Final Results

Gooch & Housego PLC
16 December 2002



                              GOOCH & HOUSEGO PLC

            PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2002


Gooch & Housego PLC, the specialist manufacturer of precision optical components
and bespoke glass engineering items, acousto-optic devices and instruments for
measuring optical radiation, today announces preliminary results for the year
ended 30 September 2002.



Highlights


•         Improved second half trading

•         Strong balance sheet maintained with gearing reduced to 8%

•         Appointment of Gareth Jones as CEO of the Group, with effect from
          January 2003

•         Recommended increase in final dividend making a total of 3.0p for the
          year

•         Continuing capital investment in a new 50,000 square foot factory and
          in high tech equipment


Archie Gooch, Chairman of Gooch & Housego, commented, 'It is likely that,
providing the recovery of the global economy continues, the Group can expect to
recover it's position and return to growth. The strength of our products and the
skills of our people combined with the development of our manufacturing
capabilities and the strengthening of the organisation will provide the
necessary platform for success.'



For further information:



Archie Gooch MBE JP
Ian Bayer                                   01460 52271
Gooch & Housego PLC

Mike Coe
Rowan Dartington                            0117 925 3377

Tim Thompson
Buchanan Communications                     020 7466 5000




                              GOOCH & HOUSEGO PLC

CHAIRMAN'S STATEMENT
Year ended 30 September 2002

In what was a challenging and difficult year, the Group is reporting results in
line with its revised expectations.  The Group issued a trading statement in
March 2002 when it became clear that the downturn in the sales of Q-Switches and
the recessionary trend that affected the US economy would adversely impact the
Group's growth projections and profit for the year.

I am pleased to report that there has been a marked improvement in the second
half of the year and this is reflected in the results announced today.  This has
been brought about by the application of rigid cost controls resulting in
increased margins. In addition tight cash controls have been reflected in strong
cash generation and a particularly low gearing rate.



Directors

I am delighted to announce that Gareth Jones is returning to the Group in
January 2003 to take up the position of Chief Executive Officer.  Gareth first
joined Gooch & Housego in 1978 and became Group Managing Director in 1995.
During his period in office he had overall responsibility for Research and
Development and worked extensively to develop the Acousto Optics business as
Gooch & Housego became a world leader in this area.  He resigned in December
1999 to take up a new challenge working for a venture capital company.  In this
position he has gained additional experience in corporate finance, which will be
of significant advantage to the Group.  I look forward to working with him
again.



Financial Results

The Group's turnover for the year was 19% lower at £15.59 million (2001 : £19.15
million).  Profit before taxation was £2.02 million (2001 : £4.06 million).
Profit before taxation and goodwill amortisation for the year was £2.32 million
(2001 : £4.36million).

Earnings per share for the year were 7.0p as compared with last year, restated
at 13.3p.

Throughout the period, the Group generated significant amounts of cash and
reduced its net debt by £0.81 million to £0.95 million, reduced gearing from 15%
to 8% while interest was covered 13 times (2001 : 16 times).

The strong balance sheet will enable the Group to continue to grow both
organically and by acquisition.  The new Ilminster factory will facilitate
organic growth, while further strategic acquisitions are being considered for
the coming year.



Dividends

Following these results and the strong cash position, your Board is proposing to
increase the final dividend to 2.0p per ordinary share (2001 : 1.9p) which,
together with the interim paid, totals 3.0p (2001 : 2.8p).  This represents an
increase of 7% on last year.

Subject to approval at the Annual General Meeting the final dividend will be
payable on 14th February 2003 to all shareholders on the register on 31st
December 2002.



OPERATIONS

United Kingdom

G & H

In the UK sales for Gooch & Housego (G&H) were £5.47 million (2001 : £7.27
million) with operating profits at £1.09 million (2001 : £2.32 million)

The major reasons for the reduction in profit at G&H have already been discussed
in both the trading statement of March 2002 and the interim statement in June
2002.  The major impact on profits was caused by the rescheduling of Q-Switches,
particularly by our customers in the US and Germany, following the effect of the
worldwide recession.

