Gooch & Housego PLC
ANNUAL REPORT 2024
Welcome
1
Contents
Strategic Report | 2–101
4 Investment Case
6 Highlights
8 Our Markets
12 Our Products and Capabilities
16 Case Studies
22 Chairman’s Statement
26 Our Business Model
28 Our Key Performance Indicators
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38 Acquisitions
42 Our Strategy
52 Operations Review
64 Financial Review
70 ESG Report
92 S172 Statement
98 Principal Risks and Uncertainties
Governance | 102–129
104 Board of Directors
106 Executive Management Team
108 Corporate Governance
112 Directors’ Report
116 Sustainability Committee Report
117 Audit Committee Report
120 Nomination Committee Report
122 Remuneration Committee Report
Financial Statements | 130–191
132 Independent Auditors’ Report
140 Group Income Statement
141 Group Statement of
Comprehensive Income
142 Group Balance Sheet
143 Group Statement of Changes in Equity
144 Group Cash Flow Statement
145 Notes to the Group
Cash Flow Statement
147 Notes to the Group
Financial Statements
176 Company Balance Sheet
177 Company Statement of
Changes in Equity
178 Company Cash Flow Statement
179 Notes to the Company
Cash Flow Statement
180 Notes to the Company
Financial Statements
Shareholder Information | 192–191
194 Company Information
195 Expected Financial Calendar
196 Notice of Annual General Meeting
Strategic
Report
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
2
2–101
STRATEGIC REPORT
3
4 Investment Case
6 Highlights
8 Our Markets
12 Our Products and Capabilities
16 Case Studies
22 Chairman’s Statement
26 Our Business Model
28 Our Key Performance Indicators
&KLHI ([HFXWLYH 2IƼFHUŮV 6WDWHPHQW
38 Acquisitions
42 Our Strategy
52 Operations Review
64 Financial Review
70 ESG Report
92 S172 Statement
98 Principal Risks and Uncertainties
Image: SpaceX/Unsplash
Why G&H is
the preferred
choice for
our investors
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
4
STRATEGIC REPORT INVESTMENT CASE
5
A Clear Strategy
We are executing on a strategy that supports the Group achieving
mid-teen returns in the medium term. Our strategic actions are making
G&H an innovative customer focused technology company.
Leading Products
and Technology
Our products support the operation of some of the most complex
photonics systems in the world. Our customers look to our engineers
to support them in solving their most demanding product challenges.
Attractive Markets
Photonics is supporting the next steps in global innovation and helping to
push forward new frontiers in technology. The products and services that
our Group provide underpin many of the world’s mega-trends. We are well
placed in markets that have attractive long-term growth characteristics.
Well-Established
Customer Positions
We have a long established reputation amongst our customers for providing
high quality, technically superior products and services. We build long term
customer partnerships thanks to our focus on our operational execution
and the skills of our engineers who work closely with our customers on
the next generation developments, securing us long-term programme
positions and recurring revenues.
Diversified Revenues
The portfolio of products and services that G&H offers addresses complex
needs in the Industrial, Aerospace & Defence (A&D) and Life Sciences
markets. This provides the Group with natural protection against individual
market cyclicality. Nearly all of those markets have demanding quality and
compliance requirements which help to defend our existing position in them.
Financial Strength
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which enables us to invest both organically and through acquisitions
to support the growth of the Group.
State-of-the-Art Facilities and
a Cost-Effective Supply Chain
We have invested extensively in our production facilities to enable us to
achieve the high levels of quality and precision that few of our competitors
can match. We have supported that by developing a supply chain that has
the capacity to produce a greater proportion of the Group’s revenue on a
fully subcontracted basis, supporting our objective to provide additional
volumes at enhanced returns.
Revenue
£136.0m
Net debt
£25.8m
New products
48
Order book
£104.5m
Adjusted profit
before tax
£8.1m
Image: Jezael Melgoza/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
6
Highlights
For the year ended 30 September 2024
£136.0m
Revenue (£m)
2023** £135.0m +0.7%
25.5p
Adjusted basic earnings per share (pence)*
2023** 33.9p (24.8%)
£8.1m
Adjusted profit before tax (£m)*
2023** £10.3m (21.6%)
13.2p
Total dividend per share (pence)
2023 13.0p +1.5%
12.7p
Basic earnings per share (pence)
2023** 19.4p (34.5%)
(24.7p)
Basic earnings per share from continuing
and discontinuing operations (pence)
2023** 16.1p (40.8p)
£16.0m
Net debt excluding IFRS16 (£m)
2023 £20.9m (£4.9m)
£25.8m
Net debt (£m)
2023 £31.7m (£5.9m)
£4.2m
Statutory profit/(loss) before tax (£m)
2023** £6.0m (29.9%)
(£6.4m)
(Loss) / profit for the year including
discontinued operations
2023** £4.0m (£10.4m)
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goodwill and acquired intangible assets, non-underlying items being site closure costs, costs of
acquisitions, and restructuring costs, together with the related tax impact. A reconciliation of
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** Represented to exclude discontinued operations.
7
STRATEGIC REPORT HIGHLIGHTS
Strategy
Good progress delivering the
strategic changes that will support
mid-teen return on sales over the
medium-term.
Outlook
Underpinned by our strategy
which is making G&H a better,
more sustainable business, we
are confident that the Group will
deliver profitable growth in the
coming financial year.
Profit
Adjusted operating profit
totalled £10.5m (FY2023: £12.1m).
Reported profit before tax
at £4.2m (FY2023: £6.0m).
Portfolio
Divestment of the EM4 business in
March 2024 and the acquisition of
Phoenix Optical in October 2024,
both supporting the Group’s
transformation journey. Loss from
discontinued operations of £9.7m.
Dividend
Final dividend of 8.3p (FY2023: 8.2p)
and full year dividend of 13.2p
(FY2023: 13.0p) reflecting the Board’s
confidence in the growth potential
of the Group.
Revenue
Up 0.7% to £136.0m (FY2023: £135.0m)
for the Group’s continuing operations;
second half revenue was 15% higher
than the first half on an organic,
constant currency (“OCC”) basis.
Order Book
Order book closed at £104.5m
(FY2023: £115.3m). Strong order
pipeline particularly for our
A&D business.
During FY2024 we made further positive progress in establishing strong
foundations to deliver our strategic priorities and enhance mindshare with
our customers many of whom are demonstrating a growing confidence
in G&H. Despite the challenges the Group experienced in the first half of
FY2024 due to reduced demand in our industrial and medical laser
markets, G&H delivered a strong performance in the second half of the
year underpinned by the solid demand for our Life Sciences and A&D
products and also reflecting the significant operational improvements
that have been made across the Group.”
Charlie Peppiatt, CEO
Image: Robin Canfield/Unsplash
Debt
Net debt fell to £25.8m (FY2023:
£31.7m) of which bank debt was
£16.0m (FY2023: £20.9m). Group
leverage remains comfortable at 0.9x.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
8
Our
Markets
Our Purpose
Photonics, the science of controlling the
transmission, modulation and amplification
of light, is the enabler for many of the latest
technology developments that are
transforming modern life.
Thanks to significant size, weight
and power advantages, the shift from
electronics as an enabling technology
to photonics is accelerating,
delivering transformative change
in manufacturing, A&D,
communications and medicine.
At G&H we are at the forefront of
this revolution. G&H’s advanced
technology, design experience and
manufacturing expertise allow us to
provide our customers with highly
specialised photonic solutions that
meet their needs for precision, quality,
and reliability whether for complex
components, subsystems, or full
system solutions.
Thanks to our innovative designs and
close working partnerships with our
customers, we provide specialist
photonic hardware that enables
leading organisations all over the world
to deliver tailored, innovative solutions
in Industrial, Telecommunications,
A&D and Life Sciences markets.
At G&H we are proud to be using our
skills and capabilities to make a
better world with photonics.
FY24 Regional Revenue
America
Europe
Rest of World
£46.6m £64.1m £25.3m
9
STRATEGIC REPORT OUR MARKETS
G&H is widely recognised as a leader in advanced
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optics, providing precision solutions for critical
applications in industries such as industrial lasers,
semiconductor manufacturing, subsea networks,
and optical sensing. With deep expertise and
cutting-edge engineering, G&H drives innovation
across diverse industrial sectors.
G&H’s components support the most advanced
semiconductor manufacturing equipment, helping
to maximise throughput and yield. Our products can
operate from the ultraviolet up to the far infrared
range allowing UV and CO2 pulsed lasers to operate
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and UV acousto-optical modulators are found in
the most modern laser tools, enabling power
stabilisation, precise and stable beam positioning,
and extremely short pulse duration.
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critical to modern laser systems, enabling precise
beam control for industries like signal processing
and photolithography. Custom-designed for client
needs, G&H’s AODs feature high diffraction
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semiconductor manufacturing where accuracy is
key. These solutions optimise processes like
drilling and cutting in microelectronics, ensuring
precision down to the micron level.
Beyond AODs, G&H’s acousto-optic modulators,
Q-switches, and precision optics set benchmarks
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components are critical for advanced semiconductor
manufacturing, enhancing throughput and precision
across a wide spectrum of operations. Our in-house
grown KDP and KD*P crystals used in the world’s
most powerful laser systems have helped achieve
fusion ignition, marking a breakthrough in the
generation of clean energy.
With more than 95% of global telecommunications
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couplers play a critical role in meeting the world’s
growing demand to share data. New solutions,
such as the high reliability 4x4 coupler, ensure
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size and will build upon G&H’s record of having no
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G&H also leads in LiDAR-based optical sensing
technologies, transforming industries from energy
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solutions. Our products enable proximity sensing
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currents around wind turbines.
G&H’s short range infrared (SWIR) and infrared
lens solutions are used in industries like food
processing and advanced security. The VAPIR™
medium range infrared lens series is capable
of detecting gas leaks, contributing to the safety
and security of oil and gas facilities.
Industrial
Image: Donald Giannatti/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
A&D
G&H has been a prominent player in the A&D market for decades,
providing innovative solutions that have consistently delivered
outstanding results for the end user. From laser protection to
advanced optical systems, our leadership in supporting mission-
critical applications with high-performance optical components,
modules, and subassemblies has established G&H as a preferred
supplier for leading A&D contractors worldwide. Our expertise in
optical design and manufacture have helped advance programs
and missions in several key application areas.
The evolution of unmanned aerial vehicles (UAVs) and other
airborne platforms has transformed image data collection,
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durations. G&H’s precision optical components and advanced lens
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resolution for short, mid, and long-wave infrared imagers, used in
A&D platforms engaged in intelligence, surveillance, and
reconnaissance (ISR) missions.
In the area of directed energy weapons, our infrared lens assemblies
are essential. The speed and precision afforded by photonics
technology enable the directed energy systems used for drone and
missile defence. With decades of close collaboration with prime
defence contractors and avionics manufacturers, G&H provides
the rigorous design and manufacturing expertise necessary for
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ensuring reliable performance in these advanced systems.
G&H is at the forefront of revolutionising inter-satellite and
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optical components, lens assemblies, and subsystems that ensure
exceptional connectivity and bandwidth for satellite-based laser
communications and sensing applications. This year, G&H celebrated
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transmitter into TNO’s satellite laser communication system. The
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that G&H’s cutting-edge laser communication technology has
established a secure and stable link between a satellite launched
by the Norwegian Space Agency and a ground station on Earth.
Specialising in cutting-edge laser protection solutions tailored for
military applications, G&H addresses the unique challenges posed
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directed energy weapons, the protection of military assets, including
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technologies, such as sighting systems, electro-optical protection
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personnel and equipment from lasers used in an offensive manner.
10
11
STRATEGIC REPORT OUR MARKETS
G&H has established itself as a trusted supplier in the life sciences
market, delivering advanced optical components that enhance
the performance and reliability of life science instruments. Our
contributions span applications such as microscopy, medical
diagnostics, biomedical imaging, and laser surgery, where our
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acousto-optics, and electro-optics is well recognised globally.
We collaborate closely with laser system original equipment
manufacturers (OEMs) and medical equipment manufacturers
to optimise patient outcomes across a wide range of surgical
applications. These applications include prostate surgery, scar
correction, cataract treatment, and the removal of freckles, moles,
and tattoos. Additionally, our optics enable skin rejuvenation and
teeth whitening procedures. We ensure that surgical lasers deliver
the precision and reliability necessary for cardiovascular procedures,
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G&H has been instrumental in the development of optical coherence
tomography (OCT) since its inception, supporting the world’s
leading OCT systems manufacturers with high-quality components
and sub-systems. Our unique capability to provide everything from
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controls allows us to meet diverse system design requirements.
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more cost-effective, and reliable optical engines. The exceptional
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and deeper tissue penetration. This leads to enhanced diagnoses,
contributing to better patient outcomes.
Polymer medical optics are transforming the life sciences market by
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Our commitment to Design for Manufacturability (DFM) ensures
that we deliver optimised and cost-effective optical solutions
tailored to specialised medical needs. Our dedicated team of experts
oversees the entire application lifecycle, making G&H a one-stop
partner for assembly services while adhering strictly to the rigorous
standards required for medical devices. This collaboration facilitates
on-time market introductions while reducing the overall cost of
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across medical sectors, from disposable light retractors and surgical
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portable ultrasound systems, and point-of-care (POC) testing.
Additionally, G&H | ITL provides comprehensive design and
manufacturing services for medical devices and laboratory
instruments, partnering with clients to create cutting-edge
healthcare technologies. This segment of G&H is dedicated to
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timelines, ensuring regulatory compliance, and effectively
managing costs for our life sciences customers.
Life
Sciences
Our Products
and Capabilities
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
12
Leading Photonics Technology
Building on its long and proud history G&H
continues to lead the way in photonics innovation.
Our extensive expertise spans the full spectrum
of optical systems, subsystems, and components,
encompassing everything from cutting-edge
research and prototype development to high-volume
manufacturing. Working in close partnership with
our customers, we are dedicated to delivering the
highest quality photonic devices and optical systems
that meet the evolving needs of the market.
STRATEGIC REPORT OUR PRODUCTS AND CAPABILITIES
13
Acousto-Optics
G&H has been a leader in the design and manufacturing of
acousto-optic (AO) devices for over 35 years. Many of our
acousto-optic and electro-optic products are made using
materials grown in-house, such as Tellurium Dioxide.
Our range of AO devices features the highest quality crystals
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to ensure exceptional reliability and consistency. Using
advanced techniques in orienting, sawing, grinding, and
lapping, we build our products to the highest standards.
G&H components play a crucial role in today’s most advanced
semiconductor manufacturing equipment, maximising both
throughput and yield. Our Germanium and UV acousto-optic
modulators are essential for modern laser tools, facilitating
power stabilisation, precise beam positioning, and extremely
short pulse durations. This year, we have expanded our product
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machining, inspection systems, via drilling, and graphic imaging.
G&H employs proprietary techniques for crystal growth,
fabrication, and polishing to produce a diverse range of
electro-optic devices. Among these are our in-house grown
potassium di-deuterium phosphate (KD*P) Pockels cells,
which are widely used in medical lasers for skin treatments
and other applications. These Pockels cells facilitate effective
procedures that result in reduced patient discomfort and
quicker recovery times.
This year, we launched the Pegasus Pockels cell series,
designed with a Lithium Niobate (LiNbO3) crystal that is
grown, cut, polished, and coated by G&H. This launch
addresses a market need for a high-speed, cost-effective
alternative to Rubidium Titanyl Phosphate (RTP) for near- and
mid-infrared applications. These products are ideally suited for
high-power applications, including medical laser systems and
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France’s Centre Commissariat à Energie Atomique and the
National Ignition Facility in the United States. These laser
systems are some of the most powerful available and are
aimed at generating energy through nuclear fusion.
Advanced
Electro-Optics
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
14
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performance and reliability needed for some of the world’s most
demanding applications, including advanced semiconductor
manufacturing and harsh environments, such as space.
G&H supports customers throughout the entire system
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optic systems. Our products enable terabit data transmission
across continents via subsea cables, with more than 95% of today’s
telecommunications relying upon these extensive networks,
including the 2Africa subsea cable, which spans over 45,000 km.
As data providers seek to master the challenge of managing
increasing data transmission rates within limited space envelopes
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with two innovative solutions: the high reliability 4x4 coupler and
the CO-pack or co-packaged coupler. These new products achieve
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VL]H RI FRPSRQHQWV LQ WKH VDPH DPSOLƼHU FRQƼJXUDWLRQ
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operation of wind turbines and are central to satellite
communication systems which will increasingly replace traditional
radio frequency-based space communication systems.
Fibre Optics
Precision Optics
G&H manufactures precision optical components and assemblies
that are used in a number of different markets including
semiconductor laser manufacturing, A&D, medical systems, and
research applications. We combine our deep knowledge of the
optical and mechanical properties of materials with our ability to
manage all stages of component manufacturing to deliver
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Our custom lenses and housed subassemblies are used in both
transmission and imaging applications. Our ring laser gyro
products are employed by every commercial airline worldwide.
G&H provided precision optics for NASA’s Mars Curiosity mission.
From our facilities in the UK and the US, we offer a comprehensive
range of optical coating capabilities that can enhance our
precision optics offerings. We have expanded our capabilities
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researching the performance characteristics of new coating
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software to optimise designs for our customers’ applications.
15
STRATEGIC REPORT OUR PRODUCTS AND CAPABILITIES
Our optical systems product range includes cutting-edge lens
assemblies, integrated imaging systems, and advanced direct-
view and electro-optic periscopes. We serve a diverse customer
base, collaborating with system integrators to deliver high-
quality, high-performance products.
This year we launched the Apollo series lens system. This visible
through near-infrared (VNIR) solution is designed for harsh
conditions, providing high-resolution imaging and customisation
to meet the needs of various sectors, including satellite
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research.
Additionally, we are collaborating with our partners to develop
an integrated sighting system for reconnaissance, surveillance,
and target acquisition, in response to the British Army’s request
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this effort, we are upgrading the Embedded Image Periscope
(EIP) system for the Challenger 3 project. Dubbed “the eyes of
the British Challenger 3,” the new EIP combines classic glass
Imaging and
Sighting Systems
G&H is a leading manufacturer of advanced polymer
optics, specialising in custom injection moulding to
achieve high-volume optics production. Our product lines
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instrumentation, including sterilisation compatibility,
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We employ a “design to manufacture” approach, which
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We utilise software, including SolidWorks, Zemax, and
MasterCam, to model and optimise designs speeding
up the product development phase.
We work closely with our customers to deliver polymer
optics that enhance their products competitiveness. Our
capabilities encompass custom injection moulding for
aspheric lenses, freeform lenses, mirrors, Fresnel optics,
and diffractive optics. We also provide in-house design
services for diamond-turned and injection-moulded
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Our offerings serve a diverse range of markets, including
consumer products, medical applications, LED lighting,
and military and civilian night-vision systems. G&H’s
mature polymer capabilities enable us to leverage
economies of scale, resulting in reduced long-run
average costs (LRAC).
Polymer Optics
with digital display technology. Its modular design maximises
versatility, allowing it to adapt to the precise requirements of the
crew in the most demanding of environments.
We also design and manufacture unity vision periscopes, sights,
driver vision aids, and related vision systems for armoured
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vehicles, and armoured personnel carriers. Our Optical Systems
group is also engaged in the development of laser directed
energy weapons and has delivered prototype systems to major
UK programmes.
A&D CASE STUDY
Precision in Layers:
G&H | Artemis Pioneering
Optical Coating Excellence
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
16
17
STRATEGIC REPORT CASE STUDY
At the heart of G&H’s cutting-edge optical innovations is
our Global Centre of Excellence for Optical Coatings based
in Plymouth, UK. With a rich heritage in optics G&H | Artemis
plays a pivotal role in developing and manufacturing optical
thin film coatings, an often-underappreciated technology
that has a profound impact in many industries ranging from
aerospace to healthcare.
Optical Coatings: A Core Competency Driving Global Impact
Optical thin film coatings have grown in significance with the rise
of precision-driven industries. Far beyond the anti-reflective
coatings found on consumer optics, optical coatings are critical in
high-stakes environments, such as enabling life-saving surgeries
and enhancing military and aerospace technologies. By altering
how light interacts with optical components—either by controlling
transmission or enhancing reflection—these coatings become
integral to the success of advanced optical systems.
G&H | Artemis has built a globally recognised reputation for
delivering high-performance optical coatings that meet the
demands of some of the most stringent sectors. Our advanced
manufacturing capabilities, honed since the 1960s, have earned
the business prestigious accolades, including the Queen’s
Award for Enterprise in 2022. As we push the boundaries of
thin film technology, G&H | Artemis continually exceeds client
expectations, building robust commercial partnerships and
long-term growth opportunities.
A Strategic Edge in Aerospace: Thin Film Coatings
for HUD Systems
One of the standout innovations emerging from G&H | Artemis is
the application of thin film coatings to head-up display (HUD)
systems in aircraft. These systems, which project flight data
directly into a pilot’s line of sight, are critical to enhancing
operational safety and decision-making in modern aviation. The
expertise of our Plymouth team is evident in the precision and
reliability of the coatings they develop, particularly the green notch
filters used in HUD systems.
These filters are engineered to reflect green light—the most
perceptible wavelength to the human eye—while allowing other
wavelengths to pass through. The result is exceptional clarity and
contrast for pilots, even in rapidly changing lighting conditions. By
reducing glare and enhancing visibility, these coatings ensure that
flight data remains readable and distraction-free, playing a crucial
role in situational awareness and safety.
This capability underscores G&H’s role in the global aerospace
market. By delivering highly specialised optical solutions that meet
the needs of aircraft manufacturers and defence contractors,
G&H has positioned itself as a key supplier in an industry poised
for continued growth.
Positioned for Growth Across High-Tech Markets
G&H | Artemis is also advancing innovations in several other
high-tech sectors, including Light Fidelity (LiFi), gas detection, and
military sighting systems. These capabilities, combined with our
investment in advanced coating chamber technology, allow us to
continually push the limits of optical performance.
G&H | Artemis represents the fusion of heritage and innovation—
an industry leader with a proven track record and a forward-
looking approach to securing further growth. Our global leadership
in optical coatings is not only a cornerstone of our existing
business but also a key driver of future opportunities across
rapidly evolving sectors.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
18
LIFE SCIENCES CASE STUDY
Powering Innovation in
Point-of-Care Diagnostics
with G&H | ITL and Prolight
STRATEGIC REPORT CASE STUDY
19
G&H | ITL was selected as the development partner to bring Psyros
from the prototype stage to a commercial-ready product. This
selection underscored the strategic alignment between Prolight’s
ambitions and G&H | ITL’s deep expertise in optical and mechanical
engineering, as well as its manufacturing prowess in the medical
device sector.
Driving Healthcare Innovation
Psyros, developed by Prolight’s subsidiary, Psyros Diagnostics,
represents a significant leap forward in near-patient testing by
enabling single-molecule detection allowing healthcare providers
to perform highly accurate diagnostic tests with minimal sample
volumes. Initially targeting the detection of troponin for early
identification of myocardial infarction, this technology has the
potential to address a wide range of biomarker tests, previously
confined to laboratory settings.
By integrating G&H | ITL’s extensive experience in medical device
development with G&H’s global leadership in optics and photonics,
we have been able to ensure that the Psyros system will meet the
highest standards of performance and regulatory compliance. The
compact optical module at the heart of the system, designed by
G&H | ITL, is key to its ability to deliver high-precision results in a
portable format, a critical factor for point-of-care devices.
A Synergistic Partnership for Long-Term Growth
This partnership is a strategic move for both Prolight and G&H. For
Prolight, leveraging G&H | ITL’s track record in optical systems and
medical device manufacturing offers a clear path from concept to a
commercial product, complete with the scalability needed for global
deployment. For G&H, the collaboration reinforces its position as a
leader in developing optical systems for the healthcare sector, with
the potential for future manufacturing contracts as Psyros enters
volume production.
Charlie Peppiatt, CEO of G&H, highlighted the broader significance
of this collaboration: “Psyros is ushering in a new era of precision
medicine, and we take pride in helping Prolight bring this
diagnostic technology to market. This partnership exemplifies
our joint commitment to advancing healthcare through
cutting-edge innovation.”
Prolight Diagnostics’ Head of Engineering, Paul Monaghan,
echoed these sentiments, noting, “Partnering with G&H | ITL
gives us an outstanding combination of technical expertise,
track record, flexibility, longer-term manufacturing capability,
and regulatory compliance.”
Positioned for Commercial Success
With the project progressing steadily, the development timeline
remains on track. By the end of 2024, the team expects to deliver
fully functional prototypes that will undergo comprehensive
product verification. This milestone will pave the way for
performance validation studies in early 2025, ultimately setting
the stage for regulatory approval and commercial launch.
The collaboration between Prolight and G&H is not just about
technology development. It’s a partnership built on shared
expertise, aligned goals, and a clear roadmap for bringing a
ground-breaking product to market. As healthcare shifts towards
more patient-centric and rapid diagnostics, the Psyros system
stands poised to capture significant market opportunities, driving
growth for both Prolight Diagnostics and G&H.
G&H | ITL’s collaboration with Prolight Diagnostics marks a
pivotal moment in the development of next-generation
diagnostic solutions. This partnership, launched in early 2023,
is focused on advancing Prolight’s innovative point-of-care
system, Psyros, which promises to transform how biomarkers
are detected, particularly in critical applications like the early
detection of myocardial infarction.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
20
INDUSTRIAL CASE STUDY
G&H’s Crystal Technology
Powers Fusion
Energy Breakthrough
Image: NIF LLNL
21
STRATEGIC REPORT CASE STUDY
These crystals are integral components in the Plasma Electrode
Pockels Cell (PEPC) and the overall optics assembly of NIF’s laser
systems, ensuring the consistent delivery of laser energy needed
for the fusion process. G&H’s strategic partnership with LLNL has
been crucial in advancing this groundbreaking fusion research.
Enabling a New Energy Future with Crystal Growth Expertise
G&H’s KD*P crystals are produced at the Company’s facility in
Cleveland, Ohio. These crystals take up to two years to grow, with
some weighing as much as 400 kg. Once grown, they are expertly
polished into large, precision optics, demonstrating G&H’s
unmatched expertise in crystal growth and crystal processing.
The role of these crystals in the fusion process is pivotal. G&H’s
KD*P crystals are responsible for converting infrared laser energy
into ultraviolet light, which is then focused on to a target to create
the necessary X-rays for starting the fusion reaction. This allows
NIF to pursue fusion energy, a scientific grand challenge that has
captivated global attention for decades.
A Decades-Long Collaboration
G&H’s collaboration with LLNL spans several decades, anchored
in the development of large-aperture crystalline optics. The
Company’s consistency in delivering reliable, high-quality crystals
has enabled NIF to push the boundaries of laser fluence, achieving
critical milestones in fusion research.
“Our crystals play an essential role in advancing fusion energy
research,” says Dr. Matthew Whittaker, G&H’s Crystal Growth and
ICF Manager. “As the world moves closer to realising a clean energy
future, we are proud to support NIF’s mission with the next
generation of crystal optics.”
The Strategic Importance of Vertical Integration
G&H’s vertically integrated crystal growth process is a key
competitive advantage. Every stage, from growing crystals at our
Cleveland facility to cutting, polishing, and inspecting the final
optics, is managed within the Company. This total quality control
ensures that G&H crystals meet the highest standards of
performance and reliability, making them indispensable to laser
manufacturers worldwide.
On December 5th, 2022, the Lawrence Livermore National
Laboratory (LLNL), through its National Ignition Facility (NIF),
made history by achieving fusion ignition using inertial
confinement fusion (ICF) for the first time. This monumental
achievement in clean energy was made possible by the cutting-
edge photonics technology at the core of NIF’s high-energy laser
systems, and specifically, G&H’s KDP and KD*P crystals.
The KDP and KD*P crystals produced by G&H are not only used in
fusion research but also in a range of other applications, including
aerospace, defence, and telecommunications. This diverse
portfolio underscores G&H’s leadership in the photonics sector
and its ability to address the needs of high-growth industries.
Supporting Future Growth and Innovation
As fusion energy continues to gain momentum, G&H is well-
positioned to capitalise on this breakthrough. “Pushing the
performance envelope in optics and photonics has always been a
driving force behind our R&D efforts,” says Stratos Kehayas,
President of G&H’s Photonics Division. “As NIF and LLNL scientists
strive to enhance their results, we will continue to provide them
with innovative crystal solutions that drive their success.”
With crystal growth technology honed over decades, G&H is at the
forefront of delivering the components necessary for realising
fusion’s potential as a sustainable energy source. Our role in
enabling this scientific milestone highlights its strategic importance
in the global photonics market and reaffirms G&H’s commitment to
pioneering advancements in clean energy technologies.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
22
Group overview
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to deliver our strategy. Last year we acquired and successfully
integrated the GS Optics and Artemis businesses, and in FY2024
we completed the sale of our EM4 business in Boston to Luminar
Technologies. These actions help ensure that the Group can offer
our customers differentiated products and technologies, generate
synergies with other parts of the G&H Group and support the
Group’s journey to mid-teens returns.
