- Sales fall on automotive weakness
- Year-to-date shares have lost 33%
- Revenues seen below last year
Shares in Dowlais (DWL) were down over 6% to 72p in morning trading as the automotive products group released a trading update for the four months to 30 April 2024 ahead of its AGM (annual general meeting) later today.
The group reported adjusted revenue of £1.7 billion in the period, a year-on-year fall of 1.9%, adding the year had started ‘broadly in line’ with expectations but cautioned ‘some uncertainty remains after a weak first half’ and lowered its full-year sales target.
MIXED PERFORMANCE
Dowlais spun out of conglomerate Melrose Industries (MRO) and only began trading as a separate company in April 2023.
The performance of company’s divisions was varied in the four-month period with adjusted revenue for the automotive business falling 3.3% due to weakness in the ePowertrain product segment.
Under the GKN Automotive brand, Dowlais is the world’s leading supplier of global drive systems serving 90% of vehicle manufacturers and employing 25,000 people.
The powder metallurgy division had a better start to the year with adjusted revenue growth of 4%, outperforming the market, while sales at the group’s Chinese joint venture operations grew slightly ahead of the market as they continued to gain share.
Although year-to-date new business bookings were in line with expectations, the company lowered its revenue outlook for 2024 to slightly below last year.
Dowlais shares have lost just over a third of their value this year and are down 50% from their closing high in May 2023.