The recovery in acousto-optic product sales is now well underway and the final
quarter of our year ended 30 September 2002 saw an upturn in both orders and
invoiced sales.  This, together with the ongoing development of new products,
increases our confidence for future growth and improved profitability.

The performance of our scientific optical division has been in line with
expectations with sales being maintained despite the effect of the recession.
During the year we have benefited from ongoing contracts from major defence
customers as they continue to outsource precision optics components.  The
current levels of order intake continue to be maintained.

I am pleased to announce that plans have been drawn up for a new 50,000 square
foot factory and headquarters building to be located not far from the existing
Ilminster facility on land purchased during the last year.  Work is expected to
start in early 2003 and be completed by the end of the year.  This exciting
development is a significant milestone in the history of the company, being the
first move away from the town centre location that has been home to Gooch &
Housego for more than fifty years.

In addition to providing the all important extra space to facilitate the
continued growth of the core Gooch & Housego precision optics and acousto-optics
activities, the state of the art factory will improve efficiency and enhance
quality while providing an attractive and pleasant working environment.  This
move is a key step in our ongoing plans to develop and grow the business.



United States

CCI



Cleveland Crystals Inc (CCI) has reported sales of £4.15 million an improvement
of £0.40 million on last year, with operating profit at £0.44 million (2001 :
£0.45 million).

Despite the difficult economic conditions and highly competitive marketplace,
sales in the core crystals and electro-optic components business grew 7% year on
year.  The company believes this improvement is a result of more aggressive
sales and marketing, on-time delivery of high quality products, customer support
and targeted new product development.  The strategy of focussing on laser OEM
customers will be continued and increased in scope to include large government
and university research laboratories.

Sales of fusion research related products decreased 17% as compared with last
year.  However, CCI's position as the world's leading supplier of large crystals
for fusion research lasers remains unchallenged.  The new facility to produce
crystals for the Lawrence Livermore National Laboratory's National Ignition
Facility laser became operational in February 2002 when pilot production
commenced.  Full production, made up of both crystal growth and fabrication of
the finished parts, is scheduled to commence in 2003 and is projected to
continue beyond 2010.


OLI

Optronic Laboratories Inc (OLI) returned a disappointing result in a difficult
and reducing market in the US.  Total sales were £2.51 million (2001 : £3.03
million) with an operating loss for the year ended 30 September 2002 of £231,000
against a profit in the prior year of £29,000.

As I reported in my interim statement of 18 June 2002 a full reorganisation of
the Group's US business has been undertaken which will result in increased
efficiencies and profits.  The major cost of this has been absorbed by OLI and
this will now have a beneficial effect on profits.

In December 2001 the RF driver business was moved to NEOS Technologies Inc
(NEOS) to capitalise on their in house expertise in design and manufacturing
which has led to significant cost savings for the Group.  In February 2002 the
optics business of OLI was closed and all business transferred to G&H Ilminster
where overall lower manufacturing costs will result in increased profitability.

To cover these losses OLI has realised a steady increase in metal fabrication
work for NEOS, which was previously purchased outside of the Group.  This new
business, when consolidated with OLI's existing fabrication, will again lead to
profit improvement through the resulting production efficiencies.

During the year under review the market for the sale of our Spectroradiometer
has been poor due to both the events of 9/11 and the resultant recession in the
US.  Quote activity has been strong in the second half but it is only recently
that we have experienced a sustained increase in orders.

The core business of design, manufacture and supply is now fully focussed on the
company's Spectroradiometry devices.  The new high-speed light-measuring
instrument, designed specifically for the LED market, has been well received by
customers and promises to be a good platform for future development.  There are
three customers expected to place multi-unit purchases next year.  A UV-version
of the LED-measuring instrument is planned for release in January and an
IR-version is planned for release by Q4.  Also, several major improvements
planned next year for older instruments will enhance future sales.  Our
continuing expertise in design and performance in Spectroradiometry has given us
a reputation for worldwide leadership, which, together with the changes already
undertaken at OLI, are expected to return the company to profit during the
current year.



