Goodwin Share Discussion Threads

[jimtech] 09/5/2020 13:11

No official news RE impact of COVID-19 yet. Family run companies often don't make announcements unless absolutely necessary.

[skeptic1] 23/4/2020 09:53

All, I am slightly concerned why we haven't had any company updates re: impact of coronavirus. Have I missed something? Should I be concerned?

[westofengland] 17/4/2020 09:47

I can't speak from any knowledge of price yet I am a long term shareholder and visited Stoke on Trent to have a look around. Very impressive, sensible people. I am confident they will do their best in the current challenging environment which ultimately is all we can ask.

[deadly] 14/4/2020 18:28

Up 10% today despite the oil price going nowhere. Would have been a good buy at 1900. I'm from Newcastle-U-Lyme so also want them to do well.

[suetballs] 27/3/2020 11:56

Coming from Stoke-on-Trent these have been on my radar for a long while.
At this price I am tempted.
Suet

[skinwalker] 13/1/2020 21:15

The pertinent question is not "not all bets will pay off" but 'will any of these bets pay off?'
The times they are a'changin.
Is there a future for oil and gas exploration ?

[kinwah] 20/12/2019 10:16

Skanjete, it is important to have a decent spread of bets in the oil and gas sector as not all bets will pay off. However the dramatic winners should outweigh the losses. I hold CHAR, I3E, IOG, HUR, CLNR, ENQ and RRE all paid for from the profits made in SQZ. But just to stress these are trading stocks and I will trade out the positions into strength on drilling or farm-in success. These stocks can be extremely volatile so you have to buy near their lowpoints and sell when others are getting excited. This type of investing is almost diametrically opposite from holding GDWN for 20 years which I did before. But please do your own research and don't invest more than you can afford to lose.

[skanjete2] 19/12/2019 19:12

Hi Kinwah,

Do you have any suggestions to look at in the oil & gas sector?

Thanks!

[kinwah] 19/12/2019 09:50

3800, I am not too keen on building back my position but I'd look at it again around £22 or so. My last purchase was a couple of years ago at £17 and I exited totally earlier this year at around £32 average. GDWN is a quality company but I don't see a driver for substantial outperformance. In addition there are too many trading opportunities in the oil sector for me to tie money up in a family engineering company like GDWN.

[3800] 19/12/2019 09:30

Remember the company was being run flat out in the last financial year to hit targets for the Directors' LTIP so it isn't surprising that is now pausing for breath.
Probably very true Kinwah, What price would you consider buying in?

[kinwah] 19/12/2019 08:51

Interims will disappoint shareholders. The shares have rerated over the last 3 years and don't merit a PER of over 20. Remember the company was being run flat out in the last financial year to hit targets for the Directors' LTIP so it isn't surprising that it is now pausing for breath. Long term it's probably ok but it's not going to perform for a while.

[norbert colon] 10/12/2019 11:32

Yep agreed and if we can get ROCE and ROE back up to 20% levels it will demonstrate the quality of the earnings post all the recent Capex and bring in further interest.

[jaf111] 10/12/2019 11:12

looking forward to the interims due in the next few days (18 Dec last year).....should be excellent on the back of surging order book........

[skinwalker] 18/11/2019 23:19

Dipped my toe in here. Hopefully not the kiss of death!

[kinwah] 13/9/2019 11:18

My back of the envelope calculation suggests that if they had used the true closing price of £31 as per the disclosed terms of the LTIP then the TSR would have been about 325% which would have resulted in 75% awards rather than the 85% they have given themselves which is worth about £1.9 million in total. Maybe not a lot of money in the scheme of things but it highlights the fundamental flaws in the LTIP scheme that if the board don't like the outcome then they can change it to suit themselves.

[redartbmud] 13/9/2019 10:21

Kinwah

I did spot that. There was definitely a 'massage' to boost the return. It wasn't difficult to justify to the auditors.
They have operated a policy of buy, and hold, additional shares for several years.
As they act together, or in small groups, it is effectively a concert party. The free float is small, and a small number of shares traded consequently has a big impact on the share price.
Doubling the dividend was also a brilliant move, in the run up to the vesting date!!

