British engineering firm Goodwin suffers 17 per cent dive in share price on profit drop
British engineer Goodwin’s shares shed over 17 per cent this morning after reporting a “deterioration” in profit for the six months to 31 October.
Pre-tax profit fell 5.1 per cent from £7.8m to £7.4m and the group expects similar profitability for the next six months.
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The company’s revenue in Britain grew steadily but across Europe fell by 38 per cent to £10.9m from £17.5m the year prior.
This reflects the downturn UK manufacturers have suffered recently. Figures released by the CBI this week showed UK manufacturing output falling at the fastest rate since the financial crisis.
Goodwin chairman Tim Goodwin said: “This is a feature of the disruption caused by the commotions in our parliamentary system over the past six months where the uncertainty has temporarily stalled projects.”
Sales grew to £70.1m from £67.5m the previous year and the engineer said it expects increased certainty around Brexit to boost its international operations.
Cash generated from operating activities slumped to £4.7m, almost a third of last year’s 12.3m, as the company bolstered its inventories and entered into new contracts.
But its spending on new land and equipment dropped by £2.4m meaning Goodwin’s cash on hand at the end of the six months was up to £6.1m compared with £3.9m a year ago.
British steel companies are also struggling too. Tata Steel announced in September that it was closing two sites, while British Steel went into liquidation in May. Goodwin’s refractory engineering segment dropped by 29 per cent.
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During the general election campaign, Prime Minister Boris Johnson pledged to intervene to protect struggling UK industries once the UK has left the European Union.
Goodwin will not pay an interim dividend, but booked a £6.9m expense to pay out 96.2p per share for last year’s performance.