Goodwin plc (LON:GDWN) saw its shares rocket over 20% higher on Thursday after the engineering group rewarded shareholders with a bumper dividend as it posted a jump in full-year profits thanks to increased margins.
For the year ended April 31, the AIM-listed firm posted a 44% increase in pre-tax profits to £13.3m, despite group revenue falling by 5.3% to £125mln.
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The company saw its gross profit margin rose to 28,.6%, up from 25.6%, while its return on capital employed increased to 12.3% from 8.4%, and its net cash flow from operating activities shot up 83% to £31m.
Trading profits from Goodwin's refractory division rose by 78% to £7.5mln as at April, excluding the sale of its land in India.
The group’s mechanical engineering division saw its three largest companies - Goodwin International, Noreva and Goodwin Steel Castings - awarded "substantial orders" from areas other than the traditional oil and gas industry.
The firm’s chairman John Goodwin said the strong trading results will likely “improve again in the new financial year, especially so as the order intake as we write is 16% increased as compared to the same time last year.”
Goodwin said, "It would be inappropriate not to make mention of how very difficult the last two financial years have been for the foundry, Goodwin Steel Castings. Indeed for all foundries worldwide other than those addressing the automotive industry and the aerospace industry, it has been a very challenging three years."
He added: "At Goodwin, we have taken the opportunity over the past eighteen months to reposition the foundry such that we can address more efficiently very large high integrity castings for nuclear fuel reprocessing and for military boat building programmes in the USA, the UK and other overseas countries.”
The firm is paying a dividend of 83.47p per ordinary share, up 97% on last year’s payout.
In late afternoon trading, Goodwin shares were 23.7 % higher at 2,300p.