REG - Gooch & Housego PLC - AGM Trading Update

Gooch & HousegoAnnouncement

22/02/2023 07:00

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RNS Number : 6201Q  Gooch & Housego PLC  22 February 2023

 

 For immediate release  22 February 2023

 

Gooch & Housego PLC

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

 

AGM Trading Update

 

"Significant progress made in adding productive capacity. Review of the
Group's strategy progressing to plan. Trading in line with expectations."

 

Gooch & Housego PLC (AIM: GHH), the specialist manufacturer of photonic
components & systems, will hold its Annual General Meeting at 11.00 a.m.
today at the Company's headquarters in Ilminster, Somerset.

 

During the first four months of the financial year, the Group has made good
progress in increasing its productive capacity as a result of our refocused
recruitment and operational improvement activities. We are pleased to report
that our UK production facilities are now fully resourced and, whilst we still
have further roles to fill in some of our US facilities, the situation
continues to improve. Our investment in inventory has helped protect our
production programmes from persistent supply chain constraints. Consequently,
the Group is making steady progress in lowering its lead-time for new orders
received and reducing its overdue order book. The addition of productive
capacity means that we now expect revenues to be more evenly balanced between
the first and second halves of the financial year.

 

As previously reported, the Group continues to experience input cost inflation
both in its employment costs and its supply chain. Whilst we are seeking to
pass on these additional costs in our pricing, the size of the Group's order
book means there will be some timing lag in this cost recovery. We, therefore,
still expect inflation to have an impact on the Group's profitability in the
current financial year.

 

Current year's trading continues to be in line with the Board's expectations.

 

As at 31 January 2023, our order book stood at £129.3 million (31 January
2022: £110.5 million), an increase of 17.0% compared with the same time last
year but a reduction of 12.5% from the record level seen at the end of the
previous financial year (30 September 2022: £147.7m). The improving levels of
output have contributed to the order book reduction. We have also seen a
moderation of order intake in parts of our Industrial and Life Science
markets, with evidence of overstocking by some of our customers. Whilst we are
alert to a potential market slow down, there remain multiple large value order
opportunities for the Group's products and services that we expect to secure
in the coming months and which will underpin expected revenues for FY2023 and
beyond.

 

The Group is refocusing investment into the development of earnings accretive
new products with urgency to meet customer requirements. We are partnering
with key customers in a number of areas including advanced semiconductor
capacity expansion, directed energy systems, high power amplifiers for space
communication and quantum based sensing, all of which are expected to provide
the Group with profitable growth in the future.

 

Whilst we continue to invest in higher levels of inventory to protect our
production programmes our receivables balance has reduced compared with the
end of the previous financial year leading to a reduction in the Group's net
debt position during the first four months of the financial year.

 

The review of the Group's strategy is progressing well and we expect to be
able to provide more information at the time of the Group's interim results in
June 2023.

 

 

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

 

"I am pleased with the initial progress in FY2023 from our initiatives to
improve output, on-time delivery performance and lead times to meet customer
expectations. We remain focused on further improvement across our production
facilities as well as with our supply chain partners.

 

"There continues to be a significant level of positive technical interaction
with our customers as we work with them on the development of their next
generation photonics projects.

 

"The Group strategy review is progressing well and full year trading remains
on track to meet the Board's expectations."

 

 

A slide deck to accompany the AGM can be viewed at the investor section of the
Company's website, https://gandh.com/investors/ (https://gandh.com/investors/)

 

 

 

For further information please contact:

 

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

 Chris Jewell, Chief Financial Officer

 Mark Court / George Cleary                                 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, Europe
and China. 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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