Goodwin Regulatory News (GDWN)

CHAIRMAN'S STATEMENT

I am pleased to report that the pre-tax profits for the Group for the six month period ending 31st October 2012 were £10.4 million (2011: £6.1 million) on revenue up by 26% of £68.4 million (2011: £54.3 million).

The Group order book remains healthy in these difficult times and represents an order backlog on average of just over six months, although this is not evenly spread amongst the 20 trading companies.

The excellent profitability achieved results from the dynamic performance of our employees and our companies being able to address the market needs. Our supplies to the oil, gas and energy industries continued to grow. We have significant vertical integration between our Group companies and, as such, the combination of the individual trading company revenues is some 20% greater than the above stated Group revenue and this vertical integration allows for greater efficiency.

At our AGM we promised the shareholders attending that we would report on the progress on three major projects the Group was proposing to release activity on, subject to them being Government supported by nature of grants for which we had applied. I am pleased to say that we have been successful with all three grant applications and we propose to start work on these projects in the new calendar year once due diligence is complete. The level of Government support is between £5 million and £6 million spread over five years but with the majority of the activity within the next 30 months and it is in support of the three UK projects below.

1) The "Employer Ownership Pilot Fund" where we are undertaking to train 25 apprentices per year over the next five years to keep adding skilled engineers to support our short to medium term growth plans.

2) A "Regional Growth Fund" grant that will support the development of the 7.9 acre site adjacent to our foundry where we are adding 60,000 sq. ft. of high quality industrial buildings, a new apprentice school, four high tech office/factory units and the development of a new range of valves to assist with our continued growth in our global valve sales.

3) A "CCS" (Carbon Capture Storage) grant where Goodwin, in conjunction with Toshiba Japan and Net Power USA, won a competition for the development of ultra super efficient gas turbines. This will result in a 25 megawatt prototype unit being built by 2015 as announced at the Kyoto conference last month (see website www.netpower.com/about_press.html).

Goodwin PLC has recently signed up with Lloyds Bank for an additional £5 million five year drawn down line of credit as, despite the profitability as illustrated in this interim report, the Board considered it appropriate taking into account the increased level of working capital associated with the increases in sales revenue and the expenditure on the three projects mentioned above. This loan is backed by the Government Funding for Lending Services (FLS) scheme.

The work ethic of the Group's management and employees is beyond world class and it is not possible to provide enough praise for their skill and hard work which is allowing the Group to attain the trading performance that it is achieving in the current difficult world trading environment.

J. W. Goodwin

Chairman 19th December 2012

Management report

The 26 % increase in turnover arising in the main from the continued buoyancy of the oil and gas industry has helped the Group to increase its pre-tax profits this year. Much of this increased profit has been used to further expand our large CNC machining capability where we are finding a market need for very high quality complex machining.

The order backlog remains steady at just over six months although this is not evenly spread amongst the Group companies, some of which are more exposed to the general slow down in the West.

Turnover

Sales revenue of £68.4 million for the half year represents a 26% increase over the £54.3 million achieved during the same period last year.

Profit Before Tax

Profit before tax for the six months of £10.4 million is up 71% from the £6.1 million achieved for the same six month period last year.

Risks and Uncertainties

The Group has in place internal control procedures which, in conjunction with its centralised management structure, identify and manage the key risks and uncertainties affecting the Group.

We would refer you to note 20 (page 34) of the Group annual accounts to 30th April 2012 which describes in detail the key risks and uncertainties affecting the business such as credit risk and foreign exchange risk. This position remains unchanged at the end of October 2012.

As we wrote in our half yearly report this time last year, our biggest risk / unknown is the relationship of the major currency pairs and with the current topical news on the Euro this situation remains. Our global competitiveness should in part be protected by our overseas manufacturing activities, but the continued volatility of exchange rates remains a concern as it must be to all international trading companies.

Report on Expected Developments

This report describes the expected developments of the Group during the year ended 30th April 2013. The report may contain forward-looking 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 to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required.

2013 Outlook

The order input so far this financial year is 23% up (2011:14% up) on this time last year and is at an historical high for the Group providing good opportunity for the second half of the year.

As noted within the Chairman's Statement, and subject to the successful completion of due diligence with respect to the grants, the Group will embark on the 3 projects which will help take the Group forward in the short to medium term.

Responsibility statement of the directors in respect of the half-yearly financial report

The directors confirm to the best of their knowledge that this condensed set of financial statements has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the Interim Management Report and condensed financial statements include a fair review of the information required by Disclosure and Transparency Rules 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year) and 4.2.8R (being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so) of the United Kingdom's Financial Service Authority.

