Goodwin Shares Tumble But Analyst Sees ‘Strong Results Across the Group’

Shares in Goodwin (LON: GDWN) slid 12% on Tuesday despite the engineering group reporting sharply higher interim profits and reaffirming confidence in delivering full-year results ahead of expectations.

The stock is up around 2.1% so far on Wednesday.

Goodwin revealed that trading profit for the six months to 31 October rose to £37.2 million, more than double the £17.1 million reported a year earlier, as revenue increased 27.4% to £135.6 million. 

The group’s workload stood at £330 million, underpinned by demand across defence, nuclear, energy and specialist engineering markets.

The company reiterated that it expects full-year profitability to exceed £71 million, supported by current order intake and programme execution. 

Net debt stood at £5.8 million at the period end, rising to £53 million after the payment of a one-off special interim dividend of 532p per share in November.

In a note following the results, Shore Capital said Goodwin had delivered “strong interim results” and remained “on track for £71m adj. EBIT”. 

The broker highlighted that adjusted EBIT of £37.2 million in the first half was “more than double” the prior year, supported by margin expansion and strong execution.

Shore Capital added that there were “strong results across the group”, with gross margin increasing to 49.3% from 43.0%.

It noted that performance was driven primarily by Mechanical Engineering, where revenue rose 38% and adjusted EBIT surged 122.9%, helped by defence and nuclear programmes, pumps, radar systems and LNG-related valve demand.

The analyst also pointed to resilient performance in Refractory Engineering and said the group’s higher net debt remained “a comfortable level”, supported by an interest rate swap fixing borrowing costs at around 1%.

Despite the sharp share price fall, Goodwin's stock remains significantly higher year to date.