Gooch & Housego benefits from favourable market, acquistions

Optical components manufacturer Gooch and Housego (GHH) saw a 13.7% jump in pre-tax profits in its recently finished financial year, driven principally by strengthened revenues and favourable market conditions.

Revenue at GHH moved ahead 30.2% to £112m, dragging pre-tax profits from the £14.2m the firm posted on 30 September 2016 to £16.1m twelve months later.

GHH, which acquired American firm StingRay Optics for $20m in February, said the business had been fully integrated into the wider group and was "performing above our expectations".

The firm pointed to favourable market conditions in its three main sectors of industrial, aerospace and defence, and life sciences for its strong financial performance, saying it had seen "particularly high" demand for critical components used in micro-electric manufacturing and hi-reliability fibre couplers used in undersea cable networks.

Earnings per share rose 25.1% to 36.4p over the year.

Moving forward, GHH said it had poured 16.2% more into research and development in the 2017 financial year than it had in the prior period and had also made "substantial investments" aimed at helping the group meet "increased demand" as well as laying the foundation for future growth.

GHH had a 27.9% increased net cash position of £14.9m as of 30 September.

Chief executive Mark Webster, said, "GHH met its FY 2017 financial goals and was able to make strategically important investments in key skills, processes, systems and the latest capital equipment. Significant progress has been made towards meeting our strategic aims of diversifying the business and moving up the value chain."

"These strategic initiatives combined with a record year-end order book mean the board remains confident that GHH is well positioned to deliver further progress in FY 2018 and beyond," he added.

As of 0925 GMT, shares had gained 4.47% to 1,458.88p.