Goodwin PLC is considering selling its defense business, which specializes in supplying critical components for naval propulsion and hull construction. This comes as the company experiences substantial growth in its mechanical division, driven by a surge in global defense spending. The defense business has secured major contracts, including for the Astute, Virginia, Columbia, and Dreadnaught submarine programs, as well as the Type 26 and DDG frigate programs, and the Gerald R. Ford-class aircraft carrier. Additionally, Goodwin is involved in pre-manufacturing for the AUKUS partnership's next-generation nuclear submarines.
Goodwin's financial performance reflects this growth, with a record trading pre-tax profit of $35.5 million in 2025, a 47% increase from $24.1 million in 2024, on revenue of $220 million, up 15%. The gross margin also improved to 42%. Cash generated from operations significantly increased to $67 million in 2025 from $33 million in 2024, leading to a reduction in net debt from $42.9 million to $13.6 million, and gearing from 35.1% to 9.9%.
The company's workload stood at $287 million at the end of April 2025, growing to $357 million by August 31, representing a 24% increase. A recent memorandum of understanding with Northrop Grumman International Trading Inc. is valued at an initial $16 million for four defense programs, with potential to exceed $200 million. Goodwin has also become the sole supplier for a critical program component for its US partner, expected to account for 25% to 30% of the MoU value.
Beyond naval defense, Goodwin's mechanical division also supplies ductile iron self-shielded boxes for nuclear waste containment at Sellafield, a multi-decade program with 237 awarded and 90 manufactured units out of a potential 747. This diversity, alongside its core defense contracts, provides significant long-term growth visibility. The company's strategic investments over the last decade in high-integrity castings and precision machining have positioned it favorably in these specialized markets.
The potential sale indicates a strategic move to capitalize on the robust demand in the defense sector, given the company's strong performance and significant order book. The involvement in multi-decade programs for both UK and US navies underscores its critical role and the high barriers to entry for competitors in this specialized market.
