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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Gooch & Housego Plc | GHH | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 518.00 | 10:04:10 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 518.00 |
| Industry Sector |
|---|
| ELECTRONIC & ELECTRICAL EQUIPMENT |
| Top Posts |
|---|
Posted at 28/11/2024 07:53 by simon gordon Odyssean - 28/11/24:In August Gooch & Housego released a trading update downgrading its full year expectations, driven by the slippage of certain orders due to supply chain delays with key partners. Gooch shares also suffered through the period being one of our few positions listed on AIM, where concerns around any change in business relief rules weighed on sentiment. Despite these short-term and technical issues, we continue to believe that Gooch is making good progress. The new CEO has set out an ambition to double group margins to 15% through self-help, portfolio re-shaping and growth. Early signs are positive on progress on all of these areas despite the mixed macro environment. The weakness in shares through the period have left the group trading on c.1x EV/sales, roughly half its long-term average, and undemanding for a business which we believe has the potential to generate 15% operating margins and grow in excess of GDP across the cycle. - Gooch & Housego % NAV: 5.8% Sector: Industrials Manufacturer of photonics solutions for a variety of end markets. Gooch posted an inline H1 trading update in April, noting a robust forward orderbook despite ongoing tough end markets. Unfortunately, later in the period the group downgraded full year expectations due to certain orders being pushed out into the following year on the back of supply chain / third party delays. We remain of the view that Gooch is on the right track and there are some good growth opportunities ahead of it. Management is making progress on their self-help plan to materially improve margins through simplification of the group and operational efficiency, whilst a more commercial approach to R&D has landed well with customers suggesting stronger organic growth to come. Shares remain well below their long-term ratings, and we see potential for this discount to correct as delivery of this operational potential comes through and end markets become more favourable. - The deliberate shift we made in the portfolio towards the industrial sector, especially smaller electronics companies in the latter part of 2023, was in retrospect, from a share price perspective, premature - although we had missed the worst of many share price declines, the trading conditions continued to deteriorate further than we had anticipated and in the short term had been insufficiently offset by self-help we had identified. However, we believe that we have secured highly strategic stakes in many of these companies, where there is very substantial upside to come as the earnings cycle turns and investor sentiment improves, or alternatively the M&A "animal spirits" rise again. |
Posted at 19/9/2024 13:28 by simon gordon Hey Bamboo,I think it would take some chronic news for it to hit 350p. According to the company they are expecting strong growth and from what I can see are advertising brand-new vacancies. This is what a fund manager at Odyssean said in August: “We met with the management team quite recently. They have a September year-end and are quite H2-weighted this year. There are some questions about whether they will roughly meet their targets this year. However, the management team's view for the next two or three years is radically different. They see substantial growth, not just as the destocking ends, but also due to new applications, particularly in some defense areas.” -Stuart Widdowson - 15/8/24 ----- Peak EPS reached 57.2p in 2018. If the new team accelerates growth, they could surpass this figure in the coming years. At 20x earnings, the share price could triple and potentially even exceed previous highs. The company has the necessary ingredients and market opportunity, but success ultimately depends on the management team. They have increased production capacity, brought in world-class sales leadership, and the new CEO has a strong operational focus. One area for improvement is their communication with private investors, such as utilizing platforms like Investor Meet. However, their LinkedIn communications are excellent, as is their engagement with fund managers. |
