29th Jan 2025 12:21
(Alliance News) - CT Automotive Group PLC shares rose on Wednesday after it recounted a "highly resilient" full-year performance despite "significant challenges" facing its industry.
Its stock was 12% higher at 33.00 pence early on Wednesday afternoon in London.
The Portsmouth, England-based interior automotive components company said it "expects to deliver a highly resilient performance for 2024" despite the industry experiencing a challenging fourth quarter.
It anticipates revenue of at least USD117 million and adjusted pretax profit of at least USD8.6 million, "broadly in line with market expectations". Singers Capital Markets forecast USD119.1 million in sales and USD9.3 million in adjusted pretax profit "immediately prior" to CT releasing the trading statement.
In its 2023 results, announced in late May last year, CT Automotive reported revenue of USD143.0 million and underlying pretax profit ("adjusted for non-recurring items") of GBP8.3 million.
During the fourth quarter, the company said, "higher interest rates and concerns over government-set [electric vehicle] quotas" caused major original equipment manufacturers to prioritise de-stocking.
However, CT Automotive was able to "offset the impact of these wider market headwinds to some extent" through margin efficiency programmes, its "agnostic position between ICE and [EVs]", and continued focus on operational efficiencies through automation and digitalisation.
The firm also announced "several significant new contracts wins" from multiple OEMs during its second half, including "programmes valued at approximately USD12 million annually".
Going forward, CT Automotive pointed out that automakers' "declining market share in China" has "no material impact" on the firm "as we are not actively engaged in the Chinese market for legacy automakers". Also, those legacy automakers are facing "additional competitive pressures" as more Chinese EV companies establish plants in America and Europe.
The company said: "These industry dynamics play strongly into the hands of CT Automotive...we are uniquely positioned to deliver the lowest manufacturing costs in our product categories.
"This focus enables us to aggressively target OEMs that are under immense pressure to find solutions to reduce costs and remain competitive in the global market against Chinese competitors."
It said it has "made significant investments in its sales function" to capitalise on this opportunity.
"Currently, CT Automotive represents just a small fraction of this market sector, but the opportunity exists now to grow our market share significantly in conditions that perfectly align with CT's business model," the company explained. "Therefore, despite tough industry conditions, given the contract wins mentioned above, we expect 2025 to produce at least mid-single digit revenue growth together with further margin expansion."
By Emma Curzon, Alliance News reporter
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