633m acquisition of Volvo Aero (VA) materially enhances the GKN investment proposition, in our view," the broker said in a research note on Friday.
In the Telegraph, the Questor column is very happy with engineering firm GKN’s takeover of Volvo’s engine division for 633m pounds. The deal pushes the group into becoming one of the top 10 suppliers to the commercial aircraft industry. GKN also trades at a relatively modest 8.3 times earnings. Questor says buy.
Investec has reiterated its 'buy' recommendation for engineering group GKN after the news that it has agreed to acquire Volvo Aero. "The acquisition of Volvo Aerospace has been announced on terms that are better than anticipated in the media," the broker said in a research note on Thursday. "Compared to some predictions, the cost (enterprise value) of £633m is lower, the equity raise is lower (5% placing), expected returns are higher (return on invested capital, with operating margins to be boosted by c£25m of cost savings)."
Positive Points: GKN’s Volvo Aerospace acquisition will help the engineering group to benefit from global growth in airlines’ aircraft orders, boosting its exposure in civil aerospace. The group's Driveline unit, which makes products such as driveshafts, chassis and axles reported underlying sales growth during April and May of 10%, with year to date margins running at similar levels to 2011. Within Aerospace, underlying sales grew 9%, ahead of expectations due to a variation in delivery schedules. GKN Land Systems saw sales increase 16%, although the company said the rate of growth is slowing reflecting weaker European industrial markets. The diverse engineering group has operations in more than 25 countries, has around 45,000 employees in subsidiaries and joint ventures and sales of £6.1 billion as at 31 December 2011.
Negative Points: GKN faces risks from volatility in vehicle production, continuing pricing pressure from car assemblers and warranty claims. As at 31 March, net debt rose to £625 million (31 December 2011: £538 million), reflecting last year's acquisitions and the expected seasonal increase in working capital requirements. The multinational company is exposed to currency exchange rates and raw material prices.
Financial Highlights: GKN advised that its performance in April and May had continued in line with the first quarter with group sales for the five months to 31 May 2012 increasing 17%, with underlying sales up 9%. Net debt at 31 March 2012 stood at £625 million (31 December 2011: £538 million), reflecting higher capital expenditure to support growth in the business, added management. The Board anticipates increasing the interim dividend by 20% to 2.4 pence per share, when half year results are announced on 31 July.
Trading statement: GKN has today agreed to buy the aerospace division from Swedish based Volvo Group for £633 million. The engineering company is one of the world’s biggest makers of structures and products used in aircraft manufacture, but it does not produce the advanced engine parts Volvo Aero specialises in. The deal, which is expected to be completed during the third quarter, subject to regulatory approval, is expected to significantly enhance GKN Aerospace's engine components business. The transaction will be funded by new debt and a placing of £140 million, which represents approximately 5% of GKN's current market capitalisation. Overall, GKN said its business performance in April and May had continued in line with the first quarter of the year. Group sales for the five months to 31 May increased 17%, with underlying sales up 9%. The Board continues to expect that 2012 will be another year of good progress. GKN is expected to announce half year results on 31 July
GKN plc is a multinational engineering company headquartered in Redditch, United Kingdom. The company was formerly known as Guest, Keen and Nettlefolds and can trace its origins back to 1759, the birth of the industrial revolution. GKN is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index
GKN: Arden Partners upgrades to buy.
Investec has reiterated its 'buy' recommendation for engineering group GKN after the news that it has agreed to acquire Volvo Aero. "The acquisition of Volvo Aerospace has been announced on terms that are better than anticipated in the media," the broker said in a research note on Thursday. "Compared to some predictions, the cost (enterprise value) of £633m is lower, the equity raise is lower (5% placing), expected returns are higher (return on invested capital, with operating margins to be boosted by c£25m of cost savings)."
