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The FTSE 250 hit a contemporary 52-week excessive this week, and I reckon a piece of that momentum got here from one shocking supply: Goodwin (LSE: GDWN). The little-known industrial engineering group shocked the market after upgrading its revenue forecast, hovering an unimaginable 50% in a matter of days.
On Tuesday (28 October), its shares briefly touched £238, up from round £135 only a week earlier.
That’s fairly a transfer for a family-run agency that’s been round since 1883. However what precisely does Goodwin do, and is that this surge sustainable?
A quiet achiever throughout the FTSE 250
Goodwin isn’t the sort of family identify that dominates funding chatter. But its attain throughout heavy engineering, defence, and power is substantial. The corporate manufactures high-spec castings and bespoke parts – suppose radar antennas, precision valves, and specialist supplies for oil and gasoline infrastructure.
Its merchandise typically find yourself in locations the place reliability isn’t non-compulsory, whether or not that’s a fighter jet radar or a nuclear reactor.
The agency’s mixture of engineering excellence and area of interest market publicity has paid off handsomely this 12 months. On Monday, the board introduced that pre-tax revenue for the 12 months ending April 2026 was now anticipated to hit roughly £71m, virtually double final 12 months’s determine.
It wasn’t simply income turning heads – the board additionally unveiled a particular dividend of 532p per share, alongside an interim payout of 140p. With a dividend protection ratio of three.88, these funds look properly funded by money circulation.
Add to {that a} strong £365m order guide spanning defence, nuclear, aerospace and mining contracts, and the outlook actually seems properly supported.
What might go mistaken?
Nonetheless, I believe it’s price remembering that speedy development can create as many challenges because it solves. With the share value leaping to date, so quick, Goodwin now trades on a price-to-earnings (P/E) ratio above 60 – a determine that makes even seasoned development buyers take a pause.
When an organization’s valuation will get that wealthy, it doesn’t take a lot disappointment to knock confidence.
A key threat for it lies in its publicity to cyclical industries. Defence demand tends to carry up properly, however tasks in oil and gasoline or mining can fluctuate with commodity cycles. Delays in giant contracts might additionally squeeze earnings momentum.
One other concern may very well be supply-chain pressures, which have hit a number of industrial producers for the reason that pandemic. Whereas its long-term partnerships provide some safety, margins might come underneath pressure if prices maintain climbing.
An extended-term story to observe
Regardless of these issues, I believe there’s nonetheless loads to love right here. Goodwin’s mixture of specialist engineering functionality and diversified finish markets provides it a resilience that many mid-cap friends may envy. Its household possession tends to foster long-term considering, and its observe file of reinvesting income in high-value niches has created a strong base for future development.
Valuation apart, the corporate matches neatly into the broader FTSE 250 narrative of British mid-caps quietly excelling on the worldwide stage. For buyers looking for diversified publicity to aerospace and defence, Goodwin’s an interesting inventory to contemplate.
The share value might need sprinted forward of itself this week, however for my part, the story beneath stays robust. I’ll be retaining an in depth eye on whether or not this under-the-radar FTSE 250 gem can sustain its momentum as soon as the mud settles.
