Dowlais Group PLC on Thursday said revenue grew over the past four months, despite the impact of auto workers strikes in the US.
The automotive engineering spin-off of Melrose Industries PLC, which listed in London back in April, said adjusted revenue in the four months to October 31 grew by 4.7% to £1.8 billion. It noted that global light vehicle production was up 3.6%.
The firm said its operating margin increased to 6.8% in the four-month period, which it said was due to successfully flowing volume to profit. This offset inflation and the impact of United Auto Workers strikes in North America.
Dowlais said the financial impact of UAW strike action is expected to be between £30 million and £45 million in revenue, as well as £1 million to £15 million adjusted operating profit.
‘Despite this, strong operational execution within the businesses has resulted in the strikes not impacting our ability to deliver on our full year expectations,’ it added.
For the full year, Dowlais said its expectations are unchanged, with company-compiled consensus indicating adjusted operating profit of £352 million. It said new programme launches in its GKN Automotive business will drive profitable growth in 2024.
During the period, GKN saw adjusted revenue rise by 4.8%, while its adjusted operating margin was 7.6%.
The firm’s GKN Powder Metallurgy sector posted an adjusted revenue increase of 4.2%, while its adjusted operating margin was 9.0%.
Chief Executive Liam Butterworth said: ‘Following a strong first half, we have continued to execute well on our strategic priorities and leverage the strength of our operating businesses. We have delivered strong growth and continued to expand margins as well as fully absorbing the impact of the UAW strike.
‘Thanks to the outstanding quality of our market leading businesses we remain confident of delivering sector leading financial performance, regardless of the speed of electrification transition.’
Dowlais shares rose 0.9% to 107.00 pence each on Thursday morning in London.
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