RNS Number:7859V
Gooch & Housego PLC
14 December 2000
FOR IMMEDIATE RELEASE 14 December 2000
GOOCH & HOUSEGO PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2000
Gooch & Housego PLC, the specialist manufacturer of precision optical
components and bespoke glass engineering items, acousto-optic devices and
instruments for measuring optical radiation, today announces preliminary
results for the year ended 30 September 2000.
Highlights
* Record order book for optics and acousto optics including a new
component for telecommunications.
* Completion in September 2000 of the US strategic acquisition of NEOS
Technologies Inc for #4.3m
* Successful placing of 1,095,000 ordinary shares
* Profit before tax increased by 40%
* Increase in earnings per share of 51%
* Recommended increase in final dividend making a total of 2.3p for the
year
Archie Gooch, Chairman of Gooch & Housego commented, "In the past year we have
seen considerable development in all areas of the Groups activities. I
believe that we have never been better positioned, or stronger commercially,
than we are now. If we can seize the opportunities now open to us, we can
look forward to the future with great confidence".
For further information :
Archie Gooch/Ian Bayer 01460 52271
Gooch & Housego PLC
Tim Thompson 0207 466 500
Buchanan Communications
GOOCH & HOUSEGO PLC
CHAIRMAN'S STATEMENT 2000
I am pleased to report a year of substantial progress for the Gooch & Housego
Group. For the twelve months ended 30th September 2000, there has been
considerable improvement in all areas of the Group's activities with turnover,
profits, earnings per share and dividends all increasing significantly.
Results and Dividends
In the year to 30 September 2000 profit before tax rose by 40% to #2.59m (1999
: #1.85m) and earnings per share increased by 51% to 9.8p (1999 : 6.5p).
Turnover was up 20% at #12.51m (1999 : #10.38m).
In view of these excellent results, your Board is recommending an increased
final dividend of 1.55p per Ordinary Share (1999 : 1.3p) which, together with
the interim paid, totals 2.3p an increase of 21% on last years 1.9p. Subject
to approval at the Annual General Meeting the final dividend will be payable
on 8th February 2001 to all shareholders on the register on 3rd January 2001.
Acquisitions
As already reported the Group completed the US acquisition of NEOS
Technologies Inc (NEOS) on 22nd September 2000 for # 4.3m. The acquisition
was financed by a vendor placing of 1,095,000 new Ordinary 20p Shares raising
# 2.6m and the balance from new loans and existing cash resources. I am
pleased to report that NEOS has made a very positive and profitable start
since joining the Group. However due to the proximity of the acquisition date
to the Group's year end no profit has been consolidated in these accounts.
Operating Performance
United Kingdom
In the UK sales for Gooch and Housego were #5.82m (1999 #4.80m), an increase
of 21.3%. The well-established precision Optics business continued to grow
strongly and we also enjoyed an exceptional increase in orders and sales of
our Acousto-Optic products in the second half of the year. In particular the
increase in sales of Q-Switches into China emphasised the worldwide nature of
our Acousto Optic business.
Since the end of the financial year we have received the two major defence
contracts I referred to in my last Interim statement, one of which is worth
over #1m across a five year period. We continue to benefit from the trend of
our major defence customers to concentrate on their core skills and outsource
an increasing amount of their optics production. As a result of these factors
and our strong Acousto Optics business we currently have a record order book
totalling #4.6m.
Following my statement of 18 September 2000 our expertise in crystal quartz
waveplates has been rewarded by increased orders from a major US company
supplying components and subsystems into the rapidly growing fibre optic
telecommunications market. We are committed to fully exploiting the
opportunity while accepting this is a fast moving market with rapidly changing
technology. To meet this demand we have set up a dedicated manufacturing cell,
equipped with standard optics production equipment and staffed by a mixture of
existing staff and new recruits.
In the longer term we will support the strong growth of all parts of the UK
based business by building a new factory in the locality. We are currently
completing negotiations to purchase a suitable site in the Ilminster area. The
facility will initially incorporate 30,000 sq ft of production capacity,
together with sufficient additional adjacent land for future expansion.
United States
Cleveland Crystals Inc has reported a further year of excellent sales at #4.1m
(1999 for 8 mths : #3.3m ) and operating profits of #1.1m ( 1999 for 8 mths :
#0.9m ) Their work on the growth and fabrication of crystals for the US
Department of Energy's National Ignitions Facility (NIF) continues with
further substantial investment now being undertaken by NIF at our Cleveland
factory. This confirms our optimism for further major contracts to be placed
with us. The development of the new range of crystals has now culminated in
commercial sales, while the original core business of Electro-optics has also
reported improved revenues.
