(Alliance News) - Gooch & Housego PLC on Tuesday reported a drop in interim revenue due to Covid-19 as well as difficult market trends and axed its interim dividend.
The optical components and systems maker reported revenue of GBP57.5 million for the six months ended March 31, down 3.8% from GBP59.7 million.
Gooch & Housego attributed this reduction to "previously reported trends" - being the continued weakness in demand from the industrial laser market - as well as "the Covid-19 emergency".
Pretax profit was GP1.7 million, up 16% from GBP1.5 million thanks to a drop in administration expense to GBP7.5 million from GBP10.4 million, as well as a steep reduction in net finance costs to GBP148,000 from GBP1.2 million.
However, adjusted pretax profit fell 51% to GBP2.7 million from GBP5.4 million. These figures are adjusted for amortisation of acquired intangible assets plus non-recurring items and fell due to "reduced volumes and product mix".
No interim dividend is recommended, after payment of a 4.3 pence per share dividend the year before. The level of any full year dividend will depend on trading performance and market trading conditions.
Googh & Housego's outlook has not changed.
Chief Executive Mark Webster said: "G&H is proud that in the US most of our product lines were considered to be vital for essential services and national security enabling sites to stay open under "stay at home" orders. All UK sites remained open, but Torquay operated at reduced capacity in order to meet social distancing guidelines. Work is being carried out to enable a return to full capacity at the site by the end of FY2020.
"Measured cost reductions were put in place in the latter part of H1, enabling us to retain critical capabilities on a return to more "normal" trading conditions. Good progress has been made on the streamlining of our manufacturing base. Both of these initiatives will deliver significant future margin progression.
"The Covid-19 emergency has validated our long term policy of diversification and moving up the value chain. We will continue to pursue this policy through internal investment and, where appropriate, acquisitions".
Shares in Gooch & Housego were flat at 1,010.00 pence in London on Tuesday morning.
By Anna Farley; annafarley@alliancenews.com
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Gooch & Housego (GHH)