Goodwin Shares Plummet After Profit Falls 22%

Mechanical engineering firm Goodwin plc (LON: GDWN) reported its half-year financial results on Wednesday showing a fall in pre-tax profit of 22% and warning of the continued impact of the coronavirus pandemic. 

The company’s pre-tax profit in 2019 was £7.4 million compared to £5.8 million for the half-year ending October 31st 2020. Goodwin also saw its revenue fall by £7.5 million to £62.6 million during the period. 

The UK-based business said the Covid-19 pandemic has impacted it’s half-year earnings via the delay of some capital projects and the downturn in the oil and gas industry, with Goodwin warning it expects it to now be a permanent feature going forward. The company also stated that with second and third lockdowns, uncertainty will continue.

However, Goodwin’s chairman, Timothy J.W Goodwin commented that its cash flow is in line with board expectations, and within its refractory engineering division, the company is seeing current activity levels similar to those before the coronavirus pandemic. 

“With the upcoming completion of several radar systems in East Asia, the commencement of manufacturing works across our nuclear contracts and, hopefully, an improving Refractory Engineering Division performance, we expect the second half-year pre-tax profits to be similar, if not improving on, the first half of this financial year,” Goodwin said in its statement. 

Despite the company’s upbeat 2020/2021 outlook and stable base, investors have been spooked by the company’s fall in profits and warning about the coronavirus uncertainty. Shares have plummeted so far on Wednesday, currently trading at 2950p, down 13.11%. 

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