Final Results

RNS Number : 9346B

Goodwin PLC

22 August 2008

 



PRELIMINARY ANNOUNCEMENT

Goodwin PLC today announces its preliminary results for the year to 30th April 2008.

I am pleased to report annual pre-tax profits for the Group for the year to 30th April 2008 of £9.82 million (2007:£7.04 million), an increase of 39.4% on a revenue of £80.6 million (2007: £66.1 million) which is up 22% on the previous year. The directors propose that a dividend of 23.004p per share (2007:18.403p) be paid.

The above results were accomplished by the Group's continued high level of sales into the oil and gas markets as well as the power generation markets worldwide. The results also benefitted from the profits of our new German valve manufacturing subsidiary, Noreva GmbH, which achieved £1.4 million pre-tax profits in its first full year of trading as part of the Group. 

The new financial year commencing 1st May 2008 was started with order books that allow us to see our companies having the opportunity to contribute to a further improvement in the performance of the Group. Oil, gas, LNG and fossil fuel production and the building of new power stations to meet the ever- growing energy needs in countries with rising gross domestic products, together with a greater demand for our refractories used in energy conservation, have resulted in excellent utilisation of our manufacturing facilities and the Board expects this will continue to be the case.

Rising energy and metal alloy costs are well publicised internationally and to date we have been able to pass on these costs. Generally, down payments received from our customers have enabled the forward fixing of the alloy costs.

As a key performance indicator, the forward order book consists of projects with scheduled delivery dates in both 2009 and 2010. The Group's engineering companies' products are scheduled to play a major part in the reduction of carbon dioxide emissions. It is a fact that fossil fuelled power stations will continue to supply the majority of the world's electricity for many years. Utilising the cast components produced by Goodwin could potentially contribute, by 2020, to delivering power generation efficiency resulting in a reduction of 800 million tonnes of carbon dioxide emissions a year in China and India, based on these countries' anticipated output by that date. Our business is starting to supply other major fossil fuel power generators who wish to improve their efficiency by operating at higher temperatures with high temperature alloys. We also have current orders for items to be used in nuclear power generation facilities. 

The strength of the Euro against Sterling now gives us an opportunity to develop increased business in Europe. The principal risks and uncertainties faced by the company relate to the possible substantial weakening in the strength of the US Dollar against Sterling, the US Dollar being the currency in which over 60% of the Group's worldwide turnover is traded. The diversification of the Group's products and markets assist in the minimising of any specific market turn down but, as with all manufacturing companies, a world depression would be unhelpful.

At the end of the financial year the company made its first investment in Brazil and is building a new manufacturing facility just north of Sao Paulo for investment lost wax casting powders, which will be sold throughout South America. This same facility will also be used to create a base for our valve and pump sales operations in Brazil. 

The acquisition of SRS Holdings was completed at the end of June 2008, after the financial year end, and therefore financial information relating to this transaction will be recorded in the Group's results for the first half of the current financial year. The purchase of SRS Holdings will increase the efficiency of our worldwide investment casting powder operations, improve the utilisation of our existing facilities and assist the enlarged Group to expand sales through the cross fertilisation of technology. 

Following completion of this acquisition, the Group will have a period of consolidation and will utilise profits to reduce the debt levels that have resulted from funding the increased debtors and work in progress which has arisen as a result of the Group's annual turnover increasing by £50 million in the past six years.

The Board again wishes to thank the employees for their never ending efforts in pushing the Group performance forward in this 125th year since the formation of the business.

J. W. GOODWIN

Chairman

Consolidated income statement

for the year ended 30th April 2008

		2008	2007
		£000	£000
Continuing operations
Revenue		80,578	66,075
Cost of sales		(58,201)	(50,135)
Gross profit		22,377	15,940
Distribution costs		(2,842)	(1,903)
Administrative expenses		(8,873)	(6,279)
Operating profit		10,662	7,758
Financial expenses		(844)	(716)
Profit before taxation		9,818	7,042
Tax on profit		(3,035)	(2,198)
Profit after taxation		6,783	4,844
Attributable to:
Equity holders of the parent		6,562	4,687
Minority interest		221	157
Profit for the year		6,783	4,844
Basic and diluted earnings per ordinary share		91.14p	65.10p

Consolidated statement of recognised income and expense

for the year ended 30th April 2008

	2008	2007
	£000	£000
Foreign exchange translation differences	109	9
Effective portion of changes in fair value of cash flow hedges	(1,218)	589
Change in fair value of cash flow hedges transferred to profit or loss	(838)	(935)
Tax recognised on income and expenses recognised directly in equity	595	104
Net expense recognised directly in equity	(1,352)	(233)
Profit for the year	6,783	4,844
Total recognised income and expense	5,431	4,611
Total recognised income and expense for the period is attributable to:
Equity holders of the parent	5,210	4,454
Minority interest	221	157
	5,431	4,611