The year brought challenges of lower levels of activity and
uncertainty in some of the markets which we supply. Despite this
there has been encouraging take up of newly developed products
generated from a more focused portfolio, which continue to be
recognised for their superior performance and reliability. I was
particularly pleased by the results of our FY2024 customer survey
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We have accelerated the transfer of our product lines to selected
manufacturing partners. I was particularly impressed by the
transformation during the year at our Torquay facility. The site has
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supply partners and repurposed production for the manufacture
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This is an excellent example of the margin accretive changes that
we are implementing across the Group and which will position G&H
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Continued investment
We have been disciplined in supporting the business with the
focused investments it needs to grow. We have added very
capable new team members, especially in our engineering,
sales and business development teams. We have implemented a
new fully integrated HR information system across the Group to
allow managers to better support the learning and development
of their team members.
Shortly after the end of the year we acquired Phoenix Optical,
the culmination of several months of hard work by the Phoenix
and G&H teams. The business, which is a very well-regarded
supplier of precision optics, is highly complementary to the
Group, and I look forward to seeing it prosper under G&H ownership.
We welcome the Phoenix employees to the G&H Group.
A sustainable business
At G&H we are focused on making our business sustainable
and supporting the transition to a net zero carbon economy.
In FY2024 we established a separate Committee of the Board,
the G&H Sustainability Committee, to focus better the Group’s
activities in these areas. Our employees are pleased to be playing
their part in moving to a more sustainable and healthier world.
Our medical diagnostic products support the earlier diagnosis of
disease and illness and our sensing products are integral to the
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business we are committed to achieving net zero for our Scope 1
and 2 emissions by 2035, and I am pleased to report that we
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Chairman’s
Statement
GARY BULLARD
23
STRATEGIC REPORT CHAIRMAN’S STATEMENT
Delivery of our strategy
is positioning the
Company for success.”
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
24
It is important for us to support the communities in which
we operate. Our facilities provide high quality employment
opportunities in the towns and cities where we are located, and our
teams often host visits from local schools and colleges to foster
excitement amongst their students to pursue careers in photonic
technologies and advanced engineering. G&H employees are also
active in supporting charities local to the sites in which they work.
Our People
The Board is committed to supporting inclusive, collaborative
ways of working at G&H. I am very pleased to see the progress that
is being made to foster a “one team” culture through regular all
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materials that share information with our people about activities in
other parts of the Group.
In meeting with our employees throughout the year, I am always
impressed by their commitment to the business and the skill with
which they conduct their day-to-day operations. I would like to
thank them all for their contribution. The progress that we have
made in the year would not have been possible without their
continued hard work and support.
The Board
Having served on the Board since 2015, and consistent with the
succession plan previously announced, Brian Phillipson stepped
down as the Senior Independent Director and Chair of the
Remuneration Committee on 30 September 2024. On behalf of
the Board, I would like to express our thanks for his considerable
contribution to G&H. Louise Evans succeeds Brian as Senior
Independent Director and Susan Searle takes on the position
of Chair of the Remuneration Committee.
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effective manner. To that end it has commissioned an independent
consultant to conduct a Board review and we look forward to
implementing any recommendations that result from the review.
We take our governance responsibilities very seriously and I am
pleased to see us engaging with several new agencies such as CDP
and EcoVadis, in addition to MSCI, to provide our stakeholders with
independent validation of the processes and controls that we have
put in place.
Dividend
Given the Group’s progress on delivering its strategy and the
long-term positive outlook for the business, the Board is
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the Company’s Annual General Meeting on 24 February 2025,
representing a total dividend for the year of 13.2 pence. Payment
of the dividend will be made on 28 February 2025, to shareholders
on the register as at 24 January 2025.
Outlook
The strategy that was put in place in FY2023 is working and
supports the path to mid-teens returns over the medium-term
as customer ordering patterns start to recover. We are positioned
in attractive markets and aligned to long-term growth trends.
We are seeing strong demand from our A&D market and whilst
the recovery in some of our Industrial and Life Sciences markets
is taking longer than we had originally anticipated, we expect to
see sustained recovery in demand in the second half of FY2025.
Underpinned by our strategy which is making G&H a better, more
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SURƼW JURZWK LQ WKH FXUUHQW ƼQDQFLDO \HDU
Gary Bullard
Chairman
3 December 2024
In meeting with our employees throughout the year, I am
always impressed by their commitment to the business and
the skill with which they conduct their day-to-day operations.”
G&H Board of Directors
25
STRATEGIC REPORT CHAIRMAN’S STATEMENT
Attractive Growth Markets
We supply attractive growing end markets.
Geopolitical tensions are adding momentum to re-shore critical
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made in new on shore semiconductor and other laser-based
manufacturing facilities.
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machine monitoring all drive increasing needs to share data
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telecoms products used to transmit data between continents.
The need to transmit more and more data around the world is also
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Growing demand for improved healthcare, especially for early-
stage diagnostics and for laser enabled cosmetic procedures.
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enable precise targeting including in the defence against
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as the next precise, low-cost defence systems.
Increasing global demand for clean, wind generated energy drives
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OUR BUSINESS
WE’RE DIFFERENT
Making a better
world with photonics
G&H is a market-leading
global provider of advanced
photonic solutions.
We create sustainable value
by bringing our expertise to
bear to supply our world leading
products and services into
attractive growth markets.
The quality and performance
of our components and systems
differentiates us. We work closely
with our customers to provide
them with precise, reliable and
cost-effective solutions that meet
their most demanding needs.
Unique Range of Skills
and Resources
Our talented engineering teams work in partnership with our
customers to design and produce some of the most complex
photonic subassemblies and systems in the world. Our engineers
are embedded with research organisations to help push forward
the boundaries of photonics.
We offer a complete design, engineering and manufacturing
service for our customers. We are experienced in supporting our
customers to have their end systems achieve their necessary
FHUWLƼFDWLRQV
We have invested to create state-of-the-art manufacturing
facilities allowing us to offer a range of capabilities that few
of our competitors can match.
We have developed a strong partnership with a contract
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additional capacity. We intend to build upon this partnership,
outsourcing more of the Group’s products at an earlier stage in
their product life cycle.
We are pioneers in crystal growth techniques and the supply of
specialist crystalline materials.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
26
Our Business Model
UNDERPINNED BY
Allows us to Create Value
for our Stakeholders
Our customers – using our expertise we work closely with our
customers to solve their mostly technically challenging system
requirements. We invested £7.8m in R&D and brought 48 new
products to the market in FY2024.
Our suppliers – we deploy our own resources and expertise to
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as possible with consistent and repeatable product quality. We
spent £47.5m with our suppliers in FY2024.
Our employees – we invest in our employees from apprentice
level through to our most experienced engineers to ensure they
have the skills and capabilities needed to operate in our industry
leading operations.
Our communities – we bring high quality employment to the
communities in which we operate. We are targeting net zero
Scope 1 & 2 emissions by 2035. We achieved a 14.3% reduction in
our GHG intensity measure in the year. We support local charities
close to our facilities.
Our shareholders – medium term target of mid-teen operating
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Competitive Advantage
We differentiate ourselves from our competitors thanks to our
industry wide reputation for innovation and continuous
improvement.
We have an established capability to work in high product quality
and compliance markets such as A&D and Life Sciences as well
as on programmes requiring high level security accreditations.
We have talented engineers, continually developing new IP.
Our manufacturing facilities are well invested and staffed with
skilled manufacturing engineering and production staff
operating to a consistent set of operating processes.
Our manufacturing know-how has been developed over
many years.
We have a clear set of corporate values supported by a set of
behaviours that we have communicated to our people that
ensure they operate as effectively as possible.
We operate an effective and prioritised deployment of our capital.
STRATEGIC REPORT OUR BUSINESS MODEL
27
Governance
The Board is committed to the highest standards of corporate
governance. The Group has adopted the UK Corporate
Governance Code (2018). We have received recognition of our
efforts in this area in the scoring of our governance by external
ratings agencies.
See our Corporate Governance Report on page 108.
Financial Position
Our revenues are generated from markets with different growth
dynamics meaning that the Group is naturally protected against
individual market cyclicality. We are cash generative and at 30
September 2024 we had $19.6m of undrawn committed facilities
and $20m of undrawn uncommitted funding facilities to support
the further growth of the Group.
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Sustainability
We work to create a long-term sustainable business for the
EHQHƼW RI DOO RI RXU VWDNHKROGHUV VXSSRUW WKH FRPPXQLWLHV LQ
which we operate, and minimise the Group’s impact on the
environment. We are working hard to achieve our target of being
net neutral on scope 1 and 2 emissions by 2035. We have
processes in place to ensure we maintain our high standards of
business conduct. Our newly formed Board Sustainability
Committee is responsible for focusing our work in this area.
See our ESG report on page 70.
Risk Management
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prioritised, evaluated and mitigated to the extent possible. A
formal group wide risk register is maintained and approved by
the Board on an annual basis. This includes risks associated with
climate change.
See our Principal Risks and Uncertainties on page 98.
Image: Alan Labisch/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
28
PERFORMANCE
2024: (3.0%)
2023: 13.6%
2022: (3.7%)
2021: 6.4%
2020: (5.4%)
PERFORMANCE
2024: 7.7%
2023: 9.0%
2022: 7.1%
2021: 10.8%
2020: 9.2%
PERFORMANCE
2024: £10.5m
2023: £12.1m
2022: £8.9m
2021: £13.3m
2020: £11.2m
2024 PERFORMANCE
Organic revenue was 3.0% lower, excluding foreign
exchange and the effect of the Group portfolio
changes. We achieved growth in our A&D and Life
Sciences market but this was offset by a decline in our
Industrial market as a result of many of our customers
in that market adjusting their inventory holdings.
2024 PERFORMANCE
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the lower revenue but also our continued investment
in the business to support future growth.
2024 PERFORMANCE
The organic revenue decline reduced the Group’s
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WHY THIS IS IMPORTANT
We are focused on long-term organic revenue
growth as a means to create value. This metric
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and our success in gaining an increasing market
share with our customers.
WHY THIS IS IMPORTANT
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ability over time to generate value from our
products and capabilities. It is impacted by our
actions to both increase revenue and optimise
our cost base.
WHY THIS IS IMPORTANT
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of the value generated from our activities.
KPI AND DESCRIPTION
Organic revenue growth (%)
The percentage change in revenue in the current year compared
with the prior year, excluding the effects of foreign exchange.
KPI AND DESCRIPTION
Adjusted operating margin (%)
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as a percentage of revenue from continuing operations.
KPI AND DESCRIPTION
Adjusted operating profit (£’m)
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to remove non-underlying items.
Our Key
Performance
Indicators
29
STRATEGIC REPORT OUR KEY PERFORMANCE INDICATORS
PERFORMANCE
2024: £7.8m*
2023: £7.4m*
2022: £9.2m
2021: £8.1m
2020: £7.9m
PERFORMANCE
2024: £16.7m
2023: £18.2m
2022: £6.6m
2021: £21.9m
2020: £22.5m
PERFORMANCE
2024: 2,532
2023: 3,135
2022: 3,941
2021: 5,414
2020: 5,852
PERFORMANCE
2024: 10
2023: 7
2022: 8
2021: 8
2020: 11
2024 PERFORMANCE
We invested £7.8m in R&D activities in FY2024.
Excluding the effect of portfolio changes this was
£0.2m higher than FY23. In the year we released
another 48 products to the market and revenues from
products contributed £25.3m of revenue in the year.
2024 PERFORMANCE
We invested £5.7m in new capital for the Group.
We achieved an improvement in our inventory
turns during the course of FY24.
2024 PERFORMANCE
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will reduce their energy consumption. We made good
progress in sourcing more of our purchased electricity
for our US sites from renewable sources.
2024 PERFORMANCE
Despite an increase in the number of incidents,
days lost have a result reduced by 56%. Our safety
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industry average. Our employees increased “Spot It,
Stop It” reports by 155% helping to achieve a safer
working environment.
WHY THIS IS IMPORTANT
Our R&D investment enables us to introduce
new products to the market supporting our
objective of increasing revenue and keeping
us ahead of our competitors. This measure
is directly related to our strategic priority of
focused R&D investment.
WHY THIS IS IMPORTANT
The KPI measures the cash generated by
the Group’s trading activities. It measures
the cash generated to fund investment in
the business either through new assets or
to acquire other businesses.
WHY THIS IS IMPORTANT
This metric measures our achievement against
our objective to reduce our carbon emission
over time and reduce the impact we have on the
environment. We are focused on making G&H
a sustainable business and have a target to be
net zero on Scope 1 & 2 emissions by 2035.
WHY THIS IS IMPORTANT
We are committed to the wellbeing of our
employees. This KPI measures our performance
in raising the safety standards in our facilities
and also underpins our operational performance.
None of the accidents in FY2024 were reportable.
KPI AND DESCRIPTION
R&D investment
R&D expenditure as disclosed on the income statement.
KPI AND DESCRIPTION
Adjusted operating cash flow
&DVK ƽRZ IURP RSHUDWLQJ DFWLYLWLHV DGMXVWHG IRU QRQXQGHUO\LQJ FDVK ƽRZV
KPI AND DESCRIPTION
Carbon dioxide equivalent (tonnes)
The total amount emitted in tonnes for Scope 1 & Scope 2 (carbon dioxide equivalent),
with further details on the calculation method set out in the ESG Report.
KPI AND DESCRIPTION
Safety performance
Any accident resulting in time off work.
* From continuing operations
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
30
While remaining mindful of the
continuing uncertain macroeconomic
and geopolitical landscape, G&H is
well positioned with a robust pipeline
and positive progress with the
implementation of our strategy to
deliver sustainable margin growth.”
31
STRATEGIC REPORT CHIEF EXECUTIVE OFFICER’S STATEMENT
The growth in revenue in the second half and the
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programme wins and the positive structural trends
evident in many of our end markets, albeit with
the recovery of the semiconductor market still not
evident and now expected in the second half of
FY2025. This has been complemented by a number
of new customer wins and incremental business
opportunities with existing customers. Our teams
across the Group have executed exceptionally well
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supply chain and cost headwinds, to deliver a robust
trading performance in the second half of the year
in line with expectations that supports improved
SURƼW JURZWK LQ )< +DYLQJ QRZ FRPSOHWHG
my second full year with G&H, I am pleased with
the continued foundational progress that has been
made across the business through the collective
hard work of the workforce which is now being
harnessed more effectively through a more focused
and fully deployed strategy to deliver sustainable
margin growth for the Group.
$ VLJQLƼFDQW FRUQHUVWRQH RI RXU VWUDWHJ\ LV IRU WKH
Group to become a more customer focused
business and to deliver an exceptional customer
experience when doing business with G&H. I am
pleased to see how this is being embraced across
the whole Company and the progress that is being
made through disciplined focus on internal and
external customer delight. Following our 2024
Customer Satisfaction Survey, it was encouraging
to see the improvements in all the key metrics that
resulted in an increased Net Promoter Score for
G&H up to 42 from the previous score of 10 in
2023, demonstrating that our customers are
already starting to recognise the changes we have
made and continue to make with this key strategic
priority for the Company.
I am proud that G&H’s products and technology are
playing a part in building a better more sustainable
world. Many of our products contribute directly to
the reduction of energy consumption and the more
HIƼFLHQW XVH RI PDWHULDOV ,Q RXU RZQ IDFLOLWLHV ZH DUH
also making great strides in reducing our impact on
the environment. In FY2024 we achieved a 14.3%
reduction in our emissions intensity measure as we
work towards our goal of being net neutral on our
Scope 1 and 2 emissions by 2035.
Business Performance
After the disappointing performance reported in
WKH ƼUVW KDOI WKH *URXS GHOLYHUHG VWURQJ WUDGLQJ
momentum during the second half of the year with
revenue up 15% enabled by the focused operational
improvements and capability investment made over
the last year (FY2023: 5% increase). For the full
ƼQDQFLDO \HDU * + DFKLHYHG UHYHQXH IURP
continuing operations of £136.0m which was broadly
ƽDW RQ WKH SUHYLRXV \HDU )< eP RU
on an organic, constant currency basis with the full
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UHYHQXHV ZHUH GRZQ $GMXVWHG SURƼW EHIRUH
tax from continuing operations was £8.1m, a
reduction of 21.6% over last year (FY2023: £10.3m).
During FY2024 we saw continued solid levels of
customer demand albeit at more normalised levels
resulting in the order book stabilising at £104.5m at
year end (FY2023: £115.3m after adjusting for the
divestment of the EM4 business). On an organic
constant currency basis, the order book declined by
5% during FY2024, partially due to a further £1.4m
reduction in the Group’s past due backlog and from
the timing of orders for our medical diagnostic
instruments. Our order book for medical laser
devices has also declined but we are now starting
to see evidence of some recovery from this market.
Introduction
G&H delivered a strong performance in the second half of the
year underpinned by solid demand for our Life Sciences and
A&D products and also reflecting the significant operational
improvements that were made across the Group following a
challenging first half due to reduced demand in our industrial
and medical laser markets.
Chief Executive
Officer’s Statement
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
32
In our industrial markets, whilst the destocking patterns we saw in
WKH ƼUVW KDOI RI WKH \HDU QRZ DSSHDU WR EH EHKLQG XV ZH KDYH QRW
yet seen sustained recovery in the industrial laser market.
Offsetting these declines our A&D order book has grown strongly
LQ WKH ƼQDQFLDO \HDU WKDQNV WR LQFUHDVHG GHPDQG IURP ERWK RXU
commercial and defence customers assisted by the enhanced
value proposition we are able to offer. Our teams in the UK and US
are focused on converting a healthy pipeline of new A&D prospects
and there has been further extension of the order book following
the year end.
Strategy
G&H is a business with outstanding products, enormous technical
capability and highly talented people and following the launch of
our new strategy in the summer of 2023, we are now starting to
VHH WKH IRXQGDWLRQDO EHQHƼWV IURP JUHDWHU IRFXV RQ RSHUDWLRQDO
execution, customer experience, employee engagement and
better prioritisation of our R&D technology and investment.
Our new strategy continues to refocus the whole business on
delivering sustainable margin growth and transforming G&H to
become an ‘innovative customer focused technology company’
delivered responsibly by making a ‘better world with photonics’. We
are making good progress to ensure that G&H becomes and remains
WKH ŮƼUVW FKRLFHŮ IRU DOO RXU VWDNHKROGHUV LQFOXGLQJ RXU HPSOR\HHV
our customers, our shareholders, our eco-system partners or the
communities where we operate. We are offering a more differentiated
performance through the four pillars of our strategy centred around,
ƼUVWO\ RXU SHRSOH E\ HVWDEOLVKLQJ G\QDPLF KLJKSHUIRUPDQFH WHDPV
and a purpose-led culture; secondly, through self-help activities
to deliver exceptional customer service and superior operational
execution; thirdly, through value creation from our technology
DQG SKRWRQLFV H[SHUWLVH DQG ƼQDOO\ E\ IRFXVHG LQYHVWPHQW ERWK
organic and inorganic, to accelerate accretive growth.
Acquisitions and Portfolio
7KH *URXSŮV QHZ VWUDWHJ\ KDV LGHQWLƼHG D SDWK WR PLGWHHQ UHWXUQV
RYHU WKH PHGLXP WHUP WKDW LQFOXGHV EHQHƼWV IURP RXU ŭSRUWIROLRŮ
activities achieved through addressing non-performers in
combination with pursuing ‘speed to value’ acquisitions. Following
the two strategic acquisitions of GS Optics and Artemis Optical in the
summer of 2023, we have made good progress with the integration
of both of these businesses into the Group. These two acquisitions
PDUNHG D VLJQLƼFDQW PLOHVWRQH DQG DOLJQPHQW ZLWK * +ŮV VWUDWHJLF
vision for growth through a greater focus on adding value through
the transition from complex photonics components to a sub-system
or full system solution by targeting two businesses that enhance our
fuller photonics systems offering into A&D markets with Artemis in
Plymouth, UK and into the North American Life Sciences market
through GS Optics in Rochester, NY. We invested in both businesses
during the year to establish enhanced capabilities at both facilities,
most notably with the addition of a further coating chamber in
Plymouth and the establishment of a new Life Sciences R&D hub
DQG PHGLFDO ,9' GHYLFH ,62 FHUWLƼHG PDQXIDFWXULQJ FHQWUH LQ
5RFKHVWHU %RWK DFTXLVLWLRQV DUH SURYLQJ WR EH DQ H[FHOOHQW ƼW LQ
terms of our commitment to precision, innovation and customer
focus, supporting the delivery of the Group’s strategy.
Aligned to our strategy to review our portfolio to address
non-performing or non-core parts of the Group, we concluded that
the majority of products supplied by our EM4 facility in Boston
ZHUH QRW VXIƼFLHQWO\ GLIIHUHQWLDWHG WR JHQHUDWH WKH OHYHO RI UHWXUQV
needed to support the Group’s journey to mid-teens returns. In
March 2024 G&H announced the divestment of EM4 to Luminar
Technologies as the result of the carefully considered and ongoing
review of our A&D product portfolio. This disposal supported the
Group’s consolidation of our A&D activities into areas where we can
offer differentiated products to our customers and enable the Group
to grow our optical systems business and maximise value creation
from accretive optical systems solutions. At the same time prior to
the sale, G&H successfully transferred out of EM4 to other G&H
IDFLOLWLHV WHFKQRORJ\ IRU ƼEUH IXVLQJ ZKLFK LV GLIIHUHQWLDWHG DQG LV
employed in the modules we supply into advanced photolithography
equipment and some medical device applications.
Our Markets
Industrial revenues in FY2024 at £67.9m declined by 9.1% from the
prior year due to the continued slowdown of the semiconductor
market and protracted destocking in our Industrial markets. Despite
WKHVH FKDOOHQJHV LQ WKH \HDU YROXPHV RI RXU ƼEUH RSWLF PRGXOHV
and assemblies used in both next generation advanced lithography
systems and subsea data networks remained robust with growth in
the second half as new programmes started to migrate to volume
production and demand picked up our long-standing high-reliability
ƼEUH FRXSOHUV 5HYHQXH IURP RXU LQGXVWULDO ODVHU FXVWRPHUV ZHUH
ZHDNHU WKDQ WKH SULRU \HDU UHPDLQLQJ EURDGO\ ƽDW WKURXJK )<
and whilst some early signs of a pick-up in demand were evident
towards the end of the year, we continue to watch developments
closely and work with our key partners in this space to assess
changes to demand visibility. Any sustained recovery from our
broader industrial laser and semiconductor markets is now not
expected until the second half of the coming calendar year.
A&D revenue growth in the year was 26.0% and on an organic
constant currency basis, grew by 10.3% compared with the prior
\HDU 9ROXPHV LQ RXU $ ' PDUNHWV JUHZ VLJQLƼFDQWO\ DV D UHVXOW RI
improved productive capacity at several of our sites and as a
number of new projects move into production phase, along with
WKH HDUO\ FRPPHUFLDO V\QHUJ\ EHQHƼWV RI WKH $UWHPLV 2SWLFDO
acquisition starting to be realised especially around advance laser
protection capabilities, that we can now offer alongside our superior
optical systems products. Our imaging and sighting systems
business for armoured vehicles and UAVs continues to progress
well with a number of multi-year new programme wins during
)< ZKHUH WKH FRQƽLFW LQ 8NUDLQH LV IXHOOLQJ LQFUHDVHG GHPDQG
and greater urgency of supply. This was particularly evident from
the second half revenue growth from deliveries of precision optics
and advanced sighting systems into both air and land military
platform programmes. In the commercial aerospace market,
demand for our ring laser gyro components was strong and the
*URXS LV QRZ EHQHƼWLQJ IURP WKH DGGLWLRQDO FDSDFLW\ ZH KDYH
added to meet this increased demand.
Both acquisitions are proving to be an
excellent fit in terms of our commitment
to precision, innovation and customer
focus, supporting the delivery of the
Group’s strategy.”
33
STRATEGIC REPORT CHIEF EXECUTIVE OFFICER’S STATEMENT
The Life Sciences business performed well overall with revenues
up 1.3% on a constant currency basis and we saw continued growth
in demand for our medical diagnostic products. For example, a
cancer care product initially designed by our customer and then
productionised by our engineering team migrated through
regulatory approvals and into production during the year, and we
expect to see further growth from this product platform in FY2025
and beyond. Our Life Sciences R&D team remained fully engaged in
supporting customers with the design and regulatory accreditations
of their next generation instruments which are expected to convert
to production revenue for the Group in the coming years. We have
also received positive and encouraging levels of customer interest
and initial orders for our new North American Life Sciences Centre
of Excellence in Rochester, NY which was established during the
year DQGKDVDOUHDG\UHFHLYHG,62΄FHUWLILFDWLRQIRUWKH
PDQXIDFWXUHof medical devices. We expect this facility to be a key
part of our growth strategy for our Life Sciences business in the
future. However, the other part of our Life Sciences business
focused on the design and manufacture of products into the
medical laser market had a challenging year. Despite some
recovery in demand in the second KDOIZHFRQWLQXHGWRVHHD
VLJQLILFDQWVORZGRZQLQWKHGHPDQGIRUour medical lasers mainly
due to extended destocking from some of our customers as well
as the impact of competition in certain product segments from
lower cost Chinese products.
Following the transfer of our acousto-optic products from our
Ilminster facility to our Asian contract manufacturing partner, we
KDYHQRZTXDOLILHGDQGVXFFHVVIXOO\WUDQVIHUUHGWKHPDQXIDFWXUH
RIDVLJQLILFDQWSRUWLRQRIRXUKLJKUHOLDELOLW\ILEUHFRXSOHUEXVLQHVV
to that same partner. During FY2024 we were able to accelerate
WKHSUHSDUDWLRQVIRUWKHWUDQVIHURIIXUWKHUILEUHRSWLFVDQGRWKHU
products, where technological sovereignty is not a differentiator,
building upon a proven model that has now been established with
our selected contract manufacturing partners.
We have continued to invest in our technology roadmaps albeit
with a greater focus following the recent strategic review and our
R&D teams are working closely with many of our customers on the
accelerated development of their next generation products. Total
investment on product development activities increased to £7.8
million in FY2024 (FY2023: £7.4m). During the year, the Group
reduced net capital expenditure to £5.2 million compared with £7.3
million in the previous year aligned to our strategic objectives.
Notable spend in the period was focused on the integration of the
new acquisitions, Artemis and GS Optics, and establishing our Life
Sciences innovation hub and Centre of Excellence in Rochester, NY.
Carefully selected capital investment was also made in our optical
systems and precision optics business to address bottlenecks and
meet increased customer demand alongside the operational
HIƼFLHQF\ DFWLYLWLHV XQGHUZD\ DW WKHVH VLWHV
The Group retained high levels of inventory during FY2024 that
are still above pre-pandemic levels, however through greater
focus and improved supply chain and inventory management
disciplines being implemented across the Company, there was a
pleasing reduction during the period and this trend is expected to
continue into FY2025.
This combined with strong collections of receivables and the funds
from the sale of the EM4 business resulted in net debt excluding
lease liabilities reducing to £16.0m from £20.9m. Our leverage as
measured for our banking covenant stands at 0.9x (2023 1.1x),
which along with available committed and uncommitted bank
facilities of $39.6 million, places G&H in a strong position to pursue
our strategic goals.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
34
35
STRATEGIC REPORT CHIEF EXECUTIVE OFFICER’S STATEMENT
Research and Development (R&D)
G&H continues to work closely within the global photonics
ecosystem and with a number of key partners to develop their
next generation products. During FY2024 we introduced 48 new
products (FY2023: 57) and delivered £25.3 million of revenue
(FY2023: £26.1 million) from new products. Following our strategic
review, we continue to refocus and prioritise our global R&D efforts
and investment behind the following seven vital few areas:
1. Expansion of AO technologies into Semiconductor market and
EUV eco-system.
2. New medical laser technologies and applications focused on
moving up value chain from component to sub assembly and
full systems.
$GYDQFHG ƼEUH RSWLFV WHFKQRORJ\ DQG V\VWHPV VXSSRUWLQJ
submarine networks.
4. Imaging and sighting systems, especially focused on the A&D
market, for periscopes, sights and other optical sub-systems.
5. Precision optics added value and advanced coatings and laser
SURWHFWLRQ ƼOWHULQJ FDSDELOLWLHV
0RYLQJ XS WKH YDOXH FKDLQ LQ ƼEUHRSWLFV ZLWK D IRFXV RQ
sensing, modules, LiDAR.
7. Medical diagnostics and bio-photonics IVD solutions with
strategic focus on expanding our offering into the US Life
Sciences market.
During FY2024 technology roadmaps have been developed to
refocus R&D activities around these seven ‘vital few’ areas for the
Group to drive ‘value creation’. There has been investment to
strengthen acoustic-optic engineering and product line teams with
the appointment of additional technical and product development
FDSDELOLW\ ,Q WKH ƼEUH RSWLFV EXVLQHVV XQLW ZH VDZ VWURQJ SURJUHVV
with the customer-led development of next generation systems for
semi fab, submarine network, and medical diagnostics. The precision
optics and optical systems technology teams have been enhanced
by the advanced coatings engineering team that joined with the
acquisition of Artemis, and disciplined refocus of our highly talented
engineering team in St Asaph is already delivering better outcomes.
