Gooch & Housego Plc · LSE:GHH
Gooch & Housego — H1 2011 Earnings Presentation
24 slides from Gooch & Housego's earnings presentation, June 2011
Slide 1: Interim Results Presentation
Interim Results Presentation For the period to 31 March 2011 Dr Julian Blogh, Chairman Gareth Jones, CEO June 2011 Andrew Boteler, CFO Page 1
Slide 2: H1 2011 Overview
H1 2011 Overview Favourable trading conditions Two strategic acquisitions Strong order intake Increased manufacturing capacity and output => increased revenues and profits Industrial revenues up by 42% compared with H1 2010 Aerospace & Defence revenues up by 18% compared with H1 2010 Life Sciences r
Slide 3: Financial Highlights
Financial Highlights For the half years ending 31 March Revenue £m Headline * operating profit £m 5.3 +33% 27.2 +102% 20.4 18.8 15.7 3.3 2.5 2.6 13.7 1.6 £27.2m £5.3m (2010: £20.4m) 2007 2008 2009 2010 2011 (2010:£2.6m) 2007 2008 2009 2010 2011 Headline * profit before tax Headline * earnings per sh
Slide 4: Financial highlights
Financial highlights H1 2011 H1 2010 Increase/ FY2010 (decrease) Revenue £27.2m £20.4m 33% £44.7m Reported operating profit £4.3m £2.1m 101% £5.9m Reported profit before tax £3.9m £1.7m 130% £5.1m Basic earnings per share 13.0p 6.1p 113% 24.4p Adjusted operating profit1 £5.3m £2.6m 102% £6.9m Adjust
Slide 5: At a glance KPI's
At a glance KPI’s For the six months to 31 March unless otherwise stated. Revenue growth Profit growth Growth in total revenue compared to prior period. Growth in headline profit before tax compared to prior period. £27.2m +33% £5.0m +128% (2010: £20.4m) (2010: £2.2m) New business growth Order book
Slide 6: A Global Business
A Global Business Ilminster, UK, Headcount: 575 Boston, Head Office Lakewood, New Global locations Jersey Massachusetts Torquay Hamburg 8 manufacturing facilities (6 US, 2 UK) Cleveland, Munich 2 R&D centres Ohio 5 Sales Offices Seattle, Paris Washington Geographical revenues: Palo Alto 2011 2010 Ho
Slide 7: Strategy Unchanged
Strategy Unchanged ………....as exemplified by our H1 results and recent acquisitions Objective: Sustainable growth Via: Diversification into new, large markets that are adopting photonic technology - specifically Aerospace & Defence and Life Sciences To: Provide a vehicle for rapid growth and reduce o
Slide 8: A leader in Photonics
A leader in Photonics A unique portfolio of world-class products • Ultra Precision Optical components • Optical coatings – capable of operating in the worlds most powerful laser systems • Fibre optics – for the aerospace, biomedical, laser and telecoms applications • Acousto optics – for laser switc
Slide 9: Market Overview
Market Overview In recent years G&H has successfully pursued a strategy of diversification, aimed at adding new large and high-growth markets whilst retaining a dominant position in its traditional industrial laser sector. G&H is a niche provider of low volume, high value optoelectronic materials, c
Slide 10: EM4 Acquisition
EM4 Acquisition Specialist manufacturer of “active” fibre optic components and systems Highly complementary to G&H’s Torquay-based “passive” fibre optics business The result is a unique end-to-end fibre optics capability for the most demanding applications: - • Space (satellites) • Commercial and mi
Slide 11: Crystal Technology Acquisition
Crystal Technology Acquisition Consolidates G&H’s leading position in the acousto-optic and electro-optic markets • Market share • Technical leadership • Most comprehensive product range Highly respected business with blue-chip customer base Active in: Industrial Aerospace & Defence Life Sciences Se
Slide 12: Diversification
Diversification Market trends 2008 2009 2010 2011 Full Year Full Year Full Year Half Year Industrial 77% 47% 52% 57% Research 13% 15% 12% 7% Life Sciences 4% 9% 11% 10% Aerospace & 6% 29% 25% 26% Defence The acquisitions of EM4 and Crystal Technology bring additional capabilities, products and custo
