Aerospace and automotive engineering giant GKN has announced a five per cent fall in first-half profits before tax, goodwill amortisation and exceptional items. Compared with the same period in 2001, profits were down by £7m to £136m.

The reported results did not include contributions from Tochigi Fuji Sangyo (TFS), the Japanese automotive business in which GKN bought a 33 per cent stake in March for £29m. Because it is a publicly-quoted company, TFS's results will be included in the year-end figures, three months in arrears.

A slump in European vehicle production of five per cent was offset by a six per cent rise in North American production, leading to a one per cent improvement overall with “encouraging” half-year sales at £1516m, £22m ahead of 2001. In what GKN describes as “a mixed half-year” OE sales to Fiat and General Motors in Europe and Ford in North America suffered significantly, while BMW in Europe and GM and the Japanese manufacturers in the USA and Canada boosted order books.

GKN's aerospace division managing director Kevin Smith is to succeed Marcus Beresford as GKN chief executive from January 1, 2003. Beresford retires at the end of December. Awarded the CBE in the 1997 New Year Honours, Smith has been on the boards of Saab, Panavia, Eurofighter, Sepecat and Matra.