Gooch & Housego PLC - Interim Results
June 08 1998 - 3:33AM
UK Regulatory
RNS No 5435c
GOOCH & HOUSEGO PLC
8th June 1998
MAIDEN INTERIM RESULTS SINCE FLOTATION
"TURNOVER UP 13%"
Gooch & Housego PLC, ("G&H"), the specialist manufacturer of
precision optical components and bespoke glass engineering
items, acousto-optic devices and instruments for measuring
optical radiation, today announces its maiden interim results
since flotation on AIM in December 1997, for the six months to
31 March 1998.
HIGHLIGHTS
* Turnover of #3,662.000
* Pre tax profit of #826,000
* UK - business recorded 24% sales growth over the same period
in 1997. Sales of acousto-optic products increased by 35% now
accounting for 65% of UK turnover, up from 59% last year.
* US - New Orlando 25,000 sq ft. factory opened in February
1998.
Commenting on the results, Archie Gooch, Executive Chairman,
said:
"We are delighted with these results, particularly with the
strong contribution from our acousto-optic products. Our state-
of-the-art Q-switch driver developed in the US is beginning to
find acceptance in the market, supported by our advantageous
patent position."
CHAIRMANS STATEMENT
I am pleased to submit my first report following the successful
flotation of Gooch & Housego PLC in December 1997. As a result
of the flotation we have experienced considerable additional
interest in the activities of the company. We now have 343
shareholders.
THE GROUP
Gooch & Housego has performed well during the six months to 31
March 1998, with turnover up by 13% and pre tax profits ahead of
budget, whilst simultaneously making considerable changes and
improvements within the group and to our facilities. Following
the flotation, the Group had net current assets of #2,369,000
(30 September 1997 #1,241,000). In the six months ended 31
March 1998 the group generated cash flows from operations of
#786,000 and had surplus cash resources of #1,337,000 at the
half year.
UNITED KINGDOM
The United Kingdom business has recorded a 24% sales growth over
the same period last year with a substantial improvement in
operating profits. Sales of acousto-optic products have
increased by 35% and now account for 65% of UK turnover, up from
59% last year. The manufacture of acousto-optics utilises our
highly specialised traditional optical production facility and
so the gradual change in sales emphasis does not translate into
a significant change in work patterns. The traditional optical
business continues to operate satisfactorily and shows steady
gains in sales and profits. A new state-of-the-art automated
lens-manufacturing machine has been ordered at a cost of
#160,000. It is due for delivery in June 1998, and should
expand our lens production considerably. Overall the comparison
with last year illustrates a very satisfactory result. With the
UK order book currently at a record level there is a high level
of confidence for the future.
Early this year confirmation was received that the Company has
been awarded funding to the value of #48,000 by the Department
of Trade and Industry under the SMART scheme in support of the
development of a fibre-optic re-routing switch. The project,
which has the acronym "COMFORT", started on 1st March 1998 and
will last eighteen months.
Research projects are ongoing in a number of areas. One of
these has recently resulted in the assignment of a patent from
the University of Kent to the Company in the field of optical
modulation, which will complement our activities in the field of
acousto-optics, and may with further development, give us a
considerable advantage in the market place.
Installation of a new computer system that will fully integrate
all of the Companys main activities, from accounts to
production control, is on schedule. Hardware and software have
been installed and training and consultancy are continuing. The
system will be fully operational early in 1999. At the same
time the Company will be fully year 2000 compliant.
UNITED STATES
The US business, Optronic Laboratories Inc., has had a difficult
second quarter to the year. Whilst achieving a pre tax profit
of $180,000 for the half year, I regret to say that they are
currently trading below expectations. They operate in a highly
specialised market area, which has experienced a downturn in
activity in recent months resulting in a decline in orders. The
current level of interest is, however, strong and it is hoped
that this situation can soon be corrected.
The new Orlando factory was completed on time in January 1998
and the move of premises took place later the same month. I was
pleased to open the new facility on 25th February 1998. The
facility provides 25,000 sq. ft. of ground floor space and will
accommodate all of Optronic Laboratories current activities as
well as the new RF driver business, while still allowing room
for the growth of the instrumentation, RF electronics and optics
businesses. The old factory has been sold at a small profit
subsequent to the half-year results, realising cash of $540,000.
Our state-of-the-art Q-switch driver was developed at O.L.I.,
and is beginning to find wider acceptance in the market and
routine production has commenced. Now that a wide range of
drivers can be offered we can begin to exploit our advantageous
patent position. (Optronic Laboratories is joint licensee of a
key patent relating to Q-switch drivers.) To date only a small
fraction of the Q-switch driver market has been addressed and
currently sample units are under evaluation in USA, Europe and
Japan.
Optronic Laboratories has functioned semi-autonomously under the
President Mr Bill Schneider, since our acquisition from him in
October 1995. He has now decided to step-down as President, and
it is intended to retain his skill as a Scientific Adviser,
where the benefits of his vast experience in the industry will
continue to be available to the Company. I thank Bill for his
considerable efforts over the last two and a half years.
I welcome Steve Denomme (formerly Vice President of Finance and
Production) to his new role as President, and look forward to
working closely with him in the future as the operations of both
businesses are brought closer together.
SUMMARY AND OUTLOOK
The performance of the UK business is very encouraging with a
record order book, but the US business has performed less
satisfactorily and steps have been taken to address the
problems. A number of exciting new contracts and opportunities
are currently being considered. Overall the Group is trading in
line with expectations, and there is a high level of confidence
in the future.
DIVIDEND
The Board has declared an interim dividend of 0.5p per Ordinary
Share. The dividend will be payable on 16 July 1998 to all
shareholders registered on 19 June 1998.