Slide 13: Market Trends
Market Trends Rate of growth in the Industrial sector returning to more sustainable levels Use of lasers in manufacturing continues to increase, particularly in microelectronics Smart phones and tablet computers driving demand for G&H products like the Q-switch Encouraging growth in high-end telecom
Slide 14: Outlook and Objectives for H2
Outlook and Objectives for H2 G&H is now well-positioned to address its target markets Market conditions remain broadly favourable Manufacturing capacity still increasing + sustainable level of demand = reduced leadtimes Integration of EM4 and Crystal Technology is top priority - sales - operations
Slide 15: Appendices
L Appendices Page 15
Slide 16: Reported Income Statement
Reported Income Statement Key Points Full year 2011 % 2010 2010 •For the period to 31 March 2011, Gooch Half year to 31 March £’000 Change £’000 £’000 & Housego PLC returned profit before tax of £3.9m compared to £1.7m in 2010. Revenue 27,192 33% 20,373 44,683 •The Company returned basic earnings pe
Slide 17: Adjusted Income Statement
Adjusted Income Statement Key Points 2011 2010 •Excluding the impact of the amortisation of £’000 £’000 acquired intangible assets, one off costs associated with the acquisitions, profit before EBITDA 5,847 3,698 income tax expense in the year amounted to Acquisition costs 495 - £5.0m, compared to £
Slide 18: Cash Flow
Cash Flow 2011 2010 Key Points £’000 £’000 •Net cash generated from operating Cash flows from operating activities 5,536 4,013 activities in the six months to 31 March Cash flows from investing activities 2011 was £5.5m (2010 : £4.0m). Working capital has remained steady, increasing Acquisition of s
Slide 19: Balance Sheet
Balance Sheet 2011 2010 Key Points £’000 £’000 Non- current assets Tangible assets 19,713 16,163 Intangible assets increased by £7.9m as a result of the EM4 & Crystal Technology Intangible assets 24,643 16,793 acquisition. Other 4,512 1,560 Total 48,868 35,516 Gross borrowings have increased by £3.5
Slide 20: Shareholder Profile
Shareholder Profile SHAREHOLDER HOLDING AS AT 15/03/2011 % HOLDING BlackRock Investment Management 3,127,465 14.31% Gooch & Virgin Family Holding 2,718,459 12.44% Standard Life Investments 2,183,238 9.99% Rensburg Sheppard Investment Management 977,752 4.47% Scottish Widows 928,193 4.25% Total of sh
Slide 21: Financial Highlights
Financial Highlights For the year ending 30 September 2010 Revenue £m Headline operating profit £m +23% 44.7 +66% 36.4 6.9 6.7 33.4 30.7 4.1 5.4 25.4 5.3 £44.7m £6.9m (2009: £36.4m) 2006 2007 2008 2009 2010 (2009:£4.1m) 2006 2007 2008 2009 2010 Headline profit before tax Headline earnings per share
Slide 22: Acquisition Funds Flow
Acquisition Funds Flow Flow of Funds Key Points £’m $’m •Initial consideration for both deals is EM4 £13.8m Initial consideration (6X 2010 EBITDA) 7.3 11.6 •Deferred consideration / earn out for both Expected earn out (1.2X 2011 EBITDA) capped @ $7.0m 2.0 3.2 deals is £4.0m and is all payable on 31
Slide 23: Key Details of Placing
Key Details of Placing Summary New Ordinary Shares Issued No. of shares 2,366,666 Issue Price £ per share £4.50 Discount on mid market price as at 15th December 2010. % 4.8% Funds Raised Gross £m 10.6 Placing Costs £m 0.4 Funds Raised Net £m 10.2 Key Points •Placing represented approximately 12.2 pe
Slide 24: Group Borrowings
Group Borrowings US$ acquisition loan Sterling acquisition loan Principal $18.0m Principal £3.1m Term – four year term commencing 31 March 2011 Term - four year term commencing 31 March 2011 Repayable by : Repayable by : Eight half yearly instalments of $2.25m Seven half yearly instalments of £221k