Gooch & Housego reports positive trading in first half

Specialist photonic components and systems manufacturer Gooch & Housego reported positive trading in a first-half update on Tuesday.

The AIM-traded company said it had made steady progress in reducing the level of its overdue order book, and adding additional capacity to its production facilities.

It said revenue for the six months ended 31 March was expected to be around £71m, supported by favourable exchange rate movements and price increases to offset cost input inflation.

The group reported strong demand for its products from its semiconductor, data communications, and next-generation industrial laser markets.

It secured new programme positions with medical diagnostic customers in the period, to replace other programmes that were nearing the end of their life cycle.

Requests for quotes for the replenishment of equipment deployed into Ukraine were also accelerating, with the company anticipating some of those would convert to new orders shortly.

The firm’s order book on 31 March stood at £124.4m - an increase of 3.8% compared with the same time last year.

Gooch & Housego said it was continuing to experience high input cost inflation, and to remain competitive in the employment market it had made upward adjustments to salary levels.

The commercial team was focussed on passing on higher costs through pricing to support the group's performance in the second half, the board said.

It added that it was in a “strong” financial position with a robust balance sheet and low net debt.

At the half-year, net debt totalled £19m, and the group had $46.2m available from existing committed and uncommitted debt facilities to fund future growth activities.

The company said it expected trading for the full year to be in line with its previously-reported expectations.

It added that the review of its strategy was progressing according to plan, with the initial findings shared with the board.

“I am pleased with the progress that has been made in the first half of the financial year with increasing operational output to better address the demand for our products as well as continued positive levels of customer engagement on next generation programmes and new product opportunities in all our main end markets,” said chief executive officer Charlie Peppiatt.

“This is thanks to the hard work of our employees across the Group and means we are well placed to meet management's expectations for the full year.

“We are on track with our review of the group strategy and expect to be able to provide more information along with the interim results in June.”

Gooch & Housego said it would report its interim results for the six months ended 31 March on 6 June.

At 1110 BST, shares in Gooch & Housego were down 6.96% at 428p.

Reporting by Josh White for Sharecast.com.