FoggyIsle.XYZ | Market's view on Dowlais

Dowlais (DWL) was negatively impacted by a £449 million goodwill impairment in its powder metallurgy division, leading to a total operating loss of £450 million. The impairment was attributed to revised medium-term prospects.
The company is also dealing with £120 million in restructuring costs within its automotive business.
There is a total of 1.3 billion Dowlais shares on the market.
On the financial front, the company’s net debt has risen to £847 million.
Dowlais has experienced a positive stock performance recently, with a notable gain around the ex-dividend date, showing an increase of approximately 5%.
The company has initiated a share buyback which is expected to continue daily for the next nine months.
Dowlais declared a dividend of 2.8p per share.
A stock watcher noted buying shares of Dowlais, motivated by its reasonable yield and expecting a price recovery based on the company’s overall financial strategy and market movements.
There are concerns regarding Dowlais’ financial strategy following its demerger from Melrose Industries, including issues related to pension contributions, provisions, leases, and higher interest costs. However, the company has shown good operational execution and margin expansion, easing some EV market pressures.
The overall market sentiment around Dowlais is cautious but optimistic, with stock watchers expecting a short-term recovery in share price, potentially reaching around £1.00.
Dowlais has failed to keep pace with the rally of global auto peers, mostly due to technical pressures post-demerger and the non-cash impairment charges, despite several positive operational developments and director share purchases.