GOODWIN PLC

Earnings Release • Aug 22, 2017

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

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 £9.24 million (2016: £12.3 million), a decrease of 24.9% on a revenue of £132 million (2016: £124 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 £0.9 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 £601,000, 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 £601,000 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
			£'000	£'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
	£'000	£'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

	Share capital	Translation reserve	Cash flow hedge reserve	Share-based payments reserve	Retained earnings	Total attributable to equity holders of the parent	Non-controlling interests	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
YEAR ENDED 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
YEAR ENDED 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
			£'000	£'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
	£'000	£'000	£'000	£'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 END 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 Engineering		Refractory Engineering		Sub Total
Year ended 30th April	2017	2016	2017	2016	2017	2016
	£'000	£'000	£'000	£'000	£'000	£'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 Engineering		Refractory Engineering		Sub Total
Year ended 30th April	2017	2016	2017	2016	2017	2016
	£'000	£'000	£'000	£'000	£'000	£'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 total assets		Segmental total liabilities		Segmental net assets
Year ended 30th April	2017	2016	2017	2016	2017	2016
	£'000	£'000	£'000	£'000	£'000	£'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
					£'000	£'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
					£'000	£'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, 2017				Year ended 30 April, 2016
	Revenue	Operational net assets	Non-current assets	PPE Capital expenditure	Revenue	Operational net assets	Non-current assets	PPE Capital expenditure
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'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 £491,000 in relation to the development of a new valve range by Goodwin International and £300,000 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 £6,082,000 (2016: £8,838,000) 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