TIDMGDWN
RNS Number : 6981O
Goodwin PLC
22 August 2017
PRELIMINARY ANNOUNCEMENT
Goodwin PLC today announces its preliminary results for the year
ended 30th April, 2017.
CHAIRMAN'S STATEMENT
The pre-tax profit for the Group for the twelve month period
ending 30th April, 2017, was GBP9.24 million (2016: GBP12.3
million), a decrease of 24.9% on a revenue of GBP132 million (2016:
GBP124 million) which is 6% up on the figures reported for the same
period in the last financial year. The Directors propose an
unchanged ordinary dividend of 42.348p (2016: 42.348p). The gross
margins have reduced again this year due to the continued
tightening in market prices for products we sell to the oil, gas
and mining industries where capital expenditure has been massively
reduced due to the substantially low commodity revenues of the
companies associated with the products they sell.
We achieved major progress in negotiating agreements and
long-term commitments with certain customers in an unprecedented
period of unexpected delays caused by elections, political
positioning and delays in orders being released due to market
situations. Examples include supply into the US submarine and the
UK Type 26 frigates programmes and into long-running radar
programmes.
We have continued to improve the balance of risk between the
capital goods and consumer markets and thus increase sustainability
and stability.
Our growth and positioning in the consumable oriented sales of
investment casting powders, waxes, rubber and 3D printers for the
jewellery lost wax casting industry, especially in India and China
associated with the increasing wealth in these countries, has meant
the proportion of the share of operating profits of our refractory
engineering companies within the Group has risen from 28% to
46%.
World investment within the fossil fuels industries has been
down 25% year on year for the last two years but the forecast is
that three quarters of energy consumption will still be from these
sources by 2040 with the demand for natural gas increasing 2% per
year to 2030 and 4.5% per year for LNG. Our valve company in
Germany has had an exceptional year being close to those markets
that have re-commenced investment but we expect it will be a
further 18 months before other areas in the world realise they will
be short of supplies. The exception to this is India, where coal
production and thermal power generation are increasing and will do
so quite rapidly for the next seven years; this has helped our
Indian pump company increase sales by 58 % last year. At the time
of writing, I am pleased to report that Goodwin International has
now received its first order for its new range of axial piston
isolation valves and we expect that our axial piston control and
isolation valves will be well positioned to benefit when the
activity of the petroleum companies starts to recover (World
Petroleum Congress - YouTube WPC2017 Day 1 AM Live stream).
During the year some cost cutting and efficiency improvements
have been necessary, without which the reduced margins we did
obtain on the lower oil and gas valve order input would have been
even more reduced. The reported pre-tax profits this year were
after recognising GBP0.9 million costs associated with reducing our
manpower to match the market demands. We have considered Brexit
together with the exceptional decrease in sterling and, whilst not
material, we have reported on the effects in Objectives, Strategy
and Business Model section of the Directors Report and Accounts to
be published shortly.
We have often been frustrated by the comments by government and
in the press and on TV regarding the very poor productivity of UK
manufacturing companies versus our European and USA counterparts.
As it is, and has been our corporate strategy for over 20 plus
years, to build and run highly efficient manufacturing companies,
the Directors have decided to include a graph illustrating how the
Goodwin Group of companies both in the UK and overseas performs in
productivity terms measured by thousands of pounds of sales output
per employee man year and compare this to the average European
multi-nationals. This graph will be shown in the Chairman's
Statement in the Directors Report and Accounts to be published
shortly and in future years will be put within the Group Strategic
Report as a KPI. It is hoped that the shareholders appreciate the
aspect that we achieve a productivity figure of more than 100%
greater than the average of our European counterparts and that is
even when our sales output and pricing levels are down due to the
market situation, as they have been for the past two years. This
performance is a feature of substantial investment in capital
equipment, good product design over the years and the fact that our
trained employees work efficiently and very hard.
Principal risks are covered in the Audit Committee Report but
guidance from the FRC has been excellent on cyber protection and we
have invested in this area and improved as a result, bearing in
mind the greater threats from ransomware and need to address the
new General Data Protection Regulation requirements.
Cash generation, control of capital expenditure and bank
facility headroom remain key to financing work in progress as order
levels increase. Down payments are achieved where possible. We
continue to drive the Company for a dividend and total return on
share value as seen from long-term growth despite market
cycles.
