Gooch & Housego order book reaches record levels

Investors in specialist photonic components manufacturer Gooch & Housego were updated on the company’s progress on Wednesday, as they mustered for its annual general meeting, as it reported benefiting from positive overall market conditions in the first four months of the current financial year.

The AIM-traded firm’s board said it expected full-year trading to be in line with management's expectations, with a typically higher second half weighting.

It said it was experiencing “exceptional demand” for critical components used in microelectronic manufacturing, although there had been a slowing in demand for high reliability fibre couplers since the start of the year, but that was expected to return in the second half of the year.

The company’s order book had reached record levels - as at 31 January, it stood at £89.7m, an increase of 48.4% compared with the same time last year.

Excluding the impact of foreign exchange and acquisitions, that represents an increase of 49.2%.

As it had previously mentioned, G&H’s 10 manufacturing sites had been organised into three manufacturing centres, based on its areas of technical expertise - Acousto Optic / Electro Optic, Precision Optic and Fibre Optic.

That was part of the board’s strategy to create a more scalable organisational model for future growth.

The board said it had already seen some benefits from that approach as it continued to upgrade capacity and performance, to meet current high levels of demand for critical components used in microelectronic manufacturing.

Gooch & Housego added that it had undertaken a review of the likely outcomes of the recent US tax reforms.

It said it expected that those would result in a one-off, non-cash benefit to the income statement of around £0.5m, resulting from the revaluation of deferred tax liabilities.

In addition, it expected the underlying effective tax rate to fall by 3% to 24% in the 2018 financial year, and to be around 23% on a full year basis thereafter.

G&H said it remained in a “strong” financial position, and intended to make further investment in the business.

“Overall market conditions for the first four months of the year have been good, we have a record order book and full year trading remains in line with management's expectations,” commented chief executive Mark Webster.

“As previously announced Gary Bullard will be appointed to the board as non-executive chairman after the AGM, and the board looks forward to benefiting from his counsel and expertise.”

At the conclusion of Wednesday’s AGM, G&H confirmed Gareth Jones would step down from the board after almost 37 years of service with the company.

“I would like to thank Gareth both personally and on behalf of G&H for his wisdom and guidance over the past three years as chairman and for his immense contribution to G&H's growth as a business over many years,” Webster added.