Stoke-on-Trent based Goodwin considers selling part of defence business

Goodwin’s mechanical engineering division is a key supplier of components to UK and US frigate and submarine programmes.

This includes Britain’s Dreadnought programme, which is building the Royal Navy’s next-generation nuclear deterrent submarines, and the Type 26 frigate programme, which is developing a fleet of advanced anti-submarine warships.

According to its latest annual report, Goodwin Steel Castings and Goodwin International have delivered a boost to the company’s profits, having benefited from economies increasing their defence spending.

A report in the Financial Times said several potential buyers that have records in defence had expressed interest in Goodwin in recent weeks.

The company, which was founded in 1883, is majority owned and managed by the Goodwin family, while it has shares listed on the London Stock Exchange.

Its shares were up by about 10% on Friday morning.

Russ Mould, investment director for AJ Bell, said: “The company is a major supplier to UK and US submarine programmes and has also benefited from bumper defence spending across other parts of its business.

“The company took a big hit in March when it lost two significant contracts and faced order delays in the Middle East.”

He added: “Yet the interest in Goodwin’s defence arm is a reminder that the UK has a collection of engineering businesses which are global leaders in their respective niches.

“What any sale would mean for the future of Goodwin as a standalone business remains an open question but it is likely to still derive a significant chunk of its revenue from military spending regardless.”