We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Gooch & Housego Plc | LSE:GHH | London | Ordinary Share | GB0002259116 | ORD 20P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 544.00 | 540.00 | 550.00 | 556.00 | 540.00 | 556.00 | 92,120 | 16:35:08 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Optical Instruments & Lenses | 148.48M | 4.05M | 0.1570 | 34.52 | 139.76M |
From Apr 2019 to Apr 2024
TIDMGHH
RNS Number : 1960H
Gooch & Housego PLC
06 June 2017
6 June 2017
GOOCH & HOUSEGO PLC
INTERIM RESULTS FOR THE SIX MONTHSED 31 MARCH 2017
Gooch & Housego PLC (AIM:GHH) ("Gooch & Housego", "G&H", the "Company" or the "Group"), the specialist manufacturer of optical components and systems, today announces its interim results for the six months ended 31 March 2017.
Financial Highlights
Period ended 31 March HY2017 HY2016 Change (%) ---------------------------- --------- --------- ----------- Revenue GBP52.2m GBP38.4m 36.0% ---------------------------- --------- --------- ----------- Adjusted profit before tax(1) GBP6.2m GBP5.6m 11.8% ---------------------------- --------- --------- ----------- Adjusted basic earnings per share (1) 18.7p 17.0p 10.0% ---------------------------- --------- --------- ----------- Net cash GBP7.8m GBP12.3m (36.9%) ---------------------------- --------- --------- ----------- Statutory profit before tax GBP4.7m GBP3.5m 33.3% ---------------------------- --------- --------- ----------- Basic earnings per share 14.1p 10.8p 30.6% ---------------------------- --------- --------- ----------- Interim dividend per share 3.7p 3.3p 12.1% ---------------------------- --------- --------- -----------
(1) Adjusted for amortisation of acquired intangible assets and non-recurring items.
Highlights
-- Strong revenue growth driven by telecoms, precision inspection equipment and microelectronic manufacturing sectors
-- Revenue growth of 36.0% compared with the same period last year. Excluding the impact of foreign exchange, an increase of 18.2% over last year
-- Completed the acquisition of StingRay Optics in February 2017
-- Continued investment in people and infrastructure to drive further growth and take advantage of the positive market conditions
-- Targeted investment in R&D of GBP4.5 million, up 28.6% on the previous year -- Adjusted profit growth of 11.8% compared with same period last year -- Cash flow from operations of GBP7.9 million, compared with GBP2.9m last year
-- Record order book of GBP66.6 million, as at 31 March 2017, an increase of 70.5% compared with the same period last year
-- Interim dividend increased to 3.7p (2016:3.3p)
Mark Webster, Chief Executive Officer of Gooch & Housego PLC, commented on the results:
"G&H is well positioned to take advantage of the positive market conditions and has continued to invest in people and infrastructure in order to meet the demands of a strong order book. We remain on track to meet our full year expectations.
"G&H is committed to a strategy of diversification and moving up the value chain. This has been most evident in the A&D sector where our most recent acquisitions, combined with increased investment in R&D have gone some way towards our goal of achieving 'critical mass' in this sector.
"We will continue to invest in our performance improvement programme, which will underpin our future growth."
For further information please contact:
Hot Features
Premium
Mark Webster / Andrew
Gooch & Housego PLC Boteler 01460 256 440
Mark Court / Sophie
Buchanan Cowles 020 7466 5000
Investec Bank plc (Nomad Patrick Robb / David
& Broker) Anderson 020 7597 5970
Notes to editors
1. Gooch & Housego is a photonics technology business headquartered in Ilminster, Somerset, UK with operations in the USA and Europe. A world leader in its field, the company researches, designs, engineers and manufactures advanced photonic systems, components and instrumentation for applications in the Aerospace & Defence, Industrial, Life Sciences and Scientific Research sectors. World leading design, development and manufacturing expertise is offered across a broad range of complementary technologies.
2. This announcement contains certain forward-looking statements that are based on management's current expectations or beliefs as well as assumptions about future events. These are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries and sectors in which G&H operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results, and G&H's plans and objectives, to differ materially from those currently anticipated or implied in the forward-looking statements. Investors should not place undue reliance on any such statements. Nothing in this announcement should be construed as a profit forecast.
Operating and Financial Review
Performance Overview
Market conditions continue to be positive, driven in large part by the telecommunications and industrial sectors, in particular high reliability fibre couplers for undersea cables, precision inspection equipment and critical components used in microelectronic manufacturing. First half revenue growth has been very good, albeit benefitting from a favourable foreign exchange environment and a relatively weak comparator period. The Company saw an acceleration in growth in the period, with the second quarter delivering 16.0% more revenue compared to quarter one. We are expecting a good second half trading performance driven by orders for our fibre business and the continued strength of the microelectronics sector.
