REG - Gooch & Housego PLC - Trading Update

Gooch & HousegoAnnouncement

15/08/2024 07:00

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RNS Number : 5083A  Gooch & Housego PLC  15 August 2024

 

 For immediate release  15 August 2024

 

Gooch & Housego PLC

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

 

Trading Update

 

"Some delay of revenue from the second half but continued progress

with the execution of our strategic plan"

 

Gooch & Housego PLC (AIM: GHH), the specialist manufacturer of photonic
components and systems, provides an update on trading.

 

Trading

 

As reported with the Group's first half results, due to a period of prolonged
destocking by our industrial and medical laser customers, the pattern of
trading in FY2024 is more heavily weighted than normal towards the second half
of the year.

 

Whilst the Group still expects to deliver an increase in output in the second
half of the financial year, we now expect some revenues to be delayed out of
the current reporting period, principally as a result of both supplier and
customer delivery delays. As a result, the Group's full year adjusted PBT may
be c.£1.5m lower than previously expected. The Group's expects to issue a
full year trading update on 8 October and its preliminary announcement of its
full year results on 3 December 2024.

 

The Group's order book has continued to grow in the second half of the
financial year and at the end of July 2024 stood at £116.8m (31 March 2024:
£115.8m).

 

Our balance sheet remains strong and the Group's bank borrowings have reduced
to £18.0m at the end of July (31 March 2024: £22.2m). The Group's total net
debt at the end of July stands at £25.5m (31 March 2024: £30.4m).

 

Strategic progress

 

The Group continues to deliver on its strategic growth plan that sets a path
to mid-teens profitability. The integration of the Artemis and GS Optics
businesses into G&H has progressed well. The laser protection filtering
and polymer optics capabilities that these two businesses respectively brought
to the Group are enabling us to offer our customers enhanced systems solutions
and address more complex photonics applications addressing a greater share of
their overall needs. We expect this to open new programme revenue streams for
the Group in the coming months.

 

We continue to monitor the market for further value creation acquisitions that
offer the possibility to accelerate the Group's strategy. Our new approach to
the integration of acquired businesses and our focus on delivering synergies
as demonstrated with the two acquisitions completed in FY2023 is proving to be
an attractive differentiator as sellers consider G&H against other
potential acquirors.

 

The transfer of selected product lines to contract manufacturing partners in
lower cost regions continues to progress to plan. All of the Group's
hi-reliability fused fibre couplers are now being produced by our outsourced
partners. Further acousto optic products are currently being qualified for
volume production at our suppliers' facilities supporting margin expansion
from outsourcing.

The phase one investment in the Group's new R&D facilities and engineering
team in our Life Sciences centre of excellence at our Rochester NY campus will
be completed before the end of this financial year. Interest from both new and
existing customers in the capabilities that this innovation and medical device
manufacturing hub can offer has been strong and we expect to receive further
material orders in the coming months.

 

Whilst there has been some delay in securing the planned level of in-house
operational efficiency benefits that form an important part of our strategic
plan, focused continuous improvement activities are being prioritised to
deliver these improvements especially as the anticipated recovery of several
of our end-markets will provide further volume growth through our factories.

 

We are also mindful of growing low-cost competition for the Group's components
sold into the medical laser market and are taking steps to address our cost
base in this area of our business.

 

Outlook

 

Despite the macro-economic and geopolitical outlook remaining uncertain we
continue to prepare for the sustained recovery in our industrial laser and
semi-conductor markets in the early part of the coming calendar year. The
Group's healthy order book along with a large high-quality pipeline of new
business opportunities provides good visibility and confidence for next year.
The Group's expectations for FY2025 trading remain unchanged.

 

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

 

"Whilst it is disappointing that our near-term trading has been impacted by a
number of factors outside of our control, I am pleased with the progress that
we continue to make in establishing the foundations to deliver our strategic
objectives."

 

"I am optimistic that with the sustained recovery of our industrial markets
expected in 2025 combined with the benefits of the improvement activities and
focused investments we are making across the business we are well positioned
to return G&H to mid-teens returns."

 

 

 

 

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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