Dowlais Group PLC on Wednesday said it remains focused on accelerating the transition to a ‘powertrain-agnostic business model’ as it posted a reduction in 2024 revenue.
Dowlais is the London-based automotive engineering spin-off of Melrose Industries PLC.
It reported a significant narrowing of its pretax loss for 2024 to £215 million from £522 million the prior year, despite an 11% reduction in revenue to £4.34 billion from £4.86 billion.
On an adjusted basis Dowlais said its pretax profit reduced 19% to £215 million from £264 million, with a mix of £145 million in restructuring costs and £191 million in amortisation of intangible assets acquired in business combinations contributing to the difference in figures.
Dowlais said its performance was impacted by weaker volumes over the period, but stated that efficiency improvements and a continued focus on cost managed served to partially mitigate the effects of the volume decline.
It drew attention to the particular weakness in the ePowertrain product line, but noted that Driveline ‘slightly outperformed the market outside China.’
Dowlais recommend a final dividend of 2.8 pence per share, flat with the prior year and bringing its total dividend to 4.2p per share, also flat on-year.
Its shares were up 5.4% at 69.45p on Wednesday morning in London.
In January this year, Dowlais agreed to a £1.16 billion takeover by American Axle & Manufacturing Inc, a producer of driveline products and systems. It expects the transaction to complete in 2025, subject to the satisfaction of relevant conditions, including shareholder approval.
Looking ahead, the firm anticipates revenue to range from flat to a mid-single digit decline in 2025, with an adjusted operating margin between 6.5% and 7.0% in constant currency. This compares with 6.6% in 2024.
Dowlais expects restructured savings and ongoing performance initiatives to ‘offset the impact of lower volumes, alongside commercial recoveries achieved in 2024’.
Chief Executive Liam Butterworth commented: ‘In 2024, strong execution enabled us to navigate a challenging environment and deliver on our updated guidance. Our market-leading Driveline business slightly outperformed the market outside of China, whereas our ePowertrain product line faced significant headwinds due to ongoing volatility in BEV production schedules.
‘Our focus remains on accelerating the transition to a powertrain-agnostic business model, to enable sustainable profitable growth and robust cash generation over the medium term. The proposed announced combination with American Axle & Manufacturing Holdings Inc represents a significant opportunity to accelerate the execution of our strategy by leveraging scale, capabilities, and the outstanding management teams of both companies.’
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