Our order book stood at a record GBP66.6 million as at 31 March 2017, which represents an increase of 70.5% compared to the same time last year. Excluding the impact of foreign exchange and acquisitions this represents an increase of 17.2% over last year. Further investment has been necessary to enable us to take advantage of this strong order book, in particular at our Ilminster site, where we have upgraded equipment and trained new operators.
The increase in our interim dividend by 12.1% reflects our confidence in the business going forward and is underpinned by our strong balance sheet.
REVENUE
Six months ended 2017 2016
31 March
----------------- -----------------
GBP'000 % of GBP'000 % of
total total
--------------------- -------- ------- -------- -------
Industrial 31,336 60% 24,764 65%
Aerospace & Defence 14,578 28% 8,064 21%
--------------------- -------- ------- -------- -------
Life Sciences 4,751 9% 3,941 10%
--------------------- -------- ------- -------- -------
Scientific Research 1,488 3% 1,592 4%
--------------------- -------- ------- -------- -------
Group Revenue 52,153 100% 38,361 100%
--------------------- -------- ------- -------- -------
Group revenue for the half year was GBP52.2 million, an increase of GBP13.8 million, or 36.0% over the comparative period last year. On a constant currency basis, revenue was 18.2% higher.
Order intake in the first half of the year has been encouraging. The Company has booked GBP59.5 million in orders since 1 October 2016, compared to GBP41.1 million in the corresponding period last year. Since March the order book has strengthened further.
Products and Markets - Industrial
Gooch & Housego's principal industrial markets are industrial lasers, telecommunications, metrology, sensing and semiconductor manufacturing. Industrial lasers are used in a diverse range of precision material processing applications ranging from microelectronics to automotive.
Business in our industrial market was good in the first six months of the year. Overall, sales of products into our industrial markets in the six months to 31 March 2017 were 26.5% higher compared with the equivalent period last year.
The industrial laser market was a principal driver of the revenue growth due to the continued high demand for precision lasers used in microelectronic manufacturing. This was a demand trend that emerged in the second half of last year. Demand for these products remains strong.
In telecommunications, the "step change" in demand for fibre optic components for under-sea telecommunications applications, reported throughout last year, has continued. We expect this demand to be maintained throughout this year and into next, as non-traditional, Silicon Valley based companies enter this market and look to lay their own undersea networks. Sales of lithium niobate wafers for modulation applications also continue to be high. The overall telecommunications market segment increased by 68% compared with the equivalent period last year.
Products and Markets - Aerospace & Defence
Product quality, reliability and performance are paramount in this sector and that plays to G&H's strengths, along with our commitment to provide value. We have solid, well established positions in target designation and range finding, ring laser and fibre optic gyroscope navigational systems, infrared and RF countermeasures and space satellite communications.
The market for G&H is characterised by high-value, long-term programmes involving the main US and European defence contractors. Over the last ten months G&H has strengthened its position in this market with the acquisition of three businesses (Kent Periscopes, Alfalight & StingRay) whose focus is either entirely, or largely Aerospace & Defence. This reflects G&H's commitment to this market which continues to represent an attractive growth area as more applications seek optical solutions in this demanding area.
Our Aerospace & Defence business grew by 80.8% during the first six months of FY2017, compared to the equivalent period last year. Excluding the impact of acquisitions, Aerospace & Defence grew organically by 15.0% compared to the same period last year.
Products and Markets - Life Sciences
G&H's three principal Life Sciences revenue streams are derived from diagnostics (fibre-optic modules for optical coherence tomography (OCT) applications), surgery / treatments (electro-optics and acousto-optics for lasers) and biomedical research (acousto-optics for microscopy applications). In each application area the Company is making steady progress in moving up the value chain and is currently selling sub-systems as well as components to several larger customers.
Our Life Sciences business grew by 20.6% in the six months to 31 March 2017, compared with the equivalent period last year, driven mainly by increased demand within our OCT business.
The principal commercial application of OCT systems is retinal imaging, and G&H continues to be the leading provider of fibre optic solutions (products and design services) to this industry. G&H considers OCT to be a growth technology and is investing both in the development of new products and in keeping its current products competitive.
Products and Markets - Scientific Research
The key application in Scientific Research is laser inertial confinement fusion ("laser fusion"), where lasers are used to create the conditions found in the core of a star, which are part of long term government funded projects, both in the USA and Europe. In addition to pure research in high energy and plasma physics, these vast laser systems are being used to investigate whether this technology could provide clean, carbon-free energy to reduce dependency on fossil fuels. G&H is continuing to supply crystals, precision optics and fibre components for new system construction and expects ongoing business to continue to service replacement and maintenance requirements.
