- First-half underlying revenue of £2.8bn, up 10% ignoring exchange rates
- Underlying operating profit rose 40% to £177m
- Underlying free cash flow of £33m, compared to an outflow of ££29m
Aarin Chiekrie, equity analyst at Hargreaves Lansdown:
“The demerger earlier this year marked the start of a new chapter for Dowlais, which now focuses operations on its Automotive, Powder Metallurgy and Hydrogen businesses. Volumes are increasing and the largest division, GKN Automotive, saw its revenues jump up at double-digit rates to £2.3bn in the first half. Serving around 90% of global car manufacturers highlights the group’s market-leading position in car components, and is helping to drive overall group performance forward. With the transition to electric vehicles looking inevitable, Dowlais is set to benefit with 78% of its new orders based around electric vehicles.
But in the Powder Metallurgy business, progress appears to have ground to a halt. This division specialises in turning powdered metals into high-precision components. This should complement the electric vehicle transition but performance across the first half has been underwhelming, with margins and profits heading in the wrong direction. Despite this, a strong Automotive performance has helped to keep full-year guidance on track.”
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