NEOS

NEOS performed well in the second half of the year.  After reporting an
operating profit of £0.52 million in the six months to 31 March 2002 NEOS
achieved a full year operating profit of £1.18million (2001 : £1.79million) from
sales of £3.67 million (2001 : £5.50 million).

The reasons for the downturn in NEOS's first half performance have been well
documented during the year and are similar to those experienced by G&H in their
acousto-optic division. In addition NEOS has historically sold in excess of 75%
of total sales into the US market which, during the year under review, was
severely weakened.

NEOS continues to invest in new product development as it moves to reduce it's
dependence on Q-switches. New derivatives continue to be researched and
developed which together with increased sales in RF drivers will fuel future
growth.



Staff

I would like to thank the directors, management and staff, both in the UK and
US, for their individual contributions to the results achieved by the group in
difficult trading conditions.



Prospects

In the second half and through into the current year we experienced a greater
level of activity in our enquiry and sales order conversion processes.  This
increased business provides the Group with confidence in regard to our current
financial forecasts.

Having recently returned from a five-week visit to our US subsidiaries it is
pleasing to observe the ongoing integration of the Group companies and this
gives us continuing confidence in the future.

It is likely that, providing the recovery of the global economy continues, the
Group can expect to recover its position and return to growth.  The strength of
our products and the skills of our people combined with the development of our
manufacturing capabilities and the strengthening of the organisation will
provide the necessary platform for success.



Archie Gooch MBE JP
Executive Chairman
16 December 2002





Gooch & Housego PLC
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2002


                                                                                             2002            2001
                                                                                            £'000           £'000
                                                                                                         Restated

Turnover                                                                                   15,586          19,146
Trading expenditure                                                                      (13,406)        (14,834)

Operating profit                                                                            2,180           4,312

Interest receivable and similar income                                                         41              76

Interest payable and similar charges                                                        (206)           (332)

Profit on ordinary activities before taxation                                               2,015           4,056

Tax on profit on ordinary activities                                                        (755)         (1,663)

Profit on ordinary activities after taxation                                                1,260           2,393

Dividends on equity shares                                                                  (540)           (504)

Retained profit for the financial year                                                        720           1,889

Basic earnings per share                                                                     7.0p           13.3p

Earnings per share before goodwill amortisation                                              8.7p           15.0p

All operations undertaken by the group in the current year are continuing.







Gooch & Housego PLC
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 30 SEPTEMBER 2002


                                                                                             2002            2001
                                                                                            £'000           £'000
                                                                                                         Restated

Profit for the financial year                                                               1,260           2,393

Currency translation differences on foreign currency net investments                        (361)            (11)

Taxation on retranslation gains/losses on foreign currency loans hedged against
foreign currency net investments                                                               -               3

Total recognised gains and losses for the financial year                                      899           2,385

Prior year adjustment (note 2)                                                              (179)

Total gains and losses recognised since the last annual report                                720





Gooch & Housego PLC
GROUP BALANCE SHEET
AS AT 30 SEPTEMBER 2002


                                                                           2002                      2001
                                                                    £'000        £'000        £'000         £'000
                                                                                            Restated
FIXED ASSETS
Intangible assets                                                                  5,161                      5,463
Tangible assets                                                                    3,763                      3,710
                                                                                   8,924                      9,173

CURRENT ASSETS
Stocks                                                                3,507                     3,759
Debtors                                                               3,215                     3,524
Cash at bank and in hand                                              2,592                     2,481
                                                                      9,314                     9,764

CREDITORS :  amounts falling due within one year                     (3,711)                   (4,112)