Strategy
G&H's strategy is built around the twin pillars of diversification and moving up the value chain. In order to ensure its strategic goals are met management considers investment in R&D, acquisitions and strategic partnerships.
R&D: In the first six months of the current financial year, G&H invested GBP4.5 million in targeted research & development. Our main target areas are fibre based lasers, fibre sensing, precision inspection equipment for microelectronic manufacturing, laser surgery, A&D sub systems, OCT medical diagnostics and space satellite communications. This represents 8.6% of revenue and is 28.6% higher than the same period last year (2016: GBP3.5m). G&H's continued commitment to investing in targeted R&D programmes is bearing fruit, with a record eighteen new products launched in the period ended 31 March 2017.
Diversification: G&H seeks to develop, through R&D and acquisition, a presence in new markets that offer the potential for significant growth as a result of their adoption of photonic technology, whilst also reducing exposure to cyclicality in any particular sector. We will continue to invest in all of our key sectors in order to ensure we maintain a balanced portfolio and over time achieve a critical mass in Life Sciences and A&D. Our recent acquisitions have greatly improved our position in A&D, which now represents 28.0% of our business (2016: 21.0%)
Moving up the Value Chain: G&H seeks to move up the value chain to more complex sub-assemblies and systems through leveraging its excellence in materials and components, and by providing photonic design and engineering solutions for our customers. This will enable G&H to transition from a components supplier to a solutions provider. A significant proportion of our business in the Aerospace & Defence market now comes from the sale of sub-systems rather than discrete components. Our recent acquisitions are all photonic design and sub-assembly businesses and have helped to increase the proportion of our business derived from non-component revenues from 15.2% in FY2016 to 20.8% in FY2017. G&H now has "world class" capability in opto-mechanical design and this substantially enhances our ability to offer "end to end" design and manufacturing solutions to our customers.
As well as continuing to develop a leadership position in space photonics, the Systems Technology Group is actively engaged in near-market developments in OCT, fibre lasers and fibre optic sensing as the Company leverages its components expertise to move up the value chain in these important areas.
Operations
As reported last year, the Company has committed to upgrading its Cleveland, Ohio facility. This facility, which houses G&H's world leading crystal growth capabilities, is a key contributor to current and future profitability and will benefit from the modernisation that has been taking place. The upgrade is substantially complete and we will have invested in the region of $5 million. The refurbished facility will help drive much needed operational efficiency, provide greater capacity, as well as a more compelling showcase for our capabilities for customers.
Our continuous improvement programme is proceeding well. Operationally the move to a lean manufacturing environment across all of our sites is set to deliver efficiency savings in 2017 and the drive for fewer more productive R&D projects combined with enhanced business development support has started to deliver an increased number of product opportunities.
Acquisitions
G&H will continue to evaluate acquisition opportunities that have the potential to accelerate delivery of the Company's strategic objectives. Having established a presence in its target markets, G&H is now focussing on moving up the value chain in each of those markets. Whilst the business will continue to evaluate bolt on businesses in our core component technologies, continued strong focus is being placed on acquisition opportunities that enhance the Company's ability to wrap electronics and software around core photonic products to yield system-level solutions.
In February 2017 G&H acquired StingRay Optics LLC ("StingRay"), a New Hampshire, USA based specialist designer and manufacturer of high performance optical and opto-mechanical subsystems for demanding defence and commercial applications.
StingRay was founded in 2004 and has established itself as a market leading designer, manufacturer and supplier of world class custom optical assemblies. The business has a proven capability in providing system level optical products for use in harsh environments to key US defence customers. StingRay's product range covers laboratory, ground based, airborne, Unmanned Aerial Vehicles (UAVs) and space applications.
The acquisition of StingRay is aligned with G&H's strategic objectives of moving up the value chain and further diversification into the Aerospace & Defence sector. Potential synergies include leveraging G&H's greater reach through our global sales teams and our expertise in manufacturing infrared precision optics and specialist coatings.
RECONCILIATION OF ADJUSTED PERFORMANCE MEASURES
Operating Net finance Taxation Earnings
Profit costs per share
---------------------- ------------------ ------------------ ------------------ ----------------
Half Year to 2017 2016 2017 2016 2017 2016 2017 2016
31 March GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 pence pence
---------------------- -------- -------- -------- -------- -------- -------- ------- -------
Reported 4,900 3,560 (197) (33) (1,261) (913) 14.1 10.8
---------------------- -------- -------- -------- -------- -------- -------- ------- -------
Amortisation
of acquired
intangible assets 797 733 - - (214) (191) 2.4 2.2
Restructuring
costs 351 1,106 - - (94) (288) 1.0 3.4
Transaction
fees 287 194 - - (77) (50) 0.3 0.6
Interest on
discounted deferred
consideration - - 80 - - - 0.9 -
---------------------- -------- -------- -------- -------- -------- -------- ------- -------
Adjusted 6,335 5,593 (117) (33) (1,646) (1,442) 18.7 17.0
---------------------- -------- -------- -------- -------- -------- -------- ------- -------
Adjusted profit before tax was GBP6.2 million, an increase of 11.8% on the prior year (H1 2016: GBP5.6 million). This strong profit performance has been delivered at the same time as investing in the increased capacity required to deliver the positive demand conditions we are currently experiencing. This investment is largely now in place for the second half of 2017.
