Profitability at engineering group Goodwin did slide at the half-year stage but, as a family-run business - similar to a classic German "Mittelstand" engineer, only based in Stoke-on-Trent - Goodwin can afford to take on costs in a downturn if it sees light on the other side.
Indeed, the decision to hire new sales staff earlier this year seems to have been vindicated by a 29 per cent increase in order input, which suggests sales growth should return in the second half. The longer-term outlook is encouraging, too, as the group has footholds in a number of global niche markets with excellent growth prospects.
Its smaller refractories division, which sells goods associated with minerals, proved highly resilient in the recession and now accounts for a third of total sales. Chairman John Goodwin is particularly optimistic about Dupré Minerals, which makes vermiculite products for insulation purposes.
Meanwhile, Goodwin's core engineering division, which has been more severely hit by economic downturn, saw revenues fall 4 per cent. But it remains profitable and the growth outlook is encouraging, with high exposure to sectors such as oil and gas and power generation, which should see significant capital investment over the next few years.
GOODWIN (GDWN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,320p | MARKET VALUE: | £95m | |
| TOUCH: | 1,300-1,320p | 12-MONTH HIGH: | 1,338p | LOW: 1000p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 550p* | NET DEBT: | 23% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 45.8 | 6.80 | 65.4 | nil |
| 2010 | 45.9 | 5.81 | 49.9 | nil |
| % change | - | -15 | -24 | - |
Ex-div: - Payment: - *Includes intangible assets of £11.1m or 154p per share | ||||
