Gooch & Housego – second half Trading Update up to expectations, while reporting a growing Order Book, shares 586p, raised TP 740p

Mark Watson-Mitchell
Oct 11
4 min read

Mark Watson-Mitchell – 11.10.2025

Photonics technology group Gooch & Housego (LON:GHH) last week reported that its trading momentum was sustained in the second half of its financial year to end-September.

The Board expects full-year revenues and adjusted profit before tax to be broadly in line with expectations, before moderately higher non-underlying costs.

Net bank debt, excluding IFRS 16, stood at £30.0m, compared to £24.1m at end-March, and £16.0m at end-September 2024.

The order book continues to grow, reaching £142.3m, up from £121.5m in late March and £104.5m on 30^th September 2024, with over 80% slated for delivery in FY26.

The Group expects to announce its full-year results on December 2, 2025.

The Business

Gooch & Housego is a photonics technology business headquartered in Ilminster, Somerset, with operations in the USA and Europe.

It is a world leader in its field, which is the researching, designing, engineering, and manufacturing of advanced photonic systems, components, and instrumentation for applications in the Aerospace & Defence, Industrial, Life Sciences, and Scientific Research sectors.

Industrial and Telecom – represents just short of 50% of group sales.

The group designs and manufactures submodules and module assemblies according to customer specifications.

It is recognised as a world-class, vertically integrated, custom-designed photonics supplier across all of its industrial applications.

Its leadership in the design and manufacture of custom optical solutions has established it as a preferred source for OEMs in industry, subsea communications, and energy.

Aerospace and Defence – makes up a third of group sales.

Mission-critical technology demands uncompromising precision, absolute reliability, and close partnerships with suppliers.

For more than seven decades, GHH has delivered proven optical solutions for aerospace, avionics, and defence platforms, including ruggedised commercial photonic components, build-to-print products, and full-scale development of customised solutions.

The group is recognised for the breadth of its acousto-optic, electro-optic, crystal-optic, fibre optic, and precision optic products.

Its engineers work closely with program managers at prime aerospace and defence suppliers.

Life Sciences – a fifth of group sales.

As a vertically integrated supplier of optics, modules, and subassemblies, the group is uniquely positioned to support scalable manufacturing, documented quality control, and security of supply.

It supports medical innovation through its contract design and manufacturing capabilities by partnering with leading pharmaceutical and medical device innovators to develop lifesaving diagnostic, analytical, and drug-delivery devices.

Earlier this summer, the group announced its $17.5m acquisition of the Tampa, Florida-based Global Photonics, which supplies optical systems for military land applications, including periscopes and fire-control systems, as well as instrumentation for air platforms and other advanced precision optics.

Its expertise in cleanroom lithography, photolithographic reticule fabrication, ion beam etching and advanced thin film coatings will complement GHH's existing manufacturing capabilities and enhance the group's offering into the North American market.

That transaction, which represents another 'speed to value' acquisition by the group, will see it supporting the Global Photonics team with wider capabilities, particularly in the areas of laser protection filtering and complex optical system design, allowing them to secure further business through their existing strong reputation and well-established relationships with US defence prime contractors.

Management Comment

CEO Charlie Peppiatt stated that:

"I am delighted with the positive progress the Group has made in FY25.

Our operational performance has shown sustained improvement and resilience in the face of a complex and uncertain macroeconomic background, with unprecedented supply chain and tariff challenges.

This is a testament to the positive progress the Group is making with the deployment of our strategy and the quality of our workforce.

The integration of both Phoenix and Global Photonics into G&H is proceeding to plan. Both businesses are an excellent strategic and operational fit for the Group.

In particular, Global Photonics, acquired in May 2025, brings strong relationships with U.S. defence primes and complementary manufacturing capabilities to our growing Optical Systems division in North America.

Both acquisitions are accelerators to G&H becoming a partner of choice for high-precision optical systems and photonics in the UK, US and Europe.

With our growing order book, strengthening market positions and differentiated photonics expertise aligned to structural growth drivers from megatrends, we are increasingly confident in the prospects of the company to deliver our strategy in the medium term."

Broker’s View

Analyst Robin Byde, at Zeus Capital, rates the shares as a Buy with a raised Target Price of 700p (670p).

His estimate for the year just finished is for £152.0m (£136.0m) sales, with adjusted pre-tax profits of £11.9m (£8.1m), lifting earnings to 34.6p (25.1p) while maintaining its dividend at 13.2p per share.

For the current year to end-September 2026, he goes for £175.0m revenues, £15.6m profits, 43.4p earnings and a 13.5p dividend.

Into 2027, his figures show £200,0m turnover, £20.0m profit, earnings of 54.1p per share and a 13.7p dividend.

As a matter of interest, Deutsche Bank have a Buy out on the shares with a 740p Target Price.

My View

This is a little cracker, capitalised at just £151.2m, with its shares at 586p.

Just look at those estimates – that is growth – and it deserves a premium rating, far, far higher than its current year 12.8 times price earnings multiple.

The shares, which hit 660p at the end of June this year, are destined to climb above that level again very soon.

Accordingly, I am now setting a new Target Price of 680p.