Back in November 2011, Investors Chronicle warned that there were tough times ahead for Gooch & Housego, and the group's half-year results show that this has now come to pass. If maiden contributions from two US acquisitions are ignored, like-for-like sales in the half year fell 23 per cent, with much of the blame falling on reduced demand for industrial laser parts. Sales to Asia during the half slumped from £6m to £3.8m. At the same time, aerospace and defence results were hit by delayed US orders.
While Gooch's plan to acquire businesses to reduce the dominance of its main industrial division did mitigate the first-half downturn, the group believes it now has a better balance of interests and, for the next two years or so, is likely to concentrate on building them up and launching new products. These products include a new 'Q-switch' that controls lasers within optic fibres.
Gooch is also bold enough to suggest that the worst may be over as the order intake in the second quarter was almost two-thirds higher than in the previous three months. Broker Investec reports that at the end of May orders stood at around £28m. For the full year Investec forecasts little changed sales of £60.3m with normalised profits down from £10.8m to £8m. On that basis, EPS falls 10p to 26.1p.
GOOCH & HOUSEGO (GHH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 365p | MARKET VALUE: | £79.8m | |
| TOUCH: | 355-375p | 12-MONTH HIGH: | 585p | LOW: 347p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 253p* | NET DEBT: | 10% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 27.2 | 3.94 | 13.00 | 2.00 |
| 2012 | 27.8 | 2.50 | 8.70 | 2.00 |
| % change | +2 | -37 | -33 | - |
Ex-div: 20 June Payment: 27 July Aim: Engineering general. *Includes intangible assets of £21.4m, or 98p a share | ||||