NET CURRENT ASSETS                                                                 5,603                      5,652

TOTAL ASSETS LESS CURRENT LIABILITIES                                             14,527                     14,825

CREDITORS :  amounts falling due after more than one year                        (2,197)                    (2,978)

PROVISIONS FOR LIABILITIES AND CHARGES                                             (188)                       (64)

NET ASSETS                                                                        12,142                     11,783

CAPITAL AND RESERVES
Called up share capital                                                            3,600                      3,600
Share premium account                                                              3,404                      3,404
Revaluation reserve                                                                  308                        308
Profit and loss account                                                            4,830                      4,471

EQUITY SHAREHOLDERS' FUNDS                                                        12,142                     11,783




Gooch & Housego PLC
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2002


                                                        Note                2002                    2001
                                                                       £'000        £'000       £'000       £'000

Cash flow from operating activities                       (i)                       3,091                   4,352

Returns on investments and servicing of finance
Interest received                                                         33                       76
Interest paid                                                          (198)                    (327)
Interest element of hire purchase contracts                             (12)                      (5)

Net cash outflow from returns on investments and                                                           
servicing of finance                                                                 (177)                  (256)

Taxation                                                               
UK tax paid                                                            (444)                    (434)
Overseas tax paid                                                      (336)                  (1,092)
Cash outflow from taxation                                                          (780)                 (1,526)

Capital expenditure and financial investment

Purchase of tangible fixed assets                                      (612)                    (597)
Sale of tangible fixed assets                                              4                       29

Net cash outflow from capital expenditure and financial
investment                                                                          (608)                   (568)

Acquisitions

Acquisition of subsidiary                                                  -                    (266)

Net cash outflow from acquisitions                                                      -                   (266)

Equity dividends paid                                                               (522)                   (441)

Cash inflow before financing                                                        1,004                   1,295

Financing
Repayment of bank loan                                               (1,017)                    (744)
Capital element of hire purchase contracts                              (78)                     (50)

Net cash outflow from financing                                                   (1,095)                   (794)

(Decrease) / increase in cash in the year                (iii)                       (91)                     501







Gooch & Housego PLC
NOTES TO THE CASH FLOW STATEMENT



(i)     Reconciliation of operating profit to net cash inflow from operating activity


                                                                                   2002            2001
                                                                                  £'000           £'000

Operating profit                                                                  2,180           4,312
Amortisation of goodwill                                                            302             301
Amortisation of debt issue costs                                                     24             15
Depreciation                                                                        464             496
Decrease/(increase) in stock                                                         60           (508)
Decrease/(increase) in debtors                                                      234            (69)
(Decrease) in creditors                                                           (173)           (195)
                                                                                  3,091           4,352



(ii)   Reconciliation of net cash (outflow)/inflow to movement in net debt


                                                                                   2002           2001
                                                                                  £'000          £'000
(Decrease)/increase in cash in the year                                            (91)            501
Cash outflow from decrease in
Debt and lease financing                                                          1,095            794

Changes in net debt resulting from cash flows                                     1,004          1,295
New hire purchase contracts                                                       (477)              -
Movement in debt issue costs                                                       (24)           (15)
Translation difference                                                              311             26

Movement in net debt in the year                                                    814          1,306

Net debt at 1 October 2001                                                      (1,761)        (3,067)

Net debt at 30 September 2002                                                     (947)        (1,761)



(iii)  Analysis of net debt
                                       At 1                    Exchange                 Non-cash           At 30
                                    October        Cash        movement                 movement       September
                                       2001        flow                                                     2002
                                      £'000       £'000           £'000                   £'000            £'000

Cash in hand and at bank              2,481        (91)             202                       -            2,592

Debt due after 1 year               (2,978)           -             103                     993          (1,882)
Debt due within 1 year              (1,236)       1,017              24                 (1,017)          (1,212)
Hire Purchase                          (28)          78            (18)                   (477)            (445)
                                                  1,095
                                    (1,761)       1,004             311                   (501)            (947)







Gooch & Housego PLC



NOTES TO THE PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2002


1.     Basis of preparation.



       The unaudited financial information contained in this preliminary
announcement does not comprise statutory accounts within the meaning of Section
240 of the Companies Act 1985.



