Autins swings to loss as costs erase revenue growth

Autins' shares dropped on Wednesday after the company swung to an annual loss after Brexit uncertainty hampered sales which in turn failed to support the company's investments in people and overheads.

For the year ended 30 September, the manufacturer and supplier of acoustic and thermal insulation solutions for the automotive sector recorded a loss before tax of £1.7m, compared with a profit before tax of £0.2m, as cost of sales climbed by 27% to £22.0m and offset an 11% increase in revenues to £28.3m.

A statement from the AIM traded company said it has since taken remedial action to rationalise costs to limit their negative impact, whilst also maintaining a platform able to support "a growing and increasingly diversified customer base".

Meanwhile, the revenue increase was driven by a 14% increase to component sales to £28.3m and a 46% jump in revenue from acoustic flooring products to £1.4m, while tooling sales dropped from £1.5m to £0.9m.

While German and Swedish revenues climbed by 67% and 37.5%, respectively, UK automotive component sales grew at a slower rate than anticipated, rising by 5% to £23.0m as sales to the business' largest customer were below even its own forecasts.

However, contracts have been secured with new customers including Aston Martin, Auria, Bentley, Grupo Antolin and Toyota, with a statement from the company stating that it expects to benefit in 2019.

Gareth Kaminski-Cook, chief executive of Autins, said: "2018 was a year of significant progress for the Autins Group. Whilst the financial performance was unsatisfactory, the strategic progress was very positive. Group sales have grown 45% in the last 2 years. The customer base has diversified, expansion into Europe has accelerated, and sales into new markets continued to grow."

Furthermore, full scale production of the company's patented Neptune material began and it said that its sales opportunity pipeline grew "significantly" throughout the year, adding that this will be "transformational" for the business after it was designated as a "superior acoustic material by BMW.

"Our unique Neptune technology has been approved by all target customers and generated a large fast-growing sales pipeline. With renewed focus on cost control and sales conversion we are confident 2019 will deliver positive results," said Kaminski-Cook.

Autins' shares were down 9.09% at 20.00p at 1218 GMT.