8th May 2025 12:44
(Alliance News) - Dowlais Group PLC on Thursday said it performed in line with management's expectations in the first quarter, and it expects full-year results to be towards the low end of its guidance range.
The London-based automotive engineering spin-off of Melrose Industries PLC said adjusted revenue for the three months to the end of March was GBP1.3 billion, down 2.2% on-year at constant currency.
This compared to a 2.7% decline in light vehicle production outside China and a 1.3% increase in global light vehicle production, Dowlais noted.
The company said adjusted revenue in the Automotive division fell by 1.5% to GBP1.0 billion. It said this was driven by a 6.6% decrease in Driveline revenue, due to adverse customer mix and timing.
It said the phasing out of older programmes has not yet been fully compensated by the ramp-up of new platforms, which are expected to be weighted to the second-half.
Dowlais said adjusted revenue in Powder Metallurgy declined by 5.7%, driven by Europe and North America as well as a weaker performance in Asia.
The company said it does not expect its full-year performance to be "materially affected" by the direct impact of current US tariffs.
"Based on our strong historical track record, we expect to fully recover these additional costs from customers through commercial actions and other performance initiatives," Dowlais said.
The company noted that the impact of tariffs on consumer demand has led to downward revisions in industry forecasts. "These revisions reflect more cautious expectations for North America and Europe, where production is expected to decline in both regions," the firm said.
Based on these assumptions, Dowlais said it expects its full-year performance to be towards the low end of its guidance range of a flat to mid-single digit adjusted revenue decline.
It is also guiding towards the low end of its adjusted operating margin range between 6.5% and 7.0% in constant currency.
Dowlais said it anticipates tariff-related cost recovery to be weighted to the second half, resulting in weaker trading and cash in the first-half before a "material improvement".
Chief Executive Officer Liam Butterworth said: "Performance in the quarter was in line with expectations, with the results reflecting our geographically diversified portfolio, continued focus on executing against our global footprint restructuring programs and ongoing performance initiatives.
"Looking ahead, we expect to fully recover the direct impact of current tariffs, however, based on the latest industry forecast and continued market volatility, we now anticipate delivering towards the lower end of our full-year guidance for both adjusted revenue and margin. Our proposed combination with American Axle is progressing well and will create a stronger, more resilient business, better positioned to navigate the changing dynamics of the industry."
Shares in Dowlais were up 2.2% to 63.88 pence in London on Thursday afternoon.
By Michael Hennessey, Alliance News reporter
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