Highlights

  • Gooch & Housego’s group revenue declined 1.4% in H1FY24, impacted by destocking by customers.
  • Gross margins improved to 29.1%, but operating profits fell due to reduced demand.
  • Full-year adjusted PBT is expected to be GBP 1.5 million lower due to revenue delays.

 Gooch & Housego PLC (LSE: GHH) specialises in optoelectronic components, materials, systems, and advanced instrumentation for the life sciences sector. The UK-based manufacturer is listed on the FTSE AIM All-Share index.

In H1FY24, the group's revenue declined by 1.4% to GBP 63.6 million, or 5.3% on an organic, constant currency basis. This drop was mainly due to significant destocking by industrial and medical laser customers. Despite this, gross margins improved to 29.1% from 28.5%. However, reduced demand impacted profitability, with underlying operating profit falling to GBP 3.8 million, compared to GBP 5.4 million in H1FY23. Reported operating profit also decreased, dropping to GBP 1.6 million from GBP 4.3 million.

Underlying gross profit slightly increased by 0.5%, rising to GBP 18.5 million from GBP 18.42 million in the previous year. Operating profit declined by 29.2% to GBP 3.8 million from GBP 5.4 million. Overhead costs increased due to the integration of GS Optics and Artemis, alongside wage inflation and strategic role additions, which contributed to higher expenses.

Recent Business Update

On 15 August 2024, Gooch & Housego issued a trading update, highlighting that prolonged destocking by industrial and medical laser customers would result in a more heavily weighted second half of FY2024. Revenue delays due to supplier and customer issues were also noted. As a result, full-year adjusted PBT is expected to be approximately GBP 1.5 million lower than originally forecast. However, the order book grew to GBP 116.8 million, and bank borrowings were reduced to GBP 18.0 million by July 2024.

On 04 November 2024, the company notified investors that it would announce its full-year results for the year ended 30 September 2024 on Tuesday, 3 December 2024.

Company Outlook

Gooch & Housego expects demand to recover in early FY25, especially in medical diagnostics, fibre optic modules, and ring laser gyros. The divestment of EM4 and the integration of GS Optics and Artemis are progressing well and creating commercial synergies. The company is focused on reducing borrowings and inventory. Overall, the company’s long-term outlook remains strong and aligned with its strategic goals.

Top 10 Shareholders:

The top 10 shareholders of GHH hold about 61.65% of the total shares. Odyssean Investment Trust PLC has the largest stake at 12.60%. Octopus Investments Limited follows with 11.99%. The chart below illustrates this:

Stock Information

Gooch & Housego's stock price has risen by about 12.37% in the past month. However, over the last 6 months, it has dropped by approximately 20.07%. The stock's 52-week low is GBX 380.00, and the 52-week high is GBX 685.66. It is currently trading below the 52-week high and low average. As of 26 November 2024, the stock’s closing price is GBX 454.00.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 26 November 2024. The reference data in this report has been partly sourced from EODHD/Others.