 |
04 Dec 2024
UK photonics company says recovery in industrial and medical laser markets is taking longer than previously expected.
Gooch & Housego (G&H), the London-listed manufacturer of a broad range of optical components and subsystems, has posted a pre-tax profit of £4.2 million on annual sales of £136 million.
Reflecting strong demand in defense-related applications offset by a sharp decline in some key industrial markets, the sales total compares with £149 million a year ago - although G&H has made some significant changes to its business since then, notably the sale of its Boston-based EM4 subsidiary in March.
Second-half boost
The company’s results for the 12 months ending September 2024 show that, on a like-for-like basis, sales were down 3 per cent on the prior year, with adjusted pre-tax profit of £8.1 million down from £10.3 million.
In his overview, CEO Charlie Peppiatt noted a solid recovery from a disappointing first half of the year that saw sales revenues rise 15 per cent, and an outlook suggesting that industrial and medical laser markets should start to recover by the middle of next year.
“The growth in revenue in the second half and the continued strong order intake reflect multi-year program wins and the positive structural trends evident in many of our end markets, albeit with the recovery of the semiconductor market still not evident and now expected in the second half of FY2025,” he wrote, with company chairman Gary Bullard adding:
“We are seeing strong demand from our aerospace and defense market, and whilst the recovery in some of our industrial and life sciences markets is taking longer than we had originally anticipated we expect to see sustained recovery in demand in the second half of FY2025.”
EUV lithography
Figures in the firm’s latest investor presentation show that G&H’s industrial division, which represents half of total revenues and is typically its most profitable business unit, delivered sales of £67.9 million, down 9 per cent on the prior year.
During the past year G&H has transferred production of its high-reliability fiber couplers to contract manufacturers in Asia, meaning that its UK team can concentrate on more complex fiber-optic sub-assemblies and modules.
“This represents a significant pivot for the production team in our Torquay facility, but one they have embraced with significant skill and dedication,” Peppiatt observed.
One key priority area for G&H is to expand the use of its acousto-optic technology for extreme ultraviolet (EUV) semiconductor lithography systems based around high-power lasers, with the CEO stating that those products were now in steady-state production.
“This represents a considerable success of converting one element of our technology roadmap into a strong and recurring revenue stream,” he added.
Peppiatt also highlighted how the firm has moved up the value chain in optical communications, with the development of an advanced fiber-optic amplifier module used in a significant new subsea data cable network.
Similar technology is also being deployed to support renewable energy generation, with a fiber-optic assembly integrated with wind turbines to assist safe and efficient operation.
Military optical coatings
G&H’s aerospace and defense business saw its like-for-like sales (excluding the EM4 contribution) jump by a quarter, to £34.5 million, partly a result of the increased conflict around the world that has seen higher spending on armored vehicles and drones with advanced capabilities.
Specific examples include optical periscope systems for the UK Army’s Challenger 3 tank upgrade program, with the same core technology now being used by an unspecified NATO country in eastern Europe for a new amphibious armored vehicle.
The company points to certain applications now requiring new features with optical systems that integrate electronics and optics in single, more complex packages, while military-specification products need increasingly complex optical coatings of which G&H is a major supplier.
“The thin-film coating capability that our Artemis business, which we acquired last year, provides is able to offer protection against the harshest threats from lasers as they are now being deployed on the modern battlefield,” stated the company in its sector overview.
“This has led to Artemis being invited to tender for the emerging requirements of western militaries, and in turn Artemis are able to cross sell other precision optic products and capabilities from other G&H sites.”
That coatings expertise is leading to new interest for applications in directed energy weapons systems, while the firm is also benefiting from the start of a generational shift from radio-frequency to laser-based satellite communications, where G&H’s space-qualified laser amplifiers are playing a key role.
Medical laser competition
Meanwhile the UK firm’s life sciences business posted higher profits on a slight increase in annual sales to £33.6 million, with the integration of GS Optics into G&H now completed, and initial revenues from G&H’s new life sciences design and production hub in North America.
“We have achieved ISO 13485 accreditation for the new facility and secured our first research and development contract for the team there,” announced the company. “This represents an important step in our strategy to access the very large North American medical diagnostic market with US-based resources.”
However in the medical laser market, where G&H says it faces growing competition in the area of less complex medical laser components, the company says it is “assessing its options” to reduce manufacturing costs.
Options include using low-cost regional suppliers, as well as assessing in which parts of the current portfolio it can continue to offer differentiated products.
“We will complete the transfer of production of some of the components and modules used in our medical diagnostic instrument to our low-cost region supply chain to support margin accretion and a surge build capability,” it added.
 |  |  |  |  |  |  |
| © 2024 SPIE Europe |
|
