Goodwin recorded trading profit of £77.5m in the year to 30 April, marking a 118% year-on-year increase, following a rise in defence programmes in recent years.

The mechanical and refractory engineering group reported that its revenue also increased by 27% to £280m.

It added that its continued strong performance reflects the sustained strength of its end markets and the benefits of the strategic decisions taken over several years to focus on technically demanding sectors.

While Goodwin has seen growth across all its manufacturing companies, its mechanical engineering division continued to experience a “substantial increase” in customers’ demand its products for mission critical defence and nuclear applications.

As a result, the firm said it has positioned itself to be a “leading supplier on many UK and US Navy frigate and submarine programmes".

The company stated that its board has continued to assess the long-term strategic direction for the business, and following the significant improvement in its mechanical engineering division’s performance, it is committed to pursuing a potential disposal of the divisions.

It said that the process is going well and that its board is “considering the most appropriate capital allocation strategy and dividend policy” going forward, and it expects a substantial amount of the cash proceeds to be paid to shareholders.

Following the update, shares in Goodwin increased by over 13% in early trading, but dropped to around 6.75% later in the day.

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