13th Nov 2024 10:31
(Alliance News) - Dowlais Group PLC shares jumped on Wednesday as the company said it is trading in line with expectations and confirmed its full-year guidance.
Dowlais is the London-based automotive engineering spin-off of Melrose Industries PLC. It was up 12% to 53.70 pence on Wednesday morning in London.
So far in 2024, Dowlais shares are down 50% as the firm has faced difficult trading conditions, with revenue at the half-year stage down 10% to GBP2.29 billion from GBP2.55 billion a year before and its pretax loss more than doubling to GBP123 million from a GBP55 million.
However, on Wednesday, Dowlais said its revenue decline has slowed since.
In the 10 months to October, Dowlais reported a 6.1% annual fall in adjusted revenue to GBP4.2 billion, driven by continued, but expected, weakness in its ePowertrain line, which Dowlais said accounted for 75% of the drop.
Adjusted operating margin for the period was down 30 basis points on a year before to 6.1%, but up 20 points since its first half-results announced in August where it reported 5.9%, as the firm executed its commercial recovery programme and proactive cost management.
Dowlais noted that commercial recoveries and ongoing performance initiatives partially offset the impact of lower volumes on its Automotive division.
Its Powder Metallurgy division was hurt by an unfavourable customer mix in North America throughout the period, but the division's adjusted operating margin remained stable at 9.0% as weaker volumes were also partially offset by planned performance initiatives.
Dowlais reiterated its expectations of a mid-to-high single digit percentage adjusted revenue decline and an adjusted operating margin of between 6.0% and 7.0% in constant currency.
The firm will announce its full-year results on March 5.
Dowlais Chief Executive Liam Butterworth said: "Performance was in line with our expectations and our full-year outlook remains unchanged, reflecting the resilience of Driveline, our largest and most diversified product group, and the effectiveness of our actions to focus on what we can control to navigate a challenging market environment.
"Ongoing restructuring and performance initiatives, along with good progress on our commercial recovery program with customers, continue to mitigate the impact of lower volumes."
By Christopher Ward, Alliance News reporter
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved