Gooch & Housego (GHH) H2 2024 earnings summary

Executive summary

• Achieved a 0.7% increase in full-year revenue to £136 million, with strong second-half performance driven by Life Sciences and Aerospace & Defence (A&D) demand after a weak first half due to destocking.

• Adjusted operating profit from continuing operations decreased by 13% to £10.5 million, reflecting lower industrial volumes and continued investment.

• Completed the divestment of the EM4 business and acquired Phoenix Optical, enhancing capabilities and transformation in A&D.

• Order book at year-end was £104.5 million, down from £115.3 million, but has grown post year-end to over £110 million, providing 70% cover for FY 2025 expected revenues and reflecting a robust pipeline.

• Net debt reduced to £25.8 million, with leverage ratio at 0.9x.

Financial highlights

• Revenue from continuing operations rose 0.7% year-over-year to £136 million; organic, constant currency revenue down 3%.

• Adjusted operating profit fell 13% to £10.5 million; adjusted EPS was 25.5p, down 24.8%.

• Gross margin improved to 30.6% from 29.8% year-over-year.

• Free cash flow generated was £4.8 million after £5.2 million investment in fixed assets.

• Proposed final dividend of 8.3p, total dividend 13.2p.

Outlook and guidance

• Expecting improved financial performance in FY 2025, with recovery in industrial laser and semiconductor markets anticipated in the second half.

• Order book and pipeline remain strong, especially in aerospace, defense, and diagnostics, with positive multi-year A&D outlook.

• Targeting mid-teen operating margins by 2026–2027, supported by volume, outsourcing, productivity, new products, and portfolio adjustments.