The successful launch of our new US Centre of Excellence in
Rochester, NY long with the new engineering talent that has joined
the Group in this team during FY2024 is promising for the future.
These R&D projects are expected to contribute more than £50m
of incremental margin accretive revenue over the plan period.
Corporate Responsibility and Sustainability
The Board is accountable to its shareholders and is committed
to the highest standards of corporate governance. To this end the
Group has adopted the UK Corporate Governance Code (2018). In
order to ensure the Group is meeting the most up to date standards,
regular reviews of policy are held by the relevant committees of
the Board of Directors. During the year the Board undertook a
self-assessment to identify opportunities for improvement and
incorporate a greater focus on ESG. Susan Searle, who joined the
Board in FY2023 with a wealth of experience in many of the markets
in which we operate and particularly sustainability matters, has
chaired the newly introduced Sustainability Committee, which is
already providing greater clarity and alignment to our activities in
this area.
G&H is committed to creating a safe, engaging, diverse, and inclusive
place to work for the Group’s employees and all stakeholders.
We continue to establish a culture that proactively works towards
reducing harm and promotes equality, diversity, and inclusion
across the company. The Group remains focused on providing
equal employment opportunities for all and aims to improve
diversity at all levels of the organisation. Our recruitment partners
have been instructed to ensure that they include a diverse range
of candidates in all shortlist applications, and we are actively
engaged with encouraging International Women in Engineering.
G&H is committed to conducting our business in an environmentally
responsible and sustainable manner. We are investing in order to
generate our electricity in a sustainable manner and to reduce our
overall energy usage. Each of our sites has an energy reduction
plan that it is working to. In the year we reduced our Scope 1 and 2
carbon emissions by 19.2%, another major step forward in achieving
our target of being net neutral on this measure by 2035. It was
particularly encouraging to see our facility in Torquay become the
ƼUVW 6FRSH DQG QHW QHXWUDO ]HUR VLWH DFURVV WKH *URXS OHDGLQJ
the way for other to follow in the future. We were also pleased to
see a further two sites, Ashford and Keene (FY2024), join Ilminster,
7RUTXD\ )< DQG )UHPRQW VLWHV ZLWK FHUWLƼFDWLRQ WR WKH
environmental ISO14001 standard. This now means that 50% of
the Group’s global footprint is covered by this environmental
accreditation and 70% of our employees. This was a core
commitment when we launched our new strategy in FY2023, and
we are making good progress to achieve the deployed road map to
roll this same initiative out across all our manufacturing sites by
2027. The Executive Directors and senior leadership team all have
VSHFLƼF HQYLURQPHQWDO PDQDJHPHQW DQG FDUERQ UHGXFWLRQ JRDOV LQ
their remuneration schemes.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
36
Outlook
During FY2024 the Group has made further positive
progress in establishing strong foundations to
deliver our strategic priorities and enhance
mindshare with our customers, many of whom are
GHPRQVWUDWLQJ D JURZLQJ FRQƼGHQFH LQ * +
Despite the challenges the Group faced during the
year through the reduced demand in our industrial
and medical laser markets persisting longer than
expected (which resulted in a material impact to
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EHQHƼW IURP UHFRYHULQJ GHPDQG OHYHOV LQ WKHVH
markets (now expected in the second half of 2025).
In the second half, we delivered the expected top
line growth for the Group through the improvements
in operational execution and a solid order book,
ZKLFK UHƽHFWHG D VLJQLƼFDQW QXPEHU RI QHZ
customer wins, incremental business opportunities
with existing customers, and continuing market
share gains. Our teams across the Group have
performed exceptionally well in a year characterised
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chain issues, destocking and continued cost
LQƽDWLRQ , ZRXOG OLNH WR H[WHQG P\ WKDQNV WR DOO
our employees for their hard work and highlight
the positive way the whole organisation has
embraced the transformational changes underway
across the Company.
G&H is well-aligned with the prevailing global
mega-trends, many underpinned by the next
frontier of photonics, which is driving demand
from high-growth markets. The current surge in
demand in the A&D markets is expected to last
for a number of years, and G&H is positioned
particularly well with our existing capabilities and
the addition of enhancing technology in this area
through recent acquisitions.
Whilst we do not expect to see our industrial laser
and semiconductor markets return to growth until
next year, we are seeing strong demand for our
advanced optical systems capabilities from the
GHIHQFH VHFWRU DQG WKHUH DUH VLJQLƼFDQW QHZ
business opportunities that we are working hard
to secure. G&H continues to make progress on
delivering the self-help, technology and portfolio
activities that underpin our strategic plan. We
saw further improvement with on time delivery
performance in FY2024 and customer feedback
is now trending in a positive direction. The Group
LV QRZ EHWWHU SRVLWLRQHG WR EHQHƼW IURP WKH
anticipated recovery in our end markets next year
thanks to the disciplined implementation of our
strategy. This has been further underlined by the
recent successful acquisition of Phoenix Optical at
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3KRHQL[ LV DQ H[FHOOHQW ƼW ZLWKLQ * + DQG WKH
initial feedback from our combined customers
has been particularly encouraging.
Despite this positive overall outlook for the Group,
we remain cautious about some supply chain and
commercial headwinds in the near term. The
labour markets for talent in both the UK and US
remain competitive, leading to some supply side
challenges that continue to frustrate the
recruitment of the required talent, especially in
engineering and technical positions. Global supply
chain constraints, although better than in the
UHFHQW SDVW FRQWLQXH DORQJ ZLWK DQ LQƽDWLRQDU\
environment for wages, raw materials, and energy,
all require diligent attention and agility. Whilst
price increases have been passed onto customers
in FY2024 to address most of these cost increases,
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WKH DELOLW\ WR IXOO\ RIIVHW DOO FRVW EDVH LQƽDWLRQ
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in certain areas.
While mindful of the persistent macroeconomic and
geopolitical uncertainties that exist, G&H remains
well positioned for growth with a robust pipeline
across all our end markets. The business will invest
to ensure G&H can capitalise on the accelerating
deployment of photonics technologies into
continuously expanding areas of the Industrial,
Life Sciences, A&D markets underpinning the
future growth potential of the Group. I am
FRQƼGHQW ZH ZLOO EXLOG RQ WKH IRXQGDWLRQDO
progress made over the last year, supported and
clearly directed from G&H’s fully deployed
strategy, to become a more resilient and agile
higher margin business over the coming years for
all our stakeholders and realise our clear vision of
‘A Better World with Photonics’.
Charlie Peppiatt
&KLHI([HFXWLYH2IƼFHU
3 December 2024
37
STRATEGIC REPORT CHIEF EXECUTIVE OFFICER’S STATEMENT
I would like to extend my thanks to
all our employees for their hard work
and highlight the positive way the
whole organisation has embraced
the transformational changes
underway across the company.”
Acquisitions
Expanding the
G&H portfolio
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
38
39
INTRODUCTION
The G&H Group’s strategy includes portfolio
enhancement as an important contributor to the
Group’s progression to mid-teen returns, and we
have moved quickly to progress this element of
our new strategy. After acquiring GS Optics and
Artemis Optical in the summer of 2023, in March
2024 the Group divested its EM4 business to
Luminar Technologies. Shortly after the end of the
financial year on 30 October 2024, the Group
completed another strategic “speed to value”
acquisition with the addition of Phoenix Optical.
Phoenix Optical
LOCATION
St. Asaph, North Wales
EXPERTISE
Precision optics
manufacturer
TEAM
FOUNDED
50
1991
STRATEGIC REPORT ACQUISITIONS
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
40
About Phoenix Optical
Phoenix Optical, based in the heart of the North Wales optical
design and manufacturing cluster in St. Asaph, has been at the
forefront of precision optics since its founding by Tony Palframan
in 1991. Over the past three decades, Phoenix has continually
adapted to meet the evolving technological demands of today’s
world, providing a comprehensive in-house service that spans the
entire optical systems manufacturing process.
)URP UDZ JODVV PDWHULDOV WR SROLVKHG FRDWHG ƼQLVKHG RSWLFDO SDUWV
prisms, and assemblies, Phoenix offers an end-to-end solution for
the most complex requirements. The company, comprising of a
team of around 50 employees, has on site capabilities for the
moulding and the annealing of glass, and its site contains one of
the largest diamond turning facilities in Europe.
With advanced machinery, long-standing customer relationships
and highly skilled teams across four co-located facilities, Phoenix
is a trusted partner to its customers for the supply of precision
optics as it embraces cutting-edge innovations in optical science
in Industrial, Life Sciences and A&D markets.
Rationale for the acquisition
The Phoenix business is highly complementary to the G&H Group.
At a time when the demand from the A&D markets for precision
optics is growing rapidly, Phoenix provides G&H with the
opportunity to expand and accelerate its reach in the UK and
European Aerospace & Defence markets. Phoenix and G&H share
complementary specialist capabilities in precision optics, allowing
us to serve a broader customer base with a more comprehensive
portfolio whilst achieving synergies from sharing our combined
manufacturing capacity and optical systems engineering
expertise, (particularly in St Asaph where we already have our
Optical Systems Innovation Centre).
Our early engagement with Phoenix’s customers has validated our
decision to acquire the business. They have been reassured by the
DGGLWLRQDO ƼQDQFLDO UHVRXUFHV WKDW * + FDQ SURYLGH 3KRHQL[ WR
support the delivery of its growing order book, and they have
FRQƼUPHG WKDW WKH SRZHUIXO FDSDELOLWLHV FUHDWHG E\ FRPELQLQJ WKH
two businesses will lead to them relying upon G&H and Phoenix
for a greater share of their precision optics and optical systems
requirements.
:H KDYH LGHQWLƼHG RSSRUWXQLWLHV IRU FRVW EDVH V\QHUJ\ IURP WKH
acquisition as well. Both businesses procure similar optical raw
materials, and we therefore anticipate being able to secure better
pricing from our supply chain thanks to our greater combined
needs. We are also assessing the appropriate future state footprint
of our two businesses in this important geographical location for
our Optical Systems operations. G&H’s existing Optical Systems
design centre is located within the same business park as Phoenix
and has been space constrained due to the strategic growth in this
part of the business. We anticipate being able to optimise the
functionality of our footprint whilst also securing facility cost
savings from the consolidation of our facilities on the St Asaph
Business Park.
Expertise in all aspects of precision optics
Phoenix is a well-regarded supplier to a number of large European
equipment manufacturers primarily in the defence market. Its
optics are selected by its customers to operate in the harshest
environments. The business has developed its own toughened
glass, ARMOURDILLO, that is six times stronger than traditional
protective glasses, and is used in land, sea, air and space mission
critical applications around the world.
Its vertically integrated operations, which range from glass
moulding and annealing through to the cutting, shaping and
polishing of optics means that Phoenix can handle all aspects of
their customers’ most complex precision optics requirements.
Talent at Phoenix
The Phoenix team of committed professionals bring a wide range
of talent and skill to the G&H Group across optical design, product
management, manufacturing and other functions. As part of the
transaction, Phoenix’s founder, Tony Palframan, who has many
years of experience in the European precision optics market, will
assume a broader product line director role within G&H’s Optical
Systems division. He will be focusing on driving the commercial
synergies from the combined Phoenix and G&H businesses and
working closely with our global sales team to help further increase
our order book.
I am delighted to welcome Phoenix to the G&H
Group. Phoenix is a highly capable, well-regarded
UK precision optics supplier with a strong portfolio
of products and services. Together we will be able
to better serve our customers’ most complex optical
systems requirements. The combination of the
Phoenix and G&H teams brings together industry
leading technology and know-how with efficient
scalable operations that will support G&H to deliver
an exceptional customer experience and accelerate
our journey towards sustainable margin growth.”
Charlie Peppiatt, CEO
STRATEGIC REPORT ACQUISITIONS
41
Our strategy is focused on delivering
sustainable margin growth and
transforming G&H to become an
‘innovative customer focused
technology company’ delivered
responsibly by making a
‘better world with photonics’.
Our
Strategy
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
42
43
STRATEGIC REPORT OUR STRATEGY
We seek to ensure that G&H becomes and
remains the ‘first choice’ for all our stakeholders
whether that’s our employees, our customers,
our shareholders, our eco-system partners or
the communities where we operate.
We offer differentiated performance through
the four pillars of our strategy.
1
2
3
4
People
Self-help
Investment
Technology
Establish dynamic
high performance
teams and a
purpose-led culture
Deliver exceptional
customer
experience and
superior operational
execution
Focus investment
to accelerate
accretive growth,
both organic and
inorganic
Create enhanced
value through
technology and
platform solutions
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
44
1 People
Establish High
Performance Teams
Priorities
• Embed our Vision, Mission, Values and Behaviours through every
step of our employees’ work experience.
• Invest in our HR team and new tools to enable them to better
support our employees.
• Apply more rigour and structure to our talent reviews and invest
in our development and succession planning.
Ŷ 5HYLHZ RXU EHQHƼWV DQG LQFHQWLYH SODQV WR HQVXUH WKH\ UHPDLQ
market competitive and appropriately motivate and reward our
employees for the right behaviours.
• Promote greater diversity amongst our team especially at
management levels.
• Drive further improvements in our safety performance targeting
zero harm in all of our facilities.
At G&H our corporate values guide the way
our teams do business. Customer focus,
integrity, action, unity and precision are the
touchstones that guide us in our day to day
work helping us to build motivated and
engaged team building a strong and
profitable business that sits at the heart of
the communities in which we operate.
Customer Focus
We ‘go the extra yard’ to prioritise our
customers both internal and external.
Integrity
We ‘do the right thing.’ Hard on the issue,
fair on the person and kind to the planet.
Action
Be a doer. Understanding ‘it is what we do
that makes a difference.’ Take initiative and
show determination.
Unity
We are stronger together. Working together
as one team in the spirit of collaboration
towards a common purpose.
Precision
Expertise in our work. Commitment to
excellence and continuous improvement
in everything we do.
The G&H Values
45
STRATEGIC REPORT OUR STRATEGY
• Having gone live with our new Group HR Information System,
RXU PDQDJHUV ZLOO XVH WKH V\VWHP IRU WKH ƼUVW WLPH IRU WKHLU )<
performance appraisals and setting objectives for their teams.
• New dedicated resources have been added to our HR team to
focus on our recruitment activities helping us to be faster and
PRUH VHOIVXIƼFLHQW LQ RXU UHFUXLWLQJ DFWLYLWLHV
Ŷ &ULWLFDO UROHV WR EH LGHQWLƼHG DQG FOHDU QHDU PHGLXP DQG
long-term plans put in place for succession in to those roles.
• New focused training programmes to be introduced:
– Sales enablement
Ū ű&HUWLƼHG WR /HDGŲ OHDGHUVKLS GHYHORSPHQW SURJUDPPH
– Internal customer awareness training
– Personal assessment tool to help improve teamwork,
communication, and productivity
• We will support the recent realignment of our sales teams in to
product/capability-based groups with revised incentive plans
that reward the winning of new customers and new programmes.
• Enabled by our new HRIS system, we will establish two
regionally based HR shared service centres focused on delivering
core HR processes for our employees in a one-stop shop,
HIƼFLHQW PDQQHU
• We will roll out our new employee engagement programme
comprising the following:
– Ensuring the voice of the employee is heard – Annual
Engagement Survey, cross group employee representative
groups meeting with the Board twice a year.
– G&H Giving programme – fund-raising and engagement
activities with our local communities.
• We will use our new HRIS to communicate regularly with our
employees. This will include recognition of employees, examples
of living the G&H values, features on sites and global teams to
promote the “One G&H” culture.
• Our Sustainability Committee will manage its supporting
working groups to help drive the Group’s agenda and accelerate
our efforts in this area. It will engage with our employees to
promote a working environment that minimises the impact on
our environment.
• We will celebrate the achievement of a safe, zero harm,
working environment.
Progress
Future Priorities
Ŷ 8QGHU WKH OHDGHUVKLS RI RXU QHZ &KLHI 3HRSOH 2IƼFHU ZH
have both added and, where appropriate, upskilled our
HR business partners.
• Following a robust assessment process we have selected
a new Group-wide HR Information System that will provide
our managers with a single source of information on each
RI RXU HPSOR\HHV )RU WKH ƼUVW WLPH * + ZLOO KDYH DQ
integrated system that handles all aspects of our employees’
journey with the business. The new system went live on
1 October 2024.
• New cross group Councils (Operations, Sales and R&D)
established and charged with the development and roll out
of best practice tools and processes across the Group.
Ŷ $ FRKRUW RI KLJK SRWHQWLDO HPSOR\HHV KDV EHHQ LGHQWLƼHG
DQG SURYLGHG ZLWK VSHFLƼF RSSRUWXQLWLHV WKDW ZLOO DGG WR WKHLU
visibility amongst the senior leadership team and give them
experience of new parts of the Group all adding to their
experience and preparing them for future promotion within
the business.
• 56% reduction in time lost due to work related incidents.
• 155% increase in our “Spot It, Stop It” reporting helping
HQVXUH SRWHQWLDO ZRUNSODFH GDQJHUV DUH Ƽ[HG EHIRUH DQ
accident happens.
Ŷ 6XFFHVVIXO UROO RXW RI * +ŮV HPSOR\HH EHQHƼWV SDFNDJHV WR
the newly acquired GS Optics and Artemis Optical businesses.
Lessons learned assessments completed from these two
integrations for carry forward for future acquisitions.
• Our newly established Sustainability Committee, led by our
non-executive director Susan Searle, has established a clear
action-based programme under the banner “G&H Sustain”
that will drive forward the Group’s equality, diversity and
inclusion agenda.
• Our new Quarterly newsletter, “The Pulse”, has been
established providing our employees with regular updates
from across our Group.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
46
Priorities
2 Self-help
Deliver an exceptional
customer experience
and superior
operational execution
• Leverage our Customer Relationship Management tools to improve
the effectiveness of our business winning activities.
• Reorganise our commercial teams to clearly separate our product
line management activities from our other selling activities.
• Support our product line and business development teams in
selling more complex solutions that incorporate more of the
Group’s components and capabilities.
• Cross-selling capabilities and products from newly integrated
acquisitions through our global sales team.
• Through strategic engagements with our customers ensure
we are developing joint product and technology roadmaps
that inform our R&D priorities.
• Disciplined focus on superior operational execution through
productivity, quality, inventory management, delivery and new
product introduction improvements along with the agility and
wisdom to avoid repeating the manufacturing and supply chain
problems of the recent past.
• Proactive outsourcing of carefully selected products earlier in life
cycle where technological sovereignty is not a differentiator.
• Use our operations planning processes to improve our on time
delivery performance and reduce our lead times.
• Anticipate our customers’ quality needs and drive to exceed them.
47
STRATEGIC REPORT OUR STRATEGY
• We will further develop our Salesforce system to enable us to
generate customer quotations directly from within the system. This
will help in further reducing the time taken to prepare quotations
DV ZHOO DV LPSURYLQJ WKH HIƼFLHQF\ RI WKH SURFHVV
• We have budgeted to recruit new sales roles in the coming
ƼQDQFLDO \HDU VSHFLƼFDOO\ LQ RXU /LIH 6FLHQFHV PDUNHWV 7KHVH
new team members will have as one of their objectives securing
new customers for our North American medical diagnostic
hub in Rochester.
Ŷ :H ZLOO GHOLYHU WKH FXVWRPHU VSHFLƼF DFWLRQV DULVLQJ IURP WKH
customer survey conducted in FY2024 ready to test for further
progress when we conduct our next survey.
• We will develop focused improvement projects at each of our sites
where production yields are not currently at target levels. We will
identify the root causes for high scrap and rework costs and
GHYHORS VSHFLƼF DFWLRQ SODQV WR HOLPLQDWH WKHP
• We have a pipeline of further products we plan to transfer to our
contract manufacturing partners. We will be working with our
customers as required to gain their support for these transfers.
Ŷ :H KDYH LGHQWLƼHG VRPH VROH VRXUFH VXSSOLHUV WKDW ZH ZRXOG OLNH WR
de-risk by identifying alternative suppliers. This programme will be
actioned using our supply chain team especially those located in
our low cost region partners’ facilities.
• We intend to pilot more advanced production planning tools in one
of our sites to trial better production planning. This tool will
integrate with our material procurement systems and is expected
to support the further reduction of our inventory levels and reduce
the time product currently takes to be completed.
• Using our newly formed Operations Council we will refresh our
business continuity plans for each of our sites to ensure they
remain up to date and capable of responding to the latest threats.
We will also work with our principal supply chain partners to ensure
they also have such plans in place.
Progress
Future Priorities
• Our Salesforce tool is now fully deployed throughout our sales team
and offers them the ability to share information on our customers and
our points of contact with them. This also provides our Operations
teams with improving forward visibility of demand patterns so that
they can better plan capacity.
Ŷ :H DUH VWDUWLQJ WKH VHH WKH EHQHƼWV RI VHSDUDWLQJ RXU SURGXFW OLQH
management teams from the day to day selling activities undertaken
by our sale leads. Our product line managers now have more time to
focus on managing the introduction of our next generation products in
to our customers’ programmes, looking into the medium and long-term.
• This is seen in successes we have had in FY2024 particularly for some
RI RXU FRPSOH[ ƼEUH RSWLF PRGXOHV ZKHUH ZH KDYH VHFXUHG VRPH
notable new programme positions.
• Our commercial teams have worked hard to exploit the commercial
synergies available from the acquisition of GS Optics and Artemis
2SWLFDO LQ )< $UWHPLVŮ WKLQ ƼOP FRDWLQJ FDSDELOLWLHV DQG DQ
important enabler for more complex optical system meaning G&H is
exposed to more programme opportunities than it had been previously.
Through our existing Life Sciences customers we are also able to offer
the new polymer optics capabilities that GS Optics bought to the group.
Ŷ :H FRQGXFWHG D FXVWRPHU VXUYH\ DQG VHFXUHG D VLJQLƼFDQW LPSURYHPHQW
in our net promoter score compared to the previous survey.
• Through a Kaizen structured programme at our Ilminster facility we
KDYH EHHQ DEOH WR YHU\ VLJQLƼFDQWO\ UHGXFH WKH WLPH WDNHQ WR UHVSRQG
to customers’ request for quotations. We will now take this learning
and apply at other sites within the Group.
• The Group’s on time delivery performance improved again in FY2024
during the year. Overdue backlog associated with Operations fell to
£3.2m from £5.7m at the previous year end.
• We have added new resources located in our contract manufacturing
SDUWQHUVŮ IDFLOLWLHV WR HQVXUH ZH ZRUN FORVHO\ DQG HIƼFLHQWO\ ZLWK WKHP
to plan their production build and to assist with the transfer of other
product lines ready to be outsourced.
• As a result of that close working relationship, our south east Asian
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RI KLJKUHOLDELOLW\ IXVHG ƼEUH FRXSOHUV DQG LV DGGLQJ IXUWKHU VWDII WR
utilise the additional production equipment we have provided.
• The proportion of the Group’s revenue derived from our subcontract
partners increased to 8.5% in FY2024.
• Over the period of our strategic plan we intend to increase the
proportion of the Group’s revenue that is manufactured by our
contract manufacturing partner to around 25%.
• We have completed the build out of our North American medical
diagnostic manufacturing activity in our GS Optics facility in
Rochester. This now means we can offer our North American
customers a medical diagnostic design, development and production
capacity similar to that offered by our Ashford facility.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
48
Priorities
3 Technology
Create value through
our technology
• Technology roadmaps that focus our investment on those areas
LGHQWLƼHG DV RIIHULQJ WKH JUHDWHVW UHWXUQV
• A smaller number of development projects but with same level of
overall Group investment thereby allowing an acceleration of
time to market.
• On time and on budget delivery of our new product development
programmes.
• An increasing proportion of the Group’s revenues derived from
products introduced in the last three years.
• A greater proportion of our engineer’s time spent on new
product development activities.
• A greater interaction between our business development and
HQJLQHHULQJ WHDPV WR PD[LPLVH RXU LQƽXHQFH RQ RXU FXVWRPHUV
DV ZHOO DV HQVXULQJ RXU WHFKQRORJ\ URDGPDSV UHƽHFW RXU
customers latest plans.
49
STRATEGIC REPORT OUR STRATEGY
• We have budgeted two further R&D roles to continue the
acceleration of our focused development programmes.
Ŷ 8VLQJ WKH DGYDQFHG WKLQ ƼOP FRDWLQJ FDSDELOLWLHV RI RXU
Artemis business we plan to access further programmes that
require optics that are protected from new and emerging
EDWWOHƼHOG WKUHDWV
• Complete the development or our advanced embedded
image periscope. This new technology will form the core
of our offering on to our customers’ latest armoured
vehicle platforms.
• We intend to expand our engineering team in our North
American medical diagnostic hub in Rochester to service
the needs of our new life sciences customers.
• We intend to leverage the polymer optics technology in
our G&H | GS Optics business to add further content to
existing life sciences product offerings.
Ŷ &RPSOHWH WKH FHUWLƼFDWLRQ RI QHZ LPSURYHG PDWHULDOV WR
be used in our high reliability couplers thereby capturing
market share from our competitors.
• Thanks to our existing work with manufacturers of the
most advance photolithography machines, we will leverage
the relationship that has been established to seek new
positions on both their current and next generation
developments.
• Use our newly formed R&D Council to develop and roll our
new tools to help with the management of our R&D projects.
Progress
Future Priorities
• Spend on R&D in FY2024 totalled £7.8m.
• Revenue from new products totalled £25.3m and there were
48 new products released to the market.
• We have progressed the ‘vital few’ research programmes which
are receiving priority given their potential to deliver material
DFFUHWLRQ WR WKH *URXSŮV UHYHQXH DQG SURƼWDELOLW\
• Acousto-optics: with the support of a newly recruited product
lifecycle manager, we are gaining traction in capturing new
customers for our latest generation optimised Germanium-based
modulators for lasers used in semiconductor fabrication and
micro-machining. The slow pace of recovery of this market has
meant that demand pull through has been slower than we had
hoped but we expect recovery in CY 2025.
• Electro-optics: we are assessing our product offerings in this
area given the emergence of low cost competition.
Ŷ )LEUH RSWLF FRPSRQHQWV ZH KDYH GHYHORSHG QHZ ƼEUH RSWLF
combiners which are currently being assessed by our customers.
• Fibre optic systems: thanks to additional engineering resources
allocated to our developments in this area, we have been
successful in securing new programme positions for complex
module assemblies both for subsea data cable and
sensing applications.
• Precision optic systems: the acquisition of the Artemis business
DQG LWV WKLQ ƼOP FRDWLQJ FDSDELOLW\ KDV SURYLGHG WKH *URXS ZLWK
a key new capability that enables us to offer more complex,
value added systems to our customers.
• Precision optics: our coating technology that supports
application in the deep ultraviolet spectrum, has opened
up new business opportunities in advanced semiconductor
laser tools.
• Life Sciences: by using capability from across the Group,
we have been able to secure new R&D programmes for
instruments including a project aimed to prevent nerve
damage during surgery.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
50
Priorities
4 Investment
Apply focused
investment in
the business
• Ensure acquired businesses are successfully integrated into
the Group and that the expected commercial and operational
synergies are achieved.
• Reduce as much as possible the Group’s investment in its
ZRUNLQJ FDSLWDO WKURXJK HIƼFLHQW RSHUDWLRQV SODQQLQJ DQG
inventory procurement policies.
• Ensure our investment in new capital equipment is prioritised
into the areas of the business that offer the most attractive
potential for returns and is aligned to new strategic priorities.
• Regularly review the portfolio to ensure we have in all cases
a differentiated offering capable of delivering attractive
returns. End-of-life or divest those elements of the portfolio
that are not differentiated or non-core.
• Invest in our supply chain partners with our capital equipment
and our on-site supply chain staff to help drive superior returns
for the Group and improved responsiveness for our customers.
51
STRATEGIC REPORT OUR STRATEGY
• We have been careful to ensure that our budgeted capital
investments for FY2025 are focused into those areas of the
EXVLQHVV VXFK DV RXU ƼEUH RSWLF PRGXOH DVVHPEO\ OLQHV WKDW
provide the highest potential returns.
• We will pilot a new production planning module to assess
whether this can help us in increasing the pace at which work
in progress passes through the factory, thereby further reducing
our inventory holdings.
• The transfer of further product lines to our contract
manufacturing partner planned for FY2025 will allow us
to reduce the amount of inventory held for what have been
in-house built products.
• We will continue to work with sell-side advisors to ensure
we are kept informed of acquisition opportunities that may
be a match to our acquisition criteria and deliver speed to
value creation for the Group.
• We will ensure that the documented lessons learned from
the two acquisitions completed by the Group in FY2023
are applied in the integration of the Phoenix business.
