Refractory and mechanical engineering specialist Goodwin (GDWN) attributed its half-year profit decline to parliamentary stasis, as chairman Timothy Goodwin described the fall as “a feature of the disruption caused by the commotions in our parliamentary system over the past six months where the uncertainty has temporarily stalled projects”.
The family business expects similar levels of profitability for the second half, followed by an increase in profits in the next financial year. The group’s difficulties over the interim period were not confined to the House of Commons, though. Goodwin’s refractory engineering division recorded flat revenue and profits of £3.4m, a 29 per cent decline on the prior year. The group highlighted an unforeseen fall in demand for consumer orientated jewellery products for which it supplies casting powder, which it said was “due mainly to the uncertainty around the ongoing USA and China trade war” and movements in the price of gold.
Goodwin’s mechanical engineering arm fared better with modest improvements to turnover, despite weaknesses in the petrochemical market that have yet to abate. Delays to the group’s projects wrought by Brexit coincided with a 68 per cent increase in its inventory levels, and Goodwin expects to markedly cut investment in working capital over the second half.
| GOODWIN (GDWN) | ||||
| ORD PRICE: | 2,920p | MARKET VALUE: | £ 216m | |
| TOUCH: | 2,900-2,940p | 12-MONTH HIGH: | 3,700p | LOW: 2,300p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 18 | |
| NET ASSET VALUE: | 1,419p* | NET DEBT: | 17%** | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 67.5 | 7.8 | 74.90 | nil |
| 2019 | 70.1 | 7.4 | 72.92 | nil |
| % change | +4 | -5 | -3 | |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £22.5m, or 304p a share **Excludes lease liabilities of £8.5m | ||||
