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(Sharecast News) - Shares in engineering firm Goodwin came under pressure on Wednesday, after problems in its polyimide business overshadowed robust performances elsewhere.
Updating on trading for the four months to 31 August, the 143-year business said in its refractory division, international profits jumped 19% to £3.1m and by 30% at AVD Fire, helping to offset the impact of planned maintenance in the UK and elevated gold and silver prices.
However, in the technological unit, polyimide business Duvelco slumped to a £1.7m loss, primarily due to depreciation charges against manufacturing assets.
Stoke-on-Trent-based Goodwin, which is still majority-controlled and run by the founding family, added: "Duvelco is a high-growth opportunity within the continuing businesses. However, work has been needed to validate the most appropriate drying solution following the identification of a mechanical issue during the commissioning of Duvelco's full-scale production plan."
As at 1045 BST, the stock had lost 4% at 13,840p.
Goodwin agreed earlier this month to sell a substantial part of its mechanical engineering division, including its defence operations, for up to £1.1bn to US private equity firm Cerberus. Completion is expected in the first quarter of 2027.
Announcing the deal, chair Timothy Goodwin said an internal reorganisation would be taken in response to the sale. On Wednesday, the firm said it would also review the roles, responsibilities and pay of the board, to ensure they were suitable for the continuing business, which will be notably smaller. It is also actively looking to recruit a chief executive and finance director.
"The intention is to provide the remaining group with dedicated executive leadership while retaining appropriate board oversight, strategic input and continuity," it noted.
A significant proportion of the net cash proceeds will be returned to shareholders, although the board has yet to decide how or when that will be carried out.
Goodwin concluded: "The board remains confident in the prospects of the continuing businesses.
"The objective remains to create sustainable long-term value for shareholders through the businesses they will continue to own, alongside the substantial value to be realised from the disposal."
Shore Capital said: "The established refractory operations provide a foundation of earnings and cash generation, while AVD and Duvelco offer high growth and longer-term potential."
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