Optical components specialist Gooch & Housego (GHH) delivered a strong first-half performance that saw adjusted pre-tax profit ahead by 23.5 per cent at £6.3m. The improvement was driven by the industrial side, where operating profit was up by a third at £4.7m, while operating margins there rose from 18.8 per cent to 21.3 per cent.
This is the group's principal trading division, accounting for around 57 per cent of turnover, and the key driver behind the improved performance was an 18 per cent rise in sales of acousto-optic components for fibre and solid-state lasers. Telecommunications added a further growth element, driven by a surge in demand for under-sea components. And while contributing only around a tenth of group turnover, life sciences revenue grew by 20 per cent, thanks mainly to increased demand for laser surgery technology. Aerospace and defence revenue was flat, although chief executive Mark Webster is expecting a pick-up in US defence-related business in the second half.
Crucially, the group is looking to move up the value chain to more complex sub-assemblies, and to provide broader engineering solutions for its customers.
Analysts at Investec Securities are forecasting full-year normalised pre-tax profit of £12.9m and EPS of 38.8p (from £11.5m and 35.2p in 2014).
| GOOCH & HOUSEGO (GHH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 790p | MARKET VALUE: | £190m | |
| TOUCH: | 773.5-800p | 12-MONTH HIGH: | 800p | LOW: 600p |
| DIVIDEND YIELD: | 1% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 315p* | NET CASH: | £11.9m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 34.4 | 3.7 | 11.0 | 2.6 |
| 2015 | 38.9 | 5.1 | 15.6 | 3 |
| % change | +13 | +39 | +42 | +15 |
Ex-div: 25 Jun Payment: 20 Jul *Includes intangible assets of £21.3m, or 88p a share | ||||
