Automotive components maker Dowlais Group PLC (LSE: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 last month.
But essentially this is a large part of the 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.