Posted at 14/9/2024 09:26 by simon gordon I asked ChatGPTo how Charlie Peppiatt was trying to improve GHH:Charlie Peppiatt, the CEO of G&H Photonics (Gooch & Housego), is focused on executing a strategic transformation to position the company as a leading, innovative, customer-focused photonics technology provider. Here are the key highlights of how Peppiatt is improving G&H: Key Strategic Initiatives and Improvements Under Charlie Peppiatt: Reshaping the Group's Portfolio: -A significant milestone in Peppiatt's strategy was the divestment of the EM4 business, which was not contributing to the company's differentiated product offerings or margin growth goals. This move aligns with his focus on consolidating G&H's Aerospace and Defense (A&D) activities into areas where they can offer unique products. Integration of Acquisitions and Realization of Synergies: -The integration of GS Optics and Artemis into the G&H Group is progressing as planned, with commercial synergies being realized. These acquisitions are key to expanding G&H's capabilities and entering new markets, particularly in Life Sciences and Aerospace & Defense. The Rochester, NY, facility is becoming a Life Sciences center of excellence, mirroring capabilities in Ashford, UK. Operational and Supply Chain Improvements: -G&H has made significant progress in improving operational efficiency and supply chain management. This includes better on-time delivery performance and reducing overdue backlogs. The introduction of more rigorous supply chain processes and outsourcing strategies has allowed G&H to meet growing demand more effectively, particularly in the industrial photonics and subsea data markets. Focus on Core Markets and Growth Areas: -Despite some challenges, like reduced demand in industrial and medical laser markets due to customer destocking, G&H is strategically focusing on markets with growth potential. For example, there is a growing demand for precision optic components in the Aerospace & Defense market, driven by increased military spending. G&H is also expanding its presence in the telecom subsea data cable market with new complex fiber optic modules. Enhanced Customer Focus and Technology Development: -Peppiatt is driving G&H to become more customer-centric by leveraging Customer Relationship Management (CRM) tools, reorganizing commercial teams, and fostering closer collaboration with key customers on next-generation product roadmaps. This approach is intended to align R&D priorities with customer needs and deliver products that meet market demand more effectively. People and Culture Initiatives: -To build high-performance teams, G&H has invested in its HR function, introduced new tools, and structured its talent development and succession planning processes. A new Chief People Officer has been appointed to drive these changes. There is also a focus on improving safety performance, diversity, and employee engagement. Investment in R&D and Innovation: -G&H is prioritizing key "Lucky Seven" research programs with the potential to drive significant revenue and profitability growth. There is a concerted effort to accelerate time to market for new products, develop advanced technologies, and expand capabilities in high-growth markets such as semiconductor photolithography and defense optics. Conclusion: Charlie Peppiatt's leadership at G&H Photonics is characterized by a clear strategic focus on optimizing the product portfolio, integrating acquisitions, enhancing operational efficiencies, and fostering a customer-centric culture. These efforts are designed to position G&H as a leader in photonics technologies and to drive sustainable margin growth. The foundational building blocks put in place under his leadership aim to support the delivery of G&H's strategic plan and ensure the company is well-positioned to capitalize on future market opportunities. ------ ChatGPTo summary of an Aswath Damodaran article on corporate Reincarnation: Summary of "Rebirth and Reincarnation: Escaping the Corporate Death Spiral*" The article discusses the concept of corporate rebirth and how companies can escape the inevitable decline often seen at the end of their business life cycle. Drawing an analogy to the Chinese saying about the stages of life—being born, aging, falling ill, and dying—the author suggests that companies, unlike people, have the potential for reincarnation by reinventing themselves. Key examples of successful corporate rebirths include IBM in the 1990s and Apple in the late 1990s, which both managed to redefine themselves and become market leaders again. Key Factors for Corporate Rebirth: -Acceptance of Change: Companies must first accept that their old strategies no longer work. This involves more than just acknowledging the need for change; it requires substantial actions to move away from outdated practices. -A Change Agent: Effective transformation often requires a strong leader or "change agent" who is willing to shake up the company. Examples include Lou Gerstner at IBM and Steve Jobs at Apple, both of whom made radical changes that helped steer their companies back to success. -A Clear Plan for Change: It is essential not just to recognize that the old ways are failing