Final Results-Replacement
Gooch & Housego PLC
19 December 2001
The issuer advises that the following replaces the Final Results announcement
released today at 07:00 under RNS number 9165O.
The dividend date should have read '4th January 2002' and not '2nd January
2002' as previously stated.
All other details remain unchanged, the full amended text appears below.
19 December 2001
GOOCH & HOUSEGO PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2001
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 2001.
Highlights
Fourth consecutive year of growth in profits, earnings and dividends
* Excellent twelve month performance
* Appointment of Ian Davidson as CEO of the Group, with effect from
January 2002
* Pre tax profits increased by 57% to £4.1million
* Increase in earnings per share, before goodwill amortisation, of 42%
to 15.3p
* Recommended increase in final dividend making a total of 2.8p for the
year
* Successful integration of NEOS Technologies Inc. following its
acquisition
Archie Gooch, Chairman of Gooch & Housego, commented, ' We are paying close
attention to world events and the impact on each of our key markets. There
will be ups and downs for each individual company, but through working closely
together, we have confidence that the group will continue to perform
satisfactorily and that we will build long-term value for our shareholders.'
For further information:
Archie Gooch / Ian Bayer 01460 52271
Gooch & Housego PLC
Tim Thompson 020 7466 5000
Buchanan Communications
GOOCH & HOUSEGO PLC
CHAIRMAN'S STATEMENT
Year ended 30 September 2001
It gives me great pleasure to report on another record year, our fourth
consecutive since flotation in which profits, earnings and dividends have all
risen strongly. These results include the profits of NEOS Technologies Inc
(NEOS) for the first time, since it's acquisition in September 2000, and I am
pleased to report that they have contributed revenues and profits in excess of
our initial expectations.
I am also delighted, that after an extensive search, I am able to announce the
appointment of Ian Davidson as CEO of the group. Ian comes with a wealth of
experience in the optics market, having worked for OCLI Optical Coatings. He
joins at the beginning of January and I look forward to working with him in
the next stage of the group's development.
I share the frustration of many of the group's valued shareholders at the
large fluctuations in the company's share price as it is difficult to explain
or understand the movement during the year under review. At 30th September
last year the price stood at 279p from which it dropped to a low of 90p in
September 2001, while the business achieved another year of record growth.
A recent analyst note on the company, written on 19th September 2001 when the
share price was 112p, has drawn attention to the fact and I quote
'Gooch & Housego's share price has been dragged back by an unjust
association with TMTs. Gooch & Housego is a leading-edge technology company
with strong EPS growth and a 2001 forecast ROCE of more than 34%'
I am pleased that at the time of writing this statement the share price
has recovered to a position close to the analysts 12 month target price of
172p.
Financial results
In the year to 30 September 2001 turnover increased by 53.1% to £ 19.1m (2000
: £12.5m) through both organic growth and the benefit of the NEOS
acquisition. Underlying operating profit, before goodwill amortisation, rose
by 54.4% to £4.6m (2000: £3.0m).
The reported pre tax profit for the year increased by 56.7% to £4.1m (2000 :
£2.6m) and is arrived at after charging £301,000 (2000 : £172,000) of goodwill
amortisation on previous acquisitions.Earnings per share for the year improved
by 38.8% to 13.6p (2000 : 9.8p).
Dividends
Following these excellent results, your Board is proposing to increase the
final dividend to 1.9p per Ordinary Share (2000 : 1.55p) which, together with
the interim paid, totals 2.8p (2000 : 2.3p). This represents an increase of
22% on last year.
Subject to approval at the Annual General Meeting the final dividend will be
payable on 15th February 2002 to all shareholders on the register on 4th
January 2002.
Operating Performance
United Kingdom
In the UK sales for Gooch & Housego (G&H) were £7.3m (2000 : £5.8m) an
increase of 24.9%. Operating profits improved by £0.6m to £2.3m.
Following the global cutback in the hi-tech industry the second half of the
year under review has seen a reduction in new order intake, however our strong
order book at the mid year has enabled us to continue trading at satisfactory
levels.
The order book is now at a workable level, which has allowed delivery times to
be reduced to the satisfaction of our customers. The situation is being
closely monitored and we are well placed to make an immediate response to new
circumstances should it be required.
