CT Automotive Group PLC shares increased on Friday after it posted a positive outlook, despite a difficult year with revenue down and losses widening.

Shares in the Portsmouth, England-based maker of custom interiors for cars jumped by 29% to 45.00 pence in London on Friday.

CT Automotive said its annual loss widened to $18.8 million from $12.4 million the previous year.

The company said this was due to the deterioration in gross profit margins to 12% in its financial year, down from 20% in the previous year, which in turn increased production costs required to maintain service.

The enforcement of the Chinese government’s ‘zero-Covid’ policy similarly resulted in temporary closure of the company’s manufacturing facilities, increasing costs as the government caught up on lost production. CT Automotive estimated these costs at $5.0 million.

Revenue fell to $124.3 million from $127.8 million the prior year, but the company said that its production revenue increased to $117.3 million, up 11% from $105.6 million the previous year, with overall demand for interior components remaining high.

Chief Executive Officer Scott McKenzie said: ‘The group navigated through a turbulent year and is now on an upward trajectory, with new awards and customer wins. We responded to the challenging operating conditions while focusing on executing our important strategic priorities.’

The company said it has seen a rapid recovery in manufacturing in China following the lifting of Covid restrictions, and that its new facility in Puebla, Mexico is fully operational; both of which should boost yearly profit.

‘We are optimistic about the outlook for the automotive industry. With the scrapping of the zero-Covid policy in China, we anticipate being able to operate normally and return to stable rhythm in our production facilities,’ the company explained.

CT Automotive said it was confident of achieving its expectations in the current financial year.

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