Optronic Laboratories Inc have also seen an increase in profits compared to
last year but their contribution to overall Group profits remains
disappointing. Turnover for the year was up by 12% at #2.9m (1999 : #2.6m) and
operating profits up at #133,000 (1999 : #66,000). However their core business
of light measurement devices remains relatively flat. Your Board continues to
take steps to remedy this position with the planned implementation of a new
technical organisation to broaden the range of products to appeal to a wider
range of customers. As I reported in my statement last year the new optics
facility is fully operational and the benefits of this will be seen in
increased profits in the coming year.
NEOS is proving to be an excellent purchase. For the two months since
acquisition there have been substantial increases in sales and profits as
compared to the same period last year. The purchase of NEOS included an
important patent for the future development of a Q-switch, which contains
crystal quartz for use in diode pumped laser systems. There is a new and
growing demand for this type of switch which, together with our leading global
position in Q-switch production, gives us confidence as to the future growth
of this product.
Financial Position
The Group's financial position remains strong. Gearing at the year end stood
at 31% (1999: 59%) and interest was covered 12.5 times (1999; 13.3 times).
Through prudent management of our resources our balance sheet remains in a
strong position for future growth and development.
Management and Staff
Your Board believes that the Group has reached the stage where it will be very
beneficial to appoint a Chief Scientist covering technical matters in all the
subsidiaries. Several potentially valuable projects have been identified for
this individual, who may be domiciled in the US, and we have already started
the recruitment process.
It is not possible to achieve outstanding results such as are set out above
without quite remarkable ability, effort and dedication at every level within
the Group. I would like to express my most sincere thanks and appreciation to
everyone who has contributed to this success.
Prospects
I believe that we have never been better positioned, or stronger commercially,
than we are now. If we can seize the opportunities now open to us, we can
look forward to the future with great confidence.
Archie Gooch MBE JP
Chairman and Chief Executive
Gooch & Housego PLC
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2000
2000 1999
#'000 #'000
Turnover 12,510 10,377
Trading expenditure (9,695) (8,376)
Operating profit 2,815 2,001
Other interest receivable and similar income 33 41
Interest payable and similar charges (259) (191)
Profit on ordinary activities before taxation 2,589 1,851
Tax on profit on ordinary activities (926) (756)
Profit on ordinary activities after taxation 1,663 1,095
Dividends on equity shares (406) (321)
Retained profit for the financial year 1,257 774
Earnings per 20p ordinary share 9.8p 6.5p
All of the amounts above are in respect of continuing
operations.
Gooch & Housego PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 30 SEPTEMBER 2000
2000 1999
#'000 #'000
Profit for the financial year 1,663 1,095
Currency translation difference on foreign currency net 143 16
investments
Taxation on retranslation gains/losses on foreign currency
loans hedged against foreign currency net investments 56 _
Total recognised gains and losses for the financial year 1,862 1,111
No note of historical cost profit for the group or the company has been
presented as the difference between the reported profit and the historical
cost profit is immaterial.
Gooch & Housego PLC
GROUP BALANCE SHEET
AS AT 30 SEPTEMBER 2000
2000 1999
#'000 #'000 #'000 #'000
FIXED ASSETS
Intangible assets 5,629 3,336
Tangible assets 3,624 3,497
9,253 6,833
CURRENT ASSETS
Stocks 3,225 1,440
Debtors 3,401 3,238
Cash at bank and in hand 1,930 269
8,556 4,947
CREDITORS : amounts falling due (3,808) (2,806)
within one year
NET CURRENT ASSETS 4,748 2,141
TOTAL ASSETS LESS CURRENT LIABILITIES 14,001 8,974
CREDITORS : amounts falling due after (3,977) (2,916)
more than one year
10,024 6,058
CAPITAL AND RESERVES
Called up share capital 3,600 3,381
Share premium account 3,404 1,113
Revaluation reserve 308 308
Profit and loss account 2,712 1,256
EQUITY SHAREHOLDERS' FUNDS 10,024 6,058
Gooch & Housego PLC
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2000
Note 2000 1999
#'000 #'000 #'000 #'000
Cash flow from operating (i) 4,142 1,592
activities
Returns on investments
and servicing of finance
Interest received 38 41
