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Dowlais Group (LSE: DWL)

Last close As at 24/10/2024

GBP0.55

▲ 1.15 (2.14%)

Market capitalisation

GBP748m

Dowlais Group is an automotive components group with two core divisions: GKN Automotive is the market leader in drive systems for both ICEs and EVs, and GKN Powder Metallurgy is the leader in sintered component manufacture and number two in metal powders.

Management is focused on shareholder value. The 10%+ margin target is the bedrock of this strategy. The disposal of the cash-consumptive hydrogen business highlights this focus, as does the announced strategic review of the Powder Metallurgy business (potential sale, JV for the development of the magnets business or other), which could unlock value.

Latest Insights

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Industrials | Update

Dowlais Group — Driveline – the strong core

Industrials | Update

Dowlais Group — Powder Metallurgy in the spotlight

Industrials | Update

Dowlais Group — Margin expansion despite mixed auto markets

Industrials | Update

Dowlais Group — Motoring forward
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Sector

Industrials

Equity Analyst

David Larkam

David Larkam

Analyst, Industrials

Key Management

  • Roberto Fioroni

    CFO

Balance Sheet

Forecast net debt (£m)

916

Forecast gearing ratio (%)

37

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (5.1) (15.8) (40.3)
Relative (5.0) (16.7) (47.4)
52 week high/low 109.0p/49.4p

Financials

Softness in the automotive markets (see Stellantis’s recent update) is weighing on sentiment in the auto sector forecasts and has led us to trim our FY25 forecasts. Dowlais management is currently reviewing the options for its smaller Powder Metallurgy division. An exit would leave GKN Automotive dominated by the higher-quality Driveline business (60% of GKN Automotive sales) and its Chinese joint venture (JV). Assuming proceeds of c £700m (latest NAV £860m), this would leave the shares trading on a pro-forma FY25 EV/EBITDA of c 2x.

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (fd) (p) P/E (x) P/CF (x)
2022A 5246.0 594.0 212.0 (15.3) N/A N/A
2023A 5489.0 618.0 264.0 13.8 4.0 1.4
2024E 4987.0 584.0 207.0 11.0 5.0 1.4
2025E 4929.0 595.0 216.0 12.1 4.5 1.4

Research

Update

Industrials

Dowlais Group — Powder Metallurgy in the spotlight

Update

Industrials

Dowlais Group — Margin expansion despite mixed auto markets

Industrials

Update

Dowlais Group — Driveline – the strong core

Update

Industrials

Dowlais Group — Motoring forward

Update

Industrials

Dowlais Group — Automotive production outlook softer

Flash note

Industrials

Dowlais Group — Firmly on track despite the UAW strike headwinds

Flash note

Industrials

Dowlais Group — Margin and EV journey accelerating

Update

Industrials

Dowlais Group — Vigo: The benefits of restructuring and investment

Flash note

Industrials

Dowlais Group — Positive start to the year

Initiation

Industrials

Dowlais Group — A premium automotive business

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Deutsches Eigenkapitalforum (EKF) 2023 industrials

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The long and winding road

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Quantum computing: A booming industry
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