Unfortunately, the LTIP deal wasn't good for shareholders, and they know that it had to be a 'one off'. The market wasn't happy with it, but they pulled it off. They are unlikely to get away with it again, for at least the next years, but ever say never, after that time has elapsed.

I doubt that anyone will have the courage to ask that question at the AGM.
Most of the attendees are former employees and locals. I bet most bought lots of shares, many years ago, at very modest prices, and have held ever since. it is possible that the current annual dividend exceeds their purchase cost.

red

[kinwah] 13/9/2019 10:03

Red, have you noticed that the board didn't like the closing price on 30th April 2019 of £31.00 despite the directors' purchases on the day to try and push the price higher. Instead the directors have used an average price of £31.70 to give themselves a substantial extra wad of shares. It's all in the first para on Page 29 of the Report and Accounts. I wonder if anyone will ask them about this at the AGM?

[redartbmud] 05/9/2019 16:40

PS

Pity that they couldn't spell it out, in the 2019 accounts, now that they have vested!

[redartbmud] 05/9/2019 16:30

Wilm

Thanks for that, I searched high and low to find the number.
It was clearly buried, in one of the documents, certainly not writ large, as they say. In the end, I decided it must be nil. Certainly didn't see it in the 2018 accounts, where the awards vested.

I have in front of me the Explanatory Notes for the 2016 AGM, Agenda items 8 and 9.
1.1 (c) Awards granted under the LTIP will be in the form of options with an exercise price equal to the nominal value of the ordinary shares ("Options").

They don't exactly hit you in the face with it!!
The nominal value is 10p. I would pay £6,120 for £1.94m worth of shares.

Many thanks.

red

[wilmdav] 05/9/2019 15:43

Exercise price is 10p, as near zero as makes no difference.

[redartbmud] 05/9/2019 10:06

I think that they are at zero price.
The number of potential shares, that could be earned (maximum of 1% of the existing share capital, of the company = 8% total) and the zero coupon, caused a big wave when it was unveiled.

It was also complex to value, based on the information provided.
There were a number of quite tough targets to hit, one of which was the average share price on 30 April 2019, £31.70 and the opening share price on 1 May £32.38.
A start reference was the 5 October share price of £22.20.

Wilm
Sorry if I confused you. The maximum that could have been earned was 1% each, for the 'Great 8' but in the event only 85% vested = 6.8% or 61,200 shares each = 489,600 shares.


It is just my opinion, on how they will take their entitlements, but 6 out of 8 are certainly family, and the other 2 may be related in some way, If not, they are very closely aligned.
They will have big tax bills to meet, so an even spread, over 5 years, may be their best option, from a personal tax and cash flow standpoint, based on the current income tax regime.
If too many of them took the 30%, in the same year, it has the potential to adversely affect the share price, and disadvantaging their co-directors.
The Goodwins have a history of buying, and holding forever.
If you look back, any sales have been matched, by an equal purchase, into some form of tax wrapper that includes spouses, and they buy Goodwin shares annually to put into their ISA accounts.

[wilmdav] 05/9/2019 09:28

Many thanks to all who have thrown light on the complex LTIP.

At the risk of displaying my ignorance, is it not true that the vesting price is the price each director must pay to exercise his options? In which case the company will receive 61,200 x £32.38 = £1,981,656 from each director who exercises all his shares. So whilst the share capital would be diluted, the company's coffers would benefit from £15,853,248 if all 8 directors exercise in full.

redartmud

Each director is entitled to 61,200 shares, a total of 489,600 shares.
So increased share capital will be 7,200,000 + 489,600 = 7,689,600 shares
In which case the dilution at end of 5 year term = 7,689,600 / 7,200,000 = 6.8%, not 8%.
Have I got it wrong?

[luderitz] 05/9/2019 08:59

oops! spoke to soon down -120 now which is more in keeping.

[luderitz] 05/9/2019 08:57

Thanks Glaws2 share price usually retreats but not so far on this one which seems rather odd to me, am I the only one?

Just to say I don't hold but they are on my watch list.