Cash Flow and Financing
In the six months to 31 March 2017 G&H generated cash from operations of GBP7.9 million, compared with GBP2.9 million in the same period of 2016. In respect of the StingRay acquisition, the consideration payable by G&H will be up to $20 million, on a debt free, cash free basis with a normalised level of working capital remaining in the business. This comprised an initial consideration of $7.5 million in cash which was paid on completion from existing G&H debt facilities and $2.5 million in new G&H ordinary shares, which are 'locked up' for one year from February 2017. There is also a deferred contingent consideration of up to $10 million, payable in cash, based upon the performance of the business for a period of up to three years.
Capital expenditure on property, plant and equipment was GBP3.6 million in the period (2016: GBP5.6 million). The main fixed asset additions were in relation to the modernisation of our Cleveland facility. This investment, together with our continued commitment to the principles of lean manufacturing are vital to improved manufacturing performance and providing increased capacity in the medium term.
The Company's net cash position remains robust at GBP7.8 million, down from GBP12.3 million at 30 September 2015, following the acquisition of StingRay.
Staff
The Company workforce increased from 755 at 30 September 2016 to 786 at the end of March 2017. This increase comes largely from the acquisition of StingRay, but also reflects our investment in increased capacity, offset by efficiency savings.
Dividends
The Directors have declared an interim dividend of 3.7p per share (2016 : 3.3p per share), a 12.1% increase on the prior period, which is reflective of the Directors' confidence in the business going forward and is underpinned by our strong balance sheet. This will be payable on 17 July 2017 to shareholders on the register as at 23 June 2017.
Prospects and outlook
G&H remains committed to the twin pillars of our strategy, namely diversification and moving up the value chain. Our recent A&D acquisitions, combined with increased investment in R&D have gone some way towards achieving our goal of establishing 'critical mass' in this sector.
The Company is well-positioned to take advantage of positive market conditions and has continued to invest in people and infrastructure to meet the demands of a strong order book. We remain on track to meet our full year expectations.
G&H will continue to pursue its strategy and invest in our continuous improvement programme prioritising further operational excellence, enhanced business development in our key markets and a more focused R&D portfolio; all of which will underpin our future performance.
Gareth Jones Mark Webster Andrew Boteler Chairman Chief Executive Officer Chief Financial Officer
6 June 2017
Unaudited interim results for the 6 months ended 31 March 2017
Group Income Statement Half Year Half Year Full Year
to to to
31 Mar 2017 31 Mar 2016 30 Sep 2016
Note (Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
-------------- -------------- -------------
Revenue 5 52,153 38,361 86,051
Cost of revenue (31,944) (25,252) (53,752)
-------------- -------------- -------------
Gross profit 20,209 13,109 32,299
Research and Development (4,096) (2,889) (6,697)
Sales and Marketing (4,706) (2,976) (6,469)
Administration (7,438) (5,247) (11,425)
Other income and expenses 931 1,563 2,476
-------------- -------------- -------------
Operating profit 5 4,900 3,560 10,184
Net finance costs (197) (33) (88)
-------------- -------------- -------------
Profit before income tax
expense 4,703 3,527 10,096
Income tax expense 6 (1,261) (913) (3,048)
-------------- -------------- -------------
Profit for the period 3,442 2,614 7,048
Earnings per share 7 14.1p 10.8p 29.1p
-------------- -------------- -------------
Reconciliation of operating profit to adjusted operating profit:
Half Year Half Year Full Year
to to to 30 Sep
2016
31 Mar 2017 31 Mar 2016 (Audited)
(Unaudited) (Unaudited)
GBP'000 GBP'000 GBP'000
-------------- -------------- ------------
Operating profit 4,900 3,560 10,184
Amortisation of acquired
intangible assets 797 733 1,263
Gain on bargain purchase - - (578)
Impairment of goodwill - - 771
Provision for regulatory
compliance risk - - 500
Restructuring costs 351 1,106 1,652
Transaction fees 287 194 466
Adjusted operating profit 6,335 5,593 14,258
-------------- -------------- ------------
Group Statement of Comprehensive Half Year Half Year Full Year
Income to to to 30 Sep
2016
31 Mar 31 Mar 2016 (Audited)
2017
(Unaudited) (Unaudited)
GBP'000 GBP'000 GBP'000
-------------- -------------- ------------
Profit for the period 3,442 2,614 7,048
