REG - Gooch & Housego PLC - Full Year Trading Update

Gooch & HousegoAnnouncement

08/10/2024 07:00

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RNS Number : 2450H  Gooch & Housego PLC  08 October 2024

 

     8 October 2024

 

Gooch & Housego PLC

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

 

Full Year Trading Update

and

Notice of Results

 

 

Gooch & Housego PLC (AIM: GHH), the specialist manufacturer of photonic
components & systems, announces its trading update for the financial year
ended 30 September 2024. Trading in the second half of the financial year has
been strong compared with the first half and is in line with current market
expectations.

 

Trading Update

 

The Group is pleased to report that, as expected, trading levels improved
during the second half of the year.

 

In our Industrial markets, volumes of our fibre optic modules and assemblies
used in both advanced lithography systems and subsea data networks grew in the
second half compared with the first half of the year, as programmes migrated
to volume production. However, revenues from our industrial laser customers
remained broadly flat compared with the first half of the year. Whilst there
are early signs of a pick-up in demand, we expect a sustained recovery from
our broader industrial laser and semiconductor markets in the second half of
the coming calendar year.

 

In our Aerospace and Defence business there was second half revenue growth
from deliveries of precision optics and advanced sighting systems into both
air and land miliary platform programmes. In the commercial aerospace market
demand for our ring laser gyro components continues to be strong and we are
now benefiting from the additional capacity we have added to meet  increasing
demand.

 

Volumes from our Ashford facility for medical diagnostic instruments increased
in the second half of the year owing to the phasing of customers'
programmes.  Our Life Sciences R&D team remains fully engaged in
supporting customers with the design and accreditation of their next
generation instruments which are expected to convert to production revenues
for the Group in the coming years. Deliveries into our medical laser customers
saw some recovery in the second half as the prolonged destocking cycle that we
have experienced is ending.

 

Thanks to the stronger trading performance in the second half the Board
expects the Group to deliver full year revenue and adjusted pre-tax profit in
line with current market expectations.

 

Cash

Cash generation in the second half of the financial year has been good and the
Group has been able to reduce its borrowing by $3.9m. 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 2024 the Group's order book stood at £104.5m (30 September
2023: £115.3m after adjusting for the divestment of the EM4 business). On an
organic constant currency basis the order book declined by 5% during FY2024,
partially due to a further £1.4m reduction in the Group's past due backlog
and from the timing of orders for our medical diagnostic instruments. Our
order book for medical laser devices has also declined but we are now starting
to see evidence of the start of a recovery from this market.  In our
industrial markets, whilst the destocking patterns we saw in the first half of
the year are now behind us, we have not yet seen sustained recovery in the
industrial laser market.

 

Offsetting these declines our Aerospace and Defence order book has grown
strongly in the financial year thanks to increased demand from both our
commercial and defence customers assisted by the enhanced value proposition we
are able to offer. Our teams in the UK and US are focused on converting a
healthy pipeline of new Aerospace and Defence prospects.

Notice of Results

The Company will announce its audited results for the year ended 30 September
2024 on 3 December 2024.

 

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

"Following the first half result, the Group recovered well in the second half
to deliver the expected increase in output.

"Whilst we do not expect to see our industrial laser and semi-conductor
markets return to growth until next year, we are seeing strong demand for our
advanced optical systems capabilities from the defence sector and there are
significant new business opportunities that we are working hard to secure.

"We continue to make progress on delivering the self-help, technology and
portfolio activities that underpin our strategic plan. We saw further
improvement with on time delivery performance in FY2024 and customer feedback
is now trending in a positive direction.

"The Group is now better positioned to benefit from the anticipated sustained
recovery from our end markets next year thanks to the disciplined
implementation of our strategy."

 

 

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               Burson 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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