18th Dec 2015 09:16
LONDON (Alliance News) - Goodwin PLC said Friday that only time will tell whether or not it will be able to find work to make up for the shortfall caused by the slowdown in oil, gas and mining industries, as the mechanical and refractory engineering company reported a fall in pretax profit for its first half.
For the half year to end-October, Goodwin reported a pretax profit of GBP6.0 million, more than halved from GBP13.5 million a year before, as revenue dropped to GBP61.2 million from GBP73.0 million.
The fall in pretax profit was as a result of a lower work load and tighter pricing in a "difficult market". Sales order input in its first six months was 16% higher than the previous year. However, the company said this had only been achieved by quoting tenders with tighter margins.
Goodwin said it had invested GBP5.8 million during the half year, predominantly in new machinery for its Goodwin International business, to help expand its specialist large five axis CNC machining capability. It expects to see an increase of GBP8 million in order input for this type of work in its current year.
This, combined with a research and development grant for its Easat Antennas business, will help to mitigate the downturn in the oil, gas and mining industries, the company said.
The company said that, in order to be able to take on larger contracts, it has arranged an extra GBP10 million five-year committed bank facility.
"Whilst currently depressed, we still have a good order book backlog in most of our companies. Time will tell whether we can find satisfactory levels of work to fill the gap temporarily caused by the slow down in the oil, gas and mining industries which we think will be quieter for a couple of years," the company said in a statement.
Shares in Goodwin were down 5.2% at 1,840.00 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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