Dowlais Group PLC on Tuesday released figures showing its loss halved in the first half of 2023 amid rising revenue, though it cautioned that auto worker strikes in the US could hurt full-year results.

Dowlais shares were down 5.2% at 121.40 pence early Tuesday in London.

Dowlais is the automotive engineering spin-off of Melrose Industries PLC, listing in London back in April.

It is composed of the GKN Automotive, GKN Powder Metallurgy and GKN Hydrogen businesses. Dowlais is based in London and has 70 manufacturing plants in 20 countries globally.

Pretax loss in the six months that ended June 30 narrowed to £55 million from £130 million a year before, as revenue rose by 14% to £2.55 billion from £2.24 billion.

On an adjusted basis, pretax profit was £139 million, up 28% from £109 million.

Dowlais said this was ahead of its own expectations. It said it was leaving full year expectations unchanged, but it said is monitoring potential strike action against its automotive customers by the UAW, formerly the United Auto Workers.

The union is in negotiations with Detroit’s ’big three’ manufacturers: General Motors Co, Ford Motor Co, and Chrysler-owner Stellantis NV. The UAW represents about 150,000 workers at the three companies, and current contracts expire on Thursday this week.

CEO Liam Butterworth said: ‘Dowlais had a strong first half of the year, trading ahead of our expectations, with double digit revenue growth, significant margin expansion in a period of high inflation, and better than expected free cash flow generation. We have also secured record new business bookings, the majority of which are related to [electric vehicles], at attractive margins.’

Dowlais declared an inaugural dividend of 1.4p per share. Going forward, it will target a progressive dividend of about 30% adjusted underlying profit after tax.

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