Consolidated balance sheet

at 30th April 2008

		2008	2007
		£000	£000
Non-current assets
Property, plant and equipment		16,376	13,305
Intangible assets		5,331	5,050
		21,707	18,355
Current assets
Inventories		15,038	14,367
Trade and other receivables		20,620	15,997
Financial assets		154	1,189
Cash and cash equivalents		1,812	412
		37,624	31,965
Total assets		59,331	50,320
Current liabilities
Bank overdraft		1,532	2,493
Other interest-bearing loans and borrowings		2,549	5,626
Trade and other payables		23,552	16,598
Financial liabilities		1,873	-
Liabilities for current tax		1,613	1,303
		31,119	26,020
Non-current liabilities
Other interest-bearing loans and borrowings		830	1,280
Deferred consideration		1,607	1,509
Deferred tax liabilities		968	1,395
		3,405	4,184
Total liabilities		34,524	30,204
Net assets		24,807	20,116
Equity attributable to equity holders of the parent
Share capital		720	720
Translation reserve		142	33
Cash flow hedge reserve		(777)	684
Retained earnings		23,447	18,210
Total equity attributable to equity holders of the parent		23,532	19,647
Minority interest		1,275	469
Total equity		24,807	20,116

Consolidated cash flow statement

at 30 April 2008

		2008		2007
		£000		£000
Cash flow from operating activities
Profit from continuing operations after tax		6,783		4,844
Adjustments for:
Depreciation		1,831		1,495
Amortisation of intangible assets		458		101
Financial expense		844		716
Loss on sale of property, plant and equipment		7		9
Tax expense		3,035		2,198
Operating profit before changes in working capital and provisions		12,958		9,363
Increase in trade and other receivables		(3,428)		(2,910)
Increase in inventories		(213)		(1,736)
Increase/(decrease) in trade and other payables (excluding payments on   account)		2,989		(597)
Increase in payments on account		2,199		1,793
Cash generated from operations		14,505		5,913
Interest paid		(684)		(657)
Corporation tax paid		(2,557)		(1,768)
Interest element of finance lease obligations		(62)		(59)
Net cash from operating activities		11,202		3,429
Cash flow from investing activities
Proceeds from sale of property, plant and equipment		12		25
Acquisition of property, plant and equipment		(3,245)		(2,403)
Acquisition of intangible assets		(594)		(880)
Acquisition of subsidiary net of cash acquired		(145)		(2,739)
Net cash from investing activities		(3,972)		(5,997)
Cash flows from financing activities
Payment of capital element of finance lease obligations		(518)		(382)
Dividends paid		(1,325)		(1,100)
(Repayment of)/proceeds from loans		(3,056)		5,000
Net cash from financing activities		(4,899)		3,518
Net increase in cash and cash equivalents		2,331		950
Opening cash and cash equivalents		(2,081)		(3,024)
Effect of exchange rate fluctuations on cash held		30		(7)
Closing cash and cash equivalents		280		(2,081)

  GOODWIN PLC

RESULTS FOR THE YEAR ENDED 30TH APRIL 2008

NOTES

1.    As required, the Group's financial statements have been prepared in accordance with International Financial Reporting

       Standards as adopted by the EU (IFRS) and the above accounts have been prepared on this basis. The comparative results

       for the year ended 30th April 2007 have also been prepared on this basis.

2.    Exchange gains and losses resulting from the translation of foreign currencies were previously included in administrative

       expenses. The directors consider it more appropriate to show such movements in revenue. The April 2007 figures have been

       restated in order that the figures are presented on the same basis year on year resulting in a decrease in revenue and

       administrative expenses of £761,000 in the prior year.

3.    The Group is managed as one business but 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.

		2008			2007
	Revenue	Operational assets	Capital expenditure	Revenue	Operational assets	Capital expenditure
	£000	£000	£000	£000	£000	£000
UK	15,325	20,622	4,077	12,761	18,060	2,786
Rest of Europe	21,686	936	401	9,966	545	-
USA	7,084	-	-	4,610	-	-
Pacific Basin	16,123	1,288	86	27,791	868	203
Rest of world	20,360	1,961	209	10,947	683	153
Total	80,578	24,807	4,773	66,075	20,156	3,142

4.    The Directors propose the payment of an ordinary dividend of 23.004p per share (2007: 18.403p). The proposed dividend will

        be paid on 7th November 2008 to shareholders on the register at the close of business on 10th October 2008.

5.    The earnings per ordinary share has been calculated on profit after taxation for the year attributable to equity holders of the

       parent of £6,562,000 (2007: £4,687,000) and by reference to the 7,200,000 ordinary shares in issue throughout both years. The

       company has no share options or other diluting instruments and accordingly there is no difference in the calculation of

       diluted earnings per share.

6.    The Annual General Meeting will be held at 10.30 a.m. on 5th November 2008 at Crewe Hall, Weston Road, Crewe, Cheshire

       CW1 6UZ

7.     Copies of the 2008 accounts are expected to be posted to shareholders in the week commencing 25th August 2008 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.

8.    The financial information set out above does not constitute the company's statutory accounts for the years

     ended 30 April 2008 or 2007 but is derived from those accounts. Statutory accounts for 2007 have been

     delivered to the registrar of companies, and those for 2008 will be delivered in due course. The auditors have

     reported on those accounts; their report was (i) unqualified, (ii) did not include a reference 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 237(2) or (3) of the Companies Act 1985 

END

 

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FR ILFVETIIFFIT