Gooch & Housego Share Discussion Threads

[garth] 17/8/2022 09:57

It would have been good to have seen them manage supply chain more effectively - what proportions of that were in and out of their control I cannot tell.

The current share price is disappointing.

New leadership is an unknown - and I haven't had a proper dig yet on the new man. That could take things either way I guess.

But surely this bodes well for potentially significantly enhanced profitability going forward:

- vertical integration
- rationalisation of sites (as you mention)
- satellite communications
- order book up 43%

Best wishes,

G.

[c3479z] 17/8/2022 09:49

yes,take your point, but to blame Covid absences and a lack of staff/ losing staff, ie not paying enough?, to fulfil orders seems a bit slack though I do recognise they've been stymied by problems in the supply chain that may have been beyond their direct control,
Have been a holder for almost 20yr so do appreciate the record but they've also integrated their business on to fewer sites that ought to have made it more efficient.

[garth] 17/8/2022 09:41

c3479z,

from the header, on a thread started 20 years ago:

"At thread start: Price 85p Mkt Cap £18m"

Current £165m

3x that at its peak.

I congratulate Mark Webster and the team on having the world class vision and skill to achieve far greater vertical integration - and with it to substantially grow the business over time.

G.

[c3479z] 17/8/2022 08:43

has world-beating and leading research and products but wonder whether the management is overall of similar quality....
must be vulnerable to takeover.

[jackdaw4243] 22/6/2022 16:11

Recommended as a "Buy" in I C so that should be the kiss of death

[km18] 07/6/2022 14:53

Gooch and Housego Plc (GHH) the specialist manufacturer of optical components and systems, issued Interims for the six months ended 31 March 2022 this morning. Revenue was down 7.4% to £54.1m, constrained by COVID-related staff absences and supply chain disruption. Adjusted profit before tax was therefore down 26.6% to £3.6m, with adjusted basic EPS down to 11.8p. But demand for the Group's technologies and capabilities remained strong and the Group’s order book reached another record level of £119.9m (31 March 2021: £92.8m), an increase of 29.2% or 25.6% at constant currency. The balance sheet remains healthy, profitability ratios are solid for the sector, valuation is ok. But share price is still in a 12-month correction so lacks momentum. GHH is a profitable, steadily growing business, but it is a share to monitor for now....

...from WealthOracle

[garth] 07/6/2022 07:22

"Order intake for the six month period was 142% of revenue, compared with 109% of revenue for the second half of FY 2021, reflecting the accelerating growth in demand for our products and services. At 31 March 2022 our order book was at a record level of GBP119.9m (31 March 2021: GBP92.8m), an increase of 29.2%, or 25.6% at constant currency, compared with the same time last year."

Well, with a forward looking view that order book looks strong.

So, will this prove to be a year of two halves, as portrayed in thse two statements?

"Despite the market trends supporting the longer-term growth of G&H's A&D business, revenue declined by 28.8% during the first six months of FY2022, compared with the equivalent period last year"

"Despite the disappointing revenue performance of our Boston site in the period, its order book at the end of March 2022 was almost 50% higher than the equivalent period last year.....Overall we expect a stronger second half and A&D remains an area of significant long term growth potential for G&H."

G.

[lindowcross] 12/5/2022 09:18

Just bought back some more stock at almost same price as March 2020. Bargain, I hope.

[matthew palmer] 07/5/2022 15:30

Anyone on TECHINVEST, I am wanting to form a group of similar minded people to discuss its views etc and information.

Click my name and send a message.

[lindowcross] 14/4/2022 12:43

I've bought back a few of the units of this stock I trade. It seems good value at this price (9.20) I'll add more if it drops further.

[garth] 12/4/2022 12:44

Re. CML,

"Well documented supply chain challenges are still a feature of the general semiconductor market although the Group continues to manage the situation well and has been successful at minimising the impact to our customer base."

