Gooch & Housego PLC AGM Trading Update and Acquisition (4886X)
February 22 2017 - 1:01AM
UK Regulatory
TIDMGHH
RNS Number : 4886X
Gooch & Housego PLC
22 February 2017
For immediate release 22 February 2017
Gooch & Housego PLC
("G&H" or the "Company")
AGM Trading Update and Acquisition in the A&D Sector
"Trading continues to be in line with management's expectations,
together with a highly complementary acquisition in the A&D
sector"
Gooch & Housego PLC (AIM: GHH), the specialist manufacturer
of optical components & systems, will hold its Annual General
Meeting at 11am this morning at the Company's headquarters in
Ilminster, Somerset. G&H's Chairman Gareth Jones will provide
an update on trading performance and the acquisition of StingRay
Optics LLC.
Market conditions for the first four months of the current
financial year have been good. The current positive trading
environment continues to drive orders in the telecommunications and
industrial sectors, in particular high reliability undersea fibre
couplers and critical components used in microelectronic
manufacturing. This is reflected in a robust order book, which, as
at 31 January 2017, stood at GBP60.4 million, an increase of 64.9%
compared with the same time last year. Excluding the impact of
acquisitions and foreign exchange this represents an increase of
19.4%.
Trading in the first quarter has been significantly better than
the same period last year, albeit against a weak comparative and
benefitting from a favourable foreign exchange environment. At this
stage, the Company expects full year trading to be in line with
management's expectations.
StingRay Optics
G&H has acquired the entire unit capital of StingRay Optics
LLC ("StingRay"), a New Hampshire, USA based specialist designer
and manufacturer of high performance optical and opto-mechanical
sub-systems for demanding defence and commercial applications.
StingRay was founded in 2004 and has established itself as a
market leading designer, manufacturer and supplier of world class
custom optical assemblies. The business has a proven capability in
providing system level optical products for use in harsh
environments to key US defence customers. StingRay's product range
covers laboratory, ground based, airborne, Unmanned Aerial Vehicles
(UAVs) and space applications.
The acquisition of StingRay is aligned with G&H's strategic
objectives of moving up the value chain and further diversification
into the Aerospace & Defence sector. Potential synergies
include leveraging G&H's greater reach through our global sales
teams and our expertise in manufacturing infrared precision optics
and specialist coatings.
The consideration payable by G&H will be up to $20 million,
on a debt free, cash free basis with a normalised level of working
capital remaining in the business. This comprises an initial
consideration paid on completion of $7.5 million in cash from
existing G&H debt facilities and $2.5 million in new G&H
ordinary shares, which are 'locked up' for one year from the date
of acquisition. There is also a deferred contingent consideration
of up to $10 million, payable in cash, based upon the performance
of the business for a period of up to three years.
The historical annual revenue of StingRay is circa $7.7 million
and the acquisition is expected to be earnings enhancing in the
first full year of ownership.
The Company's next scheduled announcements are the post close
announcement for the six months ending 31 March 2017, which is due
for release on 5 April 2017, and the interim results announcement
on 6 June 2017.
Mark Webster, Chief Executive Officer of Gooch & Housego,
commented:
"Market conditions for the first four months of this financial
year have been good and G&H is on track to meet its
expectations for the full year. There are good trading conditions
in the telecommunications and industrial laser sectors and we have
a strong order book.
"The acquisition of StingRay meets our strategic aims of moving
up the value chain and diversifying the business through increasing
our footprint in the Aerospace and Defence sector. It is a
profitable and growing business in its own right, which has
established an excellent reputation in the US Defence industry for
the high quality of its custom optical assemblies. As part of the
bigger G&H family we believe it will be able to fulfil its true
potential by leveraging our greater reach and our complementary
manufacturing and technical capabilities.
"We are very much looking forward to working with StingRay's
talented management and workforce."
For further information
contact: -
Mark Webster / Andrew Gooch & Housego
Boteler PLC 01460 256440
Mark Court / Sophie
Cowles Buchanan 020 7466 5000
Patrick Robb / David Investec Bank
Anderson 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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