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UPDATE 1-GKN CEO to retire, aerospace head to lead UK engineering firm
September 14, 2017 / 10:47 AM / 2 months ago

UPDATE 1-GKN CEO to retire, aerospace head to lead UK engineering firm

* New CEO leads GKN aerospace unit, joined in North America

* Finance director to be replaced by M&A head

* GKN Aerospace could stand alone, say Jefferies analysts (Adds details, analyst comments, updates shares)

By Noor Zainab Hussain

Sept 14 (Reuters) - GKN said on Thursday Chief Executive Nigel Stein would retire at the end 2017 to be replaced by the head of aerospace, a unit the British engineering group has said was growing faster than the rest of the market.

Kevin Cummings, who joined the company in North America in 2008 and who has been head of the aerospace division since 2014, would take over from Stein on Jan. 1, the company said, adding that Finance Director Adam Walker would also leave the firm.

“GKN Aerospace is now of a scale and maturity where it could stand alone. We believe the deckchairs are moving – and it is ultimately likely to be more than a shuffling,” Jefferies analysts said in a research note after the move.

The analysts at Jefferies, which has a “buy” rating on GKN, said Thursday’s announcement by Sweden’s Autoliv , which competes with GKN in the automotive business, could encourage GKN to review its strategy.

“That Autoliv believes the separation can create additional value must concentrate minds at GKN,” the analysts wrote.

GKN, which supplies components for Airbus and Boeing aircraft and to car makers including Volkswagen , said the new finance director would be Jos Sclater, who now heads strategy and mergers and acquisitions (M&A).

Shares in GKN were up 3.4 percent at 338.3 pence at 0952 GMT, making it London’s second largest blue-chip gainer.

GKN reported a 12 percent rise in profit in February, and said it would grow ahead of both its main aerospace and autos markets in 2017, boosted by investment in new technology.

In July, it reported a jump in first-half profit and said aerospace organic sales would increase above rates in the rest of the market in 2017.

GKN did not immediately respond to a request for comments about the management changes.

Shares in GKN have risen 2 percent this year, with share prices across the defence sector boosted this year by U.S. President Donald Trump’s promise to seek an “historic increase” in the U.S. defence budget.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Edmund Blair

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