• Our product line management teams will continue their
assessment of product line returns in the face of the evolving
competition landscape to identify product lines that we may
need to end-of-life. Where that is the case, we will work with
our customers to ensure they are able to make last time
buys of product thereby supporting their ongoing requirements.
Progress
Future Priorities
• The integration of the GS Optics and Artemis businesses was
completed successfully. This includes the full integration of
both businesses onto the Group ERP systems. The commercial
synergies from the Artemis acquisition have already delivered
in FY2024 whilst there are good emerging opportunities for the
cross sell of G&H | GS Optics polymer optics into the Group’s
existing customer base.
• Following a careful assessment, we concluded that the majority
of our Boston-based EM4 business was non-core to the Group’s
activity and that it should therefore be sold. This was completed
in March 2024. We have been careful to retain one product line
which we assessed as providing the Group with differentiated
capability, and that line has been successfully transferred to our
Torquay facility.
• Our supply chain team has worked hard to develop new tools
to ensure materials are only receipted when required for
production thereby reducing our inventory holdings. We have
also put in place some vendor managed inventory programmes
which have helped to reduce the Group’s investment in
working capital.
• Where our customers request us to eliminate materials supply
risk from our programmes, we ensure that they provide us with
advanced funding to cover the working capital investment.
• We have in place a contract review process that ensures that
customer credit terms are limited as much as possible. Our
ƼQDQFH WHDPV DUH YHU\ DFWLYH LQ FROOHFWLQJ SD\PHQWV IURP
our customers as soon as they fall due.
• By using our contract manufacturing partners more and more
for the manufacture of our products, we are reducing the inventory
we need to hold for our own in-house production activities.
• We have continued to monitor the market for potential
acquisition targets. We have a network of advisors who
understand our acquisition criteria who help us in the
LGHQWLƼFDWLRQ DQG HDUO\ VWDJH DVVHVVPHQW RI WDUJHWV
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
52
Financial
Industrial
OPERATIONS REVIEW
Revenue
Percentage of
Group Revenue
(FY2023: 55.3%)
50.0%
Adjusted
Operating Profit
(FY2023: £10.6m)
£7.8m
Operating Profit
(FY2023: £9.4m)
£7.2m
Adjusted Operating Margin
(FY2023: 14.2%)
11.5%
55.3%
2023
50.0%
2024
2024 £67.9m
2023 £74.7m
2022 £64.6m
2021 £55.6m
2020 £54.8m
(FY2023: £74.7m)
£67.9m
Our Products
Enable
Market
Drivers
STRATEGIC REPORT OPERATIONS REVIEW
53
• Industrial lasers for materials processing applications.
G&H supplies Q-switches and other acousto-optic,
HOHFWURRSWLF DQG ƼEUH RSWLF SURGXFWV
• Semiconductors for lithography and test and measurement
applications.
• Metrology for laser-based, high-precision, non-contact
measurement systems.
• Optical communications VSHFLƼFDOO\ IRU KLJKUHOLDELOLW\
and high-performance applications.
• Remote sensing for applications including asset protection,
perimeter security, strain, temperature and pressure sensing.
• 6FLHQWLƼFUHVHDUFK – the largest proportion being nuclear
fusion research and energy – laser technology is being used
to recreate the conditions found in the core of the sun.
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and automation all drive demand for semiconductors.
• Political uncertainties driving the re-shoring of the manufacture
of key components such as semiconductors.
• Next generation products such as extreme ultraviolet (EUV)
lithography lasers for nanoelectronics and new design
Germanium modulators.
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personal data devices require new forms of industrial laser cutting
and marking machines.
• Increasing transfer of data internationally for both business and
personal use drives the demand for subsea data cables.
• Accelerating investment in wind generated clean energy
particular in the US. Our ‘laser engine’ sensing technology
LPSURYHV WKH HIƼFLHQF\ RI ZLQG WXUELQHV
• Remote border and infrastructure asset protection receiving
increasing investment driving demand for our sensing products.
Image: NIF LLNL
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
54
Our Strategy
in Action
During the year we continued to deliver on our strategic objective of
transferring more of our stable production to our low cost region
contract manufacturing partner. Building upon the transfer of some
of our acousto-optic products during FY2024, we supported our
partner to increase the volume of high-reliability fused couplers they
PDNH IRU XV 7KLV LQFOXGHG VHFXULQJ LPSRUWDQW FXVWRPHU TXDOLƼFDWLRQ
of their facility for the manufacture of these very sophisticated
devices. We supported their ramp up by transferring further
production rigs that are used for the manufacturing process to them.
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are now built by our two contract manufacturing partners as we have
migrated our own in-house production teams on to the build of more
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D VLJQLƼFDQW SLYRW IRU WKH SURGXFWLRQ WHDP LQ RXU 7RUTXD\ IDFLOLW\
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Our products used in the manufacture of the most advanced
micro chips using EUV projection are now in steady state
production. This represents a considerable success of converting
one element of our technology roadmap into a strong and
recurring revenue stream.
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RSWLF DPSOLƼHU PRGXOH XVHG LQ DQ LPSRUWDQW QHZ VXEVHD GDWD FDEOH
network. During FY2024 we secured the customer’s contract,
completed our design activities, and achieved the deliveries of
production units to our customer. This is another pleasing example
RI XV XVLQJ RXU WHFKQRORJ\ URDGPDS WR PRYH XS WKLV VSHFLƼF YDOXH
chain from providing this market with high-reliability fused
couplers integrated by others in to higher level assemblies into
bringing that activity into G&H helping with the growth of both the
*URXSŮV UHYHQXH DQG SURƼWDELOLW\
2XU ƼEUH RSWLF WHFKQRORJ\ LV DOVR XVHG WR VXSSRUW WKH JURZWK
of the world’s renewable energy generation market. In this
sub-market we were pleased to see another product from our
technology roadmap migrate into production. We are providing
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generating wind turbines to assist with their safe operation and
HIƼFLHQW JHQHUDWLRQ RI HQHUJ\
Despite this pleasing progress on the delivery of our strategic
objectives, we were impacted by the general industrial market
VORZ GRZQ HVSHFLDOO\ LQ WKH ƼUVW KDOI RI WKH ƼQDQFLDO \HDU ZKHQ D
number of our customers found themselves in an overstocked
position and reduced their orders in order to correct their
inventory holdings. Volumes recovered to some extent in the
second half but nevertheless our revenue in this segment
declined by 9.7% on an organic, constant currency basis.
Our revenue into both the industrial laser and more established
areas of the semiconductor manufacturing environments both
declined sharply. Our growing deliveries into the more advanced
semiconductor manufacturing systems which increased by around
50% were not enough to offset these other sub-market declines.
Deliveries of our sensing products also declined. Revenue in this
VXEPDUNHW LV SURQH WR ƽXFWXDWLRQ LQ RXU HQG FXVWRPHUVŮ
infrastructure build out programmes and FY2024 was a
disappointing year in this regard.
Subsea data market revenues grew well driven by additional
demand from one of our large, long-standing customers in the
subsea data cable laying market. This was thanks to additional
end market demand but it was also pleasing to be able to generate
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DUH SURYLGLQJ DQ DGYDQFHG DPSOLƼHU XQLW WKDW LV LQFRUSRUDWHG LQWR
their subsea data cable network.
STRATEGIC REPORT OPERATIONS REVIEW
55
Strategic Priorities
for FY2025
• We are adding further resources to our development teams
focused on our acousto- and electro-optic products which form the
majority of our product offerings into the Industrial market. We
have good connections with our customers’ development teams
and expect this close working to result in the Group securing new
programme positions on our customers’ next generation
industrial laser and semiconductor manufacturing equipment.
• We will bring new products to the market and ensure that we
remain at the cutting edge of technology in this growing market.
During FY2024 G&H introduced 23 new products in Industrials
generating £11.7m of revenue.
Ŷ :H KDYH LGHQWLƼHG IXUWKHU SURGXFWV WKDW ZH ZLOO WUDQVIHU WR RXU
low-cost contract manufacturing partners to support our margin
expansion and to extend the lives of these products. This will
support us offering our customers additional capacity and shorter
OHDG WLPHV ,Q VRPH FDVHV ZH KDYH DOVR LGHQWLƼHG WKH RSSRUWXQLW\
for margin expansion from substituting some of our existing
supplier for our low cost region contract manufacturing partners.
• We will focus on niche markets where the quality and reliability
of G&H’s product differentiate us from the competition – in
particular those that require reliable performance in harsh
and demanding environments.
• Through both cross sharing of experiences between our sites
and focused kaizen events, our operations team will focus on
LPSURYLQJ WKH HIƼFLHQF\ RI RXU IDFWRULHV LQFUHDVLQJ RXU
production yields, eliminating waste, and further rationalising
our inventory holdings.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
56
Aerospace
& Defence
OPERATIONS REVIEW
2024 £34.5m
2023 £27.3m
2022 £30.6m
2021
£41.1m
2020 £41.4m
(FY2023: £27.3m)
£34.5m
(FY2023: 20.2%)
25.3%
(FY2023: (£1.8m))
£(1.2)m
Operating Loss
(FY2023: (£2.3m))
£(1.5)m
Adjusted Operating Margin
(FY2023: (6.8%))
(3.5%)
Financial
Revenue
Percentage of
Group Revenue
Adjusted
Operating Loss
20.2%
2023
25.3%
2024
Our Products
Enable
Market
Drivers
STRATEGIC REPORT OPERATIONS REVIEW
57
• 7DUJHWGHVLJQDWLRQDQGUDQJHƼQGLQJ used on both land-based
and airborne systems.
• Guidance and navigation components for ring laser gyroscope
DQG ƼEUH RSWLF J\URVFRSH LQHUWLDO QDYLJDWLRQ V\VWHPV
• Countermeasures for ground-based systems and
airborne platforms.
• Space photonics – G&H is leveraging its heritage of ultra-high
reliability components for both space and very high altitude
unmanned aerial vehicle applications in order to address the
growing market for laser-based space communications.
• Periscopes and sighting systems for land
EDVHG DUPRXUHG ƼJKWLQJ YHKLFOHV
• Opto-mechanical subsystems for unmanned aerial
and ground vehicles.
• Directed energy systems for military platform and
infrastructure defence applications.
• Advanced optical coatings for both laser protection
and platform stealth.
• Acrylic optics for low weight, less expensive optics as
required for soldier, body worn systems (such as night vision
JRJJOHV DQG ULƽH VFRSHV
Ŷ *OREDO FRQƽLFWV DUH GULYLQJ IXUWKHU LQYHVWPHQW LQ ERWK DUPRXUHG
vehicles, unmanned aerial vehicles (UAV), and measures to
counter them.
• Users require new features within their latest optical systems that
integrate electronics and optics in single more complex packages.
• Optics used in the defence arena increasingly require complex
coatings, for which G&H is a leading supplier.
• Photonic components and systems offer size, weight, power
DQG UHOLDELOLW\ EHQHƼWV IRU PXOWLSOH $ ' VXEVHFWRUV
Ŷ ,QIUDUHG RSWLFDO DUUD\V DUH XVHG IRU WDUJHWLQJ UDQJH ƼQGLQJ
navigation and surveillance capabilities for both UAV and
countermeasures.
• These same capabilities are needed in the operation of remotely
controlled and autonomous A&D systems for land, sea and air.
• Space satellite communication systems are migrating from
traditional radio frequency to laser-based systems. G&H’s
ODVHU DPSOLƼHU WHFKQRORJ\ VLWV DW WKH KHDUW RI WKHVH V\VWHPV
• Directed energy systems have already been deployed onto
naval platforms as part of their integrated defence systems.
6LJQLƼFDQW LQYHVWPHQW LV EHLQJ PDGH E\ ZHVWHUQ JRYHUQPHQWV
in more powerful laser systems for other applications within
and beyond naval warfare.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
58
Our Strategy
in Action
During FY2024 we made good progress on the development of the
advanced periscope systems that we will deliver into the UK Army’s
&KDOOHQJHU 0%7 XSJUDGH SURJUDPPH :H VKLSSHG ƼUVW SURWRW\SHV
to the prime contractor, and our systems were integrated into the
YHKLFOH IRU VXFFHVVIXO OLYH ƼULQJ WULDOV :H H[SHFW WR FRPSOHWH
GHYHORSPHQW DFWLYLWLHV LQ WKH ƼUVW KDOI RI WKH FRPLQJ ƼQDQFLDO \HDU
The same core technology is being used for a periscope system
that we are providing to an eastern European NATO country for a
new amphibious armoured vehicle programme. We will commence
delivery of production units in the coming few months. We expect
to secure further orders from this programme as the end
customers places orders for the full programme quantities.
7KH WKLQ ƼOP FRDWLQJ FDSDELOLW\ WKDW RXU * + _ $UWHPLV EXVLQHVV
which we acquired last year, provides is able to offer protection
against the harshest threats from lasers as they are now being
GHSOR\HG RQ WKH PRGHUQ EDWWOHƼHOG 7KLV KDV OHG WR * + _ $UWHPLV
being invited to tender for the emerging requirements of western
militaries, and in turn G&H | Artemis are able to cross sell other
precision optic products and capabilities from other G&H sites.
One of the priorities set out in our refreshed strategy was to review
our portfolio of products and to assess whether they were all
VXIƼFLHQWO\ GLIIHUHQWLDWHG WR DOORZ XV WR FRPPDQG DFFHSWDEOH
UHWXUQV IRU WKH *URXS ,Q WKH ƼUVW KDOI RI WKH \HDU ZH FRQFOXGHG WKDW
the majority of the products offered by our EM4 business in Boston
did not meet that threshold, and it was therefore decided that we
would divest the business. That divestment was completed in March
%HIRUH FRPSOHWLQJ WKH VDOH ZH WUDQVIHUUHG D ƼEUH IXVLQJ
technology from that business and moved it to our Torquay facility
as it is deployed in some of the products we supply into
the world’s most advanced photolithography machines
and its retention was therefore very important for the
Group. Shortly before its sale, the EM4 business
saw some of its contracts cancelled by the end
customer, further supporting our decision to
divest the business.
Our revenues in our A&D segment grew by 10.3% on an organic
constant currency basis. Demand for our super polished optical
components used in ring laser gyroscopes is very strong, and due
to the investments we have made in our team at Moorpark, where
those components are manufactured, revenue grew. However our
progress on improving our production yields was slower than
planned. Our precision optics are prone to damage as they
complete the production process and with a large number of new,
less experienced operators joining our team, costs associated with
poor quality increased. Reversing this trend will be a priority for us
IRU WKH QHZ ƼQDQFLDO \HDU
2XU HQJLQHHULQJ WHDPV FRQWLQXH WR EH DFWLYH LQ WKH ƼHOG RI
laser-based space communications. Building upon work previously
completed with our satellite partners, we are now developing more
SRZHUIXO ODVHU DPSOLƼHUV WKDW ZLOO HQDEOH WUDQVIHU RI JUHDWHU
volumes of data. Our work in this area is an important element
of our more focused and accelerated technology development
SURJUDPPH :H EHOLHYH ZH DUH ZHOO SRVLWLRQHG WR EHQHƼW DV WKH
laser-based space communication develops more fully.
We are also contracted by a number of prime contractors on
directed energy systems. G&H’s expertise in coating the large
optics that are positioned at the heart of these systems means
that we are well positioned to secure recurring revenue once these
programmes transition to volume production. There is a clear trend
towards greater reliance by western militaries upon directed
energy systems within their overall suite of defensive capabilities.
STRATEGIC REPORT OPERATIONS REVIEW
59
Strategic Priorities
for FY2025
• We will complete the development of our advanced periscope
systems for the Challenger upgrade programme and exploit the
core technologies that we have developed to address their
customer needs.
Ŷ :H ZLOO XVH WKH DFFHVV WKDW * + _ $UWHPLVŮ XQLTXH WKLQ ƼOP
coating capability gives us to leverage the sale of precision optic
products and capabilities from across the G&H Group.
• We will implement targeted improvement programmes to address
the poor yields and high scrap costs that we have experienced in
some of our sites supplying the A&D segment in FY2024.
• We will introduce a greater number of new products, especially
those with a high technical content. During FY2024 G&H
introduced 19 new products and generated £6.6m of revenue
from new products that addressed the A&D market including
space satellite laser-based communication systems, new sighting
systems and IR lens assemblies for UAVs.
• We will use our expanding operational footprint arising from our
acquisition of the Phoenix business to optimise the location of
manufactures of our growing order book in the A&D segment.
• We will work on the swift integration of the Phoenix business with
the rest of the G&H Group to enable us to deploy the resources
of the G&H Group to sell the business’ products worldwide.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
60
Life
Sciences
OPERATIONS REVIEW
(FY2023: £33.0m)
Financial
£33.6m
2024 £33.6m
2023 £33.0m
2022 £29.7m
2021 £27.4m
2020 £25.9m
(FY2023: £4.3m)
£4.6m
Operating Profit
(FY2023: £3.3m)
£3.9m
Adjusted Operating Margin
(FY2023: 13.1%)
13.8%
(FY2023: 24.4%)
24.7%
Revenue
Percentage of
Group Revenue
Adjusted
Operating Profit
24.4%
2023
24.7%
2024
Our Products
Enable
Market
Drivers
STRATEGIC REPORT OPERATIONS REVIEW
61
• Medical diagnostic instruments – G&H has a range of capabilities
including full product development, design, manufacturing,
FHUWLƼFDWLRQ DQG DIWHU VDOH VHUYLFH IRU WKH FRPPHUFLDOLVDWLRQ RI
high-quality medical diagnostic, in vitro diagnostic (IVD) devices,
precision analytical, electro-mechanical and laboratory
instruments.
• Advanced polymer optics are playing an increasing part
LQ PHGLFDO RSWLFV GXH WR WKH FRVW DQG ZHLJKW EHQHƼWV DV
well as the need for disposable systems to avoid infection.
• Optical coherence tomography (OCT) primarily used in
retinal imaging for the diagnosis of glaucoma and macular
degeneration, but also now used in the detection of
cardiovascular disease and cancer diagnostics.
• Laser surgery used in a wide range of applications including
prostate surgery, scar correction, cataract surgery, freckle,
mole and tattoo removal as well as wrinkle reduction and
teeth whitening.
• Microscopy – Modern, laser-based techniques are
UHYROXWLRQLVLQJ WKH ƼHOG RI PLFURVFRS\
• A growing aging population generating demand for a shift
towards early diagnosis rather than later, more serious
treatment of undetected conditions.
• A trend towards more point-of-care and personalised medicine
driving demand for simple, volume diagnostic products.
• Growing demand for laser enabled aesthetic procedures
especially from Asia, and in the west for tattoo removal.
Ŷ $ JURZLQJ PLGGOH FODVV LQƽXHQFHG E\ VRFLDO PHGLD HDJHU WR
access laser-enabled cosmetic and aesthetic procedures.
• New applications for optical coherence technologies beyond
the traditional areas of eye examination and treatment.
• Greater use of inexpensive, disposable plastic optics in
life science instruments to avoid infection.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
62
Our Strategy
in Action
Strategic Priorities
for FY2025
• We will complete the resourcing of our expanded sales and
business development team focused on securing new business
IRU RXU /LIH 6FLHQFHV EXVLQHVV ZLWK D VSHFLƼF IRFXV RQ SURGXFWLRQ
orders for our North American Life Sciences Centre of Excellence.
• This team will also focus on opportunities to cross-sell
G&H | GS Optics polymer optics in to our existing Life Sciences
customer base.
• We will complete the transfer of production of some of the
components and modules used in our medical diagnostic
instrument to our low-cost region supply chain to support
margin accretion and a surge build capability.
Ŷ :H ZLOO ZRUN ZLWK RXU 2(0 /LIH 6FLHQFHV FXVWRPHUV WR ƼQDOLVH WKH
development and accreditation of their next generation medical
devices and secure the follow-on production revenue from their
instrument build.
• We will complete our assessment of our product range currently
supplying the medical laser market in the face of growing
low-cost Asian competition.
• We will continue to invest in R&D projects in close collaboration
with our customers. During FY2024 G&H introduced 6 new
products and generated £7.0m of revenue from products that
address its Life Sciences market, especially in the medical
instrumentation market.
Following the acquisition of the GS Optics in June 2023, we have
worked quickly to convert space in their Rochester facility into a Life
Sciences design and production centre replicating the capabilities
that we have at our Ashford site in this North American centre of
excellence. We have achieved ISO 13485 accreditation for the new
IDFLOLW\ DQG VHFXUHG RXU ƼUVW 5 ' FRQWUDFW IRU WKH WHDP WKHUH 7KLV
represents an important step in our strategy to access the very large
North American medical diagnostic market with US based resources.
The integration of GS Optics into G&H is now complete and
our business development teams are implementing targeted
campaigns to offer G&H | GS Optics’ polymer capabilities to the
Group’s existing Life Sciences customers to address their needs
for disposable healthcare optics and other components providing
a one stop shop solution for their diagnostic device requirements.
These cross-selling campaigns are expected to support
G&H | GS Optics’ growth in FY2025.
Our G&H | ITL business in Ashford is working with customers on
the development and accreditation of their next generation
medical instruments. Wherever these developments require
optical components, the G&H | ITL business is able to cross-sell
products and capabilities from other parts of the G&H Group
ensuring we capture a larger share of our customers’ total spend.
Due to improvements made in our operations and supply chain
processes at our Ashford site, we were able to respond quickly to
growing demand from some of our customers for additional
volumes driven in turn by the success of their product launches
with their end customers. Despite growing volumes, the site was
DEOH WR UHGXFH LWV LQYHQWRU\ KROGLQJ JLYLQJ JUHDWHU FRQƼGHQFH LQ
our supply to delivery on time and our deployment of improved
forecasting and material planning tools and processes at the site.
:RUNLQJ ZLWK RXU FXVWRPHUV ZH KDYH LGHQWLƼHG VRPH RSSRUWXQLWLHV
for the outsourcing of certain components and modules that form
part of those medical diagnostic instruments to our low-cost region
suppliers. Initial samples have been received and in the coming year
we will progress these transfers to access the opportunities for
margin accretion and additional surge capacity that these transfers
offer, working closely with our clients through this process.
In our medical laser market, confronted by growing competition in
the area of less complex medical laser components, we are
assessing our options for reducing our cost of manufacturing –
potentially using our low-cost region suppliers as well as assessing
in which parts of our current portfolio we can continue to offer
differentiated products.
Our Life Sciences revenue grew by 1.3% on an organic constant
currency basis in the year to 30 September 2024, compared with
the prior year. Demand for our medical diagnostic instruments grew
strongly offsetting the decline we saw from our medical lasers
PDUNHWV ZKLFK ZDV VLJQLƼFDQW HVSHFLDOO\ LQ WKH ƼUVW KDOI RI WKH
\HDU DQG WKH PHGLFDO ODVHU 2(0 FRUUHFWHG WKHLU LQƽDWHG
inventory holding. We started to see this position
recover in the fourth quarter.
STRATEGIC REPORT OPERATIONS REVIEW
63
Financial
Review
Further progress on delivering
the strategy despite challenging
market conditions.”
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
64
65
STRATEGIC REPORT FINANCIAL REVIEW
FY2024 saw us complete some important steps on the Group’s
VWUDWHJ\ DJDLQVW WKH EDFNGURS RI D GLIƼFXOW PDUNHW HQYLURQPHQW
In the second half of FY2023 it had already been evident that some
of our larger customers in the industrial and medical laser markets
ZHUH RYHUVWRFNHG DQG WKDW YROXPHV LQ RXU ƼUVW KDOI RI )<
would be impacted as they sought to correct their inventory
KROGLQJ 7KDW ZDV WKH FDVH DQG LQ WKH ƼUVW KDOI RXU UHYHQXH
declined by 5.3% on an organic, constant currency basis. In the
VHFRQG KDOI UHYHQXH UHFRYHUHG DQG ZDV KLJKHU WKDQ WKH ƼUVW
half on the same measure, although in the industrial and medical
laser markets we are yet to see sustained recovery in demand
levels. Despite the second half recovery revenue for the full year
ƼQLVKHG KLJKHU WKDQ )< EXW ORZHU ZKHQ PHDVXUHG
on an organic, constant currency basis.
,Q WKH ƼUVW KDOI RI WKH ƼQDQFLDO \HDU RXU RUGHU ERRN JUHZ PDUJLQDOO\
thanks to lower levels of output driven by our customers’ scheduled
demand. In the second half, our output levels increased but when
measured at a Group level, order intake was broadly the same as the
ƼUVW KDOI ZLWK WKH UHVXOW WKDW RXU ERRN WR ELOO UDWLR IHOO WR [ DQG
the order book closed the year at £104.5m. By historical measures
this is still at a good level but our customers, particularly in the
industrial segment, are reluctant to place orders for multiple months
UHƽHFWLQJ WKHLU RZQ XQFHUWDLQW\ UHJDUGLQJ WKHLU HQG PDUNHWV
We set out in our strategy in 2023 that we would review the Group’s
SRUWIROLR RI SURGXFWV WR GHWHUPLQH ZKHWKHU WKH\ ZHUH VXIƼFLHQWO\
differentiated to generate the level of returns that supported the
Group’s journey to mid-teen returns. As a result of that review, we
concluded that the majority of products supplied by our EM4
facility in Boston did not reach that threshold and as a result, the
business should be sold. We did, however, ensure prior to the sale
that we transferred out of EM4 to another G&H facility a technology
IRU ƼEUH IXVLQJ WKDW LV GLIIHUHQWLDWHG DQG LV HPSOR\HG LQ WKH PRGXOHV
we supply into advanced photolithography equipment. The sale of
the business was completed in March 2024 and as a result, the
ƼQDQFLDO VWDWHPHQWV KDYH EHHQ UHSUHVHQWHG WR H[FOXGH WKH
results of this discontinued operation.
The lower revenue described above pulled the Group’s adjusted
RSHUDWLQJ SURƼW PDUJLQ ORZHU WR :KLOVW PDUJLQV
progressed in our A&D and Life Sciences segments thanks to
DGGLWLRQDO YROXPHV DQG VRPH SURJUHVV RQ RSHUDWLRQDO HIƼFLHQFLHV
margins fell back in our Industrial segment as a result of the lower
volumes. We continue to support our R&D programmes with
further engineering recruitment and our spend in this area
increased to £7.8m (5.8% of revenue) compared with £7.4m
(5.5% of revenue) in the previous year.
After the impact of adjusting items which totalled £3.7m (2023:
eP WKH IXOO \HDU VWDWXWRU\ RSHUDWLQJ SURƼW ZDV eP
£7.8m). The loss on disposal of the EM4 business totalled £9.2m,
and when this is combined with the trading of that business in the
period up to its sale, the total post tax loss from discontinued
operations was £9.7m (2023: £0.8m), bringing the total post tax
ORVV RI WKH *URXS IRU WKH \HDU WR eP SURƼW RI eP
$GMXVWHG (36 WRWDOOHG SHQFH SHQFH UHƽHFWLQJ WKH
*URXSŮV UHGXFHG DGMXVWHG RSHUDWLQJ SURƼW LQ WKH \HDU 5HSRUWHG
basic earnings per share was 12.7 pence (2023: 19.4 pence).
During the year we invested £5.2m in additional equipment and
systems to support the Group’s operations and future growth.
Net working capital level increased by £3.6m as a result of the
settlement of high payables balances on the September 2023
EDODQFH VKHHW LQ WKH ƼUVW TXDUWHU RI WKH \HDU 2XU LQYHQWRU\ WXUQV
and debtor days metrics both improved across the course of the
ƼQDQFLDO \HDU &DVK ƽRZ IURP RSHUDWLQJ DFWLYLWLHV WRWDOOHG eP
(2023: £16.2m). We ended the year with net debt of £25.8m
(2023: £31.7m) including IFRS 16 lease liabilities of £9.9m (2023:
£10.8m). Dividend payments totalled £3.4m (2023 - £3.2m).
At 30 September 2024 leverage was 0.9x (2023: 1.1x).
Overview of the Year
Organic
Revenue Growth
(3.0%)
Total
Revenue
£136.0m
Adjusted
Operating Profit
£8.1m
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
66
Revenue
2024
2023
Year ended 30 September
£’000
%
£’000
%
Industrial
67,947
50.0%
74,709
55.3%
A&D
34,459
25.3%
27,339
20.2%
Life Sciences
33,584
24.7%
32,993
24.5%
Group Revenue
135,990
100.0%
135,041
100.0%
Group revenue from continuing operations totalled £136.0m
(2023: £135.0m). Group revenue was 3.0% lower than the prior
year once the impact of exchange movement and the full year
EHQHƼWV RI $UWHPLV DQG *6 2SWLFV ZKLFK ZHUH DFTXLUHG GXULQJ
the course of FY2023 are excluded. Revenue in the second half
JUHZ FRPSDUHG ZLWK WKH ƼUVW KDOI RQ DQ RUJDQLF FRQVWDQW
currency basis.
We saw full year organic, constant currency revenue growth from
both our A&D and Life Sciences markets, by 10.3% and 1.3%
respectively but in our Industrial market revenue declined on the
same measure by 9.7%. In our A&D business, we are experiencing
strong demand for our super-polished components used in ring
laser gyroscopes as well as a general pick-up in demand for
precision optics used in defence applications. We expect our order
book for this segment to grow further in FY2025 given the
number of proposals we are currently providing to customers.