Other comprehensive income
Currency translation difference 1,801 2,289 5,954
-------------- -------------- ------------
Other comprehensive income for
the period 1,801 2,289 5,954
Total comprehensive income for
the period 5,243 4,903 13,002
-------------- -------------- ------------
Unaudited interim results for the 6 months ended 31 March 2017
Group Balance Sheet 31 Mar 2017 31 Mar 2016 30 Sep 2016
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
-------------- -------------- ------------
Non-current assets
Property, plant and equipment 34,935 29,645 32,384
Intangible assets 44,418 21,074 29,916
Deferred income tax assets 2,785 2,382 2,674
-------------- -------------- ------------
82,138 53,101 64,974
Current assets
Inventories 21,025 16,269 18,973
Income tax assets - 800 394
Trade and other receivables 21,852 15,532 22,679
Cash and cash equivalents 25,686 17,810 23,167
68,563 50,411 65,213
Current liabilities
Trade and other payables (20,547) (11,675) (19,624)
Borrowings (3) (10) (4)
Income tax liabilities (594) (312) (891)
Provision for other liabilities
and charges (803) (380) (940)
-------------- -------------- ------------
(21,947) (12,377) (21,459)
Net current assets 46,616 38,034 43,754
-------------- -------------- ------------
Non-current liabilities
Borrowings (17,913) (5,482) (11,494)
Deferred income tax liabilities (4,951) (3,169) (4,806)
Deferred consideration (9,437) - (2,256)
(32,301) (8,651) (18,556)
Net assets 96,453 82,484 90,172
-------------- -------------- ------------
Shareholders' equity
Capital and reserves
attributable to equity
shareholders
Called up share capital 4,895 4,852 4,852
Share premium account 15,530 15,530 15,530
Merger reserve 4,640 2,671 2,671
Cumulative translation
reserve 8,785 3,319 6,984
Retained earnings 62,603 56,112 60,135
-------------- -------------- ------------
Equity Shareholders' Funds 96,453 82,484 90,172
-------------- -------------- ------------
Unaudited interim results for the 6 months ended 31 March 2017
Statement of Changes in Share Share
Equity capital premium Merger Retained Total
account account reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
--------- --------- --------- ----------- ---------
At 1 October 2015 4,818 15,530 2,671 55,348 78,367
Profit for the period - - - 2,614 2,614
Other comprehensive income
for the period - - - 2,289 2,289
--------- --------- --------- ----------- ---------
Total comprehensive income
for the period - - - 4,903 4,903
--------- --------- --------- ----------- ---------
Dividends - - - (1,254) (1,254)
Proceeds from shares issued 34 - - (34) -
Fair value of employee services - - - 319 319
Tax credit relating to share
option schemes - - - 149 149
At 31 March 2016 (unaudited) 4,852 15,530 2,671 59,431 82,484
At 1 October 2016 4,852 15,530 2,671 67,119 90,172
Profit for the period - - - 3,442 3,442
Other comprehensive income
for the period - - - 1,801 1,801
--------- --------- --------- ----------- ---------
Total comprehensive income
for the period - - - 5,243 5,243
--------- --------- --------- ----------- ---------
Dividends - - - (1,383) (1,383)
Proceeds from shares issued 43 - 1,969 (7) 2,005
Fair value of employee services - - - 329 329
Tax credit relating to share
option schemes - - - 87 87
--------- --------- --------- ----------- ---------
At 31 March 2017 (unaudited) 4,895 15,530 4,640 71,388 96,453
--------- --------- --------- ----------- ---------
Unaudited interim results for the 6 months ended 31 March 2017
Group Cash Flow Statement Half Year Half Year Full Year
to to to 30 Sep
2016
31 Mar 31 Mar (Audited)
2017 2016
(Unaudited) (Unaudited)
GBP'000 GBP'000 GBP'000
-------------- -------------- ------------
Cash flows from operating activities
Cash generated from operations 7,871 2,911 13,897
Income tax paid (802) (465) (1,324)
-------------- -------------- ------------
Net cash generated from operating
activities 7,069 2,446 12,573
-------------- -------------- ------------
Cash flows from investing activities
Acquisition of subsidiaries,
net of cash acquired (5,549) - (5,687)
Purchase of property, plant
and equipment (3,568) (5,639) (9,710)
Sale of property, plant and 26 - -
equipment
Purchase of intangible assets (348) (654) (629)
Interest received 18 20 39
Interest paid (109) (50) (111)
-------------- -------------- ------------
Net cash used in investing
activities (9,530) (6,323) (16,098)
-------------- -------------- ------------
Cash flows from financing activities
Drawdown of acquisition borrowing
facility 6,045 - 5,426
Repayment of borrowings - (29) (39)
Dividends paid to ordinary
shareholders (1,383) (1,254) (2,055)
Net cash generated from / (used
in) financing activities 4,662 (1,283) 3,332
