Gooch & Housego expecting bigger second half

Specialist manufacturer of photonic components and systems Gooch & Housego told the market on Tuesday that trading in the six months to 31 March was in line with its expectations.

The AIM-traded firm said it reflected trends that it had previously reported, with a downturn in demand for critical components used in industrial lasers for microelectronic manufacturing, particularly from China.

In contrast, demand for fibre optic products and high reliability fibre couplers used in undersea networks was strong, the board said.

As it had previously stated, the company said it had “long been aware” of the potential risks associated with the cyclical nature of the microelectronics sector, and more recently the impact of the US-China trade tariffs.

It said it continued to expect the industrial laser market to pick up during the second half of the financial year.

Gooch & Housego said it believed that high reliability fibre couplers were about to experience a multi-year growth phase.

As a result, it said it was investing in further capacity to take advantage of its “market leading” position in the area.

The benefits of the first phase of that growth were expected to become apparent in the second half of the current financial year.

Its management said it continued to expect full-year trading to be in line with the guidance given in its trading update on 20 February, including a “significant” second half weighting.

As at 31 March, Gooch & Housego said it had a “strong” order book of £93.2m, up from £84.7m a year earlier.

“G&H has long been aware of the risks associated with the cyclical nature of the electronics sector and more recently the impact of the US-China trade tariffs,” said Gooch & Housego chief executive officer Mark Webster.

“During the first six months we experienced a cyclical downturn in demand for industrial lasers used in microelectronic manufacturing, though we expect demand to pick up during the second half of the financial year.

“Our fibre optics business is performing well and we are investing in further capacity to take advantage of the strong growth in demand for hi- reliability fibre couplers.”

Webster said it remained confident in the potential of the industrial laser sector, and its other markets, to provide “attractive” long term growth.

“G&H is committed to further diversification and moving up the value chain.

“We will continue to invest in research and development and, where appropriate, make acquisitions in order to meet these strategic objectives.”