       The figures in this preliminary announcement have been prepared under
generally accepted accounting policies in the United Kingdom. With the exception
of the change described in note 2, the accounting policies adopted are those set
out in the Annual Report and Accounts for the year ended 30 September 2001 which
includes an unqualified report of the auditors and which have been filed with
the Registrar of Companies.





2.     Following the introduction of Financial Reporting Standard 19, '
Deferred Taxation' in 2002, the Group has changed its accounting policy with
respect to deferred taxation.  Under the previous policy, provision was made for
deferred taxation using the liability method, on all material timing
differences, to the extent that it is probably that a liability or asset will
crystallise.  Under the revised accounting policy, liabilities will be
recognised for most types of timing differences regardless of whether they are
anticipated to reverse in the foreseeable future.  Deferred taxation assets will
be recognised to the extent that it is more likely than not that they will
reverse.



A review of the deferred tax position of the Group was undertaken and a prior
year adjustment was made which decreased reserves by £122,000 at 1 October 2000.
Retained profit for the year to 30 September 2001 was reduced by £57,000,
resulting in reserves brought forward at 1 October 2001 decreasing by £179,000.
The impact of the change on the retained profit for the year ended 30 September
2002 is a reduction of £83,000.





3.     Segmental Reporting.

       The analysis of turnover by destination is as follows :

                                     2002                2001
                                    £ 000               £ 000

United Kingdom                      2,769               2,937
North America                       9,334              10,827
Continental Europe                  1,688               2,241
Other                               1,795               3,141
                                   15,586              19,146




The results by geographical origin are as follows :


                                     United Kingdom                 North America              Group
                                  2002         2001            2002          2001          2002          2001
                                 £'000        £'000           £'000         £'000         £'000         £'000
Turnover
- Continuing                     5,465        7,288          10,433        12,250        15,898        19,538
inter-segment sales               (46)         (19)           (266)         (373)         (312)         (392)

Sales to third parties           5,419        7,269          10,167        11,877        15,586        19,146
Operating Profit
- Continuing                     1,091        2,263           1,089         2,049         2,180         4,312

Segment profit before            1,091        2,263           1,089         2,049         2,180         4,312
interest and taxation

Net interest                                                                              (165)         (256)
Group profit before                                                                       2,015         4,056
taxation



4.   Taxation.

     The charge for taxation on the profit for the year is made up as follows :

                                        2002                2001
                                       £ 000               £ 000

Current year                             154                 609
UK Corporation tax                       595                 997
Overseas taxation                          6                  57
Deferred taxation                        755               1,663





5.     Earnings per share

       The calculation of earnings per 20p Ordinary Share is based on the profit
on ordinary activities after taxation using as a divisor the weighted average
number of Ordinary Shares in issue during the year.  For 2002 and 2001 the
actual number of Ordinary Shares in issue throughout the year was 17,999,162.

       A reconciliation of the earnings used in the calculations is set out
below:


                                                              2002                               2001
                                              £'000          p per share         £'000          p per share

Basic earnings per share                      1,260                  7.0         2,393                 13.3
Goodwill amortisation                           302                  1.7           301                  1.7
Earnings per share before goodwill
amortisation                                  1,562                  8.7         2,694                 15.0


Earnings per share before goodwill amortisation has been shown because, in the
opinion of the directors, it reflects the underlying performance of the group.



6.      The final dividend will be paid on 14th February 2003 to shareholders on
the register at close of business on 31st December 2002.





7.        Copies of the Report and Accounts will be despatched to shareholders
during the week commencing 13th January 2003 and will also be available from the
Company Secretary at Gooch & Housego PLC, The Old Magistrates Court, Ilminster,
Somerset  TA19 0AB.


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