That was the trading statement. We haven't seen the results yet. They may have well have managed it better - but until we see the numbers we don't know the impact at CML - only that they are saying that they have "minimised" the impact.

Re GHH - if you ignore the covid 2020 drop then we are now back approaching lows not seen since 2016.

G.

[c3479z] 05/4/2022 08:18

management failure to control the supply chain or have enough staff, blaming Covid, to complete the orders. When one compares with CML which faced similar challenges, GHH seems to have fallen short although the increase in the order book is welcome. whether they will be able timely to deliver on the order book seems in question.

[wad collector] 14/1/2022 18:40

Xd 7.7p next week won't make much of a dent on the share price

[garth] 06/12/2021 09:37

Lindowcross,

interesting - thanks for sharing.

G.

[lindowcross] 06/12/2021 09:23

Once in a blue moon I buy Investors' Chronicle and did so this week: low and behold, there was a buy recommendation for Gooch! The article states the business aims to generate equal amounts of business from Industrial, Aerospace and Life Sciences. Aerospace already does so, it continues, but Life Sciences is at 23%. The buy recommendation seems to be based upon Peel Hunt's note. I wonder if it's IC's article which is causing the modest mark up in price over last few days?

[wad collector] 01/12/2021 17:16

That certainly justifies your purchase and you have backed a winner, but a current yield of 1% is about average for the AIM sector as a whole. ( I was wrong about the 20p , it is 12p this year)

[garth] 01/12/2021 15:28

Wad,

the valuation is looking more attractive all the time.

As for the 20p divi - I have been receiving those by cheque for over 20 years now on shares I originally purchased for 67.5p and 72p Over the years they have paid for themselves.

:0)

G.

[wad collector] 01/12/2021 14:31

Certainly seems unloved by the market with further falls today. It seems to be well run, sitting in a niche and with optimistic statements about the future and yet the share price keeps dropping. At some point a tech company has to be viewed as a manufacturer rather than an R&D shed , and maybe that is how G&H is being viewed after 60yrs?
Let's face it , the divi of 20p is not the attraction.

[garth] 30/11/2021 08:51

Marked down on what I would view to be solid results. Debt of about 1% of market cap. Some supply constraint. And the clever folk at R&D pushing out new products.

Nibbled a few more. Reckon we might see £10 yet (or even lower?) in this market so keeping some powder dry.

Cash Generation

Cash flow generated from operating activities was GBP16.8m, down from GBP21.6m in the prior year. This reduction was due to the non-underlying costs incurred in relation to the site rationalisation programme in the year amounting to GBP5.1m. Adjusted cashflow generated from operating activities, which excluded these non-underlying costs, was GBP21.9m (2020: GBP22.5m). This was the result of improved profitability, supported by disciplined working capital management. In total working capital reduced by GBP0.5m in the year despite the 6.4% increase in business volumes compared to the prior year. Cashflows for tangible and intangible fixed asset additions totalled GBP6.2m (2020: GBP6.4m). The final earn out payment for the Group's acquisition of the ITL business was made in the period. The payment of GBP3.25m represented that business achieving at its maximum level. The payment of an interim dividend in the year totalled GBP1.1m. The Group's strong cash generation allowed the repayment of $19.2m (GBP14.1m) of borrowings and the Group closed the year with net debt of GBP9.2m (2020: GBP14.7m) or GBP2.6m (2020: GBP6.5m) when lease liabilities are excluded.

G.

[beergut] 27/10/2021 11:57

Any thing in the budget that could help here?

[garth] 05/10/2021 07:15

Another solid trading update today.

G.

[lindowcross] 17/6/2021 13:33

let's hope so Garth. Hopefully after the re-structuring efforts they will start to turn their hand to making serious money as well as producing top-quality tech products.

[garth] 08/6/2021 16:33

Lindowcross,

Another good day. Could it be that we are heading back to the dizzy heights of £18 and beyond?

G.