Troubled engineer GKN has been "Melrosed" says new owner

Melrose, the engineering investment group behind GKN, today said all but one of its 12 factories in China were back up and running after the coronavirus and its sales into Western markets were so far unaffected by the flu.

However, chief executive Simon Peckham said: “There is no drop in the West yet but it is probably coming.”

He said car factories rely on multiple and complex supply chains: “So they may be getting their drivetrains from us OK, but if their wheels haven’t arrived, they can’t build the car.”

Melrose said its annual results showed the turnaround of GKN was kicking in well, 18 months in. “It has been Melrosed,” said Peckham. Elsewhere, it put Nortek Air Management up for sale.

Margins held up in automotive despite sales falling in line with the industry; cash generation rose and around £100 million had been taken out of working capital. Underlying profits beat forecasts, coming in at £889 million against £672 million before.