Key Performance Indicators will be shown in the Objectives,
Strategy and Business Model of the Strategic Report in the
Directors Report and Accounts to be published shortly, and for
further ratios please refer to www.goodwin.co.uk/2017, which
includes the productivity graph mentioned above.
The Directors are of the view that a share based payments charge
against pre-tax profits of GBP601,000, whilst in accordance with
Accounting Standard IFRS 2, does not reflect current market
conditions the Group faces. The accepted pricing model used to
produce the valuation uses the Company's share price at the grant
date and does not take in to account subsequent changes.
Consequently, whilst a charge of GBP601,000 has been taken through
the profit and loss account as required by the Standard, the
Directors believe there is now significant doubt that options will
vest under the scheme.
We wish to thank both our employees and Directors in the UK and
overseas for their hard work in these challenging times.
22nd August, 2017 J.W. Goodwin
Chairman
OBJECTIVES, STRATEGY AND BUSINESS MODEL
The Group's main OBJECTIVE is to have a sustainable long-term
engineering based business with good potential for profitable
growth while providing a fair return to our shareholders.
The Board's STRATEGY to achieve this is:
-- to supply a range of technically advanced products to growth
markets in the mechanical engineering and refractory engineering
segments in which we have built up a global reputation for
engineering excellence, quality, efficiency, reliability, price and
delivery;
-- to manufacture advanced technical products profitably, efficiently and economically;
-- to maintain an ongoing programme of investment in plant,
facilities, sales and marketing, research and development with a
view to increasing efficiency, reducing costs, increasing
performance, delivering better products for our customers,
expanding our global customer base and keeping us at the forefront
of technology within our markets, whilst at all times taking
appropriate steps to ensure the health and safety of our employees
and customers;
-- to control our working capital and investment programme to ensure a safe level of gearing;
-- to maintain a strong capital base to retain investor,
customer, creditor and market confidence and so help sustain future
development of the business;
-- to support a local presence and a local workforce in order to stay close to our customers;
-- to invest in training and development of skills for the Group's future.
BUSINESS MODEL
The Group's focus is on manufacturing within two sectors,
mechanical engineering and refractory engineering, and through this
division of our manufacturing activities, the Group benefits from
market diversity. Further details of our business and products are
shown on our website www.goodwin.co.uk/2017 .
Mechanical Engineering
The Group produces a wide range of dual plate, axial nozzle
check valves and axial piston valves to serve the oil,
petrochemical, gas, LNG and water markets. We create value by
globally sourcing the best quality raw material at good prices,
manufacturing in highly efficient facilities using up to date
technology to provide the very reliable products to the required
specification, at competitive prices and with timely
deliveries.
Our mechanical engineering markets also include high alloy
castings, machining and general engineering products which
typically form part of large construction projects such as power
generation plants, oil refineries, high integrity offshore
structural components and bridges. The Group through its foundry
and CNC machine shop has the capability to pour castings,
radiograph and also finish them in-house. This capability is also
targeting the defence industry.
Goodwin International, the largest company in the mechanical
engineering division, designs and manufactures dual plate, axial
nozzle valves and axial piston valves and also undertakes
specialised CNC machining and fabrication work. Noreva GmbH also
designs and manufactures axial nozzle valves. Both Goodwin
International and Noreva purchase the majority of the value of
their sand mould castings from Goodwin Steel Castings and this
vertical integration gives rise to competitive benefits, increased
efficiencies and timely deliveries.
At Goodwin Pumps India we manufacture a superior range of
submersible slurry pumps for end users in India, China, Brazil,
Australia and Africa. Easat Radar Systems designs and builds
bespoke high-performance radar antenna systems for the global
market of major defence contractors, civil aviation authorities and
border security agencies. We create value on these by innovative
design, assembly and testing in our own facilities using bought in
or engineered in-house components.
Refractory Engineering
Within the refractory engineering division, Goodwin Refractory
Services (GRS) primarily generates gross margin from designing,
manufacturing and selling investment casting powders and waxes to
the jewellery casting industry. GRS also manufactures and sells
investment casting powders to the tyre mould and aerospace
industries. The refractory division has eight other investment
powder manufacturing companies located in China, India, Thailand
and Brazil who sell the casting powders directly and through
distributors to the jewellery casting industry.
