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GKN ditches CEO designate after new writedown
November 16, 2017 / 8:00 AM / 25 days ago

GKN ditches CEO designate after new writedown

LONDON (Reuters) - The man appointed just two months ago to run British engineer GKN (GKN.L), Kevin Cummings, is leaving after the aerospace division he ran took a second large writedown, sending the shares down by almost 10 percent.

Employing 58,000 people across 30 countries in aerospace and automotive engineering, 258-year-old GKN is now without a permanent chief executive at a time when speculation is re-emerging as to whether the group should split itself in two.

New finance director Jos Sclater joined last week.

“After such upheaval, it is not clear what the next stage in GKN’s development will be, but it could be profound change,” analysts at Jefferies said.

Panmure Gordon analysts said they no longer expected a final dividend.

GKN shares fell almost 10 percent on the news, hitting a 16-month low before paring losses to stand at 291 pence at 1052 GMT, off 6.5 percent.

Cummings, head of GKN Aerospace since 2014, was named in September as group chief executive to replace retiring Nigel Stein from January. I

In October, the group issued a profit warning sparked by problems in the aerospace division. It said it would take a non-cash charge of 15 million pounds related to inventory and receivables at a plant in Alabama producing composite structures and complex machine parts for aircraft such as the Sikorsky UH-60 Black Hawk helicopter.

On Thursday it said it was now likely to take a write-off of 80 million to 130 million pounds following a wider review at other aerospace plants in north America.

“With the exception of the working capital write-off...all other guidance for the full-year remains unchanged,” it said.

Anne Stevens, a non-executive director, will assume the role of interim CEO from January 1 to replace the retiring Stein.

Hans Büthker, who joined GKN with the 2015 acquisition of Fokker Technologies, will now become chief executive of GKN Aerospace with immediate effect with a remit to improve margins and cash flow across the group.

GKN said it had launched an internal and external search for a new CEO. Any new boss is likely to face the long-running question of whether the group should split its aerospace and automotive operations.

The shares are down 20 percent since the profit warning in October, giving the group a market value of 4.9 billion pounds.

Reporting by Kate Holton; editing by James Davey and Jason Neely

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