Goodwin Share Discussion Threads

[muangsing] 25/8/2009 11:36

Gengulphus

Thanks for your reply.

I was hoping the chairman was referring to those individuals with income in excess of £150k pa.

Your comment "more likely , tax rates could go up again in the following year", is not an appealing thought, but we are in such a financial hole I agree it is entirely possible, if any political party has the guts to do it. Though they would probably be committing political suicide.

Its scary, a government deficit of £150 bn approx implies that Gordon is borrowing and spending £10k approx pa for a family of 4. That is on top of the familys existing debts and borrowings. The UK is headed for bankruptcy.

Regards

[gengulphus] 24/8/2009 19:10

Dividends are to be taxed at 42.5% instead of 32.5% next year 2010-2011 for higher rate taxpayers and perhaps for basic rate taxpayers...

Not unless there's been a more recent announcement than this year's budget notes that I've missed... What they said was that the official tax rate for dividends would rise to 42.5% for earnings over £150k, which is basically a parallel move to the tax rate on normal earnings over £150k rising from 40% to 50%.

See for the budget note concerned.

Note that I say "official tax rate" because the notional tax credit on dividends reduces the effective tax rate in all cases. For current higher-rate taxpayers, the situation is that each £9 of extra dividend income gets a £1 tax credit. They're charged at 32.5% on the £9+£1 = £10 total, for £3.25 tax, but the £1 tax credit reduces that to £2.25.

The net result is that the effective tax rate on that £9 of extra dividend income for a higher rate taxpayer is the extra £2.25 of tax paid divided by the £9 of extra dividend income.

In the 2010/11 tax year, that will remain the case for higher-rate taxpayers earning up to £150k total (*). Above that level, the same calculation is done except using 42.5% instead of 32.5%, so that the extra tax due is £4.25-£1 = £3.25 and the effective tax rate is £3.25 divided by £9, or 36.11%.

So I think the main significance of the phrase in the Chairman's statement is that he's thinking in terms of his shareholders having incomes above £150k!

(*) Except that there will be a region above £100k where the personal allowance is withdrawn - this raises the effective tax rate in that region for all types of income. Exactly how much it raises it by depends in a somewhat intricate fashion on the exact breakdown of the income, but ballpark figures are that the effective tax rate rises to 60% from £100k up to about £113k, then drops back to 40% until it rises to 50% at £150k.

Gengulphus

Edit: Note that the above is just about announced plans for the 2010/11 tax year. Those plans could change, though I think it unlikely due to the proximity to the general election and the fact that would cause an uproar from everyone in the tax business due to the need to make late changes to software, documentation, etc. More likely, tax rates could go up again in the following tax year...

[mw8156] 24/8/2009 18:35

Dividends are to be taxed at 42.5% instead of 32.5% next year 2010-2011 for higher rate taxpayers and perhaps for basic rate taxpayers...

Who were the bankers that did not offer the same terms?

[muangsing] 24/8/2009 15:02

Does anyone understand this phrase in the Chairmans Statement

"in relation to the 10% tax increase that the government has implemented on dividends to help finance the banking crisis costs"

Regards

[cockneyrebel] 23/8/2009 10:50

Wait till next weekend before making that decision Shanks :-)

CR

[shanklin] 23/8/2009 10:36

Blimey CR

That's such a good post I might have to become a Gooner :-)

Cheers, Martin

[cockneyrebel] 22/8/2009 17:09

Well I'll continue to hold.

These are a great backbone to a mixed holding imo. You get 5% divi next month too.

Power stations are a huge growth market for Goodwin. Their high temperature cast components mean that power stations can burn at a much higher temperature, reducing the carbon output. These stations will have to go this way all around the world.

When GDWN do put out any good news (and they report quarterly) then like yesterday - it will take just a couple of thousand shares to move this up £1.

2003 = 25.5p, 2004 = 27p (+6%), 2005 = 35p (+30%), 2006 = 47p (+35%), 2007 = 65p (+38%), 2008 = 91.4p (+40%) 2009 = 122p (+33%)

That's the eps record - there will be plenty wanting to buy that even if growth is flat this year imo. It's unmatched. There will be some that want to sell I guess - they pay the spread when they buy back, they lose the divi, they will in all liklihood buy back in on good news and miss the best price because these will leap on good news. That's fair enough but personally I'll keep hold what I have - I think the way these have outperformed the likes of Wellstream and Weir Group (who are also forecast not to grow their earnings this year) yet are trading on a much lower PE says to me they are undervalued, imo - and WSM and WEIR can't hold a candle to GDWN's growth and performance and debt-free status.

CR

[1q] 22/8/2009 10:22

In the words of the Bard, show me a better bet and I'll show you my a...

