Supporting British Manufacturing: Key Players in the Sector
Britain’s manufacturing industry stands out as a pillar of innovation and high-quality production, encompassing everything from specialized engineering services to cutting-edge technological advancements and pharmaceuticals. With an impressive £452 billion worth of goods exported last year, notable segments like beer and aircraft components have experienced significant growth. However, recent figures indicate that the sector is currently facing challenges, making it crucial for consumers and investors alike to seek out the “Made in Britain” label and support local manufacturers.
Why Invest in British Manufacturing?
Supporting domestic firms not only bolsters the economy but also offers potential financial gains for investors. Here, we spotlight three companies that are champions of British manufacturing and hold promise for the future.
G&H: Precision in Optical Technology
Previously known as Gooch & Housego, G&H has streamlined its name but retains a rich legacy in high-precision optical technology. Founded in Somerset by optical scientists in the late 1940s, G&H specializes in crafting complex lenses and crystals. Today, its products range from imaging systems for military applications to ultrasound devices, highlighting its critical role in various growth industries like defense and life sciences.
G&H has established facilities across the UK and recently expanded into the US, enhancing its growth footprint. Analysts anticipate the company will particularly thrive in light of increased British military expenditure, especially in sectors focused on drones and autonomous vehicles, which currently account for 35% of its revenue.
Despite facing challenges due to previous profit warnings, G&H is showing signs of recovery, with solid order books and sustainable profit margins. Its undervaluation compared to international peers makes it an attractive buy. Additionally, the company offers a dividend yield of around 2.4%, appealing for both income-savvy and growth-oriented investors.
- Traded on: AIM
- Ticker: GHH
- Website: gandh.com
HALMA: A Multi-Faceted Business Leader
Halma operates on a unique business model, incorporating nearly 50 companies under its umbrella, each addressing niche technological solutions, from elevator safety to medical screening. This diversified approach allows Halma to leverage its financial strength to foster growth across its subsidiaries.
Several of Halma’s operations are UK-based, contributing to the local economy. As regulations tighten in health and safety sectors, demand for Halma’s products is projected to rise. Although investments come with risks, the company has demonstrated a consistent performance, currently trading at £33.56—a 25% increase over the year.
For long-term investors, price fluctuations present an opportunity to enter the market, particularly following a recent minor dip in share prices.
- Traded on: Main Market
- Ticker: HLMA
- Website: halma.com
NICHOLS: The Refreshing Taste of Success
Known for producing Vimto, one of the UK’s favorite fruit-flavored drinks, Nichols is an AIM-listed company based in Ross-on-Wye. Vimto, initially launched in 1908, remains a family-run endeavor, which contributes to its stability and cautious management approach. Today, Nichols has diversified its offerings, including drinks under the Levi Roots brand and various pub syrups.
With about 75% of sales originating domestically, Nichols also sees potential growth in international markets, particularly in the Middle East and Africa. After finishing the 2024 financial year with approximately £50 million in net cash, the company has a promising outlook for dividends while being strategically positioned for expansion.
Investors may find Nichols appealing, especially with the stock down about 7% this year.
- Traded on: AIM
- Ticker: NICL
- Website: nicholsplc.co.uk
Conclusion: The Importance of Investing in British Manufacturing
With the UK manufacturing sector facing hurdles, supporting these domestic businesses is more critical than ever. From precision optics and diverse technological solutions to beloved beverages, companies like G&H, Halma, and Nichols not only represent British ingenuity and craftsmanship but also provide promising investment opportunities. By choosing to invest in or purchase from these manufacturers, you contribute to the economy while also exploring potential financial gains. Investing in Britain is not just a patriotic choice but a savvy one too.
