TIDMGHH
RNS Number : 9782I
Gooch & Housego PLC
07 April 2020
For immediate release 7 April 2020
Gooch & Housego PLC
("G&H" or the "Company")
Half Year Trading Update
Gooch & Housego PLC (AIM: GHH), the specialist manufacturer
of photonic components & systems, provides an update on trading
in the six months to 31 March 2020.
Trading
Trading in the six months reflected trends that we have
previously reported, including more recently an impact from the
COVID-19 emergency.
Industrial laser demand remained at below 'normalised' levels,
but orders for fibre optics, hi-reliability fibre couplers for
undersea cables and our A&D and life science capabilities
continued at a good level. In general we are now seeing improved
demand from Japan, S.Korea and to an extent from China, but a push
back of orders from some of our US and European customers.
Improved industrial laser demand will ultimately be driven by
technical innovation such as 5G and new laser based manufacturing
techniques. A&D and life sciences are more stable with areas of
life sciences driving extra demand.
Overall trading in the first half of FY 2020, which was weighted
more toward fibre optics, A&D and life sciences, is expected to
have been lower than the same time prior year.
As at 31 March 2020 our order book was at GBP91.7 million (31
March 2019: GBP93.2 million), which represents a reduction on the
same time last year of 1.7%, or 4.9% on a constant currency
basis.
Priorities in the COVID-19 emergency
Our primary concern during the emergency is the health and
safety of our staff, customers and suppliers. Wherever possible our
employees are working from home and for those that need to work at
our manufacturing sites we have implemented a range of new health
and safety measures to ensure that we rigorously meet social
distancing and cleanliness requirements and other relevant
guidelines and regulations.
Our teams have been responsive and agile in the rapidly
developing situation and we are working hard to ensure we continue
to support our customers' products and programmes, many of which
are classified as essential products and services.
Manufacturing capacity
As previously reported, four of our six manufacturing sites in
the US are open as they are exempt from State wide 'stay at home'
orders. The remaining two, Fremont and Cleveland are aiming to
operate at around 50% of 'normal' capacity levels, which is an
improvement on the temporary closures announced last month.
In the UK all of our five manufacturing sites are open though
the unique nature of our Torquay facility is such that it will need
to operate at a reduced capacity in order to rigorously adhere to
the Government's COVID-19 guidelines. ITL is now operating at near
to full capacity. This is due to increased demand for medical
diagnostic kits and a unit which improves respiratory function and
oxygen supply, as part of a ventilator system for patients in
critical care, including those with COVID-19.
Cost control
Management has implemented a number of measures to control cash
and costs. These measures are consistent with retaining a highly
skilled workforce and maintaining the Group's infrastructure and
capabilities to enable future growth post the COVID-19
emergency.
Financial strength
The Company remains in a good financial position with a strong
balance sheet and good levels of available cash. We have recently
completed an amendment to our existing credit facility, giving a
total facility of $50 million until April 2023.
Outlook
It is uncertain how long the current COVID-19 emergency will
last, but there is likely to be a material short term impact on
G&H. We have previously indicated an expected increased H2
weighting to this year's trading performance, with the potential
for revenue and profit to move into the Group's next financial
year. A greater A&D and life science weighting is
anticipated.
The Company is fundamentally sound and there is long term growth
potential in each of our chosen sectors. We will continue to invest
in novel, cutting edge photonic technologies. As such G&H
remains well placed to take advantage of the recovery when it
comes.
Mark Webster, Chief Executive Officer of Gooch & Housego,
commented:
"Trading in the half year has continued along previously
reported lines, including an impact from the COVID-19 emergency.
Our order book remains at a good level for fibre optics, fibre
couplers for undersea cables and A&D and life sciences.
"G&H is proud that in the US most of our product lines are
considered to be vital for essential services and national
security, enabling sites to stay open under 'stay at home orders'.
In the UK all sites are open, albeit with Torquay operating at
reduced capacity. We continue to manufacture critical components
for industrial lasers, laser systems, telecom, A&D and life
science products.
"We believe the current COVID-19 emergency has validated our
long term strategy of diversification and moving up the value
chain."
For further information
contact: -
Gooch & Housego
Mark Webster/Chris Jewell PLC 01460 256440
Mark Court/ Charlotte Slater Buchanan 020 7466 5000
Chris Baird/Patrick Robb/
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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