Interest paid (276) (173)
Interest element of hire (2) (1)
purchase contracts
Debt issue costs (77) -
Net Cash (outflow) from
returns on investments
and servicing of finance (317) (133)
Taxation
UK tax paid (301) (522)
Overseas tax paid (511) (251)
Cash outflow from (812) (773)
taxation
Capital expenditure and
financial investment
Purchase of tangible (404) (612)
fixed assets
Sale of tangible fixed - 15
assets
Net cash outflow from
capital expenditure and
financial investment (404) (597)
Acquisition
Acquisition of subsidiary (4,401) (4,272)
Cash acquired on 388 55
acquisition
Net cash outflow from (4,013) (4,217)
acquisition
Equity dividends paid (347) (304)
Cash inflow before (1,751) (4,432)
financing
Financing
New bank loans 5,103 3,411
Repayment of bank loan (3,984) (202)
Capital element of hire (13) (49)
purchase contracts
Issue of share capital 2,628 -
Net cash inflow from 3,734 3,160
financing
Increase/(decrease) in (iii) 1,983 (1,272)
cash in the year
NOTES TO THE CASH FLOW STATEMENT
(i) Reconciliation of operating profit to operating cash flows
2000 1999
#'000 #'000
Operating profit 2,815 2,001
Amortisation of goodwill 172 115
Amortisation of debt issue costs 11 -
Depreciation 433 362
(Increase)/decrease in stock (326) 203
Decrease/(increase) in debtors 262 (1,290)
Increase in creditors 775 201
4,142 1,592
(ii) Reconciliation of net cash inflow/(outflow) to movement in
net funds/(debt)
2000 1999
#'000 #'000
Increase/(decrease) in cash in the year 1,983 (1,272)
Cash (inflow)/outflow from (increase)/decrease in
debt and lease financing (1,106) (3,159)
Changes in net debt resulting from cash flows 877 (4,431)
New hire purchase contracts (25) (66)
Movement in debt issue costs 67 -
Translation difference (404) 22
Movement in net debt in the year 515 (4,475)
Net (debt)/funds at 1 October 1999 (3,582) 893
Net (debt)/funds at 30 September 2000 (3,067) (3,582)
(iii) Analysis of net (debt)/funds
At 1 At 30
October Cash Exchange Non-cash September
1999 flow Movement Movement 2000
#'000 #'000 #'000 #'000 #'000
Cash in hand and at 269 1,869 (208) - 1,930
bank
Overdrafts (114) 114 - - -
1,983
Debt due after 1 (2,900) (921) (161) 40 (3,942)
year
Debt due within 1 (763) (198) (43) 27 (977)
year
Hire Purchase (74) 13 8 (25) (78)
(1,106)
(3,582) 877 (404) 42 (3,067)
NOTES TO THE PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2000.
1. Basis of preparation.
The unaudited financial information contained in this preliminary
announcement report does not comprise statutory accounts within the
meaning of Section 240 of the Companies Act 1985.
The figures in this preliminary announcement have been prepared under
generally accepted accounting policies in the United Kingdom. The
accounting policies adopted are those set out in the Annual Report and
Accounts for the year ended 30 September 1999 which includes the
unqualified report of the auditors and which have been filed with the
Registrar of Companies.
2. Segmental Reporting.
The analysis of turnover by destination is as follows :
2000 1999
#' 000 #' 000
United Kingdom 2,852 2,337
North America 6,567 5,805
Continental Europe 1,606 1,272
Other 1,485 963
12,510 10,377
The results by geographical origin are as follows :
United Kingdom North America
Group
2000 1999 2000 1999 2000 1999
#'000 #'000 #'000 #'000 #'000 #'000
Turnover
- Continuing 5,821 4,798 7,040 5,809 12,861 10,607
Inter-segment sales - (6) (351) (224) (351) (230)
Sales to third parties 5,821 4,792 6,689 5,585 12,510 10,377
Operating Profit
- Continuing 1,677 1,008 1,138 993 2,815 2,001
Segment profit before
Interest and taxation 1,677 1,008 1,138 993 2,815 2,001
Net interest (226) (150)
Group profit before taxation 2,589 1,851
3. Taxation.
The charge for taxation on the profit for the year is made up as follows:
2000 1999
#' 000 #' 000
Current year
UK corporation tax 425 275
Overseas taxation 501 481
926 756
4. Earnings per share.
The calculation of earnings per 20p Ordinary Share is based on the
profit on ordinary activities after taxation using as a divisor the
weighted average number of Ordinary Shares in issue during the year. For
2000 the weighted average number of Ordinary Shares in issue is
16,934,080 (1999 : 16,904,162)
5. The final dividend will be paid on 8th February 2001 to shareholders
on the register at close of business on 3rd January 2001.
6. Copies of the Statement will be despatched to shareholders during the
week commencing 8th January 2001 and will also be available from the
Company Secretary, Gooch & Housego PLC, The Old Magistrates Court,
Ilminster, Somerset. TA19 0AB.
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