In our Life Sciences market we saw good growth in revenue for our
medical diagnostic instruments. Two of our customers’ instrument
programmes transitioned into full rate production, and those
devices performed well in the market generating higher levels of
demand than our customers had anticipated, resulting in additional
volumes for our G&H | ITL business. We were also pleased to be
DEOH WR UHFRUG RXU ƼUVW UHYHQXH IURP RXU QHZ 1RUWK $PHULFDQ /LIH
Sciences Centre of Excellence in our Rochester facility. Offsetting
these gains we saw a sharp reduction in our revenue from the
medical laser market. This market is characterised by a small
number of large OEMs who found themselves in an overstocked
position entering FY2024. As a result those customers pushed out
H1 FY2024 deliveries in order to correct their inventory holdings.
We started to see some resumption of demand in the second half
RI WKH \HDU EXW RYHUDOO RXU UHYHQXH ƼQLVKHG WKH \HDU VLJQLƼFDQWO\
lower than the previous period.
We faced a similar effect in our Industrial segment where many of
our industrial laser customers entered FY2024 in an overstocked
SRVLWLRQ $V D UHVXOW UHYHQXH IRU RXU ,QGXVWULDO VHJPHQW LQ WKH ƼUVW
half was 13.4% lower than the prior period on an organic, constant
currency basis. Whilst trading levels improved in the second half,
WKH VHJPHQWŮV UHYHQXH ƼQLVKHG )< ORZHU WKDQ WKH SULRU
year. Despite the headwinds in our principal industrial markets we
did see good growth from our subsea data cable market. This was
a result of securing an important new customer win for the
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activity with our principal existing customer.
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7KH *URXSŮV DGMXVWHG RSHUDWLQJ SURƼW IURP FRQWLQXLQJ RSHUDWLRQV
ZDV eP eP DQG VWDWXWRU\ RSHUDWLQJ SURƼW IURP
continuing operations was £6.8m (2023: £7.8m) after a charge of
£3.7m (2023: £4.3m) for items excluded from adjusted operating
SURƼW 7KLV LQFOXGHG
• Acquisition costs of £2.2m (2023: £2.8m) of which £2.0m
(2023: £1.7m) related to the non-cash amortisation charges on
intangible assets arising on the Group’s historical business
combinations. The remaining £0.2m (2023: £1.2m) related to
costs associated with the acquisitions of GS Optics and Artemis
in FY 2023.
• Restructuring costs of £0.9m (2023: £0.6m) associated with the
restructuring of the Group’s operations and other non-recurring
charges.
• Site closure costs of £0.5m (2023: £0.9m) associated with the
closure of the Group’s facility in Shanghai and in the prior year
the closure of a small facility in Virginia and the consolidation of
its activities into our facility in Rochester, NY.
7KH DGMXVWHG RSHUDWLQJ PDUJLQ RI UHƽHFWV WKH
impact of lower volumes especially in our Industrial segment. In
WKH ƼUVW KDOI WKH EXVLQHVV ZDV VLJQLƼFDQWO\ LPSDFWHG E\ VRPH RI
our principal industrial laser customers adjusting their inventory
holding lower. We saw some improvement in the second half with
RXU UHYHQXH LQWR WKLV VHJPHQW KLJKHU WKDQ WKH ƼUVW KDOI ZKLFK
KHOSHG WR OLIW DGMXVWHG RSHUDWLQJ SURƼW PDUJLQV IURP LQ WKH
ƼUVW KDOI WR LQ WKH VHFRQG KDOI 'HVSLWH GLIƼFXOW WUDGLQJ
conditions in our industrial laser markets, the subsea data cable
market continued to be a good one for us. Revenue grew thanks
to our principal end customer winning new networks installations.
:H ZHUH DOVR SOHDVHG WR VHFXUH D FXVWRPHU IRU D QHZ DPSOLƼHU
module – the output from one of our technology roadmaps. That
programme win will support margin accretion as the project
PLJUDWHV WR YROXPH SURGXFWLRQ LQ WKH FRPLQJ ƼQDQFLDO \HDU 7KH
SURJUHVVLYH PLJUDWLRQ RI PRUH RI RXU KLJKUHOLDELOLW\ ƼEUH FRXSOHU
build to our south east Asian sub-contractor also supports further
margin progression for the Group in this segment in the coming year.
:LWKLQ RXU /LIH 6FLHQFHV EXVLQHVV ZH VDZ D VLJQLƼFDQW VORZGRZQ
RI GHPDQG IURP RXU PHGLFDO ODVHU FXVWRPHUV LQ WKH ƼUVW KDOI
And despite further growth in our deliveries to medical diagnostic
LQVWUXPHQW FXVWRPHUV RXU UHYHQXH LQ WKH ƼUVW KDOI ZHUH
lower on an organic, constant currency basis. Similar to our
Industrial segment, revenue recovered to some extent in the
second half albeit at a subdued level in the medical laser market
,but deliveries to our medical diagnostic customers grew again.
5HYHQXH LQ WKH VHFRQG KDOI ZDV KLJKHU WKDQ WKH ƼUVW KDOI
Despite the growth in revenue, operating margins declined from
LQ WKH ƼUVW KDOI WR LQ WKH VHFRQG $V VRPH RI RXU
medical diagnostic programmes migrated to high volumes
pre-negotiated pricing reductions came into force and in our
medical laser markets we face growing competition from lower
cost Asian competition that is driving the price points in the
market lower and impacting the Group’s margins from these
product lines. We are currently assessing our strategy for the
medical laser market.
67
STRATEGIC REPORT FINANCIAL REVIEW
Reconciliation of Adjusted Performance Measures
Operating
SURƼW
1HWƼQDQFH
(costs)/income
3URƼW
before tax
Taxation
Earnings
per share
Operating
FDVKƽRZ
Year ended 30 September
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
pence
2023
pence
2024
£’000
2023
£’000
Reported
6,812
7,814 (2,604) (1,812) 4,208 6,002
(931) (1,145)
12.7p
19.4p 14,247 16,164
Acquisition costs
228
1,156
209
57
437
1,213
(85)
(83)
1.4p
4.5p
134
1,116
Amortisation of acquired intangible assets
2,002
1,672
–
– 2,002
1,672
(462)
(327)
5.9p
4.7p
–
–
Restructuring and site closure costs
1,460
1,450
–
–
1,460
1,450
(59)
(291)
5.5p
5.3p
2,323
934
Adjusted
10,502 12,092 (2,395) (1,755)
8,107 10,337 (1,537) (1,846)
25.5p
33.9p 16,704 18,214
$UHFRQFLOLDWLRQEHWZHHQDGMXVWHGSURƼWDQGVWDWXWRU\SURƼWLVVKRZQEHORZ
In our A&D market we are seeing good growth in demand. First
half revenue was 19.6% higher on an organic, constant currency
EDVLV FRPSDUHG ZLWK WKH ƼUVW KDOI RI )< DQG ZH VDZ IXUWKHU
JURZWK LQ WKH VHFRQG KDOI ZKLFK ZDV KLJKHU WKDQ WKH ƼUVW KDOI
on the same measure. The additional volume is helping to lift
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WR D SURƼW RI LQ WKH VHFRQG KDOI 7KH PRUH FRPSOH[ VLJKWLQJ
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that we are providing our customers generate better margins that
our less complex precision optic components. Nevertheless, we
are still experiencing lower yields and higher scrap rates in some
of our precision optic facilities than we would like. This has been
partially driven by high numbers of newly recruited production
team members less experienced in the handling of precision optics
through the production process. Improvements in this area will be
a focus for us in the coming year.
We made further additions to our R&D teams, and our total spend
on product development activities increased to £7.8m (2023:
£7.4m). We also added to our sales and business development
teams, especially in our Life Sciences segment, in order to support
the future growth of our business and, in particular, the North
American medical diagnostic instrument market, leveraging the
investments we have made in establishing our Life Sciences
Centre of Excellence in Rochester, NY state. Despite the weaker
demand we are currently seeing from our industrial and medical
laser markets, we are ensuring the business is well positioned to
EHQHƼW RQFH WKRVH PDUNHWV UHWXUQ WR JURZWK
$ UHFRQFLOLDWLRQ EHWZHHQ DGMXVWHG SURƼW DQG VWDWXWRU\ SURƼW LV
shown below.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
68
Discontinued operations
The loss from discontinued operations in the period totalled £9.7m.
This comprised a loss on disposal of the EM4 business of £9.2m, a
WUDGLQJ ORVV LQ WKH SHULRG RI eP SURƼW RI eP DQG D
tax credit of £0.2m. The EM4 business had received two contract
cancellations in the months leading up to its disposal in March
2024 which had impacted its trading performance in the year.
Finance costs
1HW DGMXVWHG ƼQDQFH FRVWV WRWDOOHG eP eP ZLWK WKH
increase due to the higher drawn debt levels following the
acquisition of the Artemis and GS Optics businesses in FY2023.
Included within these costs is a charge of £0.5m (2023: £0.3m) in
respect of lease interest. The additional property leases taken on as
a result of the acquisition of Artemis and GS Optics, including the
additional space taken for our North American Life Sciences Centre
of Excellence explain the increase compared to the previous year.
Further details of the Group’s debt facilities are set out below.
Taxation
The Group’s overall tax charge was £0.9m (2023: £1.1m) including
a £0.6m credit (2023: £0.7m) in respect of items excluded from
DGMXVWHG SURƼW 7KH DGMXVWHG WD[ FKDUJH ZDV eP eP
resulting in an effective tax rate of 19.0% (2023: 17.9%). The rate
UHƽHFWV D FRPELQDWLRQ RI WKH YDU\LQJ WD[ UDWHV DSSOLFDEOH
throughout the countries in which the Group operates, principally
the UK and the USA as well as the tax incentives for investment
available to the Group.
During the year, we performed a review of our deferred tax
accounting across each of the jurisdictions in which we operate.
7KLV UHYLHZ LGHQWLƼHG WKDW ZH ZHUH HQWLWOHG WR DQG VKRXOG KDYH
recognised a deferred tax asset in respect of accumulated trading
losses in our US tax group. Accordingly we have restated the balance
sheet as at 30 September 2022 to recognise additional deferred
tax assets of £2.5m in respect of losses. In accordance with IAS12,
we have also netted deferred tax assets and deferred tax liabilities
where they relate to taxes levied by the same taxation authority
on the same taxable entity. The effect of this was to net deferred
tax assets of £4.7m and £4.5m against the deferred tax liabilities
as at 30 September 2023 and 30 September 2022 respectively.
There is no effect from this adjustment on the income statement
for the year ended 30 September 2023 or 2024.
Earnings Per Share
Basic adjusted earnings per share reduced to 25.5 pence
SHQFH UHƽHFWLQJ WKH UHGXFHG DGMXVWHG SURƼW LQ WKH
period. Basic earnings per share was 12.7 pence (2023: 19.4 pence).
This reduction was driven by the reduction in adjusted operating
SURƼW DQG WKH VPDOO \HDU RQ \HDU GLIIHUHQFH LQ DGMXVWLQJ LWHPV
set out above.
&DVKƽRZ
&DVK ƽRZ JHQHUDWHG IURP RSHUDWLQJ DFWLYLWLHV ZDV eP
eP 'XULQJ WKH ƼUVW KDOI RI WKH ƼQDQFLDO \HDU WKH *URXS
increased its net working capital by £3.6m principally as a result of
settling high creditor balances on the September 2023 balance
VKHHW ,Q WKH VHFRQG KDOI ZRUNLQJ FDSLWDO OHYHOV ZHUH KHOG EURDGO\ ƽDW
despite increasing levels of output thanks to improving disciplines
around inventory management and strong collections of receivables.
Our net capital expenditure totalled £5.2m (2023: £6.8m).
,QYHVWPHQW OHYHOV UHGXFHG LQ WKH \HDU JLYHQ WKH VLJQLƼFDQW
QRQUHFXUULQJ LQYHVWPHQWV PDGH LQ WKH SUHYLRXV ƼQDQFLDO \HDU
in establishing our contract manufacturing partner for the
production of our products as well as investments in our
precision optics production facility at Ilminster. Notable spend in
)< LQFOXGHG WKH ƼW RXW RI WKH 1RUWK $PHULFDQ /LIH 6FLHQFHV
Centre of Excellence in Rochester, NY state and the
implementation of the Group’s ERP systems in the G&H | Artemis
and G&H | GS Optics businesses.
7KH QHW FDVK LQƽRZ IURP WKH VDOH RI RXU (0 EXVLQHVV LQ 0DUFK
2024 totalled £1.7m. This comprised consideration received of
£4.2m less transaction fees and other costs incurred of £2.1m and
cash included in the business at sale of £0.4m. Working capital and
net debt adjustments resulted in a repayment of £0.7m to the
purchaser. The net proceeds from the sale were used to reduce the
Group’s borrowings. The consideration for the sale of the business
included a deferred, contingent element of up to $6.75m (£5.1m)
based upon the performance of the business in the period ending
30 September 2025. We have assessed the fair value of this
deferred, contingent consideration as £nil.
Deferred, contingent consideration was payable by the Group on
its purchase of the Artemis and GS Optics businesses in FY2023.
The G&H | GS Optics business failed to achieve the levels required
in order for a payment to be made and no further amounts are now
GXH LQ UHVSHFW RI WKDW DFTXLVLWLRQ 7KH ƼUVW PHDVXUHPHQW SRLQW IRU
the deferred, contingent consideration for the purchase of the
G&H | Artemis business was the year ended 31 July 2024 and a
SD\PHQW RI eN ZDV PDGH 7KH ƼQDO HOHPHQW RI WKH GHIHUUHG
contingent consideration is dependent upon the business’
ƼQDQFLDO SHUIRUPDQFH LQ WKH SHULRG HQGLQJ -XO\
Dividend payments in the year totalled £3.4m (2023: £3.2m).
Funding and Liquidity
The Group’s operations are funded through a combination of
UHWDLQHG SURƼWV HTXLW\ DQG ERUURZLQJV %RUURZLQJV DUH UDLVHG DW
Group-level from the Group’s banking partner and lent to the
subsidiaries. The Group’s facility comprises a committed $50m
revolving credit facility (RCF) with a further $20m uncommitted
accordion facility. At 30 September 2024, the Group had drawn
$30.4m, leaving undrawn committed and uncommitted facilities
of $39.6m. The RCF matures in March 2027. A further summary
of the Group’s borrowings and maturities are set out in note 23
of the Group Financial Statements.
The Group’s leverage is expressed in terms of its net debt/
DGMXVWHG (%,7'$ UDWLR 8QGHU WKH *URXSŮV FUHGLW IDFLOLW\ WKH ƼJXUH
for net debt used in this ratio excludes IFRS 16 lease liabilities and
RWKHU ,)56 LPSDFWV 7KH *URXSŮV PDLQ ƼQDQFLDO FRYHQDQWV LQ LWV
bank facilities states that net debt must be below 2.5 times
adjusted EBITDA, and adjusted EBITDA is required to cover
interest charges, excluding interest on pension schemes, by at
least 4.5 times. At 30 September 2024 net debt/adjusted EBITDA
was 0.9x (30 September 2023: 1.1x). Interest cover at 30
September 2024 was 5.9x (30 September 2023: 9.0x).
7KH *URXS PDLQWDLQV VXIƼFLHQW DYDLODEOH FRPPLWWHG ERUURZLQJV WR
meet any forecast funding requirements.
69
STRATEGIC REPORT FINANCIAL REVIEW
Dividend Policy
In determining the level of dividend, the Board considers not only
the adjusted earnings cover, but also looks to the future expected
underlying growth of the business and its capital and other
investment requirements. The Group’s balance sheet position and
its expected future cash generation are also considered. The Board
takes into consideration the Group’s Principal Risks, which are set
out on pages 69 to 71. The Group’s ability to pay a dividend is
impacted by the distributable reserves available in the parent
Company, which operates as a holding company, primarily deriving
its net income from dividends paid by its subsidiary companies. At
6HSWHPEHU *RRFK +RXVHJR 3/& KDG VXIƼFLHQW
distributable reserves to pay dividends for the foreseeable future.
Given the strength of the Group’s order book and the growth
SRWHQWLDO RI WKH *URXS FRQƼUPHG E\ RXU UHFHQW VWUDWHJLF UHYLHZ
WKH %RDUG LV SURSRVLQJ D ƼQDO GLYLGHQG RI SHQFH SHU VKDUH
(FY2023: 8.2p), giving a total of 13.2 pence per share (FY2023:
13.0p) for the year when combined with the 4.9 pence per share
paid as an interim dividend in July 2024 (FY2023: 4.8p). The
Board is committed to growing the level of dividend cover.
Financial Risk Management
7KH *URXSŮV PDLQ ƼQDQFLDO ULVNV UHODWH WR IXQGLQJ DQG OLTXLGLW\
LQWHUHVW UDWH ƽXFWXDWLRQV DQG FXUUHQF\ H[SRVXUHV 7KH *URXS XVHV
ƼQDQFLDO LQVWUXPHQWV WR PDQDJH ƼQDQFLDO ULVNV DULVLQJ IURP
underlying business activities.
Foreign Currency
The Group is exposed to both translational and transactional
currency risk. We are able to partially mitigate the transaction risk
through matching supply currency with sales currencies but in our
UK businesses, we remain a net seller of US dollars and Euros. We
address this remaining net risk through forward hedge contracts
seeking to cover at least 75% of the forecast net exposure over the
coming twelve months. These contracts are used to reduce volatility
which might affect the Group’s cash balance and income statement.
Further details of the Group’s foreign exchange risk management
are set out in note 29 of the Group Financial Statements.
The following are the average and closing rates of the foreign
currencies that have the most impact on the translation of the
Group’s Income Statement and Balance Sheet into GBP.
Income Statement
Average rate
2024
2023
USD/GBP
1.27
1.23
Euro/GBP
1.17
1.15
Balance Sheet
Closing rate
USD/GBP
1.34
1.22
Euro/GBP
1.20
1.15
The Group’s revenue is more sensitive to exchange rate movements
WKDQ LWV SURƼW $ RQH FHQW FKDQJH LQ WKH DYHUDJH 'ROODU H[FKDQJH
rate would have a £0.7m effect on revenue but less than £0.1m
HIIHFW RQ SURƼW 7KH *URXSŮV UHVXOWV DUH QRW VLJQLƼFDQWO\ DIIHFWHG
by movements in the Euro exchange rate.
ESG
Report
Image: Tim van der Kuip/Unsplash
Environment
Reducing energy
consumption
Sourcing from cleaner,
more sustainable
sources
Social
Engaging with our
people
Developing our people
Ensuring the wellbeing
of our people
Promoting equality
and diversity
Supporting our
communities
Governance
Corporate governance
framework
Business integrity
Managing our
supply chain
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
70
71
STRATEGIC REPORT ESG REPORT
We recognise that our workforce is the
most important asset that our Group
possesses. We are focussed on investing
in the development of our employees
at all levels within the organisation.
Our apprenticeship schemes offer young
people in the communities in which we
operate routes in to rewarding, skilled roles
in an advanced and complex manufacturing
environment. We ensure we operate a safe
working environment, and we’re pleased to
see a further improvement in our metrics
in this area in the year.
We understand the importance of
maintaining the highest standards of
corporate governance. We ensure we
operate in an ethical and sustainable way
in all parts of our operation.
The Group’s Sustainability Committee
which was established in 2023 is now
embedded as an important forum for
managing and accelerating the Group’s
sustainability actions. We also require our
suppliers to apply high levels of governance
and operate in an ethical manner, and we
support them in that process through our
regular visited to their facilities.
At G&H we are working hard to reduce our
impact on the environment and supporting
steps to limit climate change. We made further
good progress in the year in reducing our
carbon emissions in support of our objective to
have zero net Scope 1 and 2 emissions by 2035.
Many of the products that we design and
manufacture are supporting the more efficient
use of energy and the transition away from
carbon based fuels to clean, renewable energy.
We are determined
to maintain our high
standards of business
conduct as we know
our reputation is key
in ensuring our
long-term success.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
72
Our business activities and the ways
in which we operate support the
UN’s Sustainable Development Goals
are shown below:
Our products enable our customers
to operate more effectively and use
UHVRXUFHVPRUHHIƼFLHQWO\
We employ scientists, engineers and
talented production operators constantly
LQQRYDWLQJLQWKHLUƼHOGVRIH[SHUWLVH
Industry,
innovation and
infrastructure
9
We apply high standards of corporate
governance and expect our suppliers
to do the same.
We are reducing our impact on the
environment.
Responsible
production and
consumption
12
We have set a target to be net zero for
Scope 1 & 2 emissions by 2035, and
are making good progress against that.
Our products support the generation of
HQHUJ\IURPFOHDQUHQHZDEOHVRXUFHV
Climate
action
13
2XUSURGXFWVVXSSRUWWKHFOHDQDQGHIƼFLHQW
JHQHUDWLRQRIHQHUJ\IURPUHQHZDEOHVRXUFHV
:HKDYHLQYHVWHGWRJHQHUDWHRXURZQHQHUJ\
IURPVRODUVRXUFHVDQGZHDUHSURJUHVVLYHO\
buying more and more of our remaining
HQHUJ\QHHGVIURPUHQHZDEOHVRXUFHV
Affordable and
clean energy
7
We are committed to equal opportunities
ZLWKLQRXUEXVLQHVV:HRIIHUƽH[LEOH
ZRUNLQJDUUDQJHPHQWVZKHUHYHU
SRVVLEOHWRKHOSUHWDLQPRUHZRPHQ
in our business.
Gender
equality
5
3
Our products help to diagnose and
treat illness and disease at their
earliest stages.
We are committed to providing a safe and
KHDOWK\ZRUNLQJHQYLURQPHQWIRURXU
employees, including their mental health.
Good health
and well being
Image: Jonatan Pie/Unsplash
73
Employee engagement
We work hard to ensure our employees feel connected to
and engaged with the over-arching vision of the Group
which is “A Better World with Photonics”. During the year,
the Group launched the G&H Employee Engagement
programme, a comprehensive employee connection model
that focuses on the “employee life” components of the
employment experience.
In a move to boost employee engagement, in April 2024,
the Group introduced a company-wide quarterly
newsletter, The Pulse. This features a variety of content
aimed at keeping our employees informed, engaged, and
inspired. From updates on company initiatives and
spotlights on team members, this newsletter is a valuable
resource that connects everyone in our organisation.
During the year we have also introduced a monthly
‘One G&H’ slide pack to be delivered to all sites which is
available for our site general managers to use at their
UHJXODU DOO HPSOR\HH EULHƼQJ VHVVLRQV 7KLV IXUWKHU KHOSV
to give our team members visibility of developments in
other parts of the G&H Group.
We have invested in a new HR Information System which
went live at the beginning of October 2024. This system
provides a “one-stop shop” for both employees and their
managers for employee performance assessments,
learning and development plans, as well as remuneration
GHWDLOV DQG DYDLODEOH HPSOR\PHQW EHQHƼWV
The Board and senior managers within the Group keep
connected with the views of employees through regular
interactions with our employee consultation groups,
comprised of management and elected employee
representatives. There are now two formal occasions
a year when the Board meet with those employee
representatives. In between those formal meetings our
non-executive director, Jim Haynes (nominated as the
Board member with overall responsibility for employee
engagement) meets with employee representatives.
STRATEGIC REPORT ESG REPORT
Social
Establishing the right culture and values amongst our
teams is critical in allowing the Group to deliver upon its
strategy. The G&H Values and Behaviours guide how we
work with each other and with our customers and
suppliers. When we recruit and when we assess our
employees’ performance, we do so by references to the
Values and Behaviours we have shared with them.
The safety and wellbeing of our employees is of utmost
importance to us. We celebrate zero harm achievement
and we were pleased to achieve a further reduction in our
time lost to accidents in 2024.
The G&H Values
Customer Focus Delivering excellence to
our customers both internal and external.
Integrity We do the right thing. Hard on the issue,
fair on the person and kind to the planet.
Action Understanding that ‘it is what we do that
makes a difference’. Demonstrating self-motivation,
initiative and determination to achieve this.
Unity Working together across teams and
sites, in the spirit of collaboration towards a
common purpose.
Precision In our engineering and our commitment
to excellence and continuous improvement.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
74
Reward & Recognition
During the year we appointed Melinda Chudleigh as the Group’s
QHZ &KLHI 3HRSOH 2IƼFHU 2QH RI KHU HDUO\ VWDJH DFWLYLWLHV KDV EHHQ
WR UHYLHZ RXU UHZDUG DQG EHQHƼWV SDFNDJHV WR HQVXUH ZH DUH
market competitive and that they are appropriately rewarding
performance in support of our corporate strategy.
This review resulted in a change in the way in which we incentive
our sales team members. The new reward structure is focused
more closely on the generation of the order book that they can
PRVW FORVHO\ LQƽXHQFH ,W DOVR DOORZV WKHP WR HDUQ KLJK DPRXQWV LI
they are particularly successful in generating new business from
their allocated customers.
We believe that all employees should be able to participate in
performance related pay schemes that reward them for both the
ƼQDQFLDO SHUIRUPDQFH RI WKHLU VLWH DQG WKH *URXS EXW DOVR WKHLU
personal contribution to the business during the year. During the
year we ensured that employees of the businesses that we
acquired in 2023 were invited to participate in these schemes.
Developing our People
We seek to develop the skills and capabilities of our employees
and to give our high potential employees the ability to take on
new responsibilities and develop their careers.
Within the Group’s new HR Information System there is a
performance management and appraisal tool which provides
opportunity for individuals to discuss training needs and career
planning with their manager. Our managers are trained to set
SMART objectives and to complete effective staff appraisals. The
Group also operates a talent management and succession planning
process managed through our online appraisal system and from
which the Executive Management Team formulate action plans
and review progress. The Board reviews this process annually and
closely follows the development of our high potential employees.
We are able to make available online training content using our
new HR systems. This will replace similar but less effective tools
we have had in the past to deliver training on how to establish high
performing team and to be aware of the needs of our internal
customers as well as areas such as cyber security, export
legislation awareness and Global Data Protection Regulations.
Safety
The health, safety and well-being of our employees across the
Group is of paramount importance, and we work hard to ensure all
our people are safe, whether they are working from home, working
in our premises or working with our customers. We have a zero
harm vision for health & safety.
Safety performance is a Group KPI, and we are pleased to report a
56% reduction in days lost to accidents in FY2024 compared with
the prior year. We manage the Group’s activities in this area through
regular monthly site and quarterly functional reviews. “Near miss”
reporting, which enables us to deal with potential problems before
they result in accidents, is a cornerstone of our efforts to improve
in this area and we were pleased that there was a 155% increase in
the number of individual “Spot it, Stop it” reports made by
employees in FY2024 compared with the prior year. We back up
W
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75
STRATEGIC REPORT ESG REPORT
local site reporting activities with annual health and safety audits
from Group safety managers not normally located at the site. The
closure of actions resulting from these audits is tracked at
quarterly Executive team meetings.
:H EHQFKPDUN RXU KHDOWK DQG VDIHW\ GDWD ZKLFK ZLWK RWKHU ƼUPV
in our industry sectors. We continue to demonstrate best-in-class
performance levels. Whilst the number of incidents which resulted
in lost work time increased from 7 in FY2023 to 10 in FY2024, the
number of days lost fell to 16.25 from 37 days in the previous year.
6DIHW\ SHUIRUPDQFH LV TXDQWLƼHG DV WKH QXPEHU RI RFFXSDWLRQDO
accidents resulting in any time off work. None of the lost time
incidents in FY2024 were reportable.
Health and Wellbeing
We support our employees’ health and well-being, including their
mental health. In the US, we contribute to our employees’ health
insurance accounts where they have opted to join one of the G&H
schemes, and in the UK, we operate a health cash plan for our
HPSOR\HHV ZKLFK SURYLGHV ƼQDQFLDO UHLPEXUVHPHQW IRU FRVWV
associated with everyday healthcare and well-being solutions.
We also make available to our employees external employee
assistance programmes (EAPs) through which employees can
access third party advice on good practice health and well-being.
2XU VLWHV KDYH WUDLQHG LQKRXVH PHQWDO KHDOWK ƼUVW DLGHUV DQG LQ
the UK we have continued our active partnering with the mental
health charity MIND. We give our managers regular training to
help them recognise and help with emerging mental health issues
amongst their teams.
:KHUH LW LV SRVVLEOH JLYHQ WKH QDWXUH RI WKHLU UROH ZH RIIHU ƽH[LEOH
working arrangements allowing our team members hybrid home/
RIƼFH ZRUNLQJ SDWWHUQV DOORZLQJ WKHP WR FKRRVH KRZ WKH\ GR WKHLU
MREV LQ D ZD\ WKDW ZRUNV EHVW IRU WKHP :LWKLQ WKDW ƽH[LEOH
structure we do however believe in the importance of employees
continuing to have regular on site attendance in order to enable
effective team working and develop working relationships.