but to have a new mission and a focused strategy. For example, Gerstner reoriented IBM toward customer-focused services, while Jobs redefined Apple from a computer company to an entertainment technology firm. -Luck: Beyond strategic planning and leadership, luck plays a significant role in a company’s ability to successfully reinvent itself. Both IBM and Apple benefited from favorable external conditions that helped them during their turnaround phases. Investment Perspective: The author suggests using these criteria—accep Conclusion: While not every company has the potential for a successful rebirth, understanding the factors that contribute to such transformations can be valuable for investors looking for turnaround opportunities. The framework provided by the author can be used to assess whether companies are value traps or potential high-reward investments. *[...] Friday, September 27, 2013 Rebirth and Reincarnation: Escaping the corporate death spiral ----- I think GHH is on the verge of a Reincarnation. The executive team has never been stronger. Operationally, Charlie Peppiatt has probably made them razor-sharp. |
Posted at 11/9/2024 16:23 by simon gordon Stuart Widdowson - 26/7/23:Text is taken from an Odyssean video* on YouTube - punctuation polished on ChatGPT. Share price c.582p on date of video upload. It appears that Odyssean took its initial position in Q4 2022 in the 400s. "I have to talk about another name that has performed well over time and won’t be stuck for long—Gooch & Housego. As I mentioned before, Gooch & Housego is a similar story. It’s one of the new investments we made last year, redeploying some of the capital from takeovers. For those of you who remember my time at SEC, I originally invested in this business in early 2010. It took me three months to buy 3% of the company, and I ended up paying approximately 30% more than my initial target price. This is a stock where, when you find the right price, at the right time, with the right opportunity, and if you can get the volume, you simply have to participate. For those who don’t know, Gooch & Housego is a niche market leader in optoelectronic components and subsystems. In several areas, it is the global market leader. One of its niches is high-reliability fiber subsea couplers, which essentially connect the internet through undersea cables across the world. It’s said to have at least a 50% market share, but we believe it’s even higher. The company also has technology in laser applications—i Over the years, Gooch & Housego has been a name I’ve followed closely. Like many others, I sold it a bit too early in the last cycle. The stock traded at a very high multiple—aroun Last year, Gooch & Housego experienced some operational challenges—not due to a lack of demand, but because of issues at their factories. These were largely the result of a prolonged restructuring of their manufacturing facilities, which began just before COVID. The pandemic only added to the operational problems, delaying product shipments to customers. This led to a disappointing trading statement before we invested, as they were unable to ship products due to inefficiencies. Nevertheless, they closed the financial year in September with a record order book. Much like James Fisher, Gooch & Housego is not a particularly liquid stock. However, we participated in two block transactions and ended up acquiring 8% of the company, making us the fourth-largest shareholder. Our entry price was around 0.85x EV/sales, compared to the company’s historical trading multiple of more than 2.2x. While it is slightly geared, we believe we’ve invested in a high-quality company at a bargain valuation. Interestingly, we believe we acquired the largest block of shares from an open-ended fund that struggled with the company’s illiquidity. This isn’t just about assuming the company will re-rate and improve—there& Our entry point at 0.85–0.9x EV/sales is very attractive for a business that should grow and generate mid-teen margins. There is also a renewed focus on improving return on capital and R&D discipline. We believe this is a strong example of a niche market leader with growth potential. It’s an international business with a self-help agenda and a refreshed management team. Historically, the company has traded at 2.2x EV/sales. Like James Fisher, sentiment around Gooch & Housego has shifted quickly. We believe it would be nearly impossible to replicate our 8% stake in today’s market, even though the shares have risen by 30%. This is a highly strategic position, and our closed-end fund structure allows us to hold it. We’re very happy with this weighting, as these companies are extremely attractively valued and often overlooked by investors." *Video: |
