Goodwin

Goodwin Dividend Analysis and Summary

• Declared final dividend: 280p per share (FY25), up 111% vs 133p (FY24).
• Structure: Payable in two equal instalments of 140p per share.
• Second instalment:
  • Ex-dividend date: 19/03/2026 (derived from the stated record date).
  • Record date: “on or around” 20/03/2026.
  • Payment date: “on or around” 10/04/2026.
  • Amount: 140p per share (second half of the 280p final).
• First instalment: 140p payable on 03/10/2025 to holders on the register 12/09/2025 (AGM approval 01/10/2025).
• Revised dividend policy: 58% of post-tax profits + depreciation & amortisation (up from 38%).
• Estimated cash cost of the full 280p final: ~£21.0m (7,509,600 shares).
• Coverage:
  • EPS (to equity holders) 327.17p vs dividend 280p ? c. 86% payout vs EPS.
  • On policy base (post-tax + D&A): APM indicates c. £36.1m ? c. 58% payout (in line with policy).
  • Operating cash flow FY25 £58.2m ? OCF covers full final dividend by ~2.8x.

• Cash generation is strong (OCF £58.2m vs capex £13.2m), supporting the higher distribution. Stage payments and customer advances (contract liabilities up to £55.2m) underpin working capital and reduce cashflow risk.
• Balance sheet has strengthened: net debt down to £13.6m, gearing 9.9%. A £30m interest-rate swap (<1% to Aug-2031) and a renewed 4-year RCF improve visibility on financing costs and liquidity.
• Earnings momentum is robust: trading PBT up 47%, gross margin ~42%, backlog/workload £287m, and multi-decade defence/nuclear programmes provide visibility.
• Policy lift to 58% of post-tax + D&A signals a structural step-up in shareholder returns; given D&A remains meaningful and capex needs are described as “modest” with major upcoming projects expected to be customer-funded, the policy appears well supported on current trends.
• Note that the 280p final equates to a high EPS payout (~86%), so near-term sustainability rests on maintaining earnings and cash conversion at current levels; the broader policy metric offers more headroom than an EPS-only view.

• Dividend policy increased to 58% of post-tax profits + D&A (from 38%).
• Final dividend paid in two instalments (Oct-2025 and Apr-2026), which smooths cash outflow.
• Financing headroom improved: 4-year facility renewed on improved terms; FTSE 250 status may broaden the investor base but does not directly alter dividend capacity.

• Programme concentration/timing: Significant exposure to large defence and nuclear contracts; slippage could affect cash timing, though milestone payments mitigate.
• Execution and new ventures: Scaling Duvelco and other growth projects carry commercialization risk; management notes robust testing and staged investment.
• Macro/trade risks: Tariff impact currently immaterial; continued monitoring required. FX and commodity inputs remain general risks.
• Higher payout sensitivity: The step-up raises dependence on sustained earnings/cash conversion; however, stress testing cited by the company indicates headroom under severe scenarios.
• Dates subject to confirmation: The record and payment dates for the second instalment are stated as “on or around,” implying administrative flexibility; ex-dividend date of 19/03/2026 is derived accordingly.