Shares in industrial conglomerate Goodwin (LON:GDWN) gained after the firm said its plan to sell assets and return cash was ‘progressing well’. The company has appointed bankers to initiate the sale of a substantial part of its Mechanical Engineering division.
Goodwin to sell assets and return cash
On 7 August, Goodwin announced it had appointed Rothschild & Co to advise it on the sale of parts of the engineering business. The sale includes Goodwin Steel Castings, Goodwin International, Noreva, Easat Group and Pumps.
The firm said the sale would ‘maximise value for shareholders whilst ensuring continuity for all stakeholders, including customers, and the long-term prospects of the business’. Today, Goodwin said the sale process was ‘progressing well’ and discussions were under way with ‘a number of potentially interested parties’.
Given the structure of the group will change materially with the disposal, the board is revising its capital allocation policy. For now, it expects a ‘substantial part’ of the cash proceeds of any sale will be paid out to shareholders.
Profit more than doubles on engineering strength
Along with the disposal update, Goodwin revealed trading profit for the year to April 2026 had more than doubled. The bulk of sales and earnings came from the Mechanical Engineering division, including assets held for sale.
Goodwin FY26 profit more than doubles
| FY2026 | FY2025 | Change | |
| Revenue | £280m | £220m | 27% |
| Gross profit | £140.3m | £91.6m | 53% |
| Operating profit | £78.6m | £37.1m | 118% |
| Trading profit | £77.5m | £35.5m | 118% |
Source: Company accounts
Mechanical Engineering delivered £211 million of revenue or 75% of the group total, while ‘continuing businesses’ delivered £69 million of revenue. In terms of trading profit, Mechanical Engineering delivered £66.6 million or 86% of the group total.
The division has experienced a ‘substantial’ increase in demand for precision-machined, high-integrity castings for mission critical defence and nuclear applications. Goodwin is now a leading supplier on many UK and US Navy frigate and submarine programmes.
It’s hardly surprising Goodwin shares shot up on news most of the sale proceeds will be handed back to investors. The question for us is, what happens next?
Selling substantial parts of the Mechanical Engineering division just as orders from the defence sector are booming is either genius or madness. The assets held for sale made up 75% of sales and 86% of profits last year, up from 71% and 63% the previous year.
Clearly, Engineering has done all the hard work growing group sales and margins. Post-sale, almost 100% of sales and earnings will come from Refractory, which makes kit for the jewellery industry. Last year, Refractory posted sales of £64.8 million, up just 2%, and a trading profit of £15.8 million, up 15%.
That’s a trading profit margin of 24%, which is respectable, but nowhere near the 35% margin in Engineering. And the jewellery industry doesn’t have anything like the tailwinds driving the defence sector. If it were us, we would take the money and run.
