REG - Gooch & Housego PLC - Half Year Trading Update

Gooch & HousegoAnnouncement

04/04/2024 07:00

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RNS Number : 2349J  Gooch & Housego PLC  04 April 2024

 

 For immediate release                              4 April 2024

 

Gooch & Housego PLC

("G&H" or the "Company" or the "Group")

 

Half Year Trading Update

 

"Trading in line with management's expectations"

 

Gooch & Housego PLC (AIM: GHH), the specialist manufacturer of photonic
components and systems, provides an update on trading for the six months ended
31 March 2024.

 

Trading

 

As previously reported, in the first half of the financial year the Group has
seen some customers in its industrial and medical laser markets normalise
their inventory holdings resulting in lower levels of demand for some of the
Group's products. This period of destocking is expected to come to an end
towards the end of this calendar year and the Group's revenue from these end
markets will then return to growth. In other parts of the Group, most notably
our medical diagnostic business and our fibre optic businesses, which supply
the semiconductor infrastructure markets, revenue has grown compared with the
comparator period.

 

Revenue for the six month period is expected to be circa £67.5 million (31
March 2023: £71.3 million) supported by the two acquisitions completed in the
previous financial year. As previously reported, we expect trading in the
current financial year to be more heavily weighted towards the second half
than in FY2023.

 

New orders for the Group's products from our semiconductor, sub-sea data cable
and aerospace navigation markets have been strong. We have secured an
important new customer for a new fibre optic amplifier module as well as
strong orders for our medical diagnostic products. Requests for quotations for
our optical systems solutions for armoured vehicles are strong and we expect
to convert a number of these into firm orders in the second half of the year.

 

At 31 March 2024 the Group's order book stood at £115.8 million (31 March
2023: £124.4 million), a decrease of 6.9%, but an increase of 3.6% on an
organic constant currency basis, compared with the same time last year. The
order book has grown by 2.3% compared with its level at 30 September 2023 on
an organic, constant currency basis This order book provides good coverage for
our expected second half revenues.

 

We remain in a strong financial position with a robust balance sheet and
significant levels of available funding to support the Group's further growth.
At the half year net debt was circa £32 million (March 2023: £19.2 million
and September 2023: £31.7 million) and the Group had $35.7 million available
from existing committed and uncommitted debt facilities to fund its future
growth activities.

 

We expect trading for the full year to be in line with management's previous
expectations.

 

 

Strategic progress

 

The Group is making good progress in delivering the strategic plan announced
last year. The divestment of our EM4 business completed in March 2024 allows
the Group to focus its resources on those parts of its A&D portfolio where
it can differentiate itself and achieve acceptable returns.

 

The transfer of carefully selected product lines to contract manufacturing
partners in lower cost regions is accelerating. Fused fibre couplers are now
being produced in volume by two outsourced partners and the share of the
Group's volumes for this product line being outsourced will now increase with
further product lines identified to be transferred.

 

The Group's new medical diagnostic design, development and production facility
based in our Rochester site has been opened. We were pleased to be joined by
one of our significant life science customers for the official opening
ceremony as this new facility will be serving their North American market
requirements. We expect further material orders for our expanded US Life
Sciences centre of excellence in the second half of this financial year.

 

The Group will announce its interim results for the six months ended 31 March
2024 on 4 June 2024.

 

 

 

Charlie Peppiatt, Chief Executive Officer of Gooch & Housego, commented:

 

"Despite the lower volumes in the first half of the financial year resulting
from a prolonged period of inventory adjustment by some of our customers we
have continued to focus on the delivery of our strategic objectives. In line
with our commitment to become a more customer focused business, we have
further improved our operational performance reducing our overdue backlog and
lead times.

 

"Our investment in new technologies and products is recognised by our
customers and we have secured important new contract wins in the period.
Following the strategic addition of the GS Optics and Artemis Optical
businesses in FY2023, we have already been rewarded with new customer orders
as a result of the Group's enhanced portfolio.

 

"The divestment of our EM4 business in March this year represented an
important milestone on our journey to focus our A&D business on those
areas where we can secure acceptable returns, supporting the Group's path to
mid-teens profitability."

 

 

For further information please contact:

 

 Charlie Peppiatt, Chief Executive Officer                  Gooch & Housego PLC      +44 (0) 1460 256440

 Chris Jewell, Chief Financial Officer

 Mark Court / Sophie Wills / Abigail Gilchrist              Buchanan                 +44 (0) 20 7466 5000

 G&H@buchanan.uk.com (mailto:G&H@buchanan.uk.com)

 Christopher Baird / David Anderson                         Investec Bank plc        +44 (0) 20 7597 5970

 

 

Notes to editors

 

1.     Gooch & Housego is a photonics technology business
headquartered in Ilminster, Somerset, UK with operations in the USA and
Europe. A world leader in its field, the company researches, designs,
engineers and manufactures advanced photonic systems, components and
instrumentation for applications in the Aerospace & Defence, Industrial,
Life Sciences and Scientific Research sectors. World leading design,
development and manufacturing expertise is offered across a broad range of
complementary technologies.

 

2.     All financial information included in this announcement is sourced
from unaudited management accounts and excludes any specific items. This
announcement contains certain forward-looking statements that are based on
management's current expectations or beliefs as well as assumptions about
future events.  These are subject to risk factors associated with, amongst
other things, the economic and business circumstances occurring from time to
time in the countries and sectors in which G&H operates.  It is believed
that the expectations reflected in these statements are reasonable but they
may be affected by a wide range of variables which could cause actual results,
and G&H's plans and objectives, to differ materially from those currently
anticipated or implied in the forward-looking statements.  Investors should
not place undue reliance on any such statements. Nothing in this announcement
should be construed as a profit forecast.

 

 

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