Have you ever driven through the industrial heartlands of Britain and wondered if anything truly world-class still gets made here? I know I have. Most headlines scream about decline, offshoring, and faded glory. Yet every now and then you stumble across a business that quietly defies the narrative – one that’s not just surviving but actually thriving in the toughest corners of heavy engineering.
That’s exactly what I felt when I first looked deeper into a company that’s been operating from the same patch of Stoke-on-Trent since the Victorian era. It’s the kind of place you’d drive past without a second glance, but inside they’re crafting components so critical that failure simply isn’t an option.
Why Goodwin Stands Out in British Manufacturing
In an age where many UK manufacturers have either disappeared or been swallowed by larger conglomerates, this family-controlled engineering group has stayed independent for over 140 years. And not just independent – it’s become exceptionally profitable by focusing on the parts of industry where precision and reliability trump everything else.
Think about what keeps vital infrastructure running behind the scenes. Specialised valves for liquefied natural gas terminals. High-integrity castings for nuclear waste storage. Precision components for naval propulsion systems. These aren’t glamorous products you’ll see advertised on television, but they’re absolutely essential. And this company has built a reputation for getting them right every single time.
The Power of Family Ownership
Family ownership often gets a bad rap in public markets. People worry about governance, entrenched management, or short-term thinking disguised as long-term stewardship. In this case, though, it’s been the opposite – arguably the company’s greatest strength.
Remaining under family control has allowed decades of patient investment without the constant pressure to deliver quarterly numbers that look good on a spreadsheet. Instead of chasing fashion or cutting corners to boost short-term earnings, the focus has stayed on building capability and winning contracts that can last for years or even decades.
I’ve always believed that when family owners have significant skin in the game, alignment with minority shareholders tends to be stronger than in many widely-held companies. Here, the family still chairs the board, runs the operations, and owns the majority of shares. That kind of structure can breed caution, but it can also foster genuine long-term thinking.
Reputation in specialist engineering isn’t built overnight – it takes decades of consistent delivery.
And that’s precisely what this business has achieved. Its track record opens doors that newer competitors can only dream about.
Reinventing Rather Than Retreating
About ten years ago, the company faced what looked like an existential challenge. Its traditional markets were closely tied to oil and gas exploration, and when prices collapsed, many similar businesses simply shrank to match reduced demand.
But management here chose a different path. Rather than manage decline, they pushed aggressively into adjacent high-barrier sectors. Defence. Nuclear decommissioning. Specialist applications requiring complex alloys and flawless quality records.
This wasn’t just diversification for its own sake. These are markets where governments and large corporations prioritise certainty over cost. Where contracts stretch over many years. Where switching suppliers mid-project is practically unthinkable.
The results speak for themselves. Today the order book stands at record levels, providing visibility that most industrial companies can only envy. Much of this comes from long-duration programmes that aren’t subject to normal economic cycles.
A Conservative Approach to Growth
One aspect that particularly impresses me is how the company funds expansion. Many engineering businesses load up on debt to build new capacity, hoping the orders will follow. Here they do things differently.
They use what they call customer-funded investment. Major capital expenditure only happens once long-term contracts are secured. The customer commits first, then the capacity gets built. It’s incredibly conservative, and it works beautifully.
The benefits are clear in the numbers. Cash generation has surged. Net debt has fallen dramatically and is heading toward zero. Rather than hoarding cash or making questionable acquisitions, the board has substantially increased the ordinary dividend and added a generous special payout.
- Record order intake providing multi-year visibility
- Net debt approaching zero
- Ordinary dividend up over 100%
- Special dividend announced
- Expanding margins despite investment
In a sector where leverage and cyclicality often go hand in hand, this combination feels almost unique.
The Exciting Second Act
Perhaps the most intriguing part of the story is only just beginning. The company has developed an advanced materials subsidiary built around a proprietary polyimide material with exceptional properties.
This isn’t some speculative side project. The material has characteristics that make it particularly valuable in demanding applications like aerospace, where performance justifies very high margins.
Getting qualified for these markets takes years of testing and validation – exactly the kind of barrier that plays to the group’s historic strengths. Interestingly, management broke their usual rule by funding the new production facility entirely from internal cash rather than waiting for customer commitments.
That tells you something about their confidence. Even more telling: current profit guidance doesn’t include any meaningful contribution from this subsidiary yet. So the forecasted doubling of pre-tax profits comes entirely from the traditional engineering operations.
If the materials business scales successfully, it could eventually become worth more than today’s core operations. That’s the kind of optionality that gets long-term investors excited.
Valuation Considerations
Of course, none of this has gone unnoticed. Recent promotion to the FTSE 250 has brought institutional attention, and the shares now trade on a clear premium to traditional engineering peers.
Is that justified? In my view, yes – but with caveats. This remains a specialist business with limited free float and significant exposure to government spending programmes. Communication is minimal, which can lead to volatility when news flow slows.
Yet the quality is genuine: multi-decade track record, near debt-free balance sheet, rising margins, secured workload for years ahead, and meaningful growth optionality from advanced materials.
Few listed British manufacturers can match that combination. The premium multiple reflects scarce quality rather than speculative hype.
You’re not paying for average industrial returns – you’re paying for consistent high-teens margins and genuine compounding potential.
What Kind of Investor Suits This Stock?
This isn’t a stock for everyone. The limited liquidity means it can move sharply on modest volume. The concentrated customer base introduces lumps in earnings. And the premium rating requires patience if near-term progress disappoints.
But for investors comfortable holding through volatility, willing to trust family stewardship, and focused on multi-year outcomes rather than quarterly noise, it offers something increasingly rare on the London market.
A genuine British industrial compounder. The kind of business that proves manufacturing excellence still exists here – you just have to know where to look.
Existing shareholders have enjoyed a tremendous run. New investors face a higher entry point. Yet the underlying drivers – secured workload, deleveraging, dividend growth, and the materials opportunity – remain firmly in place.
For patient capital, this remains one of the more attractive ways to gain exposure to high-quality British engineering. Worth holding through thick and thin, and certainly worth considering on any meaningful weakness.
Sometimes the best opportunities aren’t found in the flashy sectors grabbing headlines. Sometimes they’re quietly operating from unassuming industrial units in the Midlands, building the critical components that keep the world running.
That’s the story here – and in my view, it’s far from over.
