DJ Goodwin PLC Preliminary Results
The pre-tax profit for the Group for the twelve month period ending 30th April 2016 was GBP12.3 million (2015: GBP20.1 million), a decrease of 39% on a revenue of GBP124 million (2015: GBP127 million) which is 3% down on the figures reported for the same period last financial year. The Directors propose an unchanged ordinary dividend of 42.348p (2015: 42.348p).
The diversity of products that address different world markets is part of the Group’s strength, but even the history of diversity between our foundry, our valve companies that primarily address the oil, gas and LNG industries, our pump companies that primarily address the mining industries, our radar systems company and our ten refractory companies has not been enough to prevent the decline in profits over the past two years.
The severe contraction of the oil and gas industry worldwide, with over US$530 billion of cancelled or delayed projects, and the mining industries who have had a very difficult year has presented a challenge and the resultant reduced spending levels in the jewellery markets and the slowdown in China have all been unhelpful. There is, however, brightness on the horizon, with Easat Radar Systems, which absorbed NRPL Aero Oy, Finland this last year, and has a record work load of GBP12.5 million. Noreva GmbH has a similar order book level for its nozzle valves, which results from a combination of winning large orders in Saudi Arabia and from the USA LNG industry, and also starts the new year with a record order book.
Steps have been taken at Goodwin International over the past two years to add additional market sectors to its portfolio of products and customers by offering machining and high integrity fabrication for other customers. This has resulted in additional order input for the new financial year but as yet not enough to compensate for the drop off of the oil and gas sector where we are still winning some orders of the few that are available. Some of this new non valve work will be spread out over multi-year contracts, but nevertheless it has in part allowed the Group to mitigate some of the major damage from such a vast contraction of the oil, gas and mining industry activity where we will be unlikely to see significant signs of regeneration for another two years.
Goodwin Refractory Services benefitted from the asset purchase it made last year from a complementary French casting powder company and grew its pre-tax profits by 47% to GBP1.47 million. Similarly, in this new financial year, following intangible asset purchases in October 2015 from Westland (GB Trading) Limited and having spent six months of last year constructing a new perlite plant at Hoben International, both Dupré Minerals and Hoben International are expected to significantly improve their profitability as compared to the financial year just completed.
All the above does not alter the fact that our steel foundry and UK valve manufacturing activity have less orders and the ones we have are on tighter margins, but at least the new areas of business are softening the unwelcome severe downturn in the oil and gas and mining industries. It would be appropriate to thank all those involved in developing these new areas of business which have programmes that run for many years.
The Group order work load as at 30th April 2016 is 16 % higher than 12 months earlier and stood at GBP92 million. Although some of this workload has tighter margins, it provides a better start to the new year which will be difficult with world trading conditions being less than buoyant.
Goodwin International will be launching its newly developed and patented axial piston control and shut off valve at the Düsseldorf Valve World Exhibition this coming November and, similarly in Düsseldorf, Goodwin Steel Castings will be presenting a paper at the Duplex Conference in October on higher performing duplex stainless steel castings and welding electrode wire and rod.
The Group’s net cash generated from operating activities prior to investments amounted to GBP9.9 million (2015: GBP18.0 million) and the Group’s gearing at the year end was 26.1 % (2015: 12.3 %).
Shareholders’ equity has risen from GBP82.7 million to GBP86.3 million. It has been decided by the Board that it would be appropriate, subject to shareholder approval at the AGM, to incentivise the Executive Directors of Goodwin PLC to drive back the total shareholder return (TSR) towards the levels it enjoyed two years ago by increasing Group turnover and pre-tax profitability. Whilst this may not occur in one year, the three year programme targeted to bring in new products and customers will hopefully, with hard work, position the Group in a more favourable situation. Accordingly, shareholders are also being asked to approve a revised Directors’ Remuneration Policy incorporating the new long term incentive plan.
For the key performance indicators and ratios please refer to the web site www.goodwin.co.uk/2016.
We take the opportunity of thanking the employees and the Directors both in our UK and overseas companies for the hard work put in to achieve these Group results.
The diversity of products that address different world markets is part of the Group’s strength, but even the history of diversity between our foundry, our valve companies that primarily address the oil, gas and LNG industries, our pump companies that primarily address the mining industries, our radar systems company and our ten refractory companies has not been enough to prevent the decline in profits over the past two years.
The severe contraction of the oil and gas industry worldwide, with over US$530 billion of cancelled or delayed projects, and the mining industries who have had a very difficult year has presented a challenge and the resultant reduced spending levels in the jewellery markets and the slowdown in China have all been unhelpful. There is, however, brightness on the horizon, with Easat Radar Systems, which absorbed NRPL Aero Oy, Finland this last year, and has a record work load of GBP12.5 million. Noreva GmbH has a similar order book level for its nozzle valves, which results from a combination of winning large orders in Saudi Arabia and from the USA LNG industry, and also starts the new year with a record order book.
Steps have been taken at Goodwin International over the past two years to add additional market sectors to its portfolio of products and customers by offering machining and high integrity fabrication for other customers. This has resulted in additional order input for the new financial year but as yet not enough to compensate for the drop off of the oil and gas sector where we are still winning some orders of the few that are available. Some of this new non valve work will be spread out over multi-year contracts, but nevertheless it has in part allowed the Group to mitigate some of the major damage from such a vast contraction of the oil, gas and mining industry activity where we will be unlikely to see significant signs of regeneration for another two years.
Goodwin Refractory Services benefitted from the asset purchase it made last year from a complementary French casting powder company and grew its pre-tax profits by 47% to GBP1.47 million. Similarly, in this new financial year, following intangible asset purchases in October 2015 from Westland (GB Trading) Limited and having spent six months of last year constructing a new perlite plant at Hoben International, both Dupré Minerals and Hoben International are expected to significantly improve their profitability as compared to the financial year just completed.
All the above does not alter the fact that our steel foundry and UK valve manufacturing activity have less orders and the ones we have are on tighter margins, but at least the new areas of business are softening the unwelcome severe downturn in the oil and gas and mining industries. It would be appropriate to thank all those involved in developing these new areas of business which have programmes that run for many years.
The Group order work load as at 30th April 2016 is 16 % higher than 12 months earlier and stood at GBP92 million. Although some of this workload has tighter margins, it provides a better start to the new year which will be difficult with world trading conditions being less than buoyant.
Goodwin International will be launching its newly developed and patented axial piston control and shut off valve at the Düsseldorf Valve World Exhibition this coming November and, similarly in Düsseldorf, Goodwin Steel Castings will be presenting a paper at the Duplex Conference in October on higher performing duplex stainless steel castings and welding electrode wire and rod.
The Group’s net cash generated from operating activities prior to investments amounted to GBP9.9 million (2015: GBP18.0 million) and the Group’s gearing at the year end was 26.1 % (2015: 12.3 %).
Shareholders’ equity has risen from GBP82.7 million to GBP86.3 million. It has been decided by the Board that it would be appropriate, subject to shareholder approval at the AGM, to incentivise the Executive Directors of Goodwin PLC to drive back the total shareholder return (TSR) towards the levels it enjoyed two years ago by increasing Group turnover and pre-tax profitability. Whilst this may not occur in one year, the three year programme targeted to bring in new products and customers will hopefully, with hard work, position the Group in a more favourable situation. Accordingly, shareholders are also being asked to approve a revised Directors’ Remuneration Policy incorporating the new long term incentive plan.
For the key performance indicators and ratios please refer to the web site www.goodwin.co.uk/2016.
We take the opportunity of thanking the employees and the Directors both in our UK and overseas companies for the hard work put in to achieve these Group results.