We are currently negotiating for three new projects of considerable value,
non-disclosure agreements have been signed for all of them, and for two we
have been asked to manufacture prototypes. One is a repeat of a proximity
switch, first manufactured in 1995, and worth in excess of £1 million over a
three-year period demonstrating the loyalty of our customer base.
We continue to invest in new capital equipment and will be taking delivery of
a $500,000 machine at the end of this calendar year, which will adjust optical
components when manufacturing to a very high degree of accuracy that few other
optical companies can achieve. This exciting machine will be the first one to
be operated in the UK.
Following my previous comments concerning our new factory, we continue to
negotiate for the purchase of a suitable site in the Ilminster area. The
present market conditions in the construction industry are in our favour and
we expect to be able to take advantage of current lower costs. The new
facility will provide the company with the opportunity to improve efficiencies
and also additional production space for future expansion.
Recent European and UK tours by our sales staff have confirmed our optimism
for the next period. In particular orders have been placed for significant
quantities of acousto-optic q-switches. In addition our four operating
companies go to a major international trade fair in San Jose in January to
exhibit our products. David Irish and myself have organised visits to the
Lawrence Livermore National Laboratory (LLNL) to discuss their considerable
possible future requirements in the small optics field. We shall also see a
key waveplate customer to discuss further requirements as well as visiting our
American subsidiaries.
United States
Cleveland Crystals (CCI) has reported sales of £3.7m (2000 : £4.1m) and
operating profits lower at £0.5m (2000 : £1.1m). The general economic
conditions and product cycles in key markets were the cause of lower sales in
the core business for the 2001 financial year. Aggressive marketing strategies
have helped to reduce these effects and orders from new OEM customers have
already been secured. Sales of components to defence related product
manufacturers also show potential growth in the coming fiscal year.
Additionally, several new products are scheduled for introduction in 2002.
Completion of the National Ignition Facility (NIF) fabrication and finishing
facility located at the factory in Cleveland demonstrates the commitment of
LLNL to CCI. Production contracts for fusion laser materials are scheduled in
the new facility in the second quarter of 2002 with shipment volume ramping up
over a 15 month period. The demand for these products can be realistically
projected to continue into fiscal 2007 as CCI continues to leverage its
position as a world leader in this market.
Optronic Laboratories Inc (OLI) continues to disappoint with sales similar to
last year at £3.0m (2000 : £2.9m) but with operating profits down at £29,000
(2000 : £133,000).
Following an encouraging start to the year second half sales were 27% lower
resulting in an operating loss for that period. This was due to the weakening
markets that OLI serves in the US.
The new lower-priced high speed spectroradiometer continues to draw increased
attention and the first orders will be ready for shipment early in quarter
one. Based on requests from Japan an ultra-violet version of this Light
Emitting Diode test equipment is now under development. The optics facility
continues to expand and we look forward to an increasing level of profit
contribution from this division.
An increase in the levels of quotations leading to new orders is currently
being experienced as a gradual recovery by our customers appears to be
underway.
NEOS is included in these Group results for the first time since it's
acquisition in September 2000. It has achieved the best results in its
eighteen year history with sales of £5.5m and operating profits of £1.8m.
Sales of q-switches were particularly strong as, together with G&H, we
dominate the worldwide market for this product.
As I stated in my interim report the operations of NEOS have been subject to a
full review and where appropriate have been consolidated into other Group
activities. As an example all RF Driver manufacture for the Group is now at
NEOS and an increasing part of NEOS' optical components are produced by OLI.
As agreed at the time of the acquisition, Eddie Young has retired as President
and I, and the Board, are particularly grateful to him for his valuable
assistance during this first year as part of the group. He has agreed to act
in an advisory capacity and will attend future NEOS management meetings. Bob
Belfatto, who has been Eddie's partner since the start of the business, has
been appointed President in his place. In addition Andrew Virgin has been
appointed to the Board of NEOS as the Group's representative.
Financial Position
The Group's financial position remains strong. Net total gearing at the year
end stood at 15% (2000 : 31%) and interest was covered 16.8 times (2000 : 12.5
times) Through prudent management of our resources our balance sheet remains
in a strong position for future growth and development.
Management and Staff
I am pleased to announce a number of additions to the senior staff of the
Group in addition to Ian Davidson as the new CEO.