-------------- -------------- ------------
Net increase / (decrease) in
cash 2,201 (5,160) (193)
Cash at beginning of the period 23,167 22,556 22,556
Exchange gains on cash 318 414 804
-------------- -------------- ------------
Cash at the end of the period 25,686 17,810 23,167
-------------- -------------- ------------
Notes to the Group Cash Half Year Half Year Full Year
Flow Statement to to to
31 Mar 2017 31 Mar 2016 30 Sep 2016
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Profit before income tax 4,703 3,527 10,096
Adjustments for:
- Amortisation of acquired
intangible assets 797 733 1,263
- Amortisation of other
intangible assets 98 110 355
- Gain on bargain purchase
of Alfalight - - (578)
* Impairment of goodwill - - 771
- Depreciation 1,750 1,428 3,042
- Share based payment obligations 329 319 638
- Finance income (17) (20) (39)
- Finance costs 214 53 127
-------------- -------------- -------------
Total adjustments 3,171 2,623 5,579
Changes in working capital
- Inventories (605) 220 223
- Trade and other receivables 1,578 (811) (4,706)
- Trade and other payables (976) (2,648) 2,705
Total changes in working
capital (3) (3,239) (1,778)
Cash generated from operating
activities 7,871 2,911 13,897
-------------- -------------- -------------
Reconciliation of net cash flow to movements in net cash
Half Year Half Year Full Year
to to to
31 Mar 2017 31 Mar 2016 30 Sep
2016
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
-------------- -------------- ------------
Increase / (decrease) in
cash in the period 2,201 (5,160) (193)
Borrowings (6,045) - (5,426)
Repayment of borrowings - 29 39
Changes in net cash resulting
from cash flows (3,844) (5,131) (5,580)
Finance leases acquired - - (25)
Translation differences (54) 121 (55)
-------------- -------------- ------------
Movement in net cash in
the period / year (3,898) (5,010) (5,660)
Net cash at start of period 11,668 17,328 17,328
Net cash at end of period 7,770 12,318 11,668
-------------- -------------- ------------
Analysis of net cash
At 1 Exchange At 31 Mar
Oct 2016 Cash flow movement 2017
GBP'000 GBP'000 GBP'000 GBP'000
---------- ----------- ---------- ----------
Cash at bank and
in hand 23,167 2,201 318 25,686
Debt due after 1
year (11,474) (6,045) (371) (17,890)
Finance leases (25) - (1) (26)
---------- ----------- ---------- ----------
Net cash 11,668 (3,844) (54) 7,770
---------- ----------- ---------- ----------
Notes to the Interim Report
1. Basis of Preparation
The unaudited Interim Report has been prepared under the historical cost convention and in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the European Union.
The Interim Report was approved by the Board of Directors and the Audit Committee on 6 June 2017. The Interim Report does not constitute statutory financial statements within the meaning of the Companies Act 2006 and has not been audited.
Comparative figures in the Interim Report for the year ended 30 September 2016 have been taken from the Group's audited statutory financial statements on which the Group's auditors, PricewaterhouseCoopers LLP, expressed an unqualified opinion. The comparative figures to 31 March 2016 are unaudited.
The Interim Report will be announced to all shareholders on the London Stock Exchange and published on the Group's website on 6 June 2017. Copies will be available to members of the public upon application to the Company Secretary at Dowlish Ford, Ilminster, Somerset, TA19 0PF.
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 September 2016, as described in those financial statements.
2. Application of IFRS
Adoption of new standards
During the current reporting period there were no new standards or amendments which had a material impact on the net assets of the Group. In addition, standards or amendments issued but not yet effective are not expected to have a material impact on the net assets of the Group. However, the Group is closely monitoring the IASB projects on Contract Revenue recognition and the Lease accounting overhaul as they could potentially have a material impact on the Group's results.
3. Estimates
The preparation of interim financial statements requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 30 September 2016.
4. Financial risk management
The Company's activities expose it to a variety of financial risks, market risk (including currency risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
The interim condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements and should be read in conjunction with the Company's annual financial statements as at 30 September 2016.
There have been no changes to the risk management policies since the year end.