These companies are vertically integrated with another of our UK
companies, Hoben International, which manufactures cristobalite
which it sells to the nine casting powder manufacturing companies
as well as producing ground silica that also goes into casting
powders. Hoben International now also manufactures different grades
of perlite.
The other UK refractory company is Dupré Minerals which focuses
on producing exfoliated vermiculite that is used in insulation,
brake linings and fire protection products, including technical
textiles that can withstand exposure to high temperatures. Dupré
also sells consumable refractories to the shell moulding casting
industry.
CONSOLIDATED INCOME STATEMENT
for the year ended 30th April, 2017
2017 2016
GBP'000 GBP'000
CONTINUING OPERATIONS
Revenue 131,587 123,539
Cost of sales (97,836) (89,196)
GROSS PROFIT 33,751 34,343
Distribution expenses (3,486) (3,311)
Administrative expenses (20,317) (18,284)
OPERATING PROFIT 9,948 12,748
Financial expenses (873) (775)
Share of profit of associate
companies 169 341
PROFIT BEFORE TAXATION 9,244 12,314
Tax on profit (2,487) (3,376)
PROFIT AFTER TAXATION 6,757 8,938
ATTRIBUTABLE TO:
Equity holders of the parent 6,082 8,838
Non-controlling interests 675 100
PROFIT FOR THE YEAR 6,757 8,938
BASIC AND DILUTED EARNINGS
PER ORDINARY SHARE 84.47p 122.75p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30th April, 2017
2017 2016
GBP'000 GBP'000
PROFIT FOR THE YEAR 6,757 8,938
OTHER COMPREHENSIVE EXPENSE
ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY
TO THE INCOME STATEMENT:
Foreign exchange translation differences 3,619 279
Effective portion of changes in fair
value of cash flow hedges (6,526) (728)
Change in fair value of cash flow
hedges transferred to the income statement 2,142 (1,923)
Tax charge on items that may be reclassified
subsequently to the income statement 738 516
OTHER COMPREHENSIVE EXPENSE FOR THE
YEAR, NET OF INCOME TAX (27) (1,856)
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR 6,730 7,082
ATTRIBUTABLE TO:
Equity holders of the parent 5,654 7,018
Non-controlling interests 1,076 64
6,730 7,082
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th April, 2017
Total
attributable
Cash to equity
flow Share-based holders
Share Translation hedge payments Retained of the Non-controlling Total
capital reserve reserve reserve earnings parent interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
YEARED
30TH APRIL,
2017
Balance at
1st May, 2016 720 (1,041) (594) - 87,209 86,294 3,823 90,117
Total
comprehensive
income:
Profit - - - - 6,082 6,082 675 6,757
Other
comprehensive
income:
Foreign exchange
translation
differences - 3,218 - - - 3,218 401 3,619
Net movements
on cash flow
hedges - - (3,646) - - (3,646) - (3,646)
TOTAL
COMPREHENSIVE
INCOME FOR
THE YEAR - 3,218 (3,646) - 6,082 5,654 1,076 6,730
Transactions
with owners
of the Company
recognised
directly in
equity - (23) - 21 (2) 1 (1)
Equity-settled
share-based
payment
transactions - - - 601 - 601 - 601
Dividends
paid - - - - (3,111) (3,111) (675) (3,786)
BALANCE AT
30TH APRIL,
2017 720 2,154 (4,240) 601 90,201 89,436 4,225 93,661
YEARED
30TH APRIL,
2016
Balance at
1st May, 2015 720 (1,356) 1,541 - 81,836 82,741 3,781 86,522
Total
comprehensive
income:
Profit - - - - 8,838 8,838 100 8,938
Other
comprehensive
income:
Foreign exchange
translation
differences - 315 - - - 315 (36) 279
Net movements
on cash flow
hedges - - (2,135) - - (2,135) - (2,135)
TOTAL
COMPREHENSIVE
INCOME FOR
THE YEAR - 315 (2,135) - 8,838 7,018 64 7,082
Transactions
with owners
of the Company
recognised
directly in
equity - - - - - - 174 174
Purchase of
non-controlling
interests
without a
change in
control - - - - (360) (360) - (360)
Dividends
paid - - - - (3,105) (3,105) (196) (3,301)
BALANCE AT
30TH APRIL,
2016 720 (1,041) (594) - 87,209 86,294 3,823 90,117
CONSOLIDATED BALANCE SHEET
at 30th April, 2017
2017 2016
GBP'000 GBP'000
NON-CURRENT ASSETS
