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04 Jun 2025
UK-listed optics and photonics firm reports strong demand for components used in ring laser gyroscopes.
G&H (Gooch & Housego) has reported adjusted pre-tax profits of £5.1 million for the six months ending March 31, nearly double the figure of £2.6 million in the same period last year.
The London-listed optics and photonics company also confirmed sales revenues of £70.9 million for the latest accounting period, up 11 per cent year-on-year thanks largely to a sharp uptick in business for its aerospace and defense division.
G&H’s CEO Charlie Peppiatt also reported a solid increase in the firm’s order book to £121.5 million (up from £104.5 million last September), with recent precision optics acquisition Phoenix Optical contributing £7 million to that rise.
And while the current business outlook remains clouded by the potential impact of US import tariffs and retaliatory actions such as restrictions on critical material exports from China, Peppiatt told investors:
“Our expectations for FY2025 are unchanged; trading has continued well post the [accounting] period end, and we have [more than] 95 per cent cover for full-year expected revenue, though there are increased execution risks due to increased global uncertainty.”
Industrial weakness
G&H’s half-yearly report showed that sales attributed to its largest business unit - industrial applications - dropped around 5 per cent year-on-year to £30.1 million, with the company saying it was yet to see any recovery in either the semiconductor or industrial laser sectors.
“Production call off of our products used in the latest deep and extreme ultraviolet (DUV/EUV) photolithography machines fell as our end customer reduced build rates,” stated the optics firm. “Offsetting to some extent these reductions we saw further growth in revenue from the sub-sea data cable market.”
G&H also pointed out that demand for products used in a wide range of consumer electronics and automotive applications had been impacted by increased uncertainty around global trading relationships and rising costs for consumers related to newly imposed US import tariffs.
“This is holding back confidence in investing in new capital equipment and other major infrastructure projects,” it stated. On the plus side deliveries of complex amplifier assemblies rose as the company supported customer delivery of new cable networks.
That ramp in production has been aided by the transfer of high-reliability fiber coupler production to a contract manufacturer, meaning that the firm’s own production space and staff can focus on more complex products - improving company margins in the process.
Periscopes and germanium
With planned hikes in defense spending across Europe, G&H’s aerospace and defense division is said to be fielding higher levels of enquiries for precision optics products, while it is also collaborating on the development and early-stage prototypes of new directed energy weapons expected to become increasingly important elements of naval and land defense systems.
The latest figures were boosted by increased production of super-polished optical components for ring laser gyroscopes used in aircraft, while G&H added that it has now completed initial deliveries of advanced periscope systems for a UK Ministry of Defence (MOD) program to upgrade the Challenger battle tank platform. It is also providing a very similar periscope to a NATO partner in eastern Europe for a new amphibious armored vehicle.
“These deliveries allow both vehicles to progress in their trials programs before transitioning into volume production in the coming years,” G&H reported, as the aerospace and defense business unit posted a 41 per cent year-on-year increase in sales to £23.5 million.
Last month the company further expanded its defense-related footprint through the acquisition of Florida-based Global Photonics, which supplies optical systems for military land applications, including periscopes.
“Global Photonics as part of G&H brings together industry-leading optical know-how and capability that will accelerate value creation for the Group in North America,” Peppiatt told investors.
The company added that it has identified alternative sources of germanium following the Chinese government’s decision to restrict supply of the key optical material to Western countries.
“Germanium is used in many of our products supplied into the defense market, and we believe our newly established supply chain relationships for the provision of this material provide us with a competitive advantage,” stated G&H.
Tariffs passed on to customers
Also posting a rise in sales was G&H’s life sciences business unit, with revenues growing at a more modest rate of 13 per cent year-on-year to £17.3 million, thanks in part to customer OrganOx ramping production of its new product offering functional assessment of donor organs.
“We were also pleased to see the first two instrument production programs launching in our Rochester, New York, facility during the period,” noted G&H. “Our life sciences research and development team [is also] working on a customer’s program to develop a new point-of-care instrument which we are optimistic will generate significant revenues.”
In the half-yearly report the G&H team also noted the potentially damaging impact that US tariff-related uncertainty might have on overall demand - although for now it still expects to hit existing full-year financial targets.
“Whilst the new US tariff regime did not take effect until after the end of the reporting period we have notified our customers that we intend to pass on any incremental costs to them,” pointed out the firm.
“We have developed new reporting tools to enable us to quickly assess the impact on existing customer orders so that we can apply a tariff surcharge where required and protect [company] margins.
“We also invested in additional heavy water for our Cleveland facility in order to increase crystal growth capacity. This investment was accelerated in order to take receipt in advance of the new tariff regime coming into effect at the beginning of April.”
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