CT Automotive Group plc (LON:CTA), a leading designer, developer and supplier of interior components to the global automotive industry, has issued the following trading update for the year ended 31 December 2023, in advance of the publication of its annual results.
Return to profitable trading
The Group returned to profit in FY23, with the strong performance of H1 continuing into H2 as global automotive production volumes continued to recover.
FY23 revenue is expected to be not less than $140 million1. The improvement from $124 million in FY22 came from growth in both production revenue and revenue from tooling projects which completed in FY23. As previously announced, tooling revenue has been weighted towards the second half of the year, reflecting the timing of customer projects.
Group gross profit margins have continued to improve, supported by the ongoing efficiency initiatives. These initiatives, which include automation, consolidation of certain product lines and labour cost savings through more efficient work streams, have progressed as planned over the year, delivering further savings in H2.
As a result, the Group expects to report FY23 underlying profit before tax of c.$8 million1.
Balance sheet strengthened
The Group’s balance sheet strengthened over the year as a result of strong operating cash conversion from the improved trading performance in the second half of the year, having also benefitted from the successful $9.6 million fundraise in H1.
The year end net debt position (pre IFRS 16) is expected to be c.$6 million1 (FY22: $12 million), reduced from $9 million1 as at 30 June 2023.
Outlook
The Group is encouraged by healthy order volumes and has entered FY24 with strong visibility of booked production and tooling revenue, with recent new programme wins extending visibility into future years.
The Board is closely monitoring the situation in the Red Sea and to date the Group has not experienced any material impact. The Group continues to maintain buffer stocks to mitigate any short-term disruption to shipping times. While mindful of the wider macroeconomic and geopolitical uncertainty, the Board remains confident of making progress in the year ahead and in CT Automotive’s long-term growth prospects.
1. Unaudited