Property, plant and equipment 65,739 62,530
Investment in associates 2,045 1,640
Intangible assets 18,240 17,565
86,024 81,735
CURRENT ASSETS
Inventories 37,657 35,631
Trade and other receivables 26,338 33,792
Derivative financial assets 1,756 2,107
Cash and cash equivalents 5,172 4,970
70,923 76,500
TOTAL ASSETS 156,947 158,235
CURRENT LIABILITIES
Interest-bearing loans and
borrowings 9,542 8,531
Trade and other payables 22,454 32,608
Deferred consideration 500 500
Derivative financial liabilities 2,492 2,818
Liabilities for current tax 1,592 1,785
Warranty provision 90 151
36,670 46,393
NON-CURRENT LIABILITIES
Interest-bearing loans and
borrowings 23,675 18,497
Warranty provision 305 179
Deferred tax liabilities 2,636 3,049
26,616 21,725
TOTAL LIABILITIES 63,286 68,118
NET ASSETS 93,661 90,117
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT
Share capital 720 720
Translation reserve 2,154 (1,041)
Share-based payments reserve 601 -
Cash flow hedge reserve (4,240) (594)
Retained earnings 90,201 87,209
TOTAL EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT 89,436 86,294
NON-CONTROLLING INTERESTS 4,225 3,823
TOTAL EQUITY 93,661 90,117
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30th April, 2017
2017 2017 2016 2016
GBP'000 GBP'000 GBP'000 GBP'000
CASH FLOW FROM OPERATING
ACTIVTIES
Profit from continuing operations
after tax 6,757 8,938
Adjustments for:
Depreciation 5,597 4,748
Amortisation of intangible
assets 938 583
Impairment of intangible
assets - 340
Gain arising on bargain
purchase - (143)
Financial expenses 873 775
Foreign exchange gains (696) (276)
Loss / (profit) on sale
of property, plant and equipment 52 (456)
Share of profit of associate
companies (169) (341)
Equity-settled share-based
payments 601 -
Tax expense 2,487 3,376
OPERATING PROFIT BEFORE
CHANGES IN WORKING CAPITAL
AND PROVISIONS 16,440 17,544
Decrease / (increase) in
trade and other receivables 8,721 (5,420)
Increase in inventories (1,014) (2,357)
Decrease in trade and other
payables (excluding payments
on account) (9,445) (1,464)
(Decrease) / increase in
payments on account (5,825) 5,402
CASH GENERATED FROM OPERATIONS 8,877 13,705
Interest paid (802) (703)
Corporation tax paid (2,675) (3,058)
Interest element of finance
lease obligations (115) (20)
NET CASH FROM OPERATING
ACTIVITIES 5,285 9,924
CASH FLOW FROM INVESTING
ACTIVITIES
Proceeds from sale of property,
plant and equipment 237 968
Acquisition of intangible
assets (149) (4,319)
Acquisition of property,
plant and equipment (7,411) (7,707)
R&D expenditure capitalised (791) (1,430)
Acquisition of subsidiaries
net of cash acquired - (2,005)
Additional payment for existing
subsidiary - (330)
Additional investment in
associate companies - (30)
Dividends received from
associate companies - 173
NET CASH OUTFLOW FROM INVESTING
ACTIVITIES (8,114) (14,680)
CASH FLOWS FROM FINANCING
ACTIVITIES
Payment of capital element
of finance lease obligations (930) (274)
Dividends paid (3,111) (3,105)
Dividends paid to non-controlling
interests (675) (196)
Proceeds from loans and
committed facilities 5,871 3,305
Repayment of loans and committed
facilities (44) (3,000)
Finance fees - (100)
NET CASH INFLOW / (OUTFLOW)
FROM FINANCING ACTIVITIES 1,111 (3,370)
NET DECREASE IN CASH AND
CASH EQUIVALENTS (1,718) (8,126)
Cash and cash equivalents
at beginning of year (413) 7,732
Effect of exchange rate
fluctuations on cash held 648 (19)
CASH AND CASH EQUIVALENTS AT
OF YEAR (1,483) (413)
PRINCIPAL RISKS AND UNCERTAINTIES
The Group's operations expose it to a variety of risks and
uncertainties. These risks are no different to previous years and
they are not expected to change substantially in the foreseeable
future. The Directors confirm that they have carried out a robust
assessment of the principal risks facing the Company, including
those that would threaten its business model, future performance,
solvency or liquidity. The key risks are discussed below.
