Gooch & Housego shares rise despite drop in profits

Gooch & Housego shares (LON: GHH) surged almost 7% on Tuesday’s opening.

The optical components and systems manufacturer demand for its products and capabilities had remained “robust” and it was set for a stronger second half.

Despite this, the group reported a 30% decline in profit due to disruption at manufacturing sites amid the pandemic. Pre-tax profit was down 35% year-on-year to £9.8m whilst revenue fell 5.5% to £122.1m.

Gooch & Housego said in the update that they would scrap the total dividend for the year.

The year-end order book is 0.8% higher than the same time last year at £92.4m and the group said it is on track to reach previously targeted profits.

Mark Webster, chief executive of the group, commented: “Our priority during the ongoing COVID-19 pandemic remains the health and safety of our staff, customers and suppliers. We are very proud of the way our staff have responded to this unprecedented challenge.

“FY2020 profits were affected by temporary disruption to manufacturing and lower demand in some subsectors due to the COVID-19 pandemic. We have continued to invest in our high priority R&D targets, been able to maintain a strong balance sheet and have improved our liquidity levels.

“Our order book is robust and there remains considerable long term potential for our photonic technologies and system capabilities in all of our target sectors.

“The challenge of the pandemic has validated our long term strategic goals of diversification and moving up the value chain. We intend to vigorously pursue these goals through internal investment and where appropriate, acquisitions.”

Gooch & Housego shares (LON: GHH) are currently trading +5.55% at 1.213,80 (1128GMT).