Optical components specialist Gooch & Housego (GHH) has continued to reduce its reliance on industrial company customers - that broader revenue stream helped to push adjusted pre-tax profit up 18.3 per cent year-on-year to £9.7m. Increased efficiency boosted the operating margin from 13.5 per cent to 15.3 per cent, too, and - despite tough trading conditions - the order book ended the financial year 12 per cent higher at £27.8m.
In aerospace and defence, revenue grew 12 per cent to £17.3m, with a fall in US engineering work having been offset by an increase in sales of components and systems. In life sciences, revenue rose by 28 per cent to £7.4m but, crucially, both divisions are set to benefit from the group's progress in moving up the value chain. So, instead of selling components for sub-systems, the company is now positioning itself to deliver the systems themselves, and initial reaction from customers has been favourable. Further diversification will come following two acquisitions made since the period ended. Acquiring specialist lens manufacturer, Spanoptic, will provide an entry into infrared applications, while the purchase of Constelex will bring further expertise in making complex optical laser and fibre optic systems.
Broker Investec Securities expects adjusted pre-tax profit for 2014 of £11.6m, giving EPS of 34.8p (from £9.7m and 30.5p in 2013).
| GOOCH & HOUSEGO (GHH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 684p | MARKET VALUE: | £154m | |
| TOUCH: | 680-685p | 12-MONTH HIGH: | 707p | LOW: 395p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 289p* | NET CASH: | £5.7m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 36.4 | 1.42 | 5.0 | nil |
| 2010 | 44.7 | 5.10 | 24.4 | 2.0 |
| 2011 | 61.0 | 8.81 | 35.5 | 5.0 |
| 2012 | 60.9 | 7.08 | 24.4 | 5.2 |
| 2013 | 63.3 | 8.34 | 27.7 | 6.3 |
| % change | +4 | +18 | +14 | +21 |
Ex-div: 5 Feb Payment: 28 Feb *Includes intangible assets of £19.8m, or 88p | ||||
