Gooch & Housego Share Price (GHH)

Adjusted profit before tax for the year was £8.2m (2011 £10.8m). Adjusted basic earnings per share were 28.2p (2011 38.0p) a fall of 26%. Reported basic earnings per share were 24.4p (2011 35.5p).

Prospects Although the global macroeconomic outlook remains uncertain in the short term, Gooch & Housego's markets continue to exhibit attractive long term structural growth drivers as a result of the continued global investment in optical technologies. We remain of the view that the Aerospace & Defence sector has the potential to deliver significant growth for Gooch & Housego despite near-term delays and uncertainty resulting from budgetary constraints and political uncertainty in the US. With our highly specialised capabilities, Gooch & Housego is well positioned to address a growing demand for photonic technology in what is likely to be a shrinking overall market. In Life Sciences we are exploiting similarly unique capabilities in OCT and diagnostics, both of which are high-value, high-growth markets. Diversification within the Industrial sector into fields such as sensing, metrology and semiconductor equipment is progressively reducing our historic dependence on the Q-switch and the industrial laser market, although we are committed to maintaining our dominant position in this field. To provide long term sustainable growth and increased resilience to market cyclicality and macro-economic uncertainties, we will continue to execute our strategy of diversification and moving up the value-chain through a combination of organic R&D and strategic acquisitions.

Order book As at 30 September 2012, the Group order book stood at £24.9m, compared to £28.5m at the end of the 2011 financial year, a 13% fall. On a like for like basis, excluding the impact of foreign exchange, the order book is 11% lower. Book to bill ratios for the business as a whole were 1.01 times (six month rolling average) as at 30 September 2012, compared to 0.88 times for the same period last year. This is a reflection of the strong order performance over the last six months of the 2012 financial year in which £33.3m of orders were booked.

Gareth Jones, CEO commented: - "We have made good progress in executing our strategy of establishing a more diversified, resilient and broadly-based business. After a difficult first half we have delivered results in line with our revised expectations in a difficult trading environment."

Operating & Strategic Highlights · Satisfactory result for the year following a stronger second half performance · Net debt reduced, with continued focus on cash generation · Investment in key management to deliver growth and strategic objectives · Acquisitions now fully assimilated into the business · Strategy of diversification adds resilience

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