Newly-listed Dowlais has made a robust start to life as a standalone listed entity after being spun out by Melrose earlier this year.
Dowlais generated £1.9bn revenue in the four months to 30th April – a 9% increase on the same period a year ago.
The Automotive unit produced materially better revenue in the period, and operating margins expanded. The growth resulted from increased activity in their battery electric vehicle business as underlying demand ramped up. Automotive revenue grew 11%.
Powder Metallurgy revenue and margins were consistent with 2022.
“Dowlais’ Automotive division performed well given the challenging economic backdrop, where not every consumer’s confident enough to go out and sign the dotted line for a new car,” said Aarin Chiekrie, equity analyst at Hargreaves Lansdown.
“The global automotive market’s only expected to grow by 3% this year, so it was pleasing to see the Automotive division’s revenues jump by double digits. This highlights the group’s market-leading position in car components, which is helping to drive group performance forward. And with the transition to electric vehicles looking inevitable, Dowlais looks set to be a beneficiary as its electric vehicle order book continued to grow.
“But it appears not all cogs were turning in the right direction. The performance of the group’s Powder Metallurgy division was underwhelming, with revenues and margins flat year-on-year. Despite this, Dowlais’ full-year expectations remain on-track.”