Professor Chris Pannel will become Chief Scientist for the Group to assist and
advise on technical issues and to ensure co-ordination of new product
developments across all companies. Chris will be based at OLI in Orlando,
Florida.
Chris McLelland has joined OLI to assist in the diversification of their
product line and I am also pleased to welcome Scott Clark as the new manager
of the optics division.
In June of this year I was delighted to have been nominated in an entrepreneur
of the year competition sponsored by the Times, Vodaphone and Ernst & Young.
The competition is to honour those individuals whose vision, determination and
inspiration have built strong, innovative dynamic business ventures. I am
pleased to inform you that I was presented with a certificate as a
semi-finalist for the SouthWest and Wales region.
These excellent results, which I am proud to present today, would not have
been possible without the dedication, commitment and hard work of all the
Group's employees both in the UK and the US. I am grateful to them and to my
Board for their efforts on behalf of the Group.
Prospects
We are paying close attention to world events and the impact on each of our
key markets. There will be ups and downs for each individual company, but
through working closely together, we have confidence that the group will
continue to perform satisfactorily and that we will build long-term value for
our shareholders.
Archie Gooch MBE JP
Chairman and Chief Executive.
19 December 2001
Gooch & Housego PLC
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2001
2001 2000
£'000 £'000
Turnover 19,146 12,510
Trading expenditure (14,834) (9,695)
Operating profit 4,312 2,815
Other interest receivable and similar income 76 33
Interest payable and similar charges (332) (259)
Profit on ordinary activities before taxation 4,056 2,589
Tax on profit on ordinary activities (1,606) (926)
2,450 1,663
Profit on ordinary activities after taxation
(504) (406)
Dividends on equity shares
Retained profit for the financial year 1,946 1,257
Basic earnings per share 13.6p 9.8p
Earnings per share before goodwill amortisation 15.3p 10.8p
All operations undertaken by the group during the current year are continuing.
Gooch & Housego PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 30 SEPTEMBER 2001
2001 2000
£'000 £'000
Profit for the financial year 2,450 1,663
Currency translation differences on foreign currency net
investments 143
(11)
Taxation on retranslation gains/losses on foreign currency loans
hedged against foreign currency net investments
3 56
Total recognised gains and losses for the financial year 2,442 1,862
No note of historical cost profits for the group has been presented as the
difference between the reported profit and the historical cost profit is
immaterial.
Gooch & Housego PLC
GROUP BALANCE SHEET
AS AT 30 SEPTEMBER 2001
2001 2000
£'000 £'000 £'000 £'000
FIXED ASSETS
Intangible assets 5,463 5,629
Tangible assets 3,710 3,624
9,173 9,253
CURRENT ASSETS
Stocks 3,759 3,225
Debtors 3,524 3,401
Cash at bank and in hand 2,481 1,930
9,764 8,556
CREDITORS : amounts falling due within (3,997) (3,808)
one year
NET CURRENT ASSETS 5,767 4,748
TOTAL ASSETS LESS CURRENT LIABILITIES 14,940 14,001
CREDITORS : amounts falling due after (2,978) (3,977)
more than one year
11,962 10,024
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 4,650 2,712
EQUITY SHAREHOLDERS' FUNDS 11,962 10,024
Gooch & Housego PLC
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2001
Note 2001 2000
£'000 £'000 £'000 £'000
Cash flow from operating (i) 4,352 4,142
activities
Returns on investments and
servicing of finance
Interest received 76 38
Interest paid (327) (276)
Interest element of hire purchase (5) (2)
contracts
Debt issue costs - (77)
Net cash (outflow) from returns (317)
on investments and servicing of
finance (256)
Taxation
UK tax paid (434) (301)
Overseas tax paid (1,092) (511)
Cash outflow from taxation (1,526) (812)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (597) (404)
Sale of tangible fixed assets 29 -
Net cash outflow from capital
expenditure and financial
investment (568) (404)
Acquisition
