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Dowlais Group (LSE: DWL)

Last close As at 18/04/2024

GBP0.79

▲ −0.90 (−1.12%)

Market capitalisation

GBP1,118m

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 returns, hence strives for profitability with target operating margins (pre-central costs) over 10% from 7.3% in FY23. Global automotive production is expected to be marginally negative, which is unhelpful but with restructuring benefits we still expect positive margin progression this year.

Latest Insights

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Industrials | Update

Dowlais Group — Motoring forward

Industrials | Update

Dowlais Group — Automotive production outlook softer

Industrials | Flash note

Dowlais Group — Firmly on track despite the UAW strike headwinds

Industrials | Flash note

Dowlais Group — Margin and EV journey accelerating
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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)

929

Forecast gearing ratio (%)

38

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (8.9) (13.7) N/A
Relative (10.4) (17.9) N/A
52 week high/low 143.5p/75.5p

Financials

FY23 organic growth was 6.3% with an increase in the operating margin of 70bp, 30bp post additional head office costs as a stand-alone plc. The automotive division’s organic growth was 7.0% behind the overall automotive market as management continued to focus on profitability. Margins expanded by 110bp to 6.9%, with positive progress towards management’s target of 10%+. Powder Metallurgy was held back by the EV shift with growth of 3.5% and margins of 9.2%. Cash generation was positive with net debt reduced to £847m, with net debt/EBITDA of 1.4x enabling management to announce a £50m share buy-back programme.

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 5.8 2.1
2024E 5482.0 645.0 261.0 13.3 6.0 1.9
2025E 5612.0 697.0 302.0 15.9 5.1 1.7

Research

Update

Industrials

Dowlais Group — Automotive production outlook softer

Flash note

Industrials

Dowlais Group — Firmly on track despite the UAW strike headwinds

Industrials

Update

Dowlais Group — Motoring forward

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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