TIDMGHH
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 GBP119.9
million (31 March 2021: GBP92.8 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 GBP54.0 million (31
March 2021: GBP58.5 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 GBP2.5 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: -
Gooch & Housego
Mark Webster / Chris Jewell 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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