We value long term employment with the Group and have
operated a long-service recognition scheme across the Group for
several years. This is in addition to our employee recognition
VFKHPH ZKLFK UHZDUGV HPSOR\HHV IRU VLJQLƼFDQW FRQWULEXWLRQ WR
the business.
The average length of service across the Group is 8.5 years
(2023: 8.0 years).
7KH ORVV RI NH\ SHUVRQQHO LV LGHQWLƼHG E\ WKH %RDUG DV D ULVN ZLWKLQ
its ongoing Business Risk Assessment process. Voluntary labour
turnover was 8.2% across the Group in FY2024 (2023: 10.8%).
Promoting Equality and Diversity
The Board is committed to providing equal employment
opportunities for all employees and applicants for employment.
Diversity of age, gender and ethnicity is embraced at G&H. We
seek to recruit, hire, develop and retain the best talent from the
communities in which we operate. Our employees have diverse
backgrounds, skills, and ideas that collectively contribute to our
VXFFHVV ,Q WKH 86 RXU VLWHV KDYH SXW LQ SODFH $IƼUPDWLYH $FWLRQ
Programs (AAP) in which are designed to attract, retain and
develop a diverse pool of talent. In the UK our early year career
apprenticeships and in the US our internship programmes have
been successful in attracting new talent in to the Group. We use
our enhanced family-friendly employment practices, including
ƽH[LEOH ZRUNLQJ WR PDNH * + DQ DWWUDFWLYH HPSOR\HU WR D EURDGHU
range of people.
The Board and Executive management team monitor the
representation of women and ethnic minorities at different levels
and across different functions within our “talent pools”. Our
recruitment partners are instructed to include female candidates
in all shortlist submissions. Over time this will improve the
representation of women at all levels, notably in leadership
positions. At the end of FY2024, 25% of the Group’s Directors and
Senior Leadership team were female compared with 21% at the
same time last year. Female representation on the Board is now at
33% (2023: 28.6%).
Supporting our Communities
We support the communities in which we operate. Through our newly
launched G&H Giving programme we encourage employees to
participate in volunteer activities and community service projects.
To support this, employees are allowed to take time off work for
volunteering. We also support charitable organisations through
donations and fundraising events, and we partner with local schools.
Each of our site general managers has been allocated money to
donate to local charities preferably in the form of a “match” for
amounts raised by our employees. As a result, we know we are
supporting those causes that are important to our employees.
The Group supports and develops students and apprentices,
HVSHFLDOO\ LQ WKH ƼHOG RI HQJLQHHULQJ DQG WHFKQRORJ\ :H
frequently host students from our local schools to foster their
interest in a career in photonics and to hopefully generate the
Group’s future role applicants.
The Group has long-standing relationships with several
universities in the UK, including Herriot Watt Edinburgh,
Strathclyde, Glasgow, Exeter and University College London with
whom we work on collaborative projects as well as providing
support to academic research projects.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
76
During FY24 we achieved a reduction on 14.3% in
RXU FDUERQ LQWHQVLW\ PHDVXUH DV GHƼQHG RQ SDJH
Our programmes to transition our US sites to
purchase all of their electricity needs from clean,
renewable sources is gaining momentum following
our UK sites which have already achieved that
milestone.
We continue to maintain links with other
companies within our sector and seek to learn
from them regarding initiatives to reduce energy
consumption. We use the structure of ISO 50001
– Energy Management Systems – as best practice
guidance to help us identify where the greatest
reductions in energy use can be achieved. Building
upon last year’s ISO14001 – Environmental
Management – accreditation at our Ilminster and
Torquay sites, in FY2024 we attained the same
accreditation for our Ashford, UK and Keene, NH
sites. Keeping this momentum going, we have
LGHQWLƼHG WZR IXUWKHU WDUJHW VLWHV 3O\PRXWK DQG
Rochester, NY state for accreditation in FY2025.
Our Health, Safety and Environmental function
has developed a standardised approach to
Environmental Management Systems, which has
enabled the deployment to new sites to be
accomplished more quickly than originally planned
and that same model will be applied to any future
acquisitions made by G&H. In FY2024 we have
extended our measurement of the Group’s
environmental impact to include the monthly
recording of waste types and water consumption.
Environmental and Sustainability Governance
Oversight and governance of our environmental
strategy and performance is managed through
our Sustainability Committee, chaired by our
non-executive director Susan Searle.
The introduction of our Board’s Sustainability
Committee supported by its Sub-Committee which
is staffed with representatives from across the
Group has provided further momentum and
awareness within our business of not only
environmental matters but also our broader
sustainability agenda. An internal framework has
been developed that encompasses all these factors
under the banner of the ‘G&H Sustain’ initiative.
We are also extending our work in the area of
environmental sustainability into our supply chain.
For a number of years G&H has partnered with
Assent Compliance to proactively engage with our
supply chain. This year we incorporated the Supply
Chain ESG Module as a means of extending our
ESG awareness throughout our value chain.
Environment
G&H is proud that many of our products are supporting
the cleaner, more efficient generation and use of energy
across a range of applications. We are also working to
ensure the environmental impact of our own sites and
manufacturing activities are reduced as much as possible.
Our investments in solar panels, voltage optimisation
systems and our policy of purchasing electricity only from
renewable sources when our existing energy contracts are
renewed are all lowering our greenhouse gas emissions.
We have developed a plan with the objective of delivering
annual reductions in the energy used by the Group and
therefore its carbon equivalent emissions and are pleased
to report that we remain on track to achieve net zero
Scope 1 & 2 emissions by 2035.
77
STRATEGIC REPORT ESG REPORT
As well as measuring and reducing our CO2 emissions we
are also now collecting centrally from local data the amount
of water we use across the Group. We are committed to
reducing our water usage.
In FY2024 we have established our baseline measures
against which we will be able to report the Group’s progress
against its reduction plans.
Water
usage
WATER CONSUMPTION
CURRENT REPORTING YEAR
FY2024
Cubic Metres
We continue to invest in our sites to help them reduce
their emissions:
• Our Torquay facility has a 297 kWp solar PV system installed
which provides ~18% of the site’s electricity needs along
with a Voltage Optimisation System. Having switched gas
heating to electrical alternatives the site has become the
ƼUVW ZLWKLQ WKH * + *URXS WR EH QHW QHXWUDO IRU 6FRSH
GHG emissions.
• Our Ilminster facility has a 302 kWp solar PV system which
provides ~7% of the site’s electricity needs and this year
introduced a Voltage Optimisation System.
Ŷ 2XU $VKIRUG IDFLOLW\ EHQHƼWV IURP WZR SKDVHV RI 6RODU
PV, phase 1 – 150Kwp, Phase 2 – 35KWp which now also
incorporates 9 battery storage units that provides ~50%
of the site’s electricity needs.
• Our recent acquisition, G&H | Artemis (Plymouth), already
has a Voltage Optimisation System but will also add a PV
Solar 129KWp installation during FY2025.
As a result of these investments, we will have the capacity
to generate approximately 900 kWp of electricity from solar
sources. Collectively these have generated around 2,500
MWh’s of electricity since their installation.
We conduct annual energy audits at each of our sites.
These audits identify areas for improvement and track
existing initiatives through which the site will not only reduce
its energy usage over time but also reduce its impact on the
environment in the near term. These include:
• LED lighting where not already installed.
• Assessments of alternative forms of heating.
• Exploring heat recovery from manufacturing equipment.
• Installing battery systems to harness excess Solar PV and
IXUWKHU LPSURYH VLWH HIƼFLHQFLHV
• The double glazing of windows where not already installed.
Ŷ 8SJUDGH RI HTXLSPHQW ZLWK LPSURYHG HQHUJ\ HIƼFLHQF\
The sites’ progress on these energy reduction actions is
reported monthly to our Executive Committee and Board.
Additionally, they are reviewed by the Executive
Committee quarterly and supported where required
ZLWK ƼQDQFLDO LQYHVWPHQW
Investing to reduce
our emissions
Image: Matt Hardy/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
78
SCOPE
REPORTED
Scope 1
direct GHG emissions
Includes emissions from activities owned or
controlled by G&H that release emissions into
the atmosphere.
Examples include emissions from combustion
in owned or controlled boilers, vehicles.
Report includes:
• Emissions from combustion
of gas and fuel for transport
purposes.
Scope 2
energy indirect emissions
Includes emissions from G&H’s own consumption
of purchased electricity, steam, heat and cooling.
These are a consequence of the group’s activities
but are from sources not owned/controlled.
Report includes:
• Emissions from purchased
electricity.
CURRENT REPORTING YEAR
FY2024
COMPARISON REPORTING YEAR
FY2023
United
Kingdom
5HVWRI
World
Total
United
Kingdom
Rest of
World
Total
Emissions from activities which the Group own or control including
combustion of fuel and operation of facilities (Scope 1)/tCO2e
164
275
439
Emissions from electricity, heat, steam and cooling purchase for
own use (Scope 2)/tCO2e
75
2,622
2,697
Total gross Scope 1 & Scope 2 emissions/tCO2e
239
2,897
3,136
Energy consumption used to calculate above emissions:/MWh
5,784
12,881
18,665
Tonnes of carbon dioxide equivalent per £1 million of revenue
18.0
3.8
33.5
21.1
We are targeting to be Net Zero for Scope 1 & 2 emissions
by 2035. We are pleased that in FY2024 we made a further
VLJQLƼFDQW UHGXFWLRQ LQ RXU HPLVVLRQV 'XULQJ )< ZH ZLOO
also be assessing which of the Scope 3 emission metrics it
may be practical for us to report against and what reduction
targets may be possible.
The primary drivers of our Scope 1 & 2 emissions reduction in
the year were:
• The transfer of our Cleveland, Ohio site to renewable,
purchased electricity.
• A reduction in energy consumption as a result of site
improvement activities.
• Further investment in solar panels.
Our emissions data is calculated centrally from data collected
locally. In reporting our carbon dioxide emissions, we have
followed the UK Government’s Environmental Reporting
Guidelines. We have also followed the Greenhouse Gas (GHG)
Reporting Protocol and the Streamlined Energy and Carbon
Reporting (SECR) guidelines. 2023 Conversion factors have
been used for October 2023 to May 2024 inclusively, and 2024
Conversion factors used for June 2024 to September 2024
inclusively. In the US eGrid 2021 Conversion factors have been
used for October 2023 to January 2024 inclusively, and eGrid
2022 Conversion factors used for February 2024 to September
2024 inclusively.
We have selected as our primary intensity measure carbon
dioxide emissions per £1m of revenue for our global scope 1 and
scope 2 GHG emissions (expressed in tonnes of carbon dioxide
equivalent). We are using an operational control boundary for
direct GHG emissions. For Scope 1 emissions we include our
total owned and leased vehicles’ direct emissions impact.
By far the largest element of our energy usage is our US
Scope 2 purchased electricity. Our reported data is collected
from metered sources.
Energy Use and
Scope 1 & 2 Emissions
STRATEGIC REPORT ESG REPORT
79
Note 1
Intensity Measure – this measure has not been adjusted to
UHƽHFW FRQVWDQW H[FKDQJH UDWHV EHWZHHQ WKH FXUUHQW DQG
comparison years.
1RWH
7KH DERYH ƼJXUHV LQFOXGH WKH * + _ $UWHPLV DQG
G&H | GS Optics businesses acquired during FY2023.
1RWH
7KH DERYH ƼJXUHV LQFOXGH RXU (0 EXVLQHVV LQ WKH SHULRG
to 18 March 2024 when the business was sold. In that
period the EM4 business consumed 496MWhs or purchased
electricity from renewable sources meaning that the
business’ GHG emissions in the period were zero.
1RWH
Energy consumption increased by 11.2% (18,665 MWh’s
to 20,761 MWh’s). However, excluding the G&H | Artemis
and G&H | GS Optics businesses that were acquired during
WKH FRXUVH RI WKH SUHYLRXV ƼQDQFLDO \HDU FRQVXPSWLRQ
reduced by 3.3% (17,722 MWh’s to 17,145 MWh’s).
Energy Use
Notes
Headline Performance
Indicators
Group GHG emissions reduced by 19.2% to 2,532
tCO2e compared to 3,135 tCO2e in FY2023.
19.2%
The reduction in the intensity measure was 16.2%
when measured on a constant currency basis.
16.2%
GHG emission intensity measure reduced by
14.3% to 18.0 tCO2e / £1m of revenue compared
to 21.1 tCO2e in FY2023.
14.3%
On a constant currency basis, the Group
has achieved a reduction in its GHG intensity
measure of 62.1% compared to FY2020,
its baseline measurement year.
62.1%
Group energy purchased from renewable
sources increased to 81% of all purchased
energy for FY2024.
81%
The Group generated 629 MWhs of electricity
from its own installed solar panels. Our Ashford
site generated around half of its total electricity
needs from its own solar panels.
629MWhs
Image: Sorasak/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
80
As a global manufacturer of high technology optical
products, we understand that climate change presents both
risks and opportunities to our business and key markets,
and are committed to identifying, assessing and responding
effectively to these. Following our initial qualitative
assessment of climate-related risks and opportunities in
2023, in 2024 we enhanced our analysis by taking into
account the impact of these risks and opportunities under
various climate scenarios and time horizons.
The Board notes the requirement for mandatory climate-
related disclosures within the Companies (Strategic Report)
(Climate-related Financial Disclosure) Regulations 2022,
which this report addresses.
Non-financial and
sustainability
information statement
Board oversight of climate-related risks and opportunities
At Gooch & Housego, the Board of Directors has ultimate
oversight and responsibility for our sustainability strategy,
targets, disclosures and reporting. This includes overall
accountability and responsibility for climate-related issues such
as risks and opportunities, monitoring the company’s progress
in achieving its climate related targets, and assessing climate-
related performance objectives for Executives. The Board
reviews climate and environmental risks and opportunities as
part of its periodic Group Risk Review meetings, and receives
monthly updates via board presentations and board packs
from the Head of Compliance and Quality, covering a range of
environmental and other key sustainability topics. This includes
climate-related matters such as emissions, and progress
against the business’s Scope 1 and 2 net zero target. In
addition, in-depth reviews are undertaken at least bi-annually.
The Board is supported by the Board-level Sustainability
Committee and its subcommittee. The Sustainability Committee
meets twice per year and is chaired by non-executive director
Susan Searle, who brings broad expertise in ESG matters to drive
progress on the Group’s activities in this area, as demonstrated
through her other non-executive roles including as Chair of
Greenback Recycling Technologies. The committee oversees
actions to minimise the impact of the Group’s operations on the
environment and planet, as well as ensuring the Group’s strategy
is aligned with its environmental and social responsibilities. The
committee is accountable for ensuring progress against Gooch
& Housego’s KPIs and targets, such as implementation of ISO
FHUWLƼFDWLRQ LQ OLQH ZLWK VWDNHKROGHUVŮ H[SHFWDWLRQV
Management of climate-related risk and maintenance of systems
and processes to manage those risks is the responsibility of the
Board of Directors, with the Audit Committee supporting them in
this role. The Audit Committee has responsibility for reviewing the
effectiveness of the risk management framework that incorporates
climate-related risk and opportunities. The Remuneration
Committee supports the Board by assessing Executives’
performance against their short-term incentive plan objectives.
7KH %RDUGŮV DFWLYLWLHV GXULQJ WKH ƼQDQFLDO \HDU LQFOXGHG WKH
approval of the Group’s updated climate risk assessment as
described in this section, in addition to approving the Group’s
registration to participate in the EcoVadis Assessment, and
site-based activities such as the development of additional
battery storage at Ashford. The Board continues to regularly
monitor the Group’s progress in reducing its emissions
intensity through the transition to purchased renewable
electricity. In November 2024, the Remuneration Committee
assessed the Executive Committee’s performance against
Short Term Incentive Plan objectives including a 10% reduction
of the Group’s carbon intensity.
Governance
STRATEGIC REPORT ESG REPORT
81
Management’s role in assessing and managing
climate-related risks and opportunities
At management level, the Executive Team are kept informed
on sustainability and environmental issues and the company’s
progress against its initiatives via a monthly board report from
the Head of Compliance and Quality.
The Executive Team play key roles in the Group’s climate-risk
management process:
&KLHI ([HFXWLYH 2IƼFHU UHVSRQVLEOH IRU WKH RYHUDOO LQWHJUDWLRQ
of climate related considerations in our Group strategy, and
a member of both the Sustainability Committee and
Subcommittee.
&KLHI )LQDQFLDO 2IƼFHU UHVSRQVLEOH IRU FOLPDWH UHSRUWLQJ
and compliance with disclosure requirements, and a member
of both the Sustainability Committee and Subcommittee.
7KH &KLHI )LQDQFLDO 2IƼFHU LV DOVR UHVSRQVLEOH IRU RYHUVHHLQJ
WKH LPSOHPHQWDWLRQ RI HQYLURQPHQWDO DQG HQHUJ\ HIƼFLHQF\
projects at our sites.
A cross-functional Sustainability Subcommittee is in place to
propose and then support the implementation of the Group’s
sustainability strategy at a regional/site level, with regional
EHS managers among its members. Meetings take place on
a quarterly basis and allow EHS managers along with project
leads to provide sustainability updates at a site level. Susan
Searle, a non-executive director, attends this meeting on a
ELDQQXDO EDVLV ZKLFK KHOSV WKH ƽRZ RI LQIRUPDWLRQ DFURVV
all levels of the business. The subcommittee reports into the
group level Sustainability Committee on a bi-annual basis.
At the divisional level, EHS managers organise quarterly
meetings related to sustainability with employees, and have
separate meetings to discuss environmental touch points
as part of our group-wide ISO 14001.
Our climate-related governance structure is summarised in
WKH ƼJXUH EHORZ
Board of Directors
Overall climate change
responsibility
Board Sustainability
Committee
Oversees actions to
minimise impact of group
on the environment
Executive Team
Oversee integration of
climate issues into group
strategy, reporting
and compliance
Audit Committee
Reviews effectiveness of
risk management
framework, inclusive
of climate risk
Sustainability
Subcommittee
Implements sustainability
strategy at regional/site level
Business Unit
& Regional Leaders
Oversee engagement with
employees on sustainability
issues and targets
Image: Derek Sutton/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
82
Our process for identifying, assessing and
managing climate-related risks
,GHQWLƼFDWLRQ RI FOLPDWHUHODWHG ULVNV LV IXOO\ LQWHJUDWHG LQWR
Gooch & Housego’s risk management processes and considered
as part of the overall Group risk management process. Risks are
managed through quarterly functional reviews, and progress
against our agreed roadmaps are reviewed in meetings of our
Sustainability Committee.
Climate-related risks are assessed in the same manner as other
*URXS ULVNV VR WKDW WKHLU UHODWLYH VLJQLƼFDQFH LV FRPSDUDEOH
Our climate risk assessment takes into account all existing
and emerging risks and opportunities, and all risk categories
outlined in the CFD recommendations. We considered risks and
opportunities in relation to all our global operations, and the
Group’s largest sole source suppliers in addition to the Group’s
contract manufacturing partners. While all categories were
assessed, not all risk categories were applicable or material
to the business. A summary of the risks and opportunities
LGHQWLƼHG LQ WKLV DVVHVVPHQW FDQ EH IRXQG IURP SDJH RI
this Annual Report.
&OLPDWH ULVN LV LGHQWLƼHG ERWK WKURXJK ERWWRPXS DQG WRSGRZQ
processes. Physical risks are rolled up from business unit level,
and through surveys of functional owners within the business,
conducted annually with oversight by the Group Financial
Controller. In addition, a top-down assessment is conducted
of strategic and market risks. This year both physical and
transition risks were assessed with the assistance of third-party
consultants, using Munich Re’s Location Risk Intelligence tool,
which provides a geospatial natural hazard risk assessment
DFURVV IXWXUH WLPH KRUL]RQV 2XU ƼQGLQJV ZHUH GLVFXVVHG ZLWK
site representatives at each material site to improve awareness
and understand the current mitigations facilities have for
such hazards.
Climate-related transition risks were determined by senior
management in discussion with sustainability consultants
and took into account input from our sustainability team and
IXQFWLRQDO OHDGV 7KH SURFHVV DOVR LGHQWLƼHG ULVN PLWLJDWLRQ
actions, and our management team will continue to monitor
progress against these actions through monthly reports and
the use of internal dashboards.
In order to assess the relative magnitude of climate-related
risks, the Group has adopted the following scale. The
magnitude of opportunities is assessed using the inverse
RI ULVNVŮ ƼQDQFLDO LPSDFW
Risk Management
LIKELIHOOD
IMPACT
LOW
• Highly unlikely to occur
• No supporting legislation in any relevant market
• No regulatory impact
Ŷ 9HU\ ORZ RU ORZ ƼQDQFLDO LPSDFW eP SURƼW ZLWK OLPLWHG
impact on business operations or key customers
• Minor adverse comment in local media
MEDIUM
• Unlikely to occur
• Legislation likely to be in place in some markets
• Moderate regulatory or legal obligation
• Moderate impact on relationships with customers with medium
LPSDFW RQ WKH ƼQDQFLDO KHDOWK RI WKH EXVLQHVV
eeP SURƼW LPSDFW
• Unfavourable coverage in national media
• Disruption to services
HIGH
• More likely than not to occur
• Legislative instruments in place or highly likely to be across
most markets
Ŷ +LJK SRWHQWLDO IRU GLVFORVXUH WR PDUNHW UHVXOWLQJ LQ VLJQLƼFDQW
penalties and high likelihood for a fall in share price
Ŷ /RVV RI NH\ FXVWRPHUV DV ZHOO DV YHU\ VLJQLƼFDQW FRQWUDFWV
• Widespread critical coverage in national/ international media
• Closure or suspension of business operations
Ŷ +LJK RU YHU\ KLJK !eP SURƼW ƼQDQFLDO LPSDFW
• High staff turnover or departure of key personnel
83
STRATEGIC REPORT ESG REPORT
Image: Dan Meyers/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
84
Strategy
Impact of climate-related risks and opportunities on the
RUJDQLVDWLRQŮVEXVLQHVVHVVWUDWHJ\DQGƼQDQFLDOSODQQLQJ
%DVHG RQ RXU DQDO\VLV DQG TXDQWLƼFDWLRQ RI FOLPDWHUHODWHG
risks, in aggregate we assess the Group’s risk exposure to be
moderate. The magnitude of climate-related opportunities is
currently assessed to be mostly low, although development
of products that may facilitate the low-carbon economy are
judged to be a medium opportunity. Given the long time
frames over which climate-related risks and opportunities may
manifest there is a high level of uncertainty in our longer-term
impact calculations for both risks and opportunities.
Overall we consider that the Group’s existing business strategy
and ambitious decarbonisation agenda (net zero Scope 1 and 2
HPLVVLRQV E\ SURYLGH ƼQDQFLDO DQG VWUDWHJLF UREXVWQHVV
to climate change. All risks have well-established mitigations
that substantially reduce the net risk to the business. In
particular the Group’s transition to net zero is incorporated
into ‘business as usual’ in regard to operational and capital
expenditure. There are no effects of climate-related matters
UHƽHFWHG LQ MXGJHPHQWV DQG HVWLPDWHV DSSOLHG LQ WKH ƼQDQFLDO
statements. We will continue to develop our analysis as new
data becomes available, both internally and externally, and
will continue to monitor our climate exposures and initiatives
through our overall risk management framework.
Our approach to scenario analysis
In 2024 the Group undertook a thorough analysis of the
physical and transition risks affecting the Group with the
assistance of a third-party sustainability consultancy. This
involved the use of public climate scenarios to provide
comparisons across potential climate outcomes.
Physical risk scenarios
Four climate scenarios were used to analyse climate-related
physical risks. These are the default scenarios in the Munich
Re location analysis software we use, modelled by the
Intergovernmental Panel on Climate Change (IPCC).
• RCP 2.6/IPCC SSP1: a climate-positive pathway, likely to keep
global temperature rise below 2 °C by 2100. CO2 emissions
start declining by 2020 and go to zero by 2100.
• RCP 4.5/IPCC SSP2: an intermediate and probably baseline
scenario more likely than not to result in global temperature
rise between 2 °C and 3 °C, by 2100 with a mean sea level
rise 35% higher than that of RCP 2.6. Many plant and animal
species will be unable to adapt to the effects of RCP 4.5 and
higher RCPs. Emissions peak around 2040, then decline.
• RCP 7.0/IPCC SSP3: consists of a baseline outcome rather
than a mitigation target and represents the medium-to-high
end of the range of future emissions and warming resulting
from no additional climate policy.
• RCP 8.5/IPCC SSP5: a bad case scenario where global
temperatures rise between 4.1-4.8°C by 2100. This scenario is
included for its extreme impacts on physical climate risks as
the global response to mitigating climate change is limited.
The physical climate-related assessment covered the Group’s
own operations and 29 selected supplier facilities, in addition
to the Group’s 5 contract manufacturer sites. Supplier facilities
ZHUH SULRULWLVHG E\ IRFXVLQJ RQ VROH VXSSOLHUV DERYH D ƼQDQFLDO
materiality threshold. This year, downstream physical risks
ZHUH QRW DQDO\VHG JLYHQ WKH VLJQLƼFDQW GLYHUVLƼFDWLRQ RI WKH
Group’s customers was considered to be a strong mitigation
against any downstream climate risk exposure.
85
STRATEGIC REPORT ESG REPORT
Transition risk and opportunity scenarios
Gooch & Housego additionally used two scenarios for
analysis of transition risks and opportunities, with a
horizon of 2050. These scenarios, derived from the
International Energy Agency (IEA) are more descriptive
and therefore especially useful for modelling more
positive climate forecasts.
• Net Zero 2050 (NZE): an ambitious scenario which sets
out a narrow but achievable pathway for the global energy
sector to achieve net zero CO2 emissions by 2050.
This meets the TCFD/CFD requirement of using a
“below 2°C” scenario and is included as it informs the
decarbonisation pathways used by the Science Based
Targets initiative (SBTi), which validates corporate net
zero targets and ambition.
• Stated Policies Scenario (STEPS): a scenario which
represents the roll forward of already announced policy
measures. This scenario outlines a combination of physical
and transitions risk impacts as temperatures rise by around
2.5°C by 2100 from pre-industrial levels, with a 50%
probability. This scenario is included as it represents a
base case pathway with a trajectory implied by today’s
policy settings.
Time Horizons
&OLPDWHUHODWHG ULVNV DQG RSSRUWXQLWLHV ZHUH LGHQWLƼHG DQG
assessed over the following time horizons:
Where appropriate scenarios were supplemented by additional
VRXUFHV WKDW DUH VSHFLƼF WR HDFK ULVN :H QRWH WKDW VFHQDULR
analysis involves a range of assumptions and limitations,
applicable to both physical and transitional risks, including:
1. Scenarios often only provide high level global and
regional forecasts.
Not all risks are easily subject to scenario analysis.
6FHQDULR DQDO\VLV UHTXLUHV DQDO\VLV RI VSHFLƼF IDFWRUV DQG
PRGHOOLQJ WKHP ZLWK Ƽ[HG DVVXPSWLRQV
It is assumed that Gooch & Housego will have the same
carbon footprint and the same business activities in the
future as are in place today.
Impacts are be considered in the context of the current
ƼQDQFLDO SHUIRUPDQFH DQG SULFHV
6. Impacts are assumed to occur without the company
responding with any mitigation actions, which would
reduce the impact of risks.
7. Impacts are modelled to occur in a linear fashion, when
in practice dramatic climate-related impacts may occur
suddenly after tipping points are breached.
8. The analysis considered each risk and scenario in isolation,
when in practice climate-related risks may occur in parallel
as part of wider set of potential global impacts.
9. Carbon pricing was informed by the Global Energy Outlook
2023 report from the International Energy Agency (IEA).
10. There will be opportunities in future years to increase
the sophistication of modelling as new data is made
available both internally and externally to support a
meaningful quantitative assessment.
TIME HORIZON
RATIONALE
SHORT
0-5 YEARS
,QOLQH ZLWK VSHFLƼF EXVLQHVV SODQ IRUHFDVWLQJ
MEDIUM
5-12 YEARS
Encompassing the Group’s ambition for net
zero by 2035 (Scopes 1 and 2)
LONG
>12 YEARS
Long enough to encompass long-term industry
and policy trends, such as UK net zero by
2050 and for climate-related risks to manifest
Image: Damian Karpinski/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
86
Climate-related transition risks
This year we also enhanced our transition risk assessment
by conducting more detailed analysis of a wide range of
climate risk exposures and considering the impact of climate
scenarios. Risks that were explored and ultimately dismissed
DV LQVLJQLƼFDQW LQFOXGHG WKH ULVN RI RSHUDWLRQDO H[SRVXUH WR
carbon pricing mechanisms in the UK, and potential exposure
to shortages of supply in critical metals and compounds
given their high demand for other uses in the energy
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ERWK ULVNV ZHUH XOWLPDWHO\ GHHPHG LQVLJQLƼFDQW JLYHQ WKH
low non-renewable energy usage of our UK facilities and
continued decarbonisation trajectory, and secondly given
the relatively low volumes of key compounds/metals that
are purchased by the Group on an annual basis.
