The UK manufacturing sector may be out of favour , but Unicorn UK Smaller Companies ’ Alex Game says it is full of global leaders with a rich heritage in niche areas
There are many reasons why one might want to avoid small UK manufacturers : the domestic economy is seen as a laggard to the G7 , UK equities are out of favour and such companies are regarded as cyclical with a capital “ C ”. As a result , valuations in this area look cheap . But the UK has a rich manufacturing heritage , comprising global leaders that make products for specialist applications . We believe any cyclical demand weakness will be asynchronous , due to the legacy of recent supply chain issues and structural drivers . That ’ s why we are backing the following stocks .
Goodwin designs and manufactures high-quality engineering products , serving international customers since 1883 . Examples of its expertise include the manufacture of steel casings used to contain nuclear waste from decommissioned sites , steel castings for aircraft carrier and submarine hulls , and submersible pumps for the mining industry . Its market-leading position in these niche areas acts as a significant barrier to entry and ensures attractive through-cycle profit margins . Goodwin is a global player , generating less than a third of revenues from the UK .