TIDMGHH
RNS Number : 5818U
Gooch & Housego PLC
07 April 2021
For immediate release 7 April 2021
Gooch & Housego PLC
("G&H" or the "Company")
Half Year Trading Update
"Recovery of industrial laser demand and further progress
streamlining manufacturing"
Gooch & Housego PLC (AIM: GHH), the specialist manufacturer
of photonic components & systems, provides an update on trading
in the six months ended 31 March 2021.
Trading
In the first half of the financial year we have seen a recovery
in the industrial laser sector in line with the trends previously
announced in our AGM trading statement in February 2021. Demand for
fibre optics, hi- reliability fibre couplers and our life sciences
products and services remains strong. Our Defence markets have been
robust, whilst demand from our limited number of commercial
aerospace customers has been affected by current end-market
conditions.
The Asian markets have led the recovery in industrial lasers and
we are now seeing the US and European markets also emerging from
the pandemic downturn. The roll out of new technologies such as 5G,
along with greater use of new materials in microelectronic
manufacturing has fuelled demand, building on the sustained growth
in semiconductors.
In the UK we have secured important new A&D business for our
UK Precision Optic (PO) hub, adding to the strong US Defence order
book.
Medical diagnostics has continued to demonstrate good growth and
we are now seeing improving levels of demand for our specialist
medical laser products, which were adversely affected by the
reduction in elective procedures in FY 2020 owing to COVID-19.
As at 31 March 2021 our order book was at GBP92.8 million (31
March 2020: GBP91.7 million), an increase of 1.3%, or 7.9% at
constant currency, compared with the same time last year.
Operations
We are proud of the way our staff have responded to the
challenge of the pandemic. All of our sites remain fully open and
are operating in line with all relevant health and safety rules and
regulations. Nevertheless, travel restrictions and some staff self
isolating have presented hurdles that we have worked hard to
overcome. We anticipate that these issues will ease as the vaccine
roll out progresses in the UK and USA.
As part of the Company's ongoing performance improvement
programme we are making good progress streamlining our
manufacturing sites. As previously reported all of the product
lines at our Glenrothes, Scotland facility have been transferred to
our new UK PO hub in Ilminster and the Glenrothes site has been
closed. Outsourcing of the Acousto Optic (AO) products from
Ilminster to our contract manufacturer in Asia is progressing well
and we expect this to be substantially complete by the end of the
current financial year. The costs and full year benefits of the
above mentioned moves are expected to be in line with previous
communications.
Our two further site streamlining projects are also progressing
to plan. Production at our Baltimore, MD facility is in the process
of being transferred to our Boston, MA and Torquay, Devon
facilities and our Baltimore site will be closed. We are also
transferring production from our facility in St Asaph, Wales to our
UK PO hub in Ilminster. We will retain an optical systems
engineering and design centre in St Asaph, housing our world
leading optical systems engineers.
We are on track to complete both projects by the end of the
current financial year and to reap the full year benefits of the
reduced cost base in FY2022.
Financial Strength
The Group's cash generation in the first half of the financial
year has been strong. The payment of the final earn out associated
with the acquisition of the ITL business has been completed, with
that business achieving at its maximum target level. In the first
half of the year the Group's liquidity levels improved and total
headroom from existing facilities has increased.
Continued execution of our strategy
Our long standing strategic objectives are to diversify our
business and move up the value chain. We continue to make
considerable progress against these objectives and we are securing
important new orders thanks to our growing systems capability
across all three of our business sectors.
Mark Webster, Chief Executive Officer of Gooch & Housego,
commented:
"Trading in the first half of the financial year has been in
line with our expectations. A broader based recovery of the
industrial laser market is encouraging, driven by new technologies
such as 5G and stronger, more flexible materials used in smart
phone and tablet screens.
"We are very proud of the way our staff have responded to the
challenge of the pandemic. The vaccine roll out programme in the UK
and USA should enable some of the restrictions and hurdles
associated with the pandemic to ease however, our priority remains
the health and safety of all our staff, customers and
suppliers.
"G&H has made significant progress with the streamlining of
our manufacturing base. We are on track to have substantially
completed all of the ongoing projects by the end of the financial
year. This will enable us to reap the full year effects in
FY2022.
"The challenge of the pandemic has validated our long term
strategic goals of diversification and moving up the value chain.
We intend to vigorously pursue these goals through internal
investment and where appropriate, acquisitions."
The Company's Interim Results, for the six months ended 31 March
2021, are expected to be announced on Tuesday 1 June 2021.
For further information
contact: -
Gooch & Housego
Mark Webster/Chris Jewell PLC 01460 256440
Mark Court/ Sophie Wills/
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, Europe and China. 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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