LONDON (ShareCast) - (Sharecast News) - Mechanical and refractory engineer Goodwin reported first-half pre-tax profit of £7.7m on Wednesday, up from £5.8m year-on-year, on revenue of £68.9m, up from £62.6m.
The London-listed company said that at the half-year point on 31 October, its workload remained "steady" at £156m, and did not yet contain some of the major projects its mechanical engineering division had been pursuing within the military, nuclear waste reprocessing and surveillance markets.

Its refractory engineering division delivered a "strong performance", with its activity on an upward trajectory, delivering like-for-like sales growth of 40%.

"With the recent acquisitions now generating revenue; our end user markets growing; our research and development investment programmes in the fire protection and construction products now gaining traction in their respective markets, the division currently represents 40% of the group's revenue," said chairman Timothy Goodwin.

"The division's focus on price increases, global sourcing, network capabilities and operational footprint has enabled it to date to manage the price pressures and supply chain disruptions."

Its mechanical engineering division, meanwhile, had experienced "low levels" of activity due to customer approval delays on documentation for cast and machined products going into complex stakeholder environments.

That, coupled with navigating supply availability and increased energy costs, had impacted both sales and profitability in the first six months of the year.

"We now have in place fixed price energy contracts that go out until June 2023 that will remove the extreme spikes in energy prices that were seen in September," Timothy Goodwin said.

"A pragmatic approach has also been taken to highlight and reduce the amount of red tape and address the increased costs of production that will enable efficient production, moving forward, of orders in hand."

Goodwin's net debt stood at £34.8m at the end of the first half, widening from £31.1m a year earlier, with a "relatively moderate" level of gearing of 31.7%.

"During the six month period just completed, the group's cash generation has been reduced by the requirement of additional working capital as new projects start to ramp up," Timothy Goodwin explained.

"Furthermore, the group has proceeded as planned with its investment programme that is spread across both divisions, including projects that will reduce its carbon footprint and its reliance on the energy markets, details of which will be released in the next annual report."

At 1107 GMT, shares in Goodwin were down 5.26% at 3,278p.

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