BUY RATING: Killik initiates buy on GKN Source: http://www.stockmarketwire.com/article/4369423/FLASH-Killik-initiates-buy-on-GKN.html OUT PERFORM CONSENSUS: The Financial Times indicates that "as of May 11, 2012, the consensus forecast amongst 14 polled investment analysts covering GKN plc advises that the company will outperform the market. This has been the consensus forecast since the sentiment of investment analysts improved on Apr 12, 2012. The previous consensus forecast advised investors to hold their position in GKN plc." Source: http://markets.ft.com/Research/Markets/Tearsheets/Forecasts?s=GKN:LSE P.S. Here's a couple of links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?threadid=252803 http://www.euroinvestor.com/community/discussionthread.aspx?threadid=253089
GKN WILL BE BUSY PRODUCING AIRCRAFT STRUCTURES FOR THE JOINT STRIKE FIGHTER FOR MONTHS TO COME GKN Aerospace of Britain says it has started production of precision-machined titanium structures for BAE Systems, a principal subcontractor to Lockheed Martin, for the F-35 Lightning II Joint Strike Fighter. The F-35, touted as the most advanced next-generation combat aircraft, is multinational funded and will come in several variants, including a vertical takeoff and landing one. GKN Aerospace said it will be produce 10 titanium structures for the aft and tail sections of the aircraft. "The ability to machine highly complex titanium parts such as these for the JSF is a core competency for GKN Aerospace globally and one which our team at Filton (a plant in the United Kingdom) have employed on commercial airframes for a number of years," said Phil Swash, chief executive officer and president of GKN Aerospace-Aerostructures. "This work package sees their expertise now being applied to military aircraft, extending the skills base at the site in a direction that is at the very heart of our long-term aero-structures strategy." Details on the parts to be produced were not disclosed. GKN Aerospace acquired the Filton facility, located in South Gloucestershire, nearly four years ago and spent more than $27 million on its modernization, which includes precision manufacturing equipment. The company estimates its involvement in the F-35 program generates about $2.5 million in revenue per aircraft. In addition to titanium structures for the plane, GKN facilities also design and supply all-composite engine front fan case and embedded electro-thermal ice protection systems, among others. Source: http://www.upi.com/Business_News/Security-Industry/2012/05/10/GKN-Alenia-get-production-work/UPI-80581336679703/
GKN SEES GROWTH ACROSS ALL SEGMENTS IN Q1 GKN has recorded a 17% increase in its first quarter (Q1) sales to to £1742 million, bringing pre-tax profit to £125m, also up 17%, as the company benefits from improved market conditions and strong performance from its 2011 acquisitions. Nigel Stein, CEO, says: “GKN has made an excellent start to the year with sales up 17% and margin improvement in all four divisions. Last year's acquisitions, Gertrag Driveline Products and Stromag, have been successfully integrated an both made a strong contribution. “Despite some macro-economic uncertainty, we expect 2012 to be a year of goo progress for GKN based on our market leadership positions, advanced technology and extensive global foot-print.” GKN was partially lifted by the 4% growth in global light vehicle production during the quarter to 20.4m vehicles Japanese automotive production grew 49%, North American 15% and Indian 5%. This more than offset the 10% decline in Brazil, 8% in Europe and 4% decline in China. POWDER METALLURGY UP 9% GKN's Powder Metallurgy division saw a 9% increase in sales to £236m, driven by the growth in the North American automotive production and new programmes in the division. SALES BY SEGMENT Driveline: £847m, +26% Aerospace: £370m, +5% Land Systems: £264m, +20% Powder Metallurgy: £236m, +9% Source: http://www.metal-powder.net/view/25250/gkn-sees-growth-across-all-segments-in-q1/
GKN DRIVELINE IN CHINA - GROWTH ON TRACK Employing 250 workers, the new 13,900 square-meter plant in Changchun will have the capacity to build one million sideshafts a year and a new 10,000-square-meter, phase-two expansion of the plant will increase its capacity to four million sideshafts within the next five years. This follows the opening in 2009, of a new plant in Wuhan that produces sideshafts for automakers in central China. The 25,000 square-meter plant is expected to produce two million sideshafts by the end of the year. GKN Driveline continues to regard China as a key growth market for the company, forecasting vehicle production in China to reach 15 million units by 2014. The company's production capacity for CVJ (constant velocity joint) systems and AWD (all-wheel-drive) systems in China is expected to grow by 50 percent in the next three years. "China is a key market for our overall growth strategy," said Marc Vuarchex, managing director, GKN Driveline Asia Pacific. "With our CVJ and AWD systems production along with our industry-leading electric-vehicle technology and plans to produce new, low-cost systems for China's small-car market, we will increase our number of employees by over 30% in China over the next four years." Additional investment will be made over the next three years in Shanghai as well. The company is investing 94 million RMB to expand its research and development center in Shanghai which will lead to the development of prototyping facilities, as well as materials and metrology capability to allow products to be developed for the domestic Chinese market. Here is a link to the full article: http://www.supplychaindigital.com/press_releases/gkn-driveline-in-china-growth-on-track Here is a video presentation of GKN in China: http://www.gknchina.com/
