You could argue that Goodwin (GDWN) has taken up a holding position in expectation of recovering demand in the natural resource markets it serves. Actually, it’s debatable whether hope has given way to expectation, even though the refractory and mechanical engineering specialist recorded another decent rise in full-year turnover. Unfortunately, Goodwin's exposure to the extractive industries continues to constrict margins, resulting in a 2 per cent fall in gross profits to £33.8m. That mightn’t seem too severe, save for the fact that the gross margin contracted from 27.8 per cent to 25.6 per cent. Suffice to say, it's been a buyer's market.
Chairman John Goodwin points out that “world investment within the fossil fuels industries has been down 25 per cent year on year for the past two years”. The duration of the slump saw the screws applied to suppliers, but there could be a turnaround in the offing. A maiden order for a range of axial piston valves provides encouragement; while demand prospects for certain delayed programmes have improved, most notably those linked to the development of the Royal Navy’s UK Type 26 frigates. In the meantime, margins should benefit from a rebalancing of the product mix in favour of the refractory engineering business.
| GOODWIN (GDWN) | ||||
| ORD PRICE: | 1,510p | MARKET VALUE: | £109m | |
| TOUCH: | 1,510p-1,644p | 12-MONTH HIGH: | 2,350p | LOW: 1,510p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 1,242p* | NET DEBT: | 30% | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 127 | 20.3 | 212 | 35.3 |
| 2014 | 131 | 24.1 | 264 | 42.3 |
| 2015 | 127 | 20.1 | 209 | 42.3 |
| 2016 | 124 | 12.3 | 123 | 42.3 |
| 2017 | 132 | 9.2 | 84.5 | 42.3 |
| % change | +7 | -25 | -31 | - |
| Ex-div: | 07 Sep | |||
| Payment: | 06 Oct | |||
| *Includes intangible assets of £18.2m, or 253p a share. | ||||
