Gooch & Housego PLC – Preliminary Results

Gooch & Housego PLC (AIM: GHH), the specialist manufacturer of optical components and systems, today announces its preliminary results for the year ended 30 September 2019.

 

Year ended 30 September	2019	2018	Change
Revenue (£m)	129.1	124.9	3.4%
Adjusted profit before tax (£m)*	15.0	18.8	(19.9%)
Adjusted basic earnings per share (pence)*	46.8p	57.2p	(18.2%)
Statutory profit before tax (£m)	6.0	10.1	(40.6%)
Basic earnings per share (pence)	15.1p	29.3p	(48.5%)
Total dividend per share (pence)	11.5p	11.3p	1.8%
Net debt (£m)	14.3	10.6	£3.7m

*adjusted figures exclude the amortisation of acquired intangible assets, impairment of goodwill, adjustments to accrued contingent consideration, non underlying items being restructuring costs, site closure costs, transaction costs, and interest on deferred consideration, together with the related tax impact.

Operating & Strategic Highlights

·      Trading: as previously disclosed, challenging macro-economic environment in our industrial laser sector, contrasted with record levels of demand for fibre optics, hi-reliability fibre couplers used in undersea cables and life science products

·      Industrial laser products: we believe that technical innovation in end markets and new laser based manufacturing techniques combined with our market leading position will ultimately drive improved demand

·      Strategic investment: we invested in order to deliver a multi-year growth phase of hi-reliability fibre couplers and new US A&D contracts. Further investment made in R&D projects that represent the highest potential for our photonics technologies

·      Life science business: more than doubled in size compared with last year, driven by growth in our existing market areas, strongly supported by the addition of ITL, which has performed ahead of expectations since its acquisition in August 2018

·      Strategic goals: we made considerable progress with further diversification and moving up the value chain, in large part due to the continued growth in A&D and Life Science business

 

Financial Highlights

·      Revenue of £129.1 million, increased by 3.4%

·      Adjusted profit before tax of £15.0 million, down 19.9%. This reflects both lower market demand for relatively higher margin critical components for industrial lasers and the investment required to deliver multi-year growth in hi-reliability fibre couplers and new US A&D contracts

·      Adjusted earnings per share down 18.2%

·      Capital expenditure of £5.9m. Net debt of £14.3m (c.0.7 x adjusted EBITDA)

·      Dividend increased to 11.5p, reflecting the Board’s long term confidence in the business

·    Order book of £94.4m, 1.8% lower than the same time last year, reflecting strong demand for fibre optics, hi-reliability fibre couplers and our A&D and Life Science capabilities, with industrial laser demand yet to recover to more “normalised” levels

Mark Webster, Chief Executive Officer, commented:

“Trading reflected a challenging macro-economic environment for industrial lasers and in contrast record demand for fibre optics, hi-reliability fibre couplers used in undersea cables and life science products. We believe that ultimately technological innovation in industrial laser end market applications and new laser based manufacturing techniques will drive improved demand for our industrial laser products.

“During the year we invested in manufacturing capacity for areas of high growth such as hi-reliability fibre couplers and in R&D projects that represent the highest return for our photonic technologies.

“Considerable progress was made on our strategic goals of further diversification and moving up the value chain, with life sciences more than doubling compared with last year.

“Our order book reflects strong demand for fibre optics, hi-reliability fibre couplers and our A&D and Life Science capabilities, with industrial laser demand yet to recover to more “normalised’ levels. G&H’s forecasts and plans are not dependent on an industrial laser recovery. The Board is confident the Company is well positioned to deliver progress in FY20 and beyond.”