Posted at 1.30 am - have you had a drink ?

I would hardly say Goodwin are ex-growth - far from it. Just going through a period of prudent consolidation, with a fair reward for their patient shareholders to boot.

For anyone looking for a long-term, solid company where you can sleep at night with your investment, then there's no better bet than GDWN.

[stegrego] 22/8/2009 01:30

Sold at 1275 - p/e 10 at that price and this statement doesnt exactly thrill me:

'but it is unlikely due to the global trading environment that there will be any growth in pre-tax profit for the year ending 30th April 2010.'

p/e 10 isnt cheap for something thats gone ex growth, even if only for a year. Better bets elsewhere IMO.

Good Luck.

[jo0ls] 21/8/2009 18:52

With my impressive 6 months of experience, I thought it might drop after the results. I've been waiting to buy for a couple of weeks. I'll collect some on Monday, place in an ISA and leave to ferment for a year or two.

[cockneyrebel] 21/8/2009 17:42

Yep, a few profit takers and I guess being near the close the mm's decided it might be prudent to put people off.

55p divi

Earnings Growth Record

2003 = 25.5p, 2004 = 27p (+6%), 2005 = 35p (+30%), 2006 = 47p (+35%), 2007 = 65p (+38%), 2008 = 91.4p (+40%) 2009 = 122p (+33%)

Take a look at that track record, it counts for a lot. You won't find one as good as that anywhere else imo.

A reliable place to have your money imo, even if earnings don't grow this year. But with the order book at £57m I think they might still surprise as they often do.

PE of 9 after you net off the divi - compare that to Wellstream imo.

Chart still in an uptrend if you care to take a look, £3 spikes and £2 drift backs.

CR

[shanklin] 21/8/2009 16:54

Yep, seems a bit of an over-reaction. Having sold 500 at 1297 per my earlier post, I bought them back for 1185 just before the close :-)

55p dividend to come shortly and a company where management seem 100% reliable.

[jo0ls] 21/8/2009 16:48

Looks like a buying opportunity on Monday then.

[cellars] 21/8/2009 12:01

WCB FWIW i came up with 111p eps for fy2010. Anyone else any thoughts?

[cockneyrebel] 21/8/2009 11:30

Agree Westcountryboy.

Extraordinary divi and debt gone. Remember they achieved this in Q4 with the £ much stronger against the $ when 60% of earnings come from $ denominated countries - that's rather excellent imo

Take a look at Wellstream results this week they hav blown Wellstream to pieces :-)

Good of them to put the results out at 9.30am this time when I had just got aclimatised to 3.30pm :-) Caught me in the bath!


Jewellery - have a read of ACR recently, seems jewellery is on the pick up here too.


With debt killed perhaps a larger divi will become the norm.

CR

[shanklin] 21/8/2009 11:16

Given how much they have talked in recent RNSes about the importance and merits of going cash positive in the current economic environment, IMHO it seems very +ve for them suddenly to add an extra 27.77p to the dividend payable.

I managed to sell 500 at £12.96, which I'll buy back if the share price drops back for any reason. Knowing my luck we'll probably see a bid tomorrow at £20 /share :-)

Cheers, Martin

[dasv] 21/8/2009 10:43

good post WCB- thanks.

[westcountryboy] 21/8/2009 10:02

Much as expected but eps for the year 'only' 121.93p. Eps in final quarter only 24.6p as against 24.86p in Q4 08. Shouldn't read too much into quarterly eps figures as so much depends on when tax is paid. Revenue for Q4 up but operating margin down at 11.7%, actually the lowest quarterly margin of the eight reported since quarterly reporting began. That may be more significant than eps freeze.

Fairly clear warnings that little growth can be expected next year, and the jewellery castings business is obviously suffering. However SRS will contribute in the longer term, and Noreva contributed £3.1m, a dream acquisition since it only cost £3.4m.

Capex back to normal at £2.22m for H2 (after acquisition of SRS in H1) but still ahead of depreciation at £1.24m for H2.

The big news is a) the abolition of debt, always something I like to see, and b) the special dividend, making 55p in all for holders this year.

All in all a very creditable performance from a company that is clearly operating to long-term plans and is prudent about managing cash and growth. Remains a very firm hold. I would guess 110-120p eps next year, but difficult to say really, and no estimates to guide us!

cheers
WCB

[rbf] 21/8/2009 09:50

Results look good at first glance, but perhaps a little caution advised....


"but it is unlikely due to the global trading environment that there will be any growth in pre-tax profit for the year ending 30th April 2010."

[cambium] 21/8/2009 09:44

Basic and diluted earnings per ordinary share 121.93p

[cambium] 21/8/2009 09:40

cash before profit