When Can We Expect A Profit From Dowlais Group plc (LON:DWL)?

Dowlais Group plc (LON:DWL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Dowlais Group Plc manufactures and sells automotive parts in the Americas, Europe, and Asia. The UK£1.2b market-cap company posted a loss in its most recent financial year of UK£82m and a latest trailing-twelve-month loss of UK£64m shrinking the gap between loss and breakeven. The most pressing concern for investors is Dowlais Group's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Dowlais Group

Dowlais Group is bordering on breakeven, according to the 9 British Auto Components analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK£55m in 2025. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 87%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

Underlying developments driving Dowlais Group's growth isn’t the focus of this broad overview, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 39% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Dowlais Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Dowlais Group, take a look at Dowlais Group's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Valuation: What is Dowlais Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Dowlais Group is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Dowlais Group’s board and the CEO’s background.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.