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Highlights:

  • Dowlais Group reported adjusted operating profit up 5.3% YoY to GBP 154 million despite revenue decline.
  • Automotive segment margin increased 70bps YoY to 6.7% driven by restructuring and cost actions.
  • Dowlais and AAM received nine regulatory approvals for proposed merger, completion expected in Q4 2025.

Dowlais Group plc (LSE:DWL), a specialist engineering group focused on the automotive sector, has announced its financial results for the six months ended 30 June 2025. The company delivered higher profitability in the first half, despite facing volume declines, tariff impacts, and ongoing macroeconomic challenges.

Adjusted revenue for the period stood at GBP 2,464 million, reflecting a 1.6% year-on-year decline at constant currency. This compared with a 0.7% decline in light vehicle production outside China, and a 3.1% increase in global light vehicle production. Adjusted operating profit rose by 5.3% year-on-year to GBP 154 million, with the adjusted operating margin improving by 40 basis points to 6.3%. The increase in profitability was attributed to global footprint restructuring and ongoing cost efficiency measures that offset the impacts of lower volumes and tariffs, which were less severe than initially forecast.

The Automotive segment saw a 0.9% decline in adjusted revenue. However, adjusted operating profit in this segment rose by 11%, with the margin improving to 6.7% (up 70bps). This was largely due to restructuring efforts and cost discipline, which helped mitigate pressures from adverse customer mix and production delays in the Driveline product line. In contrast, the Powder Metallurgy segment recorded a 4.0% drop in adjusted revenue, primarily driven by lower volumes in Europe and North America. Despite some growth in China, adjusted operating profit for the segment declined by 16%, with the margin falling by 120bps to 8.4%.

Adjusted basic earnings per share increased 14% to 5.6 pence, supported by higher earnings and reduced net finance costs. On a statutory basis, the company reported a loss per share of 1.1 pence, an improvement from the 7.3 pence loss reported in the first half of 2024. Adjusted free cash flow turned negative at GBP 29 million, compared to a £10 million inflow in H1 2024. The decline was attributed to tariff impacts, higher restructuring outflows, and partial timing of dividend receipts from a China joint venture. Net debt rose to GBP 1,034 million from GBP 915 million a year earlier, with leverage increasing to 2.0x from 1.6x.

During the period, Dowlais secured new business wins totalling over GBP 1.5 billion in forecast lifetime revenue for the Automotive segment. The Powder Metallurgy segment secured GBP 55 million in new business, 62% of which relates to EV or propulsion-agnostic products. On 22 and 15 July 2025, shareholders of Dowlais and American Axle & Manufacturing Holdings, Inc. (AAM) approved resolutions relating to their proposed merger. Nine regulatory clearances have been received, with remaining approvals in progress. The companies expect the combination to complete in Q4 2025, subject to final conditions.

Dowlais reiterated that it expects full-year performance to be toward the lower end of its previously stated guidance range. This includes flat to a mid-single-digit decline in adjusted revenue and an adjusted operating margin between 6.5% and 7.0%, on a constant currency basis.

DWL is trading 0.16% higher at GBX 70.76  per share as of 7 August 2025.