Market risk: The Group provides a range of products and
services, and there is a risk that the demand for these products
and services will vary from time to time because of competitor
action or economic cycles or international trade friction or even
wars. As shown in note 2 to the financial statements, the Group
operates across a range of geographical regions, and its turnover
is split across the UK, Europe, USA, the Pacific Basin and the rest
of the world. This spread reduces risk in any one territory.
Similarly, the Group operates in both mechanical engineering and
refractory engineering sectors, mitigating the risk of a downturn
in any one product area. The potential risk of the loss of any key
customer is limited as, typically, no single customer accounts for
more than 10% of turnover. As described in the Business Model, the
Group generates significant sales from the worldwide energy
markets. Whilst these markets may suffer short-term declines, over
the medium to long-term the growing worldwide demand for energy
will ensure these markets remain buoyant.
Technical risk: The Group develops and launches new products as
part of its strategy to enhance the long-term value of the Group.
Such development projects carry business risks, including
reputational risk, abortive expenditure and potential customer
claims which may have a material impact on the Group. The potential
risk here is seen as manageable given the Group is developing
products in areas in which it is knowledgeable and new products are
tested prior to their release into the market.
Product failure/Contractual risk: The risks that the Group
supplies products that fail or are not manufactured to
specification are risks that all manufacturing companies are
exposed to but we try to minimise these risks through the use of
highly skilled personnel operating within robust quality control
system environments, using third party accreditations where
appropriate. With regard to the risk of failure in relation to new
products coming on line, the additional risks here are minimised at
the R&D stage, where prototype testing and the deployment of a
robust closed loop product performance quality control system
provides feed back to the design department for the products we
manufacture and sell. The risk of not meeting safety expectations,
or causing significant adverse impacts to customers or the
environment, is countered by the combination of the controls
mentioned within this section. The risk of product obsolescence is
countered by R&D investment.
Health and safety: The Group's operations involve the typical
health and safety hazards inherent in manufacturing and business
operations. The Group is subject to numerous laws and regulations
relating to health and safety around the world. Hazards are managed
by carrying out risk assessments and introducing appropriate
controls, as well as attending safety training courses.
Acquisitions: The Group's growth plan over recent years has
included a number of acquisitions. There is the risk that these, or
future acquisitions, fail to provide the planned value. This risk
is mitigated through financial and technical due diligence during
the acquisition process and the Group's inherent knowledge of the
markets they operate in.
Financial risk: The principal financial risks faced by the Group
are changes in market prices (interest rates, foreign exchange
rates and commodity prices). Detailed information on the financial
risk management objectives and policies is set out in note 20 to
the financial statements. The Group has in place risk management
policies that seek to limit the adverse effects on the financial
performance of the Group by using various instruments and
techniques, including credit insurance, stage payments, forward
foreign exchange contracts, secured and unsecured credit lines, and
interest rate swaps.
Regulatory compliance: The Group's operations are subject to a
wide range of laws and regulations. Both within Goodwin PLC and its
subsidiaries, the Directors and Senior Managers within the
companies make best endeavours to comply with the relevant laws and
regulations.
Assessment of principal risks: Changes and likely impact:
As part of the Board's risk management and control of principal
risks, areas of monitoring and expert advice undertaken are
reported upon by the Audit Committee in the Directors Report and
Accounts to be published shortly
FORWARD-LOOKING STATEMENTS
The Group Strategic Report contains forward-looking type
statements and information based on current expectations, and
assumptions and forecasts made by the Group. These expectations and
assumptions are subject to various known and unknown risks,
uncertainties and other factors, which could lead to substantial
differences between the actual future results, financial
performance and the estimates and historical results given in this
report. Many of these factors are outside the Group's control. The
Group accepts no liability to publicly revise or update these
forward-looking statements or adjust them for future events or
developments, whether as a result of new information, future events
or otherwise, except to the extent legally required.
