Dowlais Group PLC on Tuesday reported weaker financial performance in the first half leading the company to lower revenue forecasts for the year amid downturn in the automotive industry.
The London-based specialist engineering group focused on the automotive sector said pretax loss widened to £123 million in the half that ended June 30 from £55 million the previous year.
Revenue declined 10% to £2.29 billion from £2.55 billion, as cost of sales also fell 10% to £1.94 billion from £2.16 billion.
Dowlais maintained its interim dividend at 1.4 pence per share.
Chief Executive Officer Liam Butterworth said: ‘In this challenging market environment, we focused on what we can control and took several decisive actions to mitigate the impact from lower volume as well as unlock value from our portfolio.
‘First, we implemented a relentless focus on cost control, limiting the impact on adjusted operating profit...Second, we initiated a comprehensive programme of commercial recovery initiatives with our customers which, together with the ongoing restructuring programmes and performance initiatives, will limit the impact from expected lower revenues in the second half of the year.’
Dowlais further initiated a strategic review of its GKN Powder Metallurgy business to consider a range of options, including a potential sale. During the period, the order book for this business rose 10% with 53% of new business wins being for electric vehicles or propulsion agnostic products.
The Automotive business secured business wins totaling £2.4 billion of forecast lifetime revenue balanced across regions, customers, and product groups.
Dowlais revised its full-year outlook as industry forecasts no longer predict improvement in the second half with light vehicle production expected to decline 2% overall in 2024.
The company now expects a mid to high single-digit decline in adjusted revenue for 2024 compared with previous forecasts of similar revenue to £4.86 billion reported in 2023.
Dowlais shares were down 3.9% to 59.00 pence each in London on Tuesday morning.
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