5. Segmental analysis
Aerospace Scientific
& Defence Life Sciences Industrial Research Corporate Total
For half year to 31 March GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2017
Revenue
Total revenue 14,578 4,751 34,463 1,488 - 55,280
Inter and intra-division - - (3,127) - - (3,127)
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
External revenue 14,578 4,751 31,336 1,488 - 52,153
Divisional expenses (13,178) (4,216) (25,121) (1,415) (677) (44,607)
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
EBITDA(1) 1,400 535 6,215 73 (677) 7,546
EBITDA % 9.6% 11.3% 19.8% 4.9% - 14.5%
Depreciation and Amortisation (334) (192) (942) (57) (324) (1,849)
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
Operating profit before
amortisation of acquired
intangible assets 1,066 343 5,273 16 (1,001) 5,697
Amortisation of acquired
intangible assets - - - - (797) (797)
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
Operating profit 1,066 343 5,273 16 (1,798) 4,900
Operating profit margin
% 7.3% 7.2% 16.8% 1.1% - 9.4%
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
Add back non-recurring
items - - - - 638 638
Operating profit excluding
non-recurring items 1,066 343 5,273 16 (1,160) 5,538
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
Adjusted profit margin
% 7.3% 7.2% 16.8% 1.1% - 10.6%
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
Aerospace Scientific
& Defence Life Sciences Industrial Research Corporate Total
For half year to 31 March GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2016
Revenue
Total revenue 8,064 3,941 27,365 1,592 - 40,962
Inter and intra-division - - (2,601) - - (2,601)
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
External revenue 8,064 3,941 24,764 1,592 - 38,361
Divisional expenses (7,364) (3,271) (20,059) (1,375) (462) (32,531)
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
EBITDA(1) 700 670 4,705 217 (462) 5,830
EBITDA % 8.7% 17.0% 19.0% 13.6% - 15.2%
Depreciation and Amortisation (248) (178) (985) (66) (60) (1,537)
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
Operating profit before
amortisation of acquired
intangible assets 452 492 3,720 151 (522) 4,293
Amortisation of acquired
intangible assets - - - - (733) (733)
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
Operating profit 452 492 3,720 151 (1,255) 3,560
Operating profit margin
% 5.6% 12.5% 15.0% 9.5% - 9.3%
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
Add back non-recurring
items 21 23 1,055 7 194 1,300
Operating profit excluding
non-recurring items 473 515 4,775 158 (1,061) 4,860
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
Adjusted profit margin
% 5.9% 13.1% 19.3% 9.9% - 12.7%
------------------------------- ----------- -------------- ----------- ----------- ---------- ---------
(1)EBITDA = Earnings before interest, tax, depreciation and amortisation.
All of the amounts recorded are in respect of continuing operations.
5. Segmental analysis continued
Analysis of revenue by destination
Half year Half year
to to
31 Mar 2017 31 Mar 2016
(Unaudited) (Unaudited)
GBP'000 GBP'000
------------- -------------
United Kingdom 8,714 8,351
America 21,393 15,189
Continental Europe 11,675 8,687
Asia-Pacific 10,371 6,134
52,153 38,361
------------- -------------
6. Income tax expense
Analysis of tax charge in the period
Half Year Half Year Full Year
to to to 30 Sep
2016 (Audited)
31 Mar 2017 31 Mar
2016
(Unaudited) (Unaudited)
GBP'000 GBP'000 GBP'000
--------------
Current taxation
UK Corporation tax 569 448 1,760
Overseas tax 517 319 887
Adjustments in respect of prior
year tax charge - - (77)
-------------- -------------- ----------------
Total current tax 1,086 767 2,570
Deferred tax
Origination and reversal of temporary
differences 175 146 218
Adjustments in respect of prior
year deferred tax - - 290
Impact of change in the UK tax
rate - - (30)
Total deferred tax 175 146 478
Income tax expense per income
statement 1,261 913 3,048
The tax charge for the six months ended 31 March 2017 is based on the estimated effective rate of the tax for the Group for the full year to 30 September 2017. The estimated rate is applied to the profit before tax.
7. Earnings per share
The calculation of earnings per 20p Ordinary Share is based on the profit for the period using as a divisor the weighted average number of Ordinary Shares in issue during the period. The weighted average number of shares is given below.
Half Year Half Year Full Year
to to to 30 Sep
2016
31 Mar 2017 31 Mar (Audited)
2016
(Unaudited) (Unaudited)
No. No. No.