Posted at 04/9/2024 19:06 by simon gordon GHH:- R&D effort and investment behind the following seven vital few areas:1. Expansion of AO technologies into Semiconductor and EUV. 2. New medical laser technologies and applications. 3. Advanced fibre technology supporting submarine networks. 4. Imaging and sighting systems. 5. Added value around our precision optics and optical coatings capability. 6. Moving up the value chain in Fibre-Optics with a focus on sensing, modules, LiDAR. 7. Medical diagnostics and bio-photonics IVD solutions. -Source: GHH Prelims, 5/12/23. ------ Point six described by ChatGPT: Fiber-optic technology is increasingly being utilized in various advanced sensing applications, LiDAR systems, and integrated modules, driven by the need for high precision, reliability, and fast data transmission in various industries, including defense, automotive, telecommunications, and industrial automation. 1. Fiber-Optic Sensing Overview: Fiber-optic sensors are used to measure physical parameters such as temperature, pressure, strain, and vibration. These sensors are valued for their immunity to electromagnetic interference, high sensitivity, and the ability to operate in harsh environments. Applications: Commonly used in infrastructure monitoring (e.g., bridges, pipelines), aerospace, and military applications where real-time, accurate data collection is crucial. Technology: Distributed Fiber Optic Sensing (DFOS) is a significant area of growth, enabling continuous monitoring over long distances, which is critical in industries like oil and gas and power transmission. 2. LiDAR (Light Detection and Ranging) Overview: Fiber-optic technology plays a crucial role in LiDAR systems, which are used for 3D mapping, autonomous vehicles, and environmental monitoring. LiDAR systems emit laser pulses that bounce off objects, and the returning light is captured and analyzed to create high-resolution maps or detect objects. Advantages: Fiber optics enhance the accuracy and range of LiDAR systems, making them essential for autonomous driving technologies, where precise object detection is critical for safety. Emerging Trends: The development of solid-state LiDAR, which uses fiber optics for light transmission, is gaining traction due to its robustness and scalability for mass production in the automotive industry. 3. Fiber-Optic Modules Overview: Fiber-optic modules are critical components in telecommunications and data centers, providing high-speed data transmission with low latency. These modules include transceivers, multiplexers, and amplifiers. Applications: They are used in high-speed internet infrastructure, cloud computing, and expanding 5G networks. In defense, they are used in secure, high-speed communication systems. Innovation: The push towards faster and more efficient data transmission has led to innovations in dense wavelength-division multiplexing (DWDM) and coherent optics, which enable higher bandwidth and longer transmission distances. Future Prospects The integration of fiber optics in sensing, LiDAR, and modules is expected to grow rapidly, driven by the demand for higher precision, reliability, and data rates in various applications. The continued evolution of autonomous vehicles, smart cities, and advanced telecommunications will likely further accelerate the development and deployment of fiber-optic technologies. ----- It could be that Fiber-Optic Modules are the product that will experience explosive growth in GenAI data centres. Tech investor Gavin Baker talks about optics from the 21 minute mark: Vidrio Financial- 1/7/24 Thematic Investors: Gavin Baker Blending Sci-fi, History and Literature for Tech Investing Success The actual text tidied up by ChatGPT: "A significant challenge right now is that there are only three locations where it's feasible to establish large-scale data centers. The industry has moved beyond 100-megawatt data centers and is now focusing on 1-gigawatt and even 5-gigawatt facilities, which may be necessary to support AGI, GPT-6, XAI 3 or 4, or similar advanced technologies. However, in the United States, there are only three sites where nuclear reactors are close enough together to provide the required power for such data centers. Beyond these sites, the alternative would involve linking separate power plants, which absolutely requires optical technology. This presents a significant challenge because it necessitates the creation of what's called a "coherent cluster," which, as of now, can only be achieved within a single data center at a single location. Given the limited number of suitable sites, many are working hard to develop ways to make clusters coherent across long distances and multiple data centers. The only viable solution for this will involve advanced optical technologies. Moreover, as data centers continue to expand, we are likely to see facilities the size of ten Pentagons, standing ten stories high, and consuming five or six gigawatts of power. In such enormous data centers, coherent optics will be crucial both within the data center and across multiple locations, representing a radical shift in data center architecture—a ----- Does anyone know if GHH are pitching for this type of business? |