Our key climate-related transition risks are summarised
below, affecting our global operations:
RISK
TCFD
CATEGORY
AREA
4. Carbon pricing mechanisms
Regulation
Upstream
5. Technology risk
Market
Own operations
6. Reputational risk
Market
Own operations
Climate-related physical risks
Gooch & Housego currently has nine manufacturing sites
DFURVV WKH 8. DQG 86$ ZLWK VDOHV RIƼFHV LQ )UDQFH *HUPDQ\
and Japan. This year in collaboration with an external
consultant we used geospatial risk modelling software to
analyse the Group’s exposure to climate-related natural
hazards. In addition, we explored the risk of natural hazards
affecting our key sole suppliers and contract manufacturing
partners. Our natural hazards assessment indicated that two
of our sites in the USA are currently assessed to be at a high
WR KLJKPHGLXP H[SRVXUH WR ƼUH ZHDWKHU VWUHVV DQG WKDW DQ
additional facility is predicted to be at a very high risk of river
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hazards have previously impacted these facilities and all
have robust mitigations as summarised in the table below.
Key risks
RISK
TCFD CATEGORY
AREA
1. Damage/disruption to own
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VWUHVV DQG ZLOGƼUHV
Physical
Own operations
2. Damage/disruption to own
RSHUDWLRQV GXH WR ƽRRG HYHQWV
Physical
Own operations
3. Disruption to supply chain due to
climate-related natural hazards
Physical
Upstream
87
STRATEGIC REPORT ESG REPORT
POTENTIAL FINANCIAL IMPACT
TIME
HORIZON
LIKELIHOOD
MAGNITUDE
OF IMPACT
SCENARIO
WITH LARGEST
POTENTIAL IMPACT
MITIGATING ACTIONS
• Price of carbon related to GHG
emissions associated with upstream
value chain increases costs
(manufacturing of raw materials and
shipping) where suppliers pas on the
added costs to their customers
Medium-Long
Likely
Medium
NZE
• Scope 3 footprinting planned for FY25 to
improve visibility of key suppliers
• Subsequently we may engage with key
suppliers to encourage decarbonisation of
upstream value chain
• Emissions-related criteria may in future be
selected as an aspect of supplier selection
criteria
• Potentially explore incorporation of low
carbon materials and improvements to
PDWHULDO HIƼFLHQFLHV WR UHGXFH VSHQG RQ
materials with high emissions
• Increased capital expenditure due
to potential replacements and/
orupgrades of machinery with high
emissions intensity, as part of group’s
decarbonisation strategy
Medium-Long
Medium
Medium
NZE
• Clear roadmap of required upgrades by 2035
should allow for most upgrades to fall under
BAU expenditure
• Increased cost of capital and/
or loss of revenue in the event
of being perceived as a laggard
on sustainability issues and not
meeting stakeholders’ ESG reporting
requirements, or delivery of targets
and the net zero roadmap
Short-Medium
Medium
Medium
NZE
• Improved sustainability governance at
G&H, including recent establishment of a
board-level Sustainability Committee and
Subcommittee
• Proactive reporting to rating agencies/
frameworks including CDP and Ecovadis
• Continued rollout of ISO14001, currently
covering 72% of the workforce
POTENTIAL FINANCIAL IMPACT
TIME
HORIZON
LIKELIHOOD
MAGNITUDE
OF IMPACT
SCENARIO
WITH LARGEST
POTENTIAL IMPACT
MITIGATING ACTIONS
• Lost production/revenues
• Cost of asset damages
• Increased insurance costs associated
with higher exposure
• Revenue losses from downtime
Short
Medium
High
RCP 8.5/SSP5
• Fire prevention methods including clearing of
YHJHWDWLRQ DQG ƼUHSURRƼQJ IDFLOLWLHV
• Insurance for asset/property damage and
business interruption
• Lost production/revenues
• Cost of asset damages
• Increased insurance costs associated
with higher exposure
• Revenue losses from downtime
Medium-Long
Medium
High
RCP 8.5/SSP5
• Ability to transfer work to other facilities
• Insurance for asset/property damage and
business interruption
• Local infrastructure including storm drains
DQG PDQPDGH ƽRRG FKDQQHOV
• Lost production/revenues
• Higher costs of purchased goods
Short-Medium
Likely
High
RCP 8.5/SSP5
• Dual sourcing strategies
• Redundancy in critical materials/
components
• Insurance in the event of downtime at a
contract manufacturing partner
Image: Michael Pointner/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
88
Metrics and Targets
Key opportunities
OPPORTUNITY
TCFD CATEGORY
AREA
POTENTIAL FINANCIAL IMPACT
TIME HORIZON
1. Products aiding the transition to a low
carbon economy
Product & services
markets
Own operations,
Downstream
Ŷ +LJKHU UHYHQXHV SURƼWDELOLW\ IURP SURGXFWV FDWHULQJ
to low carbon economy, such as for EV technologies,
advanced batteries, and renewable energy
Medium-Long
,PSURYHPHQWV WR UHVRXUFH HIƼFLHQF\
5HVRXUFH HIƼFLHQF\
Own operations
• Cost reductions from reduced resource consumption
DQG LPSURYHG HIƼFLHQF\
Medium
3. Energy sourcing
Energy source
Own operations
• Decreased exposure to carbon pricing through
installation of renewables and purchase or renewable
energy contracts
• Reduced energy costs
Medium-Long
4. Reputational opportunity
Reputation
Own operations,
Downstream
• Increased access to capital and increased revenues
from customers with sustainability criteria
Short-Medium
Gooch & Housego currently reports Scope 1 and Scope
2 emissions in accordance with UK SECR regulation and
calculated using the Greenhouse Gas (GHG) Reporting
Protocol. While the group does not currently report its
Scope 3 emissions, we intend to assess these categories in
the near term to determine which categories can be reliably
and effectively measured. Categories that are under
consideration for future assessment include Category 4
(Upstream Transportation & Distribution), 5 (Waste),
and 9 (Downstream Transportation & Distribution).
In addition to its absolute Scope 1 and 2 emissions, the Group
has disclosed its operational emissions (Scope 1 & 2) per
eP RI UHYHQXH VLQFH )< ZLWK VLJQLƼFDQW DQQXDO
improvement year-on-year.
Gooch & Housego’s key target is to achieve net zero Scope 1
and 2 emissions by 2035 from a 2020 baseline, which we are
currently on track to achieve, with interim targets to reduce
emissions 10% by FY24 and a further 10% by FY25 and FY26.
The FY24 target has been met, following an 62.1% reduction
from 2020. The Group will explore the option of setting SBTi
aligned targets, following an assessment of Scope 3 emissions
in due course. The executive directors in the business have
short and long-term incentives which include measures
related to the Group’s ESG agenda such as the progress of
sites’ ISO14001 accreditation, and reductions in the Group’s
carbon intensity. These performance objectives are assessed
by the Remuneration Committee. In the future we will look to
introduce additional targets and performance measures.
The Group tracks exposure and mitigations to each respective
climate-risk and opportunity through the following metrics/KPIs:
89
STRATEGIC REPORT ESG REPORT
LIKELIHOOD
MAGNITUDE
OF IMPACT
SCENARIO WITH LARGEST
POTENTIAL IMPACT
MITIGATING ACTIONS
Likely
Medium
NZE
Ŷ 6WUDWHJLF LQYHVWPHQW LQ SURGXFWV WKDW LPSURYH FXVWRPHUVŮ HQHUJ\ HIƼFLHQF\
Ŷ )RFXV RI 5 ' LQYHVWPHQW RQ DGYDQFHG ƼEUH WHFKQRORJ\ WR RSWLPLVH IRRWSULQW
EDQGZLGWK GHQVLW\ DQG UHOLDELOLW\ RI ƼEUH RSWLF FRPSRQHQWV LQ VXEVHD QHWZRUNV
Likely
Low
NZE
• Employee engagement on reducing energy consumption
• Installation of LED lighting
Ŷ ,QVWDOODWLRQ RI LQVXODWLRQ WR LPSURYH HQHUJ\ HIƼFLHQF\
Ŷ 5HSODFHPHQWXSJUDGLQJ RI PDFKLQHU\ WR PRUH HIƼFLHQW PRGHOV
• Improvements to recyclability and reuse of product packaging by customers
Unlikely
Low
NZE
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Ŷ 8VH RI 5(*2FHUWLƼHG RU HTXLYDOHQW FHUWLƼFDWLRQV DW RI 8. IDFLOLWLHV ZLWK
remaining electricity produced by onsite renewable installations
• Capital investment strategy especially focused on the transition from natural
gas to alternative solutions, such as hydrogen
Unlikely
Low
NZE
• Improved sustainability governance and internal controls to ensure timely and
accurate reporting
RISK
METRIC TO TRACK
'DPDJHGLVUXSWLRQ WR RZQ RSHUDWLRQV GXH WR ƼUH ZHDWKHU VWUHVV DQG ZLOGƼUHV
Ŷ 'D\V RI IDFLOLW\ GRZQWLPH GXH WR ZLOGƼUH LQFLGHQWV
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3. Disruption to supply chain due to climate-related natural hazards
• Price of purchased goods
• Inventory levels and buffer stocks
4. Carbon pricing mechanism (upstream)
• Scope 3 emissions (planned for FY25)
• IEA carbon pricing forecasts
5. Technology risk
• Investment in new technologies
6. Reputational risk
• ESG Rating Agency scores
• Scope 1-3 emissions (Scope 3 planned for FY25)
OPPORTUNITY
METRIC TO TRACK
1. Products aiding the transition to a low carbon economy
• Revenue from low carbon products (planned for FY25)
• GHG Intensity Measure – emissions per£M of revenue
• % of revenue resulting from low carbon end applications
,PSURYHPHQWV WR UHVRXUFH HIƼFHQF\
Ŷ :DVWH ZDWHU HQHUJ\ FRQVXPSWLRQ HQHUJ\ HIƼFLHQF\)7( RU eP
3. Energy sourcing
• Group energy use, % renewable electricity, Scope 2 emissions
4. Reputational opportunity
• External ESG ratings
• Scope 1-3 emissions (Scope 3 planned for FY25)
Image: Richard Burlton/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
90
We have put in place a G&H Code of Conduct a
supported it with a suite of policies. The policies
are published on our website at www.gandh.com
These policies are operated across all of our
sites. We provide training to ensure employees
understand and implement our policies. We also
monitor our suppliers’ compliance through a
programme of audits.
&RGHRI&RQGXFW
The G&H Code of Conduct covers:
a) operating our business in an ethical manner
b) the provision of a safe and healthy work place
c) business conduct that demonstrates respect for
co-workers, suppliers, customers and partners
d) the Group’s commitment to the principles of
equality and diversity and compliance with
all relevant equality and anti-discrimination
legislation
e) excellence in management practice through
the ongoing development of business aligned
human resource systems and initiatives,
structured training and development programs
for employees through which they can enhance
the skills, knowledge and capability necessary
for further growth within the organisation.
*URXSKHDOWK VDIHW\VWDWHPHQW Managing health
and safety is a top priority and is a central element
of managing the total risks faced by our business.
(TXDORSSRUWXQLW\VWDWHPHQW The Group is
committed to providing equal opportunities for
all employees and applicants for employment.
$QWLFRUUXSWLRQDQGEULEHU\ G&H takes a
zero-tolerance approach to bribery and corruption
and is committed to acting professionally, fairly
and with integrity in all our business dealings and
relationships wherever it operates.
)UDXGSROLF\ The Group has in place systems
designed to mitigate the risk of fraud.
0RGHUQVODYHU\ G&H is committed to preventing
VODYHU\ DQG KXPDQ WUDIƼFNLQJ LQ LWV FRUSRUDWH
activities, and to ensuring that its supply chains
DUH IUHH IURP VODYHU\ DQG KXPDQ WUDIƼFNLQJ
(QYLURQPHQWDO G&H aims to reduce the
environmental impacts of its activities and to help its
customers, suppliers and partners to do the same.
6XSSOLHUFRGHRIFRQGXFW Which sets out the
minimum level of behaviours and practices we
expect to see applied by our suppliers regardless
of where they operate.
&RQƽLFWPLQHUDOV We believe in the ethical
sourcing of materials used in the manufacturing
processes within G&H. G&H will not purchase
any materials which originate from any areas
RI ZDU RU FRQƽLFW
Governance
Corporate Governance
At G&H we strive to maintain the highest standards of
Corporate Governance. We conduct our business activities
honestly and with integrity. For more information on the
Group Corporate Governance Framework see page 108.
91
Ethics
Human Rights
99% of the Group’s employees are based within the major advanced
economies of the UK, USA, France and Japan, which have strong
legislation governing human rights. The Group complies fully with
applicable legislation in these areas, and the other countries in
which it operates, to ensure the rights of every person (whether
employees, suppliers, clients or stakeholders) are respected.
We put in place employment policies and practices which support
and promote diversity and equal opportunities to make sure all
employees are treated with dignity and respect, and all staff are
provided with a safe, secure and healthy environment in which to
work, regardless of where in the world they are located.
Supply Chain
It is important to us that our suppliers operate to the same high
standards that we set ourselves. We support them in this be
establishing clear contractual commitments and back that up
through on site audits. Our supplier contracts cover areas such
as Modern Slavery, Safe working practices and Anti-Bribery/
Corruption to ensure the supplier adheres to our policies.
We undertake annual risk assessments of our suppliers and
the outcome of that process determines not only the decision
as to whether to work with a supplier but also those suppliers
that are selected for an on-site audit visit to ensure they are
in compliance with our policies. We have a team of four G&H
employees permanently based in our large contract
manufacturing partners’ facility.
Whistleblowing
We have a whistleblowing policy which encourages open and
honest communication where incidents of non-compliance are
seen in our business. Whistleblowing issues are reported directly
WR PDQDJHPHQW DQG DQ\ VLJQLƼFDQW LVVXHV VKRXOG WKH\ DULVH DUH
reported to the Audit Committee and the Board. In each instance,
cases are investigated in detail and appropriate action taken.
Compliance with Regulations and Standards
We do not tolerate practices which contravene industry best
practices. Regulatory demands upon us vary around the world;
however, we have established a core compliance team to ensure the
Group fully adheres to legislative and regulatory requirements
whilst adapting to local needs as a minimum. We support this with
online training tools through which we make sure our employees
know what is expected of them.
STRATEGIC REPORT ESG REPORT
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
92
Some of those engagements are undertaken directly by the Board
and some by the Group’s senior managers and reported back to
the Board. Throughout the year the Board assesses how its
decisions and the Group’s activities impact our various stakeholders.
As a Board we have a duty to promote the success of G&H for the
EHQHƼW RI RXU PHPEHUV ZKLOVW KDYLQJ UHJDUG WR WKH LQWHUHVWV RI
our people, the success of our relationships with suppliers and
customers and the impact of our operations on the environment
and communities in which we operate. Stakeholder considerations
are included in all Board discussions and decisions. Presentation
and other materials provided to the Board help it understand the
EHQHƼWV DQG ULVNV DVVRFLDWHG ZLWK LWV SURSRVHG DFWLYLWLHV ,I D
chosen course of action adversely affects one group of stakeholders
IRU WKH FROOHFWLYH EHQHƼW RI RWKHUV ZH DOZD\V WU\ WR HQVXUH WKH\ DUH
treated fairly.
The Board is focused upon the long term consequences of its
decisions as well as more immediate operational matters. For
example, our approach to partnering with customers on their next
generation product developments allows us to build long term and
PXWXDOO\ EHQHƼFLDO UHODWLRQVKLSV ZKLFK ZLOO OLYH IRU PDQ\ \HDUV
2XU WHFKQRORJ\ URDG PDSV ZLOO GHOLYHU EHQHƼWV SRWHQWLDOO\ PDQ\
years in the future meaning that we are investing now for the
IXWXUH EHQHƼW RI WKH *URXS
The Board’s oversight of the Group’s risk management process
through which the senior leadership team provide updates of the
Group’s risk environment together with associated action plans to
mitigate those risks, is another example of how the long term
sustainability of the Group is managed by the Board.
The Board understands the importance of maintaining high
standards of corporate governance and avoiding reputational issues
that may follow if the Group does not. Consequently, we strive to
follow best corporate governance practices and have a governance
framework in place that allows us to make reasoned and informed
decisions. Further information on how the Board and its Committees
operate can be found in the Corporate Governance Report.
7KH *URXS KDV LQ SODFH VSHFLƼF SROLFHV WR HQVXUH DOO *URXS
employees operate in an honest and ethical way. Details of these
can be found in the ESG Report.
We have set out below details of our engagement with stakeholders.
This constitutes our Section 172(1) Statement. Further information
on how these duties have been applied can be found throughout
the Annual Report.
S172
Statement
Our stakeholders are key to the long-term sustainability
of our business. The importance of open and meaningful
engagement with all our stakeholders is fully embraced by
our Board members and is encouraged through all levels of
the Group. The Board has identified its key stakeholders and
has considered how it engages with these groups so as to
maintain a clear and current understanding of their views.
93
STRATEGIC REPORT S172 STATEMENT
How we engage
G&H has a track record of working with our
customers on their next generation development
needs, often many years prior to entering in
to volume production. The Board is regularly
updated on the work of our engineering teams
on our technology roadmaps to ensure we are
progressing to plan and those plans address the
QHHGV RI RXU LGHQWLƼHG ODXQFK FXVWRPHUV
In June 2024 we used a third party organisation
to undertake a survey of our customers.
The survey covered all sites in the Group and
customers were given the option of providing
their feedback anonymously if they wished to.
Outcomes
:H VDZ D VLJQLƼFDQW LQFUHDVH LQ WKH UHVSRQVH
rate year on year and a marked improvement
in our net promoter score. The survey results
showed that G&H continued to perform well
in the areas of product quality and technical
support but delivery performance continued to
be an area of concern with customers wanting
to see shorter lead times and better on time
delivery performance. This continues to be a
key area of focus for the business and we have
VHHQ VLJQLƼFDQW UHGXFWLRQV LQ RXU RYHUGXH
backlog in the second half of FY2024.
Priorities for FY2025
We will continue to work on further reducing our
overdue backlog and the time taken to respond
to our customers’ requests for proposals. We will
conduct another customer survey to measure
our progress on these objectives through the
eyes of our customers as well as gathering
further feedback from them on other aspects
of our performance.
The Board reviews progress on the key projects
within our technology roadmaps on a regular
basis. The aim of this continues to be to ensure
RXU UHVRXUFHV DUH GHSOR\HG LQ WKH PRVW HIƼFLHQW
manner on the projects with the highest potential
returns. We expect this to help accelerate our
time to market for our next generation products.
Our R&D spend in FY2024 totalled £7.8m and
we brought 48 new products to market.
Customers
Our customers rely upon us for innovative, advanced
solutions for their photonic needs. We invested £7.8m
in research and development in FY2024 in products and
solutions that seek to address their current and emerging
needs. We understand that our customers depend upon us
to supply our products on time and to the required quality.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
94
How we engage
We have a number of channels through which we
engage with our employees. There are regular all
hands meetings whereby local site management
engage with an receive feedback from site
employees. During the year we introduced a
monthly ‘One G&H’ slide pack to be delivered
to all sites which is available for our site general
manager to use at their regular all-employee
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team members visibility of developments in other
parts of the G&H Group. These are supplemented
by regular, more detailed feedback sessions with
employee representative groups.
When members of the Group Executive visit sites
they will typically either join the site’s all hands
meeting or schedule a separate session through
which they can receive feedback from employees.
In April 2024, the Group introduced a company-
wide quarterly newsletter, The Pulse. This features
a variety of content aimed at keeping our
employees informed, engaged, and inspired.
From updates on company initiatives and
spotlights on team members, this newsletter is a
valuable resource that connects everyone in our
organisation.
Jim Haynes is our designated non-executive
director for employee engagement. Following the
meetings Jim held with employee representatives
from all sites in FY2023, the feedback received was
given back to employees at all-hands meetings
during the year together with the actions
proposed to address it. Further details are given
on pages 73 and 109.
We have invested in a new HR Information
System which went live at the beginning of
October 2024. This system provides a “one-stop
shop” for both employees and their managers for
employee performance assessments, learning
and development plans as well as remuneration
GHWDLOV DQG DYDLODEOH HPSOR\PHQW EHQHƼWV
Outcomes
We achieved a further reduction in lost time
accidents in the year and are working to
eliminate these completely. We continue to run
“Spot it, Stop it” campaigns in the business to
increase awareness on the importance of near
miss reporting as a way or preventing accidents
from happening. We have seen an increase in
near-miss reporting as a result of this, which
enables us to take corrective action where
necessary before any incident occurs.
:H KDYH H[WHQGHG RXU PHQWDO KHDOWK ƼUVW DLGHU
programmes and held a number of awareness
workshops during the year intended to help
managers recognise early warning signs of
mental health issues amongst their teams.
Our CEO, Charlie Peppiatt visited each of the
Group’s sites to present an update on progress
on our Strategy in the year. More detailed
sessions were then held with the site’s
management team to discuss how the site was
expected to contribute to the various strategic
objectives that underpinned the achievement
RI WKH VWUDWHJLF ƼQDQFLDO SODQ
We continued to work on addressing the
feedback received by Jim Haynes from his
structured programme of interactions from site
employee groups. In November 2024, we have
launched an all-employee engagement survey,
the results of which will be reviewed by the
Board in detail.
Priorities for FY2025
We will ensure there is regular feedback to our
teams on the progress of the Group against its
strategic plan.
We will also work hard to promote diversity and
inclusion across the Group. We have an objective
to increase female representation amongst our
management teams.
More details of our engagement with our
employees and the results of those engagements
are set out in the ESG Report.
Employees
Our people play a crucial role in helping us pursue our
strategic goals. We work to provide them with safe working
conditions, attractive terms of employment and the ability
to develop their careers in a fair and engaging workplace.
95
STRATEGIC REPORT S172 STATEMENT
How we engage
We engage with our shareholders through
Investor Roadshows led by the Chief Executive
2IƼFHU DQG &KLHI )LQDQFLDO 2IƼFHU
During the year we hosted a number of
shareholder visits across our UK sites to enable
to them to gain a deeper understanding of our
capabilities and strategy.
The Group’s brokers provide independent
feedback to the Board on shareholder opinions
and their views on our meetings with investors.
Regular trading updates are provided as well as
the Annual Report.
We understand the focus many of our
shareholders place on the area of Executive
Director remuneration. Brian Phillipson, the
chairman of our Remuneration Committee
until 31 May 2024, consulted with our principal
shareholders on the recent renewal of the
Group’s Long Term Incentive Plan.
Outcomes
Our shareholders have been briefed on progress
on the Group’s strategic objectives.
7KH YLHZV H[SUHVVHG E\ LQYHVWRUV ZHUH UHƽHFWHG
in the Group’s revised Long Term Incentive Plan
XQGHU ZKLFK WKH ƼUVW DZDUGV ZHUH PDGH LQ
January 2024.
Priorities for FY2025
We will continue to offer an extensive investor
engagement focused primarily around our
Roadshows in June and December 2025.
7KLV ZLOO LQFOXGH VSHFLƼF XSGDWHV RQ RXU
progress towards the achievement of our
strategic priorities.
Shareholders
We maintain strong relationships with shareholders.
We want to ensure they understand our strategy, progress
and performance and that we understand how they view
our business. Our shareholders rely upon us to create value
over time. We have consistently increased our dividend
over the years. In FY2024 we paid £3.4m in dividends
to our shareholders.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
96
How we engage
Our Supply Chain Management team are
responsible for the engagement with our suppliers.
We have put in place supply contracts which
include the minimum standards which we expect
our suppliers to operate to. During FY2024 we
continued to build on the relationship with our
main contract manufacturing partner as we
worked with them to increase their output.
We have a team of four employees permanently
based at our principal contract manufacturing
partner’s facility in Asia to ensure we keep them
LQIRUPHG RI RXU ODWHVW IRUHFDVW GHPDQG SURƼOHV
as well as working with them to explore ways in
which we can jointly improve their operations
and reduce the cost of manufacture. Our two
business systems are connected with suitable
security controls in place, allowing our two
organisations to communicate in a very
timely manner.
For our other suppliers we have a team of
supplier quality engineers who undertake on site
visits to our suppliers to audit their compliance
with the standards we expect of them. The
selection of suppliers to audit in any period
is based upon a risk assessment tool which
considers both the materiality of the supplier
to G&H’s operations as well as the control
environment in place at the supplier’s facility.
Outcomes
We established relationships with new suppliers
during the year to help de-risk our production
programmes sensitivity to shortfalls in electronic
component supply.
In FY2024 we used Assents’ Supply Chain ESG
Module as a means of extending awareness of
ESG matters throughout our supply chain.
We made further progress in the year in
transferring further product lines to our contract
manufacturing partners. In particular our contract
manufacturing partner in southeast Asia was
IXOO\ TXDOLƼHG IRU WKH SURGXFWLRQ RI KLJKUHOLDELOLW\
IXVHG ƼEUH FRXSOHUV DQG KDV LQFUHDVHG LWV RXWSXW
to achieve volume production supplying directly
from its facility to our customers.
Priorities for FY2025
During FY2025 we intend to start monitoring
our suppliers’ impact on the environment by
reviewing which elements of the Group’s Scope 3
emissions arising from our supply chain we are
able to measure and reduce. We intend to work
with Carbon Disclosure Project (CDP) to help us
with this activity using their questionnaires and
processes to help our suppliers provide the
information we are seeking. Once we have
completed these initial assessments we will then
work with our suppliers with higher carbon
footprints to see how these may be reduced.
As part of our strategic plan rolled out in FY2023
we made it clear that we intend to increase the
proportion of the Group’s revenue that is derived
from products that have been subcontracted to
our contract manufacturing partners from less
than 10% to around 25% by the end of the plan
period. Progress against this objective was made
in FY2024 and in the coming year we will identify
further products that we believe are suitable to
be outsourced.
Suppliers
The supply of goods and services to our operations is critical
to our overall success. Our suppliers expect from us fair
contracting, on time payments and accurate forecasting
of our future requirements. We review the performance of
our suppliers on a monthly basis and work with them to
implement improvement programmes.
97
STRATEGIC REPORT S172 STATEMENT
How we engage
We invest in job creation. We attend job fairs
close to our sites to encourage school and
college leavers to join G&H. We also have
established relationships with universities
DQG IXQG 3K' VWXGLHV LQ WKH ƼHOG RI SKRWRQLFV
Our facilities offer high quality employment across
a range of functional areas. We are pleased to offer
apprenticeships to employees at the beginning
of their career journeys. We have supported the
charity MIND through fund raising activities.
Outcomes
Thanks to the growth in demand for the Group’s
products we were able to add new roles during
FY2024 at most of our facilities. We held a
number of apprentice days where local school
leavers were able to visit our facilities and see
the work we do.
Our growing business meant we were able to
increase the volumes of products and services
we bought from our suppliers many of whom
continue to be local to our facilities.
Priorities for FY2025
We will continue to support our employees
in contributing to local causes close to their
hearts. We will also engage positively with
our local communities about any changes
to our operations.
Communities
We strive to engage with the communities in which
we operate in a responsible manner. We aim to make a
positive contribution to our communities though the
employment we provide, the suppliers we work with and
the taxes we pay. Our site general managers each have
funding allocated to them to support local charities.
We ask them to focus on those charities that their site
employees care about and so they frequently spend
these funds in the form of a match for amounts raised
by our employees themselves.
Where to find out more
Employees – ESG Report
Investors – Corporate Governance Report
Environment – ESG Report
Society – ESG Report
Long-Term Success – Strategic Report
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
98
Principal Risks
and Uncertainties
7KH *URXS KDV D SURFHVV IRU WKH LGHQWLƼFDWLRQ DQG
management of risk as part of the governance
structure implemented by the Board. Management
of risk and maintenance of systems and processes
to manage those risks is the responsibility of the
Board of Directors. In managing and mitigating
risk, a comprehensive and robust system of controls
and risk management processes has been
implemented. The Board’s role in the risk
management process comprises:
• Promoting a culture of integrity throughout
the business;
• Making risk management a core part
of the business;
• Setting the appetite for risk;
• Identifying the key risks and ensuring they are
effectively communicated and managed; and
• Establishing overall policies for risk management
and control.
The Group maintains a risk register which is
approved annually by the Board. The Group’s
functional heads and leadership team all have
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responsibility for the day-to-day management of
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required mitigating actions. The risks are ranked
according to their likelihood of affecting the
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PD\ KDYH 7KH ULVNV LGHQWLƼHG FDQ EH FDWHJRULVHG
in to four key areas: strategic risk, operational risk,
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The assessment of key risks during the year has not
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reduced in severity during the year. The Board is
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will keep this under review. The Board is conscious
of the importance to our stakeholders of our ESG
agenda and the potential impact of climate change
on the operations of the Company. In response to
this risk the Board has established a Sustainability
Committee to ensure that the Company’s strategy
and operations are conducted in a sustainable
manner and consistent with our corporate values.