Responsibility statements of the Directors in respect of the
annual financial report
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit of the
Company and the undertakings included in the consolidation taken as
a whole; and
-- the Group Strategic Report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group's position and
performance, business model and strategy.
J. W. Goodwin, Chairman
R. S. Goodwin, Managing Director
J. Connolly, Director
M. S. Goodwin, Director
S. R. Goodwin, Director
S. C. Birks, Director
B. R. E. Goodwin, Director
T. J. W. Goodwin, Director
J. E. Kelly, Non-Executive Director
Accounting policies
Goodwin PLC (the "Company") is incorporated in England and
Wales.
The Group financial statements consolidate those of the Company
and its subsidiaries (together referred to as the "Group") and
equity account the Group's interest in associates.
The Group's financial statements have been approved by the
Directors and prepared in accordance with International Financial
Reporting Standards as adopted by the European Union (EU).
The accounting policies are included in Note 1 of the financial
statements to be published shortly.
New IFRS standards and interpretations adopted during 2017
In 2017 the following amendments had been endorsed by the EU,
became effective and therefore were adopted by the Group:
-- Amendments to IAS 1 - Disclosure Initiative (effective for
annual periods beginning on or after 1st January, 2016)
-- Amendments to IFRS 10, IFRS 12 and IAS 28 - Applying the
Consolidation Exception (effective for annual periods beginning on
or after 1st January, 2016)
-- Amendments to IFRS 11 - Accounting for Acquisitions of
Interests in Joint Operations (effective for annual periods
beginning on or after 1st January, 2016)
-- Amendments to IAS 16 and IAS 38 - Clarification of Acceptable
Methods of Depreciation and Amortisation (effective for annual
periods beginning on or after 1st January, 2016)
-- Amendments to IAS 27 - Equity Method in Separate Financial
Statements (effective for annual periods beginning on or after 1st
January, 2016)
-- Annual improvements to IFRSs 2012-2014 Cycle (effective for
annual periods beginning on or after 1st January, 2016)
The adoption of these standards and amendments has not had a
material impact on the Group's financial statements.
The financial information previously set out does not constitute
the Company's statutory accounts for the years ended 30th April,
2017 or 2016 but is derived from those accounts. Statutory accounts
for 2016 have been delivered to the Registrar of Companies, and
those for 2017 will be delivered in due course. The auditors have
reported on those accounts; their report was:
i. unqualified;
ii. did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their
report; and
iii. did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
Copies of the 2017 accounts are expected to be posted to
shareholders within the next two weeks and will also be available
on the Company's website: www.goodwin.co.uk and from the Company's
Registered Office: Ivy House Foundry, Hanley, Stoke-on-Trent ST1
3NR.
Note 1
Segmental information
Products and services from which reportable segments derive
their revenues
For the purposes of management reporting to the chief operating
decision maker, the Board of Directors, the Group is organised into
two reportable operating divisions: mechanical engineering and
refractory engineering. Financial information for each operating
division is also available in a disaggregated form in line with the
identified cash-generating units. Segment assets and liabilities
include items directly attributable to segments as well as those
that can be allocated on a reasonable basis. In accordance with the
requirements of IFRS 8 the Group's reportable segments, based on
information reported to the Group's Board of Directors for the
purposes of resource allocation and assessment of segment
performance are as follows:
-- Mechanical Engineering - casting, valve, antenna and pump
manufacture and general engineering
-- Refractory Engineering - powder manufacture and mineral processing
Information regarding the Group's operating segments is reported
below. Associates are included in Refractory Engineering.