THE TELEGRAPH'S BUSINESS BULLET 10:12AM BST 18 Apr 2012 Business Bullet on risk-averse markets, Tesco's £1bn re-vamp, GKN's profit growth and the madness of EU bankers Use the slider to get to the GKN story, 1.50 min into the video: http://www.telegraph.co.uk/finance/financevideo/businessbullet/9211010/Business-Bullet-on-risk-averse-markets-Tescos-1bn-re-vamp-GKNs-profit-growth-and-the-madness-of-EU-bankers.html
Positive Points: The group's Driveline unit, which makes products such as driveshafts, chassis and axles, reported a 28% rise in profit in the first three months of 2012. GKN's revenues were also boosted by the acquisition in 2011 of Stromag, which makes components such as electro-magnetic brakes and hydraulic clutches, and Getrag Driveline, a privately owned German business that supplies all-wheel-drive transmission systems. Aerospace revenues were £370 million, up 5% year on year, supported by increased production of civilian aircraft such as Boeing’s 787. The diverse engineering group reported sales growth in all four of its divisions. Audi, BMW and Volkswagen are among GKN's biggest customers
GKN faces risks from volatility in vehicle production, continuing pricing pressure from car assemblers and warranty claims. Net debt rose to £625 million (31 December 2011: £538 million), reflecting last year's acquisitions and the expected seasonal increase in working capital requirements. The multinational company is exposed to currency exchange rates and raw material prices.
Financial Highlights: GKN's first-quarter trading profit rose 19% to £142 million. Revenue increased 17% at 1.74 billion pounds, helped by the contribution of acquisitions made last year. Net debt at 31 March 2012 stood at £625 million (31 December 2011: £538 million), reflecting higher capital expenditure to support growth in the business, added management.
Interim statement: The engineering company reported that good progress had been made with sales for the first 3 months of 2012 totalling 1.74 billion pounds, a 17% increase over the comparable period in 2011. GKN’s acquisitions last year, Getrag Driveline Products and Stromag, were reported as being successfully integrated and both made a strong contribution. Despite some macro-economic uncertainty, management expects 2012 to be a year of good progress, based on its market leadership positions, advanced technology and extensive global footprint. The Group intends to issue its half year results announcement on 31 July 2012. Financial Highlig
GKN plc is a multinational engineering company headquartered in Redditch, United Kingdom. The company was formerly known as Guest, Keen and Nettlefolds and can trace its origins back to 1759, the birth of the industrial revolution. GKN is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
Meanwhile, Jefferies reiterated its buy recommendation for GKN on Thursday as well, saying that the read-across from last week's takeover of Umeco (from US-listed Cytec Industries) "is perhaps a timely reminder that within GKN, the Aerospace division may represent a store of significant incremental value for shareholders at some point."
Credit Suisse upgraded its rating on the firm on Thursday (April 12th) from neutral to outperform, highlighting the stock's recent underperformance. The group has made headlines in recent months due to the rumoured acquisition of aircraft engine group Volvo Aero, however over the last month (prior to Thursday), the share price had fallen by 11% and underperformed the sector by 4%. The broker said that any concerns surrounding the acquisition are now discounted in the current price.
Shares in automotive and aerospace engineer GKN were performing strongly ahead of the firm's trading update later this week, providing a lift to the automobiles and parts sector on Monday afternoon.
"Shares in GKN have been hurt by speculation it might need to raise additional funds in order to finance a possible acquisition of Volvo's aircraft business. Following that decline, Credit Suisse upped its rating on the blue-chip stock to "outperform" from "neutral". "We upgrade our recommendation with concerns over the acquisition of Volvo Aero in our view discounted in the current price," said analysts. "There is no certainty that GKN will acquire Volvo Aero Engines but with MTU having now reportedly exited the bidding process (according to press reports) GKN is in pole position." The Telegraph Target price of 240p apparently