Photonics company Gooch & Housego (LON: GHH) has reassured investors that tariffs should not have a significant direct effect on the business, although there could knock-on problems due to increased costs. This enabled the share price to recover 8.2% to 400.5p.
Gooch & Housego is not significantly exposed to the countries hit hardest by US import tariff rises. There has been some retaliatory action in limiting supply of raw materials. Management believes it can pass on any rise in costs. US businesses may even benefit from non-US suppliers being less competitive in terms of price.
An interim trading statement shows organic growth of 7.5%. Semiconductors and industrial lasers remain weak areas, but the rest of the business is trading strongly. The medical business has benefited from its new US facility. Trading is in line with full year forecasts.
Net debt is £24.1m and the debt facility has been extended to 2030. Debt is always lower at the year end and it should fall to £15m at the end of September 2025.
Cavendish maintains its 2024-25 pre-tax profit forecast at £13,3m, up from £8.1m the previous year. That means that the shares are trading ten times prospective earnings, which is low for a company with such strong market positions.