(Alliance News) - Dowlais Group PLC on Thursday said it saw its annual loss widen on impairments, but said its Automotive division lifted sales.

The automotive engineering spin-off of Melrose Industries PLC, which listed in London back in April, said pretax loss widened in 2023 to GBP522 million from GBP63 million the year before. This resulted from a goodwill impairment of GBP449 million in 2023 compared to no such cost in 2022.

Revenue, however, rose by 5.7% to GBP4.86 billion from GBP4.60 billion a year prior, due to volume growth in its Automotive division, as well as inflation recoveries across the firm.

Dowlais recommended a final dividend of 2.8 pence per share, compared to none a year ago. This brings the firm's total dividend to 4.2p per share.

Looking ahead, Dowlais said it expects its 2024 revenue to be similar to that of 2023, noting expected industry-wide declines in global light vehicle production. It also said it expects its operating profit to be "modestly second half weighted".

Chief Executive Officer Liam Butterworth said: "2023 was a year marked by significant progress and transformation for Dowlais, following the group's successfully executed demerger and listing on the London Stock Exchange. Through excellent execution we delivered on our commitments with a strong financial and operational performance, demonstrating resilience, expanding margins, generating free cash flow above our expectations and reducing our financial leverage.

"During our first year of ownership, we have undertaken a full review of the medium-term prospects of Powder Metallurgy and as a result we have recognised a non-cash goodwill impairment.

"We remain confident of achieving our margin target of 10%+ in Automotive over the medium-term, largely underpinned by announced restructuring."

Shares in Dowlais were trading 4.6% lower at 85.78 pence each in London on Thursday morning.

By Sabrina Penty, Alliance News reporter

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