Family controlled Goodwin is used to turning first-half results may not be up to its own high standards - pre-tax profit growth has averaged 30 per cent a year over the past eight years - but nevertheless it has weathered the recession well relative to other UK manufacturers. There was little change to both interim sales and profits. And while order intake was quiet in the first three months, it has since recovered and by end-October when the workload was roughly the same at the start of the year. Major new orders include machined castings for the Hardanger Bridge in Norway and a large order for nozzle check valves for China.
Some 84 per cent of Goodwin’s sales are overseas so there were also currency gains. Oil and gas valves, radar antennae and pumps for coal slurries (strong emerging market demand) account for a major portion of turnover, and the Pacific Basin is the biggest market. In the half-year these engineering products accounted for £34m of sales and heat resistant materials made up the balance.
Buoyed by the improved order book, Goodwin has committed itself to a £3m capital investment programme. Part of the money will go on increasing the maximum casting size from 10 to 15 tonnes, which will help it compete for nuclear-related work, and part on increasing machining capacity. In the latest half year, capital spending fell from £2.19m to £1.36m.
Expectations of “improved profitability” this year suggest that 12-months profits will beat 2008-09’s figure of £13.12m.
| Goodwin (GDWN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,050p | MARKET VALUE: | £76m | |
| TOUCH: | 1020-1050 | 12-MONTH HIGH: | 1,318p | LOW: 683p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 9 | |
| NET ASSET VALUE:* | 435p | NET DEBT: | 13% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 46.8 | 6.81 | 67.4 | nil |
| 2009 | 45.8 | 6.80 | 65.4 | nil |
| % change | -2 | -0 | -3 | |
Ex-div: na Payment: na *Includes intangibles of £11m, or 150p per share | ||||
