Full-Year Trading Update

RNS Number : 8814N

Gooch & Housego PLC

04 October 2012

 



For immediate release

4 October 2012

Gooch & Housego PLC

("G&H" or the "Company")

Full-Year Trading Update

"Profit in line with market expectations"

Gooch & Housego PLC, the specialist manufacturer of optical components & systems, today announces that profit for the year ended 30 September 2012 is expected to be in line with market expectations. Preliminary results will be announced on 27 November 2012.

During the year Gooch & Housego made good progress towards delivering its strategic objective of transitioning the business from a predominantly components supplier focussed on the industrial sector to that of a provider of advanced photonic solutions at the sub-systems level to a broader customer base encompassing the aerospace & defence and life sciences markets. To facilitate these objectives the senior management team has been strengthened and reorganised, most notably through the appointment of a Chief Technology Officer, to drive organic new product development, and through the creation of a dedicated aerospace & defence business development team with the sector specialisation necessary to further exploit the potential for Gooch & Housego in this complex market.

Following a weak start to the year, the second half was characterised by generally favourable market conditions. In the industrial sector, the recovery experienced during the second quarter was followed by steady demand throughout the final six months. Although there was probably an element of re-stocking, the market has been reasonably measured without the fluctuations experienced in the past.

In the aerospace & defence sector, as reported in July, a number of previously delayed orders were received. A number of these were notable as they relate to the supply of higher value sub-system products against what are forecast to be longer term programs.  To support its changing role, Gooch & Housego has made substantial progress in the past year in further strengthening such disciplines as quality systems and project management. This has been instrumental in enabling a number of key project milestones and deliverables to be met, and is reflected in the positive feedback that has been received from a number of customers.

The life and health sciences sector has continued to be an important source of revenues and a focus for investment in research and new product development. Gooch & Housego is a leading supplier of complex sub-systems to the optical coherence tomography and microscopy markets, which have performed well during the past year. Research and development efforts have been primarily directed towards biomedical imaging systems and in performing pre-commercialisation work for applications in diagnostics.

Gareth Jones, Chief Executive of Gooch & Housego commented: -

"After a difficult start to the year, improving market conditions combined with solid progress in creating a more broadly-based business have enabled us to deliver a good second half. While the economic outlook remains unpredictable, Gooch & Housego is now well-positioned in its targets markets with world-leading products and strong customer relationships."

Value Creation Plan Update

On 7 January 2010, following consultation with major shareholders, a share-based incentive scheme in the form of a Value Creation Plan was put in place. On the third anniversary of the plan the value created during the life of the plan will be calculated and a share of that value (approximately 10%) will be distributed among the participating members of the senior management of the Company in the form of nil-cost share options. Half of those options are exercisable immediately and the balance after twelve months subject to certain conditions. The extent of the dilutive effect of the plan is a function of the average share price over the 30 days prior to the third anniversary of the plan. At an illustrative effective share price of 425p (equivalent to a CAGR of 42% over the 3 year period), approximately 1.2m shares, equivalent to 5.5% of the current ISC, would fall to be issued, should those options be exercised. At an illustrative effective share price of 450p (equivalent to a CAGR of 44% over the 3 year period), approximately 1.3m shares, equivalent to 6.1% of the ISC, would fall to be issued, should those options be exercised.          

For further information contact: -
Gareth Jones / Andrew Boteler	Gooch & Housego plc	01460 256440
Tim Thompson / Nicola Cronk	Buchanan	020 7466 5000
Patrick Robb / James Grace	Investec Bank plc	020 7597 5970

 

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