Optical components specialist, Gooch & Housego, (H&G) saw its shares fall 4 per cent on the day that these bumper full-year results were released - even though the restoration of a dividend came a year earlier than expected.
In 2008-09 destocking and delayed orders knocked Gooch & Housego's results hard but, during the period, the reverse was true - adjusted profits almost doubled to £6m, while adjusted earnings advanced a similar amount to 23.1p. The key factor was a jump in demand for laser controls - notably Q-switches - and particularly from Asia Pacific. Indeed, turnover in that region advanced from £4.71m to £8.91m and a significant portion of sales to Europe and north America probably ended up in Asia, too. Profitability was also helped by reduced finance costs, lower acquisition amortisation and a mere 8 per cent tax charge following recognition of a deferred tax asset.
A surge in demand is also changing the way G&H works. Big customers want to deal with fewer suppliers, so management is beginning to outsource electronics work - even to recent competitors. Broker Investec Securities expects adjusted profits of £8.2m for 2011, giving adjusted EPS of 25.4p.
GOOCH & HOUSEGO (GHH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 433p | MARKET VALUE: | £83m | |
| TOUCH: | 425-440p | 12-MONTH HIGH: | 455p | LOW: 131p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 186p* | NET DEBT: | 15% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 25.4 | 5.45 | 20.8 | 4.20 |
| 2006 | 30.7 | 6.64 | 26.8 | 4.50 |
| 2007 | 33.4 | 5.14 | 18.5 | 4.50 |
| 2008 | 36.4 | 1.42 | 5.00 | nil |
| 2009 | 44.7 | 5.10 | 24.4 | 2.00 |
| % change | +23 | +259 | +388 | - |
Ex-div:na Payment:na * Includes intangible assets of £15.3m, or 80p a share | ||||
