Proactive Investors - Automotive components maker Dowlais Group PLC (LON:DWL) is likely to highlight its importance to the electric vehicle (EV) market when it puts out its first results on Tuesday after being spun out by Melrose Industries (LON:MRON) last month.
But essentially this is a large part of the GKN (LON:GKN) business that Melrose bought in a hostile takeover in 2018, save for its aerospace components business that the ‘turnaround specialist’ is keeping for itself.
Dowlais, which is made up of GKN Automotive, GKN Powder Metallurgy and a nascent hydrogen storage arm, made £4.6bn of revenue in 2022, up 11% year-on-year, with roughly £4.2bn from automotive and circa £1bn from powder metallurgy.
Separated-out results for last year show a £63mln loss before tax, improved from £254mln in 2021.
According to its prospectus, more than £100mln has been shaved from selling, distribution and administrative costs and an overhaul of procurement has knocked almost £80mln off its materials bill, with Melrose having also cut 4,000 jobs and closed a number of plants.
The results will give management a platform to set out their stall for the company and their investment proposition.
GKN Automotive, according to the prospectus, has a “comprehensive and propulsion-agnostic drive system portfolio that is positioned to profitably benefit from electrification”, with an EV order book accounting for over 40% of new orders last year.
EV opportunities are also seen for GKN Power Metallurgy – which both supplies powders sintered high-precision objects made from powders – including sintered rare earth magnets for electric motors. The company said it had 24% ‘pure EV’ bookings in 2022.