Posted at 19/11/2023 11:18 by z1co Odyssean Investment Trust looks to invest in high-quality British businesses trading below their fundamental value, with scope for that value to grow through proactive management action.On this theme, one area where we have been active recently is an unglamorous sector in an unloved part of an undervalued market: UK small-cap industrials. We think the sector hides a number of gems. Within industrials we look for firms with know-how in complex production processes that is hard to replicate, as this offers the opportunity for pricing power and attractive margins. We like companies with a global customer base, reducing reliance on the UK economy and increasing the potential appeal to overseas investors and acquirers. Finally, we like to back proven management teams with a clear plan. We have found a number of such opportunities, which is why industrials is currently our largest sector exposure. A BIG BLUE-CHIP CLIENT BASE One of our more recent investments has been Gooch & Housego (LSE: GHH), a leading manufacturer of photonics and electro-optics solutions selling to a blue-chip client base of healthcare, industrial and aerospace customers around the globe. The group’s end markets are growing strongly, and G&H is well-placed with unique capabilities in optical coatings and materials. Having historically been built up through mergers and acquisitions, the group recently appointed a new CEO, who is focusing on boosting margins significantly by integrating historic deals better. Today the stock is on an enterprise-value/sal |
Posted at 28/10/2023 15:44 by wiltowin Conflict in the Middle East and Ukraine has created a surge in demand for weaponsSash Tusa, an analyst at research house Agency Partners, says investors are beginning to see that demand, kickstarted by the war in Ukraine, is not disappearing any time soon. Sash Tusa says: “We are in probably a decade-long defence upcycle and we haven’t had one of those in the last 30 years.” Anyhow it's not doing GHH's aerospace and defence arm any harm, the customer orders are bound to be on the increase. |
Posted at 23/6/2023 18:37 by wiltowin No harm to Investors Champion they're missing the point with this acquisition. They're aiming to provide an end product not just parts sold to other manufacturers to maximise profits. Also as stated by GH, Rochester is the epicenter for their line of business in North America. So it's a win win on both counts for GHH, absolutely one of the future rising stars of AIM. |
Posted at 22/6/2023 19:44 by value viper Yesterday from Investors Champion Gooch & Housego: another acquisition, but is it too soon?Gooch & Housego (AIM:GHH), the specialist manufacturer of optical components and systems, has acquired US-based GS Optics for up to $15.7m.GS Optics specialises in the custom design and manufacture of precision polymer optics for use in the biomedical, machine vision and analytical instrument markets, as well as military and civilian night-vision and visible-range sighting applications. The acquisition expands the Company's presence in the Life Sciences sector and extends its capabilities into polymer optics.In its financial year ended 31 December 2022 GS Optics generated revenue of c.$10m and adjusted EBITDA of c.$1.5m, implying a multiple of 9.3x. Nearly 6 months after its year end it's a puzzle why those numbers are still only approximate!The acquisition is expected to be marginally earnings enhancing in the first full financial year of G&H's ownership.With new CEO Charlie Peppiatt only assuming control in September 2022 and plenty of tidying up to do, we are somewhat surprised that GHH has leaped to acquire. GHH makes interesting things, but surely it needs to work out how to produce these more efficiently and enhance those meagre margins before making yet more acquisitions in overseas territories to complicate the picture.Reported operating margins back in 2013 were 14%. After plenty of acquisitions and heaps of capital investment, revenues since then have more than doubled, but margins have halved and that was before the pandemic interrupted things! Return on equity has also declined from 14% to low single digits. As is so often the case, while considerably bigger, GHH appears to be a far lesser business.Let's hope Mr Peppiatt can get things back on track. |
Posted at 09/6/2023 09:35 by value viper Buy advice in Investors Chronicle today fwiw 16 PE for 2024 reasonable To benefit from huge US and EU industrial policy initiatives |
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