(Sharecast News) - Automotive interior component designer, developer and supplier CT Automotive said in a trading update on Friday that it returned to profitability during the 2023 financial year.
The AIM-traded firm said the strong performance it saw in the first half continued into the second half, driven by the ongoing recovery in global automotive production volumes.
It anticipated 2023 revenue to top $140m, marking a substantial improvement compared to the $124m it recorded in 2022.
That growth was attributed to increased production revenue and revenue generated from tooling projects that concluded in 2023.
Notably, tooling revenue was skewed toward the latter part of the year, aligning with the timing of customer projects.
CT Automotive said its commitment to efficiency initiatives, including automation, product line consolidation and streamlined work processes leading to labour cost savings, further contributed to the improvement in group gross profit margins.
The initiatives progressed as planned throughout the year, resulting in additional savings in the second half.
As a result of those efforts, the group said it was poised to report an underlying profit before tax of about $8m for the year.
Additionally, CT Automotive said its balance sheet had strengthened over the course of the year.
That improvement was attributed to robust operating cash conversion, driven by enhanced trading performance in the latter part of the year.
The successful fundraise of $9.6m in the first half also played a pivotal role in bolstering the balance sheet.
Furthermore, the company expected its net debt position at the end of the year, pre IFRS 16, to be around $6m - a notable reduction from the $12m reported on 30 June.
"The group is encouraged by healthy order volumes and has entered 2024 with strong visibility of booked production and tooling revenue, with recent new programme wins extending visibility into future years," the board said in its statement.
"The board is closely monitoring the situation in the Red Sea, and to date, the group has not experienced any material impact."
CT Automotive said it continued 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."
CT Automotive said it would announce its results for the 12 months ended 31 December in early May.
At 1434 GMT, shares in CT Automotive were up 19.06% at 76.2p.
Reporting by Josh White for Sharecast.com.
Ct Automotive (CTA)