UPDATE 1-GKN Q1 profit up 22 pct, changes pension scheme


* Q1 pretax profit 71 mln stg vs 28 mln stg loss

* Q1 sales up 22 pct to 1.3 bln stg

* Cuts scheme funding liabilities by 80 mln stg

(Adds details)

LONDON, April 27 (Reuters) - British aerospace parts maker GKN swung to a first quarter profit, boosting hopes of a recovery in the aerospace and automotive supply sector, and said it had improved the funding position of its UK pension scheme.

GKN, which produces airframes, engine structures and components for planemakers Airbus and Boeing , on Tuesday reported a pretax profit of 71 million pounds ($109.8 million) in the first three months of 2010 compared to the 28 million loss it made in the same period last year.

GKN said sales rose 22 percent to 1.3 billion pounds and that the outlook for its major markets was mainly positive.

"In aerospace, the U.S. defence market should remain solid and recent commercial aircraft customer schedule increases have removed uncertainty around second half demand," said GKN's Chief Executive Kevin Smith.

"GKN Aerospace is expected to deliver another strong performance, with margins improving steadily from the first quarter and reaching double digits for the year as a whole."

The company is, on average, expected to post a pretax profit of 208 million pounds for the year, according to a Thomson Reuters I/B/E/S poll of 11 analysts.

GKN also said it had implemented a number of actions to improve the funding position of its UK pension scheme and had reduced future scheme funding liabilities by 80 million pounds.

Shares in GKN, which have risen a quarter in the last three months, closed at 152.60 pence on Monday, valuing the business at around 2.3 billion pounds.

(Reporting by Rhys Jones; editing by Paul Sandle)



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