Last checked at 22 Aug 2008 16:33
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) | |
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| Gross profit | 22,377 | 15,940 | |
| Distribution costs | (2,842) | (1,903) | |
| Administrative expenses | (8,873) | (6,279) | |
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| Operating profit | 10,662 | 7,758 | |
| Financial expenses | (844) | (716) | |
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| Profit before taxation | 9,818 | 7,042 | |
| Tax on profit | (3,035) | (2,198) | |
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| Profit after taxation | 6,783 | 4,844 | |
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| Attributable to: | |||
| Equity holders of the parent | 6,562 | 4,687 | |
| Minority interest | 221 | 157 | |
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| Profit for the year | 6,783 | 4,844 | |
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| Basic and diluted earnings per ordinary share | 91.14p | 65.10p | |
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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 |
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| Net expense recognised directly in equity | (1,352) | (233) |
| Profit for the year | 6,783 | 4,844 |
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| Total recognised income and expense | 5,431 | 4,611 |
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| Total recognised income and expense for the period is attributable to: | ||
| Equity holders of the parent | 5,210 | 4,454 |
| Minority interest | 221 | 157 |
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| 5,431 | 4,611 | |
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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 | |
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| 21,707 | 18,355 | ||
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| 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 | |
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| 37,624 | 31,965 | ||
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| Total assets | 59,331 | 50,320 | |
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| 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 | |
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| 31,119 | 26,020 | ||
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| Non-current liabilities | |||
| Other interest-bearing loans and borrowings | 830 | 1,280 | |
| Deferred consideration | 1,607 | 1,509 | |
| Deferred tax liabilities | 968 | 1,395 | |
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| 3,405 | 4,184 | ||
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| Total liabilities | 34,524 | 30,204 | |
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| Net assets | 24,807 | 20,116 | |
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| 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 | |
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| Total equity attributable to equity holders of the parent | 23,532 | 19,647 | |
| Minority interest | 1,275 | 469 | |
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| Total equity | 24,807 | 20,116 | |
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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 | ||
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| 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 | ||
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| 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) | ||
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| Net cash from operating activities | 11,202 | 3,429 | ||
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| 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) | ||
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| Net cash from investing activities | (3,972) | (5,997) | ||
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| 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 | ||
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| 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) | ||
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| Closing cash and cash equivalents | 280 | (2,081) | ||
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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 |
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| Total | 80,578 | 24,807 | 4,773 | 66,075 | 20,156 | 3,142 |
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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