Mechanical Refractory
Engineering Engineering Sub Total
Year ended 30th 2017 2016 2017 2016 2017 2016
April
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External sales 91,335 88,747 40,252 34,792 131,587 123,539
Inter-segment
sales 29,084 18,248 6,522 4,534 35,606 22,782
Total revenue 120,419 106,995 46,774 39,326 167,193 146,321
Reconciliation
to consolidated
revenue:
Inter-segment
sales (35,606) (22,782)
Consolidated revenue
for the year 131,587 123,539
Mechanical Refractory
Engineering Engineering Sub Total
Year ended 30th 2017 2016 2017 2016 2017 2016
April
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profits
Operating profit
and including
share of associates 6,982 10,961 5,933 4,211 12,915 15,172
% of total operating
profit including
share of associates 54% 72% 46% 28% 100% 100%
Group centre (2,798) (2,083)
Group finance
expenses (873) (775)
Consolidated profit
before tax for
the year 9,244 12,314
Tax (2,487) (3,376)
Consolidated profit after
tax for the year 6,757 8,938
Segmental Segmental Segmental
total assets total liabilities net assets
Year ended 30th 2017 2016 2017 2016 2017 2016
April
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental net
assets
Mechanical Engineering 80,968 82,569 65,036 65,432 15,932 17,137
Refractory Engineering 41,717 43,207 23,321 28,455 18,396 14,752
Sub total reportable
segment 122,685 125,776 88,357 93,887 34,328 31,889
Goodwin PLC net
assets 71,944 71,620
Elimination of Goodwin
PLC investments (22,084) (22,441)
Goodwill 9,473 8,994
Other consolidation
adjustments - 55
Consolidated total net
assets 93,661 90,117
Segmental property, plant and equipment (PPE) capital
expenditure
2017 2016
GBP'000 GBP'000
Goodwin PLC 5,070 5,633
Mechanical Engineering 1,611 3,405
Refractory Engineering 918 3,030
7,599 12,068
Segmental depreciation, amortisation and impairment
2017 2016
GBP'000 GBP'000
Goodwin PLC 2,258 1,781
Mechanical Engineering 2,607 2,690
Refractory Engineering 1,670 1,200
6,535 5,671
For the purposes of monitoring segment performance and
allocating resources between segments, the Group's Board of
Directors monitors the tangible and financial assets attributable
to each segment. All assets and liabilities are allocated to
reportable segments with the exception of those held by the parent
Company, Goodwin PLC, and those held as consolidation
adjustments.
Geographical segments
The Group operates in the following principal locations.
In presenting the information on geographical segments, revenue
is based on the location of its customers and assets on the
location of the assets.
Year ended 30th April, Year ended 30 April,
2017 2016
Operational PPE Operational PPE
net Non-current Capital net Non-current Capital
Revenue assets assets expenditure Revenue assets assets expenditure
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
UK 24,034 63,451 69,693 6,504 36,776 66,292 69,383 9,771
Rest of
Europe 29,712 10,213 2,271 466 21,656 8,035 1,120 453
USA 6,574 - - - 13,974 - - -
Pacific
Basin 33,095 14,012 7,459 210 26,958 11,497 5,610 708
Rest of
World 38,172 5,985 6,601 419 24,175 4,293 5,622 1,136
Total 131,587 93,661 86,024 7,599 123,539 90,117 81,735 12,068
Note 2
Intangible assets
During the year, the Group added to its portfolio of intangible
assets. The main additions are GBP491,000 in relation to the
development of a new valve range by Goodwin International and
GBP300,000 in relation to a new fire extinguisher project carried
out by Dupré Minerals Limited.
Note 3
Dividends
The directors propose the payment of an ordinary dividend of
42.348p per share (2016: ordinary dividend of 42.348p). If approved
by shareholders, the ordinary dividend will be paid on 6th October,
2017 to shareholders on the register at the close of business on
8th September, 2017.
Note 4
Earnings per share
The earnings per ordinary share has been calculated on profit
for the year attributable to ordinary shareholders of GBP6,082,000
(2016: GBP8,838,000) and by reference to the 7,200,000 ordinary
shares in issue throughout both years.
There is a share option scheme in place for the Directors of the
Company under the Company's Long Term Investment Plan (LTIP), based
on the Company exceeding a target growth in the total shareholder
return of the Company over the period from 1st May, 2016 to 30th
April, 2019. Under the LTIP, as at 30th April, 2017, there would be
no share options accruing to the Directors under the LTIP and so
there is no difference between the basic and fully diluted earnings
per share of the Company in the current and prior year.
Note 5
The Annual General Meeting will be held at 10.30 a.m. on 4th
October, 2017 at Crewe Hall, Weston Road, Crewe, Cheshire CW1
6UZ.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PTMITMBJTBMR
(END) Dow Jones Newswires
August 22, 2017 10:32 ET (14:32 GMT)
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