Acquisition of subsidiary (266) (4,401)
Cash acquired on acquisition - 388
Net cash outflow from acquisition (266) (4,013)
Equity dividends paid (441) (347)
Cash inflow / (outflow) before 1,295 (1,751)
financing
Financing
New bank loans - 5,103
Repayment of bank loan (744) (3,984)
Capital element of hire purchase (50) (13)
contracts
Issue of share capital - 2,628
Net cash (outflow) / inflow from (794) 3,734
financing
Increase in cash in the year (iii) 501 1,983
Gooch & Housego PLC
NOTES TO THE CASH FLOW STATEMENT
(i) Reconciliation of operating profit to net cash inflow from
operating activity
2001 2000
£'000 £'000
Operating profit 4,312 2,815
Amortisation of goodwill 301 173
Amortisation of debt issue costs 15 10
Depreciation 496 434
(Increase) in stocks (508) (326)
(Increase)/decrease in debtors (69) 262
(Decrease)/increase in creditors (195) 774
4,352 4,142
(ii) Reconciliation of net cash inflow to movement in net debt
2001 2000
£'000 £'000
Increase in cash in the year 501 1,983
Cash (inflow)/outflow from (increase)/decrease in
debt and lease financing 794 (1,106)
Changes in net debt resulting from cash flows 1295 877
New hire purchase contracts - (25)
Movement in debt issue costs (15) 67
Translation difference 26 (404)
Movement in net debt in the year 1,306 515
Net debt at 1 October 2000 (3,067) (3,582)
Net debt at 30 September 2001 (1,761) (3,067)
Gooch & Housego PLC
NOTES TO THE CASH FLOW STATEMENT (continued)
FOR THE YEAR ENDED 30 SEPTEMBER 2001
(iii) Analysis of net debt
At 1 At 30
October Cash Exchange Non-cash September
2000 flow Movement movement 2001
£'000 £'000 £'000 £'000 £'000
Cash in hand and at bank 1,930 501 50 - 2,481
Debt due after 1 year (3,942) - (14) 978 (2,978)
Debt due within 1 year (977) 744 (10) (993) (1,236)
Hire Purchase (78) 50 - - (28)
794
(3,067) 1,295 26 (15) (1,761)
Gooch & Housego PLC
NOTES TO THE PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2001
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. The accounting
policies adopted are those set out in the Annual Report and Accounts for the
year ended 30 September 2000 which includes the unqualified report of the
auditors and which have been filed with the Registrar of Companies.
2. Segmental Reporting
The analysis of turnover by destination is as follows:
2001 2000
£'000 £ 000
United Kingdom 2,937 2,852
North America 10,827 6,567
Continental Europe 2,241 1,606
Other 3,141 1,485
19,146 12,510
The results by geographical origin are as follows:
United Kingdom North America
Group
2001 2000 2001 2000 2001 2000
£'000 £'000 £'000 £'000 £'000 £'000
Turnover
- Continuing 7,288 5,821 12,250 7,040 19,538 12,861
Inter-segment sales (19) - (373) (351) (392) (351)
Sales to third parties 7,269 5,821 11,877 6,689 19,146 12,510
Operating Profit
- Continuing 2,263 1,677 2,049 1,138 4,312 2,815
Segment profit before
Interest and taxation 2,263 1,677 2,049 1,138 4,312 2,815
Net interest (256) (226)
Group profit before taxation 4,056 2,589
3. Taxation
The charge for taxation on the profit for the year is made up as
follows:
2001 2000
£' 000 £' 000
Current year
UK Corporation tax 609 425
Overseas taxation 997 501
1,606 926
4. 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 2001 the
actual number of Ordinary Shares in issue throughout the year was 17,999,162
(2000 : 16,934,080)
A reconciliation of the earnings used in the calculations is set out
below:
2001 2000
£'000 p per £'000 p per
share share
Basic earnings per share 2,450 13.6 1,663 9.8
Goodwill amortisation 301 1.7 172 1.0
Earnings per share before goodwill 2,751 15.3 1,835 10.8
amortisation
Earnings per share before goodwill amortisation has been shown because,
in the opinion of the directors, it reflects the underlying performance of the
group.
5. The final dividend will be paid on 15th February 2002 to shareholders
on the register at close of business on 4th January 2002.
6. Copies of the Report and Accounts will be despatched to shareholders
during the week commencing 14th January 2002 and will also be available from
the Company Secretary, Gooch & Housego PLC, The Old Magistrates Court,
Ilminster, Somerset. TA19 0AB.
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