REG - Gooch & Housego PLC - Half Year Trading Update

Gooch & HousegoAnnouncement

05/04/2022 07:00

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RNS Number : 2222H  Gooch & Housego PLC  05 April 2022

 

 For  immediate release   5 April 2022

 

Gooch & Housego PLC

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

 

Half Year Trading Update

 

"A record order book with output constraints"

 

Gooch & Housego PLC (AIM: GHH), the specialist manufacturer of photonic
components & systems, provides an update on trading in the six months
ended 31 March 2022.

 

Trading

 

In the first half of the financial year we have seen strong and sustained
levels of overall demand and the Group has a record order book across all its
principal areas of business, industrial lasers, telecoms, A&D and life
sciences. There continues to be high demand for industrial lasers, especially
for those used in semiconductor manufacturing where G&H has captured
market share in a growing market. Medical lasers continue to benefit from the
strong return of elective surgery and demand for our medical diagnostics has
remained at a high level. We have recently secured important orders for our
A&D business, including the supply of an upgraded optical imaging suite
for a major UK A&D programme.

 

As at 31 March 2022 our order book stood at a record £119.9 million (31 March
2021: £92.8 million), an increase of 29.1%, or 25.6% at constant currency,
compared with the same time last year.

 

Throughout the first half of the financial year we have continued to invest in
our commercial team, in an increasingly productive R&D group and in our
manufacturing capacity in order to take advantage of strong and sustained
demand for G&H's technologies and capabilities.

 

In line with our previous AGM trading update, announced on 23 February 2022,
pandemic related factors have restrained output in the first half of our
financial year. We are working hard to mitigate these factors and good
progress has been made with recruitment and securing our supply chain, though
COVID absences impacted our US sites earlier in the financial year and more
recently our UK facilities have been affected.

 

The Group remains in a strong financial position with a robust balance sheet
and low net debt. At the end of March we entered into a new credit facility
($40 million committed/ $30 million uncommitted) with our existing lender with
a term that extends to April 2027.

 

Outlook

 

Despite a record order book pandemic related factors mean that first half
revenue is expected to be circa £54.0 million (31 March 2021: £58.5
million). We continue to expect a higher second half weighting and the
investment we have made in our manufacturing capacity and in improving our
supply chain resilience will enable this step up in trading levels. We do not
expect to be able to 'catch up' all of the first half revenue deficit in the
second half of the current financial year and full year PBT is now forecast to
be up to £2.5 million below management's previous expectations. This assumes
that the impact the business has seen from COVID related absences in the first
half of the financial year is not repeated in the second half.

 

 

 

 

Fundamental demand for our photonic technologies and system capabilities
remains strong and growing. We will continue to invest in the business in
order to improve resilience to external factors so we can take full advantage
of the outstanding opportunities in our target markets.

 

Streamlining of our manufacturing

 

In the second quarter of the financial year our contract manufacturer in
Southeast Asia has achieved the desired production line capacity and is now
supplying the vast majority of our Acousto-Optic (AO) Q-switches to our
industrial laser customers.

 

We will continue to review our higher volume, established products with a view
to transferring them to our contract manufacturing partner. Our UK and US
sites will focus on newer, innovative products that require higher local input
from our engineering team.

 

 

Continued execution of our strategy

 

G&H remains committed to the long term goals of further diversification
into A&D and life sciences and moving up the value chain. We intend to
vigorously pursue these policies through internal investment and where
appropriate, acquisitions.

 

 

Mark Webster, Chief Executive Officer of Gooch & Housego, commented:

 

"During the first half of the financial year we have seen strong demand for
the Group's technologies and capabilities and our order book has achieved
another record level. However like many industrial businesses our revenue has
been held back by COVID related staff absences and supply chain disruption.

 

"We have been working hard to increase production capacity in areas of
substantial demand and build resilience within our supply chain. As a result
we expect trading levels to accelerate in the second half.

 

"With our innovative technologies and world leading products G&H is well
positioned for longer term profitable growth."

 

 

The Company's Interim Results, for the six months ended 31 March 2022, are
expected to be announced on Tuesday 7 June 2022.

 For further information contact: -

 Mark Webster / Chris Jewell          Gooch & Housego PLC      01460 256440
 Mark Court / Sophie Wills            Buchanan                 020 7466 5000

 Chris Baird / David Anderson         Investec Bank plc        020 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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