J. W. Goodwin

Chairman 19th December 2012

Condensed consolidated income statement

for the half year to 31st October 2012

Condensed consolidated statement of comprehensive income

for the half year to 31st October 2012

Condensed consolidated statement of changes in equity

for the half year to 31st October 2012

Condensed consolidated balance sheet

as at 31st October 2012

Condensed consolidated cash flow statement

for the half year ended 31st October 2012

Notes

 to the condensed consolidated financial statements

1 Reporting entity

Goodwin PLC (the "Company") is a company incorporated in England. The condensed consolidated interim financial statements of the Company as at and for the six months ended 31st October 2012 comprises the Company, its subsidiaries, and the Group's interests in associates (together referred to as the "Group").

The consolidated financial statements of the Group as at and for the year ended 30th April 2012 are available upon request from the Company's registered office at Ivy House Foundry, Hanley, Stoke on Trent ST1 3NR or via the Company's web site: www.goodwin.co.uk.

2 Statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted in the EU. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 30th April 2012.

The comparative figures for the financial year ended 30th April 2012 are extracts and not the full Group's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors 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 498(2) or (3) of the Companies Act 2006.

These condensed consolidated interim financial statements were approved by the Board of Directors on 19th December 2012.

3 Significant accounting policies

The accounting policies applied by the Group in these condensed consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30th April 2012.

4 Restatement of 31st October 2011

As detailed in note 1 of the consolidated financial statements for the year ended 30th April 2012, following discussions with the Financial Reporting Review Panel, the Group reviewed its accounting treatment of intangible assets and also took the opportunity to review its measurement of intangible assets in foreign currency acquisitions. This review was completed after the issue of the half year accounts to 31st October 2011, and the comparative results for the half year to 31st October 2011 herein have been restated accordingly.

In the income statement for the half year to 31st October 2011, the restatement has resulted in a £47,000 increase of profit after tax from £4,499,000 to £4,546,000, being additional amortisation of intangible assets of £25,000, and a decrease in the deferred tax charge by £72,000. The foreign exchange translation difference for the half year to 31st October 2011 has been restated from (£141,000) to (£336,000). The earnings per share for the half year to 31st October 2011 has been restated from 57.44p to 58.10p. As reported in the consolidated financial statements for the year ended 30th April 2012, in the restated balance sheet at 30th April 2011, the restatement resulted in a £1,345,000 increase in net assets, being a £2,264,000 increase in intangible assets and a £919,000 increase in deferred tax liabilities. In the restated balance sheet at 31st October 2011, the restatement has resulted in a £1,197,000 increase in net assets, being a £2,184,000 increase in intangible assets and a £987,000 increase in deferred tax liabilities.

A further adjustment to the 31st October 2011 balance sheet has been to show warranty provisions separately, which were previously included in accruals.

5 Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 30th April 2012.

The tax charge in the period is based on management's estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period, and the impact of any disallowed costs.

6 Business Segments

Products and services from which reportable segments derive their revenues

In accordance with the requirements of IFRS8 "Operating Segments" 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, machining and general engineering

·; Refractories Engineering - powder manufacture and mineral processing

Information regarding the Group's operating segments is reported below. 

Segment revenues and profits

Segmental assets and liabilities

Geographical segments

The Group operates in the above 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.

 7. Dividends

The directors do not propose the payment of an interim dividend.

8. Earnings per share

The calculation of the earnings per ordinary share is based on the number of ordinary shares in issue during all periods of 7,200,000 and on the profit for the six months attributable to ordinary shareholders of £7,613,000 (six months to 31st October 2011: £4,183,000, restated see note 4). The company has no share options or other diluting interest and accordingly, there is no difference in the calculation of diluted earnings per share.

9. Capital Management, issuance and repayment of debt.

At 31st October 2012 the capital utilised was £76,387,000 as shown below.

10. Property, Plant and Equipment

During the six month period to 31st October 2012, the Group had fixed asset additions of £4,154,000 on various capital projects throughout the Group, depreciation was £1,629,000, and other movements were the effect of exchange adjustments of £161,000, and disposals of £107,000. During the six month period to 31st October 2011, the Group had fixed asset additions of £2,890,000 on various capital projects throughout the Group, depreciation was £1,442,000, and other movements were the effect of exchange adjustments of £232,000, disposals of £192,000, and £40,000 of fixed assets as part of the acquisition of new subsidiaries.

11. Intangible assets

During the six month period to 31st October 2012, intangible assets were amortised by £396,000 and reduced by the effect of exchange adjustments of £90,000. During the six month period to 31st October 2011, intangible assets were amortised by £367,000 (restated), reduced by the effect of exchange adjustments of £55,000 (restated), and increased by £805,000 of intangible assets acquired with acquisitions.