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(Sharecast News) - Gooch & Housego reported strong order book growth at the start of its new financial year on Friday, driven by rising demand from defence customers, as the board reiterated its full-year expectations.
In a trading update ahead of its annual general meeting, the AIM-traded photonics specialist said its order book had increased to 168.3m since 1 October, up from 142.3m on 30 September.
The uplift reflected further growth in demand from aerospace and defence customers in the US and Europe for precision optics, optical systems and advanced imaging solutions for military platforms.
Recently-acquired businesses Global Photonics and Phoenix Optical also saw strong demand.
Demand in the group's industrial markets has improved since the start of the year, with encouraging signs of a recovery in semiconductor manufacturing.
Gooch & Housego said it continued to expect a sustained recovery in industrial laser and semiconductor markets in the second half of 2026.
In life sciences, supply chain challenges previously highlighted in connection with 'last time buy' orders for 'Pockels' cells had now been resolved.
The company said it expected production to ramp up in the second half of the 2026 financial year, resulting in a greater second-half weighting to results than in 2025.
Net debt excluding lease liabilities reduced to 28m at the end of January from 29.9m at the end of September, reflecting lower working capital, partly offset by capital expenditure and deferred consideration payments.
"The strong order book growth since the start of the new financial year increases our confidence in the group's full year out-turn," said chief executive Charlie Peppiatt.
He added that the strategic acquisitions of Global Photonics and Phoenix Optical in 2025 "have delivered strong customer demand, such that capacity at both sites is being increased."
Despite ongoing macroeconomic uncertainty and potential supply chain constraints, the board said its expectations for the current year remained unchanged, underpinned by the order book, self-help measures and a growing pipeline of potentially large, multi-year contracts.
The group said it was still targeting mid-teen returns on sales in the medium term.
At 1239 GMT, shares in Gooch & Housego were up 8.2% at 818p.
Reporting by Josh White for Sharecast.com.