REG - Gooch & Housego PLC - Full Year Trading Update

Gooch & HousegoAnnouncement

03/10/2023 07:00

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RNS Number : 4379O  Gooch & Housego PLC  03 October 2023

 

     3 October 2023

 

Gooch & Housego PLC

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

 

Full Year Trading Update

and

Notice of Results

 

"Trading ahead of expectations. Integration of the two recent acquisitions
progressing well"

 

 

Gooch & Housego PLC (AIM: GHH), the specialist manufacturer of photonic
components & systems, announces that trading in the second half of the
financial year has been strong, continuing the positive trends reported in its
interim results. Revenues for the financial year have marginally exceeded
market expectations.

 

Trading Update

 

Following the positive performance in the first half, the Group is pleased to
report that trading momentum was sustained during the second half of the year.

 

In our Industrial markets volumes of our fibre and acousto optic assemblies
used in advanced lithography systems grew more than offsetting the effects of
some de-stocking by our customers in our industrial laser markets. Demand for
our hi reliability fibre couplers used in subsea data cables has been stable
and we expect demand to increase in the new financial year as our customers'
new infrastructure projects are delivered.

 

In our A&D business we saw a number of fibre optic assembly programmes
transition into full scale production. In the second half of the year, we made
good progress on design and development activities for a number of customers
for our embedded imaging periscope systems which has the potential to unlock
significant orders based upon forecast vehicle build rates. In the commercial
aerospace market there is sustained recovery in demand for our ring laser gyro
components and we are steadily adding capacity to meet our customers'
increased needs.

 

Revenues in the second half the year for our medical diagnostic devices grew
thanks to deliveries for new customer programmes commencing. Our engineering
team in Ashford is fully utilised supporting our customers new instrument
development and qualification programmes.

 

In light of the positive trading performance in H2, enhanced by the focused
operational improvements and capability investment over the last year, the
Board expects the strong revenue performance to translate into a full year
adjusted pre-tax profit above the current market expectations.

 

Acquisitions Update

The integration of GS Optics and Artemis into the G&H Group is proceeding
to plan. Our ITL US business, focused on medical diagnostic devices, has now
been relocated to GS Optics' facility in Rochester, NY and our expansion
programme at that site is underway. We are adding new team members to our
manufacturing and engineering teams there to support our US Life Sciences
expansion plans as outlined in our new strategy.

The exploitation of commercial synergies between the newly acquired Artemis
business and the rest of the G&H Group is already underway with a number
of combined optical substrate and coating offerings now available to
customers.

Cash

Cash generation in the second half of the financial year has been strong and
allowing the Group to reduce its borrowing by $5.5m from its level immediately
following the completion of the two acquisitions. Net debt (pre-IFRS 16) at
the financial year end is, therefore, expected to be slightly better than
market expectations.

Outlook

 

As at 30 September 2023 the Group's order book stood at £124.9m (30 September
2022: £147.7 million and 31 March 2023: £124.4m). Following the
normalisation of the order book in the first half of the financial year there
was a small order book decline in the second half of around 2.5% when measured
on an organic, constant currency basis. Whilst destocking in some parts of our
Industrial market is expected to impact in FY2024, especially in the first
half, our A&D and Life Sciences revenues are both expected to grow. Around
75% of the order book is for delivery in FY2024 and this provides a good
underpin for trading in the new financial year.

Notice of Results

The Company will announce its audited results for the year ended 30 September
2023 on 5 December 2023.

 

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

"I am delighted with the positive progress the Group has made in FY2023. Our
operational performance has shown sustained improvement with on time delivery
and lead times both improving significantly.

"The integration of GS Optics and Artemis into the G&H Group is on track.
Both businesses are already benefitting from the additional market access and
investment that being part of G&H brings.

"The detailed activities supporting the delivery of our recently announced
strategic plan are now in place and support our budgeted plans for FY2024."

 

 

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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