Gooch & Housego (GHH) H1 2025 earnings summary

Executive summary

• Revenue increased 11.4% year-over-year to £70.9m, with adjusted operating profit up 60.5% to £6.2m, driven by strong Aerospace & Defence and Life Sciences growth, despite Industrial decline and macroeconomic challenges.

• Strategic progress included successful integration of Phoenix Optical and acquisition of Global Photonics, expanding US and defense capabilities.

• Order book rose to £121.5m, providing over 95% cover for FY2025 revenues.

• Margin improvement achieved through outsourcing, productivity gains, and portfolio enhancement.

• Interim dividend maintained at 4.9p per share.

Financial highlights

• Organic constant currency revenue growth of 7.5%, with gross margin improving to 30.4% from 29.1%.

• Adjusted profit before tax reached £5.1m; adjusted basic EPS was 15.0p.

• Net cash from operations was £2.6m; net debt increased to £35.5m (leverage ratio 1.3x).

• Capital expenditure focused on fibre optic and crystal growth capacity.

• Non-underlying charges of £2.2m, mainly from M&A and restructuring.

Outlook and guidance

• Full-year performance expectations unchanged, with over 95% order book cover for FY2025 revenues.

• Near-term execution risks elevated due to macroeconomic and geopolitical uncertainty, especially from new US tariffs and Chinese retaliatory measures.

• Confident in delivering mid-teen returns by 2028, supported by structural growth drivers and operational improvements.

• Capital expenditure guidance for FY25 is £7–8m; R&D spend expected at £7m (5% of revenue).

• Adjusted effective tax rate forecasted at 23–24%.