Gooch & Housego sees FY in line, buys US-based StringRay Optics
Gooch & Housego said it expects full-year trading to be in line with management’s expectations, as it announced an acquisition.
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The optical components manufacturer has acquired US-based StingRay Optics, a specialist designer and manufacturer of high performance optical and opto-mechanical sub-systems for up to $20m.
The price comprises an initial consideration paid on completion of $7.5m in cash from existing G&H debt facilities and $2.5m in new ordinary shares, which are 'locked up' for one year from the date of acquisition. There is also a deferred contingent consideration of up to $10m, payable in cash, based upon the performance of the business for a period of up to three years.
The historical annual revenue of StingRay is around $7.7m and the deal is expected to be earnings-enhancing in the first full year of ownership.
Chief executive officer Mark Webster said: “The acquisition of StingRay meets our strategic aims of moving up the value chain and diversifying the business through increasing our footprint in the aerospace and defence sector. It is a profitable and growing business in its own right, which has established an excellent reputation in the US defence industry for the high quality of its custom optical assemblies. As part of the bigger G&H family we believe it will be able to fulfil its true potential by leveraging our greater reach and our complementary manufacturing and technical capabilities.”
The company also updated the market on trading in the first four months of the year. It said market conditions have been good and it is on course to meet its expectations for the full year as trading in the first quarter has been significantly better than the same period last year, albeit against a weak comparative and benefitting from favourable currency movements.
Gooch & Housego said the order book was “robust”, standing at £60.4m at 31 January 2017, up 64.9% compared with the same time last year. Excluding the impact of acquisitions and foreign exchange, this represents an increase of 19.4%.
At 1357 GMT, the shares were up 6.4% to 1,195.20p.