Shares in Dowlais Group PLC (LSE:DWL) reached a new high after the spin-out from Melrose last month as the automotive engineer reported revenue growth from the battery electric vehicle (BEV) sector and confidence about growing profit margins.
The owner of the GKN Automotive and GKN Powder Metallurgy businesses said it was an “encouraging start” to 2023, increasing confidence in expanding adjusted operating margins in the full year, though full-year guidance remained unchanged.
The first four months of the year produced £1.9bn of adjusted revenue, up 9% on a constant currency basis, with margins in line with those delivered for full-year 2022 but up more than 200 basis points over the same period of the prior year.
While Powder Metallurgy saw revenues and margins roughly flat year-on-year, Automotive was more positive, with 11% revenue growth resulting in “significant operating margin expansion” year-on-year and slightly above full-year 2022.
“Bookings were healthy with the majority relating to BEV platforms, underlining our strong market position as the transition to electrification continues,” the FTSE 250-listed group said.
The shares rose 3% to 148p in early trading, their highest point since being spun out at 105p in April, before easing to 145p.