GOODWIN (GDWN) – Industrials
| Price: £204 -5.6% | P/E: 68x |
| Market Cap: £1.55bn | Yield: 2% |
Engineering group Goodwin posted a ‘solid’ 1H performance with trading profits for the six months to 31 October more than doubling from £17.1 million to £37.2 million.
Steel Castings and the international business continue to see ‘robust’ demand from the defence and nuclear sectors, while pumps saw mixed trading with softness in Australia and Brazil offset by strength in India and South Africa.
Full-year profit guidance is unchanged at ‘above £71 million’, with order cover underpinning activity for the second half.
Our View
The absence of an upgrade to full-year earnings may keep a lid on the share price after it rallied by more than 10% over the last four days, adding £150 million to the company’s market cap.
Also, gearing has risen to 46% after the one-off special payment of 532p per share in November, which some might question.
Given the stock has more than doubled sine the start of September, adding £750 million of market cap, you would assume there would be some reliable earnings forecasts, but there aren’t – even house broker Shore Capital doesn’t have any.
Just going on our own work, the shares are exorbitantly priced and we would not be chasing them here.
Read the press release here: https://www.goodwin.co.uk/investors/
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