Archie Gooch M.B.E. J.P.
Executive Chairman
Copies of this Statement will be sent to Shareholders on 8th
June 1998, and will be available from The Old Magistrates Court,
Ilminster, Somerset.
GOOCH & HOUSEGO PLC
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
6 months 12 months
ended ended
31 March 98 30 Sept 97
#000 #000
Turnover 3,662 6,718
Changes in stocks of finished goods
and work in progress 104 51
Other operating income 25 128
Raw materials and consumables (817) (1,498)
Other external charges (221) (396)
Staff costs (1,401) (2,618)
Depreciation (122) (241)
Other operating charges (404) (644)
---------- ----------
Operating profit 826 1,500
Exceptional item; Profit on
disposal of fixed assets - 149
----------- -----------
Profit on ordinary activities
before interest 826 1,649
Other interest receivable
and similar income 33 7
Interest payable and similar
charges (33) (80)
----------- -----------
Profit on ordinary activities
before taxation 826 1,576
Tax on profit on ordinary
activities (249) (465)
------------ -----------
Profit on ordinary activities
after taxation 577 1,111
Dividends on equity shares (85) (51)
------------ ------------
Retained profit for the
financial period 492 1,060
============ ============
Earnings per ordinary share 3.6p 7.4p
============ ===========
All of the amounts above are in respect of continuing operations
Earnings per ordinary share is calculated on profit on ordinary
activities after taxation, using the weighted average number
of shares in issue for the period, of which there were
16,150,630 (1997: 14,999,400)
UNAUDITED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
6 months 12 months
ended ended
31 March 98 30 Sept 97
#000 #000
Profit for the period 577 1,111
Currency translation
differences on foreign
currency net investments (71) (34)
------------ ------------
Total gains and losses
for the financial period 506 1,077
------------- ------------
UNAUDITED CONSOLIDATED BALANCE SHEET
6 months 12 months
ended ended
31 March 98 30 Sept 97
#000 #000
FIXED ASSETS
Intangible assets 5 5
Tangible assets 2,862 2,175
-------------- -------------
2,867 2,180
============= =============
CURRENT ASSETS
Stocks 918 835
Debtors 1,736 1,659
Cash at bank and in hand 1,337 278
--------------- --------------
TOTAL CURRENT ASSETS 3,991 2,772
--------------- --------------
CREDITORS: amounts falling
due within one year (1,622) (1,531)
--------------- --------------
NET CURRENT ASSETS 2,369 1,241
=============== =============
TOTAL ASSETS LESS CURRENT
LIABILITIES 5,236 3,421
CREDITORS:
amounts falling due
after more than one year (412) (548)
---------------- -------------
NET ASSETS 4,824 2,873
=============== =============
CAPITAL AND RESERVES
Called up share capital 3,381 5
Share premium 1,115
Revaluation reserve 308 308
Goodwill reserve (1,335) (1,335)
Profit and loss account 1,355 3,895
-------------- ------------
EQUITY SHAREHOLDERS FUNDS 4,824 2,873
============= ============
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
6 months 12 months
ended ended
31 March 98 30 Sept 97
Note #000 #000
Cash flow from operating
activities (1) 786 1,640
Returns on investments
and servicing of finance:
Interest received 33 7
Interest paid (37) (71)
Interest element of
hire purchase contracts (3) (7)
----------- ----------
Net cash (outflow)/inflow
from returns on
investments and servicing
of finance (7) (71)
Taxation
UK tax paid (11) (252)
Overseas tax paid (20) (128)
----------- ------------
Cash outflow from taxation (31) (380)
Capital expenditure and
financial investment
Purchase of tangible
fixed assets (934) (899)
Sale of tangible fixed assets 1
------------ -------------
Net cash outflow from capital
expenditure and financial
investment (933) (899)
Equity dividends paid (26) (26)
------------ -------------
Net cash (outflow)/inflow
before financing (211) 264
Financing
Receipts from share issue 2,000
Cost of share issue (504)
Inception of hire purchase
contracts 76
Repayment of bank loan (119) (233)
Hire purchase repayment (5) (27)
-------------- -----------
Net cash inflow/(outflow)
from financing 1,372 (184)
Increase/(decrease) in cash
in the period (2) 1,161 80
============= ===========
Notes to the cash flow statement
(1) Reconciliation of operating profit to operating cash flows
6 months 12 months
ended ended
31 March 98 30 Sept 97
#000 #000
Operating profit 826 1,500
Exceptional item 149
Depreciation 141 262
Loss on disposal of assets
damaged in fire 40
Increase in stock (97) (122)
Increase in debtors (86) (282)
Increase in creditors 2 93
---------- ------------
786 1,640
========== ============
(2)Reconciliation of net cash inflow to movement in net debt
6 months 12 months
ended ended
31 March 98 30 Sept 97
#000 #000
Increase in cash in the period 1,161 80
Cash outflow from decrease in
debt and lease financing 124 260
----------- -----------
Changes in net debt resulting
from cashflows 1,285 340
New finance leases (76)
Translation difference (8) (4)
------------ ------------
Movement in net debt in the period 1,277 260
Net debt at 1 October 1997 (569) (829)
------------ ------------
Net debt at 31 March 1998 708 (569)
=========== ===========
The comparative figures for the year to 30 September 1997 are an
abridged version of the Accounts filed with the Registrar of
Companies, on which unqualified audit opinion has been given.
For further information:
Archie Gooch/Gareth Jones
Gooch & Housego PLC Tel: 01460 52271
David Scott
Sutherlands Tel: 0171 628 2030
Tim Thompson/Jennie Roberts
Buchanan Communications Ltd Tel: 0171 466 5000
END
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