Analysts Pick Apart Goodwin Update as Shares Slide

Goodwin (LON: GDWN) shares plunged 36 percent on Monday following its trading update, with analysts today highlighting communication missteps and softer order visibility, despite the company repeating that “the Group’s trading performance remains in line with expectations.”

Shore Capital, which acts in an advisory capacity to Goodwin, said the update was broadly consistent with the company’s October guidance but noted investor focus on the details management chose to emphasise.

Analysts pointed to the decision to highlight tender losses, including Easat’s failure to win a 20-unit coastal radar contract worth about €18 million and Goodwin International’s unexpected loss on a bid with Sellafield Ltd valued at more than £45 million.

In the update, Goodwin said the Mechanical Engineering Division “has been disappointed by the outcome of two significant tenders during the period.”

Meanwhile, a note from The Curious Compounder, written by professional investor Simon Young, described the statement as resembling a “Jim Bowen moment,” arguing management drew attention to missed opportunities rather than the longer-term positives.

“Strip away the noise and little has fundamentally changed. Goodwin remains well-positioned in structurally attractive end markets, with scarce capabilities and long-term demand drivers intact,” wrote Young.

The trading update itself opened with the company saying, “It is encouraging that the Group’s trading performance remains in line with expectations,” yet analysts said the market reacted to the detailed disclosure of what had not been secured.

Shore Capital also pointed to the reduced fixed orderbook, which stood at £288 million at the end of February versus £330 million previously.

Analysts noted the Middle East remains a swing factor after Goodwin said it had been “requested to delay the dispatch of valves, reflecting the current geopolitical environment in the Gulf.”

While Goodwin reiterated none of its LNG valves had been cancelled and reaffirmed progress on its foundry expansion and Duvelco business, analysts believe the narrative weighed heavily on sentiment, contributing to the sharp share-price reaction.