-------------- -------------- ------------
Number of shares used for basic
earnings per share 24,374,577 24,213,432 24,248,471
Dilutive shares 376,517 393,973 436,112
Number of shares used for dilutive
earnings per share 24,751,094 24,607,405 24,684,583
-------------- -------------- ------------
A reconciliation of the earnings used in the earnings per share calculation is set out below:
Half Year Half Year Full Year
to to to
31 Mar 2017 31 Mar 2016 30 Sep 2016
(Unaudited)
(Unaudited) (Audited)
p per p per p per
GBP'000 share GBP'000 share GBP'000 share
-------- ------- -------- ------- -------- -------
Basic earnings per share 3,442 14.1p 2,614 10.8p 7,048 29.1p
Adjustments net of income
tax expense:
Amortisation of acquired
intangible assets 583 2.4p 542 2.2p 930 3.8p
Goodwill impairment - - - - 771 3.2p
Gain on bargain purchase
of Alfalight - - - - (578) (2.4p)
Provision for regulatory
risk compliance - - - - 500 2.1p
Restructuring costs 257 1.0p 818 3.4p 1,261 5.2p
Transaction fees 210 0.9p 144 0.6p 373 1.5p
Interest on discounted deferred
consideration 80 0.3p - - - -
Total adjustments net of
income tax expense 1,130 4.6p 1,504 6.2p 3,257 13.4p
Adjusted basic earnings per
share 4,572 18.7 4,118 17.0p 10,305 42.5p
-------- ------- -------- ------- -------- -------
Basic diluted earnings per
share 3,442 13.8 2,614 10.6p 7,048 28.6p
Adjusted diluted earnings
per share 4,572 18.5 4,118 16.7p 10,305 41.7p
------ ----- ------ ------ ------- ------
Adjusted earnings per share before amortisation and adjustments has been shown because, in the opinion of the Directors, it more accurately reflects the trading performance of the Group.
8. Dividend
The Directors have declared an interim dividend of 3.7 pence per share for the half year ended 31 March 2017. This dividend has not been accounted for within the period to 31 March 2017 as it is yet to be paid.
Half Year Half Year Full Year
to to to 30 Sep
2016
31 Mar 2017 31 Mar (Audited)
2016
(Unaudited) (Unaudited)
GBP'000 GBP'000 GBP'000
-------------- -------------- ------------
Final 2016 dividend paid: 5.7p 1,383 - -
per share
Final 2015 dividend paid : 5.2p
per share - 1,254 1,254
2016 Interim dividend paid :
3.3p per share - - 801
-------------- -------------- ------------
1,383 1,254 2,055
-------------- -------------- ------------
9. Borrowings
The group's banking facilities with the Royal Bank of Scotland comprise a committed revolving credit facility of $15m and an uncommitted flexible acquisition facility of $20m both available until 30 April 2019.
The revolving credit facility attracts an interest rate of between 0.9% and 1.8% above LIBOR dependent upon the Company's leverage ratio.
10. Called up share capital
2017 2016 2017 2016
No. No. GBP'000 GBP'000
---------
Allotted, issued and fully
paid
Ordinary share of 20p
each 24,476,471 24,260,024 4,895 4,852
------------- ------------- --------- ---------
11. Acquisition of StingRay Optics LLC
On 21 February 2017, the Group completed the acquisition of the entire unit capital of StingRay Optics LLC, a Keene, New Hampshire, based specialist designer and manufacturer of high performance optical and opto-mechanical subsystems for demanding defence and commercial applications. The acquisition strengthened the Group's position in the aerospace and defence sector.
The consideration for the acquisition will be up to $20m comprising initial consideration of $7.5m paid in cash and $2.5m paid in new G&H ordinary shares. There is also deferred contingent consideration of up to $10m, payable in cash, based on the performance of the business for a period of up to three years post acquisition.
The fair value of the assets acquired is summarised as follows:
Provisional
fair value
GBP'000
------------------------------- ------------
Property, plant and equipment 98
Intangible assets 7,986
Cash 231
Trade and other receivables 655
Inventory 1,058
Trade and other payables (1,274)
Current and deferred tax
assets 156
Net assets acquired 8,910
-------------------------------- ------------
Consideration paid:
Cash and shares paid on
completion 7,996
Deferred consideration 7,013
-------------------------------- ------------
Goodwill 6,099
-------------------------------- ------------
The fair value of the intangible assets represents the estimated fair value of StingRay's order book, its customer relationships and its brand. These have been valued using a discounted cash flow model. The deferred consideration has been discounted using the company's weighted average cost of capital.
The goodwill arising on acquisition reflects items not separately recognised, including the expertise of StingRay's employees and their contacts in target markets.
Post-acquisition, the acquired business contributed GBP1.1 million of revenue and GBP0.3 million of profit after tax excluding central costs to the consolidated income statement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFVRRLIEIID
(END) Dow Jones Newswires
June 06, 2017 02:00 ET (06:00 GMT)
1 Year Gooch & Housego Chart |
1 Month Gooch & Housego Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
