Good morning, it's Paul here.

I had a few technical problems getting yesterday's article to update, so have decided to start with a new article today, with the backlog from yesterday.

Timings for today - I'm not sure at the moment. In all likelihood the remaining backlog from yesterday might have to wait until this evening, or tomorrow morning.




Goodwin (GDWN)

Share price: 3480p (up 1.5% at close yesterday)
No. shares: 7.2m
Market cap: £250.6m

Final results

This is an engineering group. Several readers asked me to look at it yesterday. Unfortunately, the section I wrote yesterday disappeared when I updated the article, so am having to write it up again now.

Results for FY 04/2019 look solid:

  • Revenue up 1.8% to £127m
  • Pre-tax profit up 11% to £14.7m - note the decent profit margin of 11.6%
  • Diluted EPS of 150p - giving a PER of 23.2 - that looks very pricey compared with Castings, which I looked at yesterday, on a PER of about half this level.

Outlook - this is the exciting bit. There's been a huge increase in the order book, with more in the pipeline:

Furthermore, I am also delighted to confirm that we have seen a significant rise in the level of sales order input within our Mechanical Engineering Division. Whilst some individual elements would not be notifiable the aggregation is significant for the Group. With this exceptional input, I am able to confirm that, at the time of writing, the Group order input since the start of the new financial year stands at £93 million and the total forward order book stands at a record £165 million (July 2018: £85 million), a 94% increase from this time last year, with yet more large long-term contracts, that we have been targeting over the past few years, still to be placed.

That sounds tremendously positive. I wonder what's driving it? At a guess, cheap sterling must be boosting things. Weak sterling is reported on the news as being something terrible, but of course it's positive for UK producers & exporters, making them more competitive.

Here are my notes from reviewing the results today;

  • Very positive commentary & outlook
  • Capex heavy
  • Capitalised development spend of £1.5m - not very much
  • High inventories - but £5m due to unwind. Still high though
  • Balance sheet OK, but weaker than Castings (CGS)
  • Big fall in cash generation compared with…

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