Profits rise but first half flat for castings group
Engineering group Goodwin has seen a slight rise in half year pre-tax profits after a flat first half for the business characterised by stagnating orders and redundancies.
For the six months ended October 31, 2017, pre-tax profit at the Stoke-on-Trent group was £6.10m (H1 2016: £6.05m), an increase of 1% from a revenue of £61.89m.
Chairman John Goodwin said: “The current workload as at (period-end) stands at £84m, unchanged from 12 months ago. The order input for the first six months of this financial year is the same as for the same period last financial year.
“Due to the persistent low activity in the oil, gas and mining industries which is now into its third year, the group had no alternative than to further reduce the labour force by 50 since April 2017 and the total number of group employees now stands at 1,070.”
He said that due to the further improvement on the refractory engineering side of the business, the group expected to see profitability for the second half of the year begin to move forward.
The pre-tax profit for this first half benefitted from a gain of £1.61m realised when Gold Star Powders India sold its one acre of land and factory facility it purchased in 2003 for £110,000. Gold Star Powders has now moved to the same site as Goodwin Pumps India and currently rents its building from Goodwin Pumps India, which purchased three acres of land in 2005 for £325,000.
Mr Goodwin said considerable effort and focus on cash flow improvement was being made and, while the cash flow position at the half year was largely unchanged as compared to the six months to April 30, 2017, the group expected to see a significant improvement by April 30, 2018.
“Although the oil price is now just over $60 per barrel and the iron ore price is similarly just over $60 per tonne, there is little reason to expect an upturn in the release of orders for new capacity in these capital equipment needy markets until 2020,” warned Mr Goodwin.
“We are, however, not relying on an immediate upturn in these industries and have been focusing on trying to win business in nuclear recycling and decommissioning and processing of mining industry waste materials where our potential customers are receiving closer scrutiny by environmental agencies.”
An example of this is the receipt in the first half of a $7.3m order for large machined and fabricated stainless steel castings for the nuclear fuel decommissioning industry in the United States.
