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09 Jun 2011
UK-headquartered firm reports surging demand from all commercial sectors as it posts strong half-yearly results.
Gooch & Housego (G&H), the expanding UK optics company, has reported a pre-tax profit of £3.9 million for the six months ended March 31, after revenues rose 33% compared with a year ago to £27.2 million.
That increase partly reflected G&H’s recent acquisitions (EM4 sales contributed £1 million in the final two months of the period), moves that are designed to diversify the company’s overall product offering. Each of G&H's commercial sectors saw strong organic growth – although the one application sector where the company is seeing reduced demand is the scientific market, where sales fell 19%.
CEO Gareth Jones, interviewed by optics.org last month, described the results as encouraging, adding: “The work we put in during 2010 has enabled us to meet the continuing strong demand for our products in 2011 and deliver an encouraging set of results for the first half of the year.”
The acquisitions of EM4 and Crystal Technology – expected to cost a combined total of £17.9 million including earn-out clauses – have strengthened G&H’s standing in the defense sector in particular. Defense and aerospace applications will now account for around one-third of the company’s sales on an annualized basis, making G&H much less reliant on the industrial laser market than it has been previously.
Organic growth
However, industrial lasers remains the key market for the company, which remains best-known for its acousto-optic products. Driven by strong demand for laser systems in smart phone and automotive manufacturing, G&H’s revenues in the sector grew 42% on the fiscal 2010 figure to reach £15.6 million – more than half of total company revenue. “The rate of growth has stabilised in recent months to what appears to be a sustainable level,” said G&H in its interim results statement.
Sales into aerospace and defense applications rose 18% over the same period, while in the life sciences sector revenues rose 51% as G&H made inroads into optical coherence tomography (OCT) applications through a deal with Michelson Diagnostics.
Speaking at the recent LASER World of Photonics conference in Munich, the OCT pioneer James Fujimoto, who played a major role in the development of the diagnostic imaging technique at the Massachusetts Institute of Technology, estimated that the market for the technology was now worth in excess of $1 billion per year – calculated from the number of procedures using the technique.
G&H's recent acquisitions were part-financed through an additional £5 million debt facility, and gross debt has increased to £17 million as a result. The company lists gross cash of £11.5 million on its balance sheet, while it is obliged to pay an additional $6.6 million in relation to the EM4 and Crystal Technology acquisitions in March 2012.
Following the strong operating performance, G&H said that it would pay a shareholder dividend of 2 p per share for the half-year ended March 31 2011. No dividend was paid in fiscal 2010. The company’s share price remains at a long-term high of close to 600 p, having risen steadily from 200 p a year ago.
That strong performance looks set to continue in the second half of fiscal 2011, with G&H’s order book now standing at a record level of £32.7 million and the additional revenues from Crystal Technology set to kick in for the first time.
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