The Audit Committee has responsibility for
reviewing the effectiveness of the risk management
framework and internal controls and ensures that
the Group complies with relevant regulations and
laws. Although the Group does not have an internal
audit function, the function of internal control is
discharged by the Group Finance team. Its
responsibility is to monitor compliance and conduct
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The Audit Committee has reviewed the work
undertaken by Group Finance to review compliance
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during the year.
7KH IROORZLQJ UHSUHVHQW WKH VLJQLƼFDQW ULVNV DQG
XQFHUWDLQWLHV LGHQWLƼHG LQ WKH *URXSŮV ULVN UHJLVWHU
STRATEGIC REPORT PRINCIPAL RISKS AND UNCERTAINTIES
99
RISK
As a result of the ongoing war in
Ukraine and administration changes
in certain countries, there is a
growing risk political instability
results in disruption and increased
protectionism in the form of
higher trade tariffs in some of our
geographic markets, as evidenced
by the stated intentions of the new
US administration. This could impact
the Group’s sales in to these
markets. There is a further risk
that our incoming supplies from
these markets could be blocked
by government action.
MITIGATION
:H UHJXODUO\ UHYLHZ RUGHU ƽRZ IURP RXU YDULRXV JHRJUDSKLF PDUNHWV DQG
target new markets to mitigate the risk from politically unstable regions.
The geographic spread of our customers limits the impact of any one
market on the results of the Group as a whole.
The Group’s in house production activities are all now located in
either the UK or the US. We are able to supply from our US facilities
to mitigate the impact of any new US import tariffs.
The Group is developing its low cost region supply chain, which does
QRW LQFOXGH &KLQD WR DOORZ VXSSO\ RI ƼQLVKHG SURGXFW GLUHFWO\ IURP
the region thereby reducing the impact of tariffs.
Our supply chain team actively seek new, alternative sources of supply
to reduce our dependence upon suppliers in unstable regions.
CHANGE FROM FY2023
Geopolitical risk
RISK
We do not deliver on our
commitments to enable a
sustainable future, leading
to reputational damage.
Our operations may be impacted
by the effects of climate change.
MITIGATION
Our ESG agenda is closely monitored by the Board via regular
Sustainability Committee meetings.
In FY24, we have engaged CEN Advisory to help us identify the
climate change related risks that may impact upon our operations
and how best to mitigate them. Further details are given in our
Sustainability Report.
Our annual report updates our stakeholders on progress towards
delivering against our stated targets.
Net zero Scope 1 and 2 commitment published.
Engagement with our stakeholders to obtain feedback on their
concerns in this area, and on their views on our progress.
CHANGE FROM FY2023
Sustainability, climate change and the environment
RISK
Shortages in certain commodities
such as electronic components
could have an effect on our ability to
manufacture products.
We utilise a number of sole source
suppliers in the business, and certain
of our suppliers are based in higher
risk regions. An interruption in
supply could have an adverse effect
on our manufacturing operations.
Export restrictions such as those
being imposed by China on certain
key raw materials could affect our
ability to produce.
MITIGATION
Our supply chain team have undertaken a comprehensive review
of existing supply arrangements to identify and mitigate risk.
They regularly monitor the availability of key components and
seek to put in place long term agreements with critical suppliers to
ensure continuity of supply. Buffer stocks are held where necessary,
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delay in supply.
Our engineering teams work to identify and qualify alternative
sources of supply to mitigate risk where this is possible.
Our supplier audit programme is designed to identify supply chain
ULVN DQG ZH ZRUN ZLWK RXU VXSSOLHUV WR PLWLJDWH WKRVH ULVNV LGHQWLƼHG
CHANGE FROM FY2023
Security of materials supply
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
100
RISK
There is an ongoing risk of loss of
market share or price erosion due
to the activities of competitors in
our marketplaces. This could lead
to a reduction in revenue and/or
SURƼWDELOLW\
MITIGATION
7KHUH KDV QRW EHHQ D VLJQLƼFDQW FKDQJH WR WKH FRPSHWLWLYH ODQGVFDSH
during the year, but this remains a key area of focus for the G&H
management team.
Maintenance of our product quality and on-time delivery performance
remain top priorities and we have continued to reduce our past due
backlog in the year.
We also seek to stay ahead of our competition by bringing new,
technologically superior products to the market. This will help us to
counteract the emergence of lower cost competitors in the market.
Our sustained investment in R&D enabled us to launch 48 new
products during FY2024.
The Group’s continuous improvement plan targets increased
HIƼFLHQF\ DQG ORZHU ZDVWH XOWLPDWHO\ DLPHG DW PDUJLQ LPSURYHPHQW
This, combined with our manufacturing footprint and outsourcing
strategy, is enabling more agile manufacturing, thereby helping to
sustain our cost competitiveness in the market.
Our business development teams maintain a strong presence in the
marketplace and attend key trade shows which enables them to
monitor competitor activity and respond accordingly.
CHANGE FROM FY2023
Competition
RISK
There is a risk of loss of digital
intellectual property/data or our
ability to operate systems due to
internal failure or external attack.
MITIGATION
Clear ownership of cyber risk and IT controls.
Data is appropriately stored and backed up with IT system recovery
plans in place. These plans are regularly tested.
Employee training programmes and regular communication have
been put in place to warn employees of the risk of cyber-crime.
CHANGE FROM FY2023
Information and cyber security
RISK
There is a risk of slower than
expected economic growth
and recovery especially in the
semi-conductor market impacting
demand for some of our products.
MITIGATION
Orderbook coverage is regularly reviewed in detail and regular
reviews are held identifying new business opportunities.
We regularly meet with our customers to receive updates on their
view of growth trends within their end markets.
We use this information in scheduled meetings between our site
operations teams and our business development staff to scale our
operations accordingly.
CHANGE FROM FY2023
Order intake and global economic trends
The strategic report has been approved by the Board of Directors
and signed on its behalf by:
Charlie Peppiatt
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3 December 2024
STRATEGIC REPORT PRINCIPAL RISKS AND UNCERTAINTIES
101
RISK
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we have started to see central
banks lowering interest rates.
However, if the lower interest rates
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consequences, it would have an effect
on the Group’s cost base through
increased staff costs, material costs
and overheads, including power costs.
MITIGATION
Our sales team works to pass on input price increases to customers
by increasing sales prices.
Our global supply chain team is closely monitoring purchase price
variances to identify price increases from suppliers. The team is
focused on achieving savings.
CHANGE FROM FY2023
Inflation
RISK
M&A remains a key part of our
growth strategy and we have an
in-house team who identify and
review opportunities in this regard
with assistance from an external
consultant where required. There is
a risk that we may not be able to
identify the right acquisition targets
to enable the Group’s growth
strategy.
There is also risk attached to the
performance and integration of
acquisitions made by the Group.
MITIGATION
Dedicated teams are established to manage the integration of
acquired businesses. These teams meet on a regular basis to review
progress against agreed integration milestones. Our business
development and R&D teams work closely with the acquired
businesses to drive commercial synergies and create value.
Regular meetings continue to be held internally to review new
acquisition opportunities which present themselves and those
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$FTXLVLWLRQ WDUJHWV DUH VXEMHFW WR IXOO OHJDO ƼQDQFLDO RSHUDWLRQDO DQG
commercial due diligence prior to acquisition.
CHANGE FROM FY2023
M&A strategy
RISK
The Group recognises the importance
of retaining and developing its
workforce in order to achieve
its strategic objectives.
Whilst this remains a key risk,
we have seen this risk reduce in
WKH FXUUHQW ƼQDQFLDO \HDU
MITIGATION
Our people are at the heart of our business. We have put in place
development and reward schemes to encourage individuals to play a
long-term role in the future development of the Group.
We have thorough on-boarding processes for new employees to help
new starters to settle into their new roles.
Our HR teams review local market conditions on an ongoing basis
and take appropriate action where necessary.
Succession planning is reviewed by the senior management team on
a regular basis.
We are investing in a new HR Information System that will provide a
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training needs.
CHANGE FROM FY2023
Staff recruitment and retention
Governance
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
102
104 Board of Directors
106 Executive Management Team
108 Corporate Governance
112 Directors’ Report
116 SustainabilityCommittee Report
117 Audit Committee Report
120 Nomination Committee Report
122 Remuneration Committee Report
102–129
GOVERNANCE
103
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
104
&KLHI([HFXWLYH
2IƼFHU
Appointed
6HSWHPEHU
Charlie joined Gooch & Housego PLC in September 2022 from TT
Electronics PLC where he was Executive Vice-President since 2018
when TT acquired Stadium Group Plc. Charlie was CEO at Stadium,
an AIM listed company, from 2013 until its acquisition by TT.
Previously he was Vice President of Global Operations for Laird PLC,
a FTSE 250 electronics company. Charlie has held senior roles
globally in hi-tech businesses supplying into the medical, telecoms,
Industrial and A&D sectors.
Charlie
Peppiatt
&KULV KDV \HDUVŮ H[SHULHQFH ZRUNLQJ LQ VHQLRU ƼQDQFH UROHV LQ
international engineering and manufacturing businesses, operating
in Europe, North America and Asia. Prior to joining Gooch & Housego
PLC Chris was Group Director of Financial Control at TT Electronics
PLC, Senior Vice President of Finance at Cobham PLC and Finance
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working with Ernst & Young.
Chris holds master’s degrees from Cambridge University and the
London School of Economics. He is a Fellow of the Institute of
Chartered Accountants in England and Wales.
Chris
Jewell
&KLHI)LQDQFLDO
2IƼFHU
Appointed
6HSWHPEHU
The right blend of skills and experience
Board of
Directors
Executive Directors
GOVERNANCE BOARD OF DIRECTORS
105
Gary previously held senior management positions, including sales
and marketing roles, at IBM and BT Group PLC and was a non-
executive director of Chloride Group PLC and Rotork PLC. Gary most
recently held the position of President of Logica UK until October
2012 and was a member of the Executive Committee of Logica PLC.
Gary is a non-executive director of Spirent Communications PLC and
non-executive Chair of AFC Energy PLC. He is also acting as interim
&KLHI ([HFXWLYH 2IƼFHU RI $)& (QHUJ\ SOF IRU WKH SHULRG IURP
September 2024 to 6 January 2025.
Gary is Chair of the Nomination Committee and a member of the
Remuneration and Sustainability Committees of the G&H Board.
Gary
Bullard
1RQ([HFXWLYH
Chairman
Appointed
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/RXLVH KDV ZLGH ƼQDQFLDO OHDGHUVKLS H[SHULHQFH KDYLQJ KHOG *URXS
Finance Director roles at Braemar Shipping Services PLC and
Williams Grand Prix Holdings PLC. She has also held senior positions
DW 536 *URXS 3/& DQG 5H\QDUG 0RWRUVSRUW 6KH TXDOLƼHG DV D
Chartered Accountant whilst working with Ernst & Young.
Louise is a non-executive director and Audit Committee chair of AB
Dynamics PLC and the International Foundation for Aids to
Navigation, and is also an independent director of World Rugby.
Louise holds a bachelor’s degree in Management Science from the
University of Wales and is a Fellow of the Institute of Chartered
Accountants in England and Wales.
Louise was appointed Senior Independent Director with effect from 1
June 2024 and is Chair of the Audit Committee and a member of the
Remuneration, Nomination and Sustainability Committees of the
G&H board.
Louise
Evans
Appointed
0D\
Jim has over 35 years’ experience in the Optoelectronics industry,
where he has held senior management positions in operations,
engineering and business.
Jim has worked for Nortel Networks, Agility Communications and
Oclaro PLC, where he was COO. He was also a Non-Executive
Director at Andor PLC, and until February 2023 was an advisor at
Silicon Photonics start up, Rockley Photonics.
Jim holds a Bachelor’s Degree in Material Science from the
University of Wales.
Jim is a member of the Audit, Remuneration, Nomination and
Sustainability Committees of the G&H board. Jim is also the
Non-Executive Director with responsibility for the Board’s
engagement with the workforce.
Jim
Haynes
Appointed
)HEUXDU\
Susan
Searle
Appointed
$SULO
Susan was a founder of Touchstone Innovations plc, and formerly its
CEO. She has served on a variety of public and private company
boards in engineering, healthcare and advanced materials, and held
a variety of commercial and business development roles with Shell
Chemicals, the Bank of Nova Scotia, Montech (Australia), and Signet
Group plc. Previously Susan was the Senior Independent Director
and Remuneration Committee Chair of Horizon Discovery Group plc
and Chair of two investment businesses; Mercia Asset Management
plc and Schroder UK Public Private Trust plc.
Susan is Non-Executive Director and Chair of the Remuneration
Committee of QinetiQ Group plc, Chair of Greenback Recycling
Technologies Limited and a Non-Executive Director of Bibby Line Group.
Susan holds an MA in Chemistry from Oxford University.
Susan is Chair of the Sustainability and Remuneration Committees and
a member of the Audit and Nominations Committees of the G&H board.
Non-executive Directors
The right blend of
skills and experience
Board of
Directors
&KDUOLH 3HSSLDWW DVVXPHG WKH SRVLWLRQ RI &KLHI ([HFXWLYH 2IƼFHU DW
Gooch & Housego Plc in September 2022, steering the company
with a wealth of leadership experience. Before his tenure at G&H,
Charlie held the role of Executive Vice President at TT Electronics Plc
from 2018, a position he assumed following TT’s acquisition of
Stadium Group Plc. His leadership as CEO at Stadium, an AIM listed
company, spanned from 2013 until its acquisition by TT. Charlie’s
FDUHHU WUDMHFWRU\ DOVR LQFOXGHV D VLJQLƼFDQW VWLQW DV WKH 9LFH
President of Global Operations for Laird Plc, a prominent FTSE 250
electronics company. With an international perspective and senior
roles in cutting-edge industries serving the medical, telecoms,
industrial, and A&D sectors, Charlie brings a profound and diverse
experience to his pivotal leadership role at G&H.
&KLHI([HFXWLYH
2IƼFHU
Appointed
Executive
Management
Team
Chris
Jewell
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2IƼFHU
Appointed
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6HSWHPEHU EULQJLQJ ZLWK KLP D ZHDOWK RI ƼQDQFLDO H[SHUWLVH WR
the executive team. Before joining G&H, Chris served as the Group
Director of Financial Control at TT Electronics Plc, Senior Vice
President of Finance at Cobham Plc, and Finance Director of MBDA
UK. Chris has masters degrees from Cambridge University and the
London School of Economics and is a Fellow of the Institute of
Chartered Accountants in England and Wales. His multifaceted skill
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business, restructuring, with specialised expertise in the aerospace
and defence sector.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
106
Charlie
Peppiatt
The right blend of skills and experience
Bryan is the Executive Vice President, Life Sciences. He has a wealth
of life sciences leadership experience, having most recently led a
business unit focused on developing medical point-of-care
diagnostics solutions and medical devices using sensor technology.
Bryan holds Masters degrees in Business and Electrical Engineering
from Babson’s FW Olin Graduate School of Business and Oregon
Health and Sciences Universities respectively. He holds
undergraduate degrees in Biology and Biochemistry.
His background is in business development, strategic planning,
and commercialisation across the medical device, biotech, and
high-tech industries.
Bryan
Bothwell
([HFXWLYH9LFH
3UHVLGHQW/LIH6FLHQFHV
Appointed
Stratos
Kehayas, PhD
3UHVLGHQW3KRWRQLFV
Appointed
0HOLQGD &KXGOHLJK VHUYHV DV WKH &KLHI 3HRSOH 2IƼFHU DW * +
bringing 25 years of invaluable expertise in human resources and
organisational development. Her distinguished background includes
senior talent leadership roles at Mentor Graphics Corp, Novell Inc,
Qorvo, TT Electronics, and Xytech Systems. Melinda is recognised for
spearheading initiatives that enhance employee engagement and
talent development. Her unwavering commitment to creating
inclusive and supportive work environments aligns seamlessly with
G&H’s values, making her a key player in shaping and implementing
the company’s talent strategy.
Melinda
Chudleigh,
&KLHI3HRSOH
2IƼFHU
Appointed
Bill Keating is the Executive Vice President Optical Systems. Prior
to his time at G&H, Bill was Regional President Americas for Oxford
Instruments, a UK listed company which designs and produces
microscopy systems, semiconductor equipment, low-temperature
systems, imagining detectors and x-ray sources. Bill has more
than 25 years’ experience in general management in a variety of
life sciences, A&D and industrial technology businesses supplying
complex engineered solutions to a global customer base.
Bill holds an MBA from the University of Rhode Island and a BS in
Electronic Engineering Technology from Wentworth Institute of
Technology and has pursued graduate coursework in Information
Technology and Organisational Behavior.
Bill
Keating
([HFXWLYH9LFH3UHVLGHQW
Optical Systems
Appointed
Dr. Efstratios (Stratos) Kehayas serves as the President of our
Photonics Division. Dr. Kehayas holds a Ph.D. from the National
Technical University of Athens and a Master’s degree in photonics
from Imperial College London. As the co-founder and Managing
Director of Constelex Technology Enablers, a startup acquired by
* + LQ KH KDV VLJQLƼFDQWO\ FRQWULEXWHG WR WKH GHYHORSPHQW
RI QRYHO ƼEUHRSWLF V\VWHPV IRU VDWHOOLWH ODVHU FRPPXQLFDWLRQV
DQG KDUVK HQYLURQPHQW ƼEUH VHQVLQJ 6WUDWRVŮ VNLOOV LQFOXGH
entrepreneurial leadership, cross-functional team leadership,
new product development, and strategic product marketing,
making him a driving force in G&H’s technological innovation.
GOVERNANCE EXECUTIVE MANAGEMENT TEAM
107
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
108
The Board of Gooch & Housego PLC reviewed its
corporate governance procedures at its September
2024 meeting. Following the actions taken in
previous years to ensure full compliance with the
Code, no further actions were required this year
and the Board consider the group to have fully
complied with the Code during the year ended
30 September 2024.
How we Govern the Group
The Board leads the group’s governance framework.
It is responsible for setting the strategic targets
for the group, monitoring progress made,
approving proposed actions and for ensuring that
the appropriate internal controls are in place and
that they are operating effectively.
The Board is assisted by four principal committees
(Audit, Nomination, Remuneration and
Sustainability) each of which is responsible for
dealing with matters within its own terms of
reference, which are available on the group’s website.
The Board
The Board currently comprises two executive and
ƼYH QRQH[HFXWLYH GLUHFWRUV 7KH GLUHFWRUV KROGLQJ
RIƼFH GXULQJ WKH SHULRG RI WKLV UHSRUW DQG WKHLU
biographies are detailed from pages 104 to 105 and
are also available on our website; www.gandh.com.
Brian Phillipson retired on 30 September 2024
after having completed his nine year tenure.
The Executive Directors have rolling service contracts
that are subject to either six or 12 months’ notice.
The Chairman and Non-Executive directors do not
have contracts of service. The terms of appointment
of the Directors are available for inspection during
EXVLQHVV KRXUV DW WKH UHJLVWHUHG RIƼFH RI *RRFK
Housego PLC and are also available at the AGM.
All the Non-Executive directors are considered
by the Board to be independent of management
and free of any relationships which could materially
interfere with the exercise of their independent
judgement.
The Nomination Committee is responsible for
approving appointments to the Board. The Board
XQGHUVWDQGV DQG UHFRJQLVHV WKH EHQHƼWV WKDW
diversity can bring, and our recruitment partners
are briefed on our requirements in this regard.
Roles and Responsibilities
There is a documented clear division of
responsibilities between the Chairman and the
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a balance of power and authority between
leadership of the Board and executive leadership.
Introduction
The Board is accountable to shareholders and is committed
to the highest standards of corporate governance. To this end,
the Group has adopted the UK Corporate Governance Code
(2018). The Code is available to download at www.frc.org.uk.
Corporate
Governance
109
GOVERNANCE CORPORATE GOVERNANCE
All Directors are entitled to seek independent, professional advice
at the Group’s expense in order to discharge their responsibilities
as Directors. Gooch & Housego PLC maintains appropriate
GLUHFWRUVŮ DQG RIƼFHUVŮ LQVXUDQFH FRYHU
External Roles for Directors
The Board reviews the Directors’ external commitments on an
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them to discharge their responsibilities, particularly if there were
exceptional circumstances that might require additional time at
short notice. The Board is cognisant that the Chairman, Gary
Bullard currently has three non-executive roles, two of which are
as Chairman (including G&H). He is also acting as interim CEO of
AFC Energy PLC for the period from 5 September 2024 to 6
January 2025. He has assessed his time commitments and
FRQƼUPHG WR WKH %RDUG WKDW WKH\ GR QRW KLQGHU KLV DELOLW\ WR
discharge his responsibilities as Chairman of G&H. Gary attended
all of the scheduled Gooch & Housego PLC board meetings during
the year and has no other external commitments other than his
Board roles.
Board Activities
Day to day responsibility for the running of the Group is delegated
to executive management. However, there are a number of matters
where, because of their importance to the Group, it is not considered
appropriate to do this. The Board therefore has a documented
schedule of matters reserved for its decision. This schedule is
available on the Group’s web site.
There are typically eight routine board meetings a year, with
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Meetings between the non-executive directors, without the executive
directors present are scheduled in the Board’s annual programme.
These meetings are encouraged by the Chairman and provide the
non-executive directors with a forum in which to share experiences
and to discuss wider business topics, fostering debate in Board and
committee meetings and strengthening working relationships.
The Board has established a procedure for Directors, if deemed
necessary, to take independent professional advice at the Group’s
expense in the furtherance of their duties. The Chairman ensures
that the Board is kept properly informed and is consulted on all
matters reserved to it. Board papers and other information are
distributed in a timely manner to allow Directors to be properly
briefed in advance of meetings.
In accordance with best practice, the Chairman addresses the
developmental needs of the Board as a whole, with a view to
further developing its effectiveness as a team, and ensures that
each Director refreshes and updates his or her individuals skills,
knowledge and expertise.
A formal, comprehensive and tailored induction is given to all
non-executive directors following their appointment, including
access to external training courses, visits to key locations within the
Group and meetings with members of the senior management team.
Louise Evans is the Senior Independent Director. Her role includes
providing a sounding board for the Chairman and acting as an
intermediary for the non-executive directors, where necessary.
The Board believes that Louise has the appropriate experience,
knowledge and independence to continue this role.
The Board is responsible for setting the Group’s strategy.
The board calendar includes two strategy sessions per year.
At these sessions, members of the leadership team present
updates on strategic progress to the board in advance of wider
discussions which form the basis of our ongoing strategy. Further
details of our strategy can be found in the Strategic Report.
Board meeting attendance is presented in the following table.
Executive Directors
Charlie Peppiatt
8/8
Chris Jewell
8/8
Non-executive Directors
Gary Bullard
8/8
Louise Evans
8/8
Jim Haynes
8/8
Susan Searle
8/8
Brian Phillipson
8/8
Retired 30 September 2024
Maintaining a Dialogue with Shareholders
The Chairman ensures that the Board maintains an appropriate
dialogue with shareholders. During FY2024, the Chairman met
with a number of major shareholders independently of the
Executive Directors.
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regularly meet with institutional investors to discuss strategic
issues and to make presentations on the Group’s results.
In addition to the full and half year results, the Group publishes
Regulatory News Service announcements through the London
Stock Exchange.
The Group’s website contains an archive of information on the
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history and up to date share price information.
Although the non-executive directors are not formally required
to meet the shareholders of the Group, their attendance at the
Annual General Meeting and at presentations of the interim and
annual results is encouraged.
Engagement with the Workforce
Jim Haynes is our non-executive director with responsibility for
engagement with the workforce. During FY2023, Jim met with
employee Groups from all of our sites. There was a commitment to
cascade this feedback back to employees during FY2024, and this
has been the focus of Jim’s efforts during the year. There was also
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strategy and also to further develop the “employee voice”
structure within the company.
Site employee communication groups are now well established in
all of our sites with regular monthly meetings. The intention is that
Jim Haynes, and other Board members as appropriate, will attend
a number of these meetings going forward.
We have also established a global employee representative group
from across our site teams. This group will be responsible for the
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
110
cross fertilisation of ideas between sites, and will meet formally with
the Board of Directors twice a year to provide consolidated feedback.
In addition to further developing our engagement structure, we
have focused on addressing some of the core points that
employees have raised. In particular with regard to improved
communications, we have formally introduced monthly business
division updates, and a ‘spotlight’ communication to focus globally
on a part of G&H each month.
As we enter 2025, we will launch our new annual employee
survey, to get even broader feedback from employees.
The Board reviews the organisation’s culture to ensure it is aligned
with the Group’s strategy. The Group’s Mission, Vision, Values and
Behaviours have been rolled out across the Group and further
strengthen the Group’s culture in support of its strategic aim. Further
information on our work in this regard is given in the ESG Report.
Other ways in which we ensure appropriate engagement with our
workforce are set out in the Strategic Report. These activities
enable the Board to gauge the Group’s culture and to make
changes where necessary to ensure it is aligned with our strategy.
Board Effectiveness
The Chairman is responsible, with assistance from the Nomination
Committee, for ensuring that the Company has an effective Board
with a suitable range of skills, expertise and experience. During
FY2024, the Board took the decision to undertake an external
independent review of the Board and the Chairman. Louise Evans, as
Senior Independent Director, led the appointment of the reviewer,
and having met with a number of providers, recommended to the
Board that Lorna Parker be appointed. Lorna has met with a number
of the Directors during the year and is due to attend the November
2024 Board meeting in Ilminster. It is currently anticipated that
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The Board focuses on formulation of strategy, management of
effective business controls and review of business performance.
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interim results and interim management statements, acquisitions
and disposals, major capital expenditure, borrowings, director and
company secretary appointments and removals, any material
litigation, strategic forecasting and major development projects.
A framework of delegated authorities is in place that details the
structure of delegation below Board level and includes matters
reserved for the Board.
Board Committees
The Board has established a number of committees to assist in
the discharge of its duties. The formal terms of reference for the
principal committees can be found on the Group’s website.
The Board has four formally constituted committees, the Audit
Committee, the Remuneration Committee, the Nomination
Committee and the Sustainability Committee. A report on the
activities of each of the other committees follows later in this report.
Accountability
The Directors acknowledge that they are responsible for the
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provide only reasonable, and not absolute, assurance against
material misstatements and losses.
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evaluated and mitigated to the extent possible. A formal group
wide risk register is maintained and approved by the Board on
an annual basis. This year, the risk register was reviewed at the
March 2024 and September 2024 meetings.
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which are centrally maintained and documented and provide
reasonable assurance of the maintenance of proper accounting
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the business.
The Audit Committee is responsible for reviewing the effectiveness
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risk. It is also responsible for advising the Board on whether the
Committee believes the Annual Report taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Group’s performance,
business model and strategy.
The Group does not have an internal audit department. Each year,
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detailed testing of compliance with the Group’s comprehensive
control framework. The results of this work were summarised and
presented to the Audit Committee in September 2024. This showed
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been subject to review, and set a baseline for the two sites
acquired in the year ended 30 September 2023.
Annual budgets and strategic plans are prepared for each business
unit. Financial and operational reports enable the Board to compare
performance against budget and to take action where appropriate.
Remuneration
The Remuneration Committee is responsible for setting
remuneration packages of the Executive Directors which are
designed to promote the long-term success of the Group and take
account of current corporate governance practice. The committee
ensures that performance related components of Executive
Director remuneration are transparent, stretching and rigorously
applied. The committee also monitors the level and structure of
remuneration for other senior management.
No director is involved in deciding his or her own remuneration.
111
GOVERNANCE CORPORATE GOVERNANCE
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
112
A review of the development and performance of
the Group during the year and its future prospects
is set out in the Financial Highlights and in the
Financial Review. An outline of the business’s
principal activities, strategy and the Group’s
progress in the year towards these strategies is
given in the Strategic Report. An analysis of the
segmental information by market sector is given
in the Operations Review.
Key Financial Performance Indicators (KPIs)
The Group uses a selection of KPIs to monitor and
review the performance of the business. These are
detailed from page 28.
Dividends
During the year ended 30 September 2024 a
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4.9p was paid for the half year ended 31 March
2024 (2023: 4.8p).
For the year ended 30 September 2024, the
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8.3p per share (2023: 8.2p).
Substantial Shareholdings
As at 15 November 2024, the following
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held an interest in 3% or more of its issued
ordinary share capital:
Shareholder
Number
% holding
Odyssean Capital LLP
3,250,000
12.60%
Octopus Investments
2,864,522
11.11%
Fidelity Worldwide Investment 1,527,327
5.92%
Schroders
1,507,758
5.85%
Royal London Mutual
Assurance Society
1,219,031
4.73%
JM Finn & Co
1,070,845
4.15%
Canaccord Genuity Group Inc 1,051,559
4.08%
Perpetual
980,000
3.80%
abdrn plc
826,879
3.21%
St James’ Place
800,266
3.10%
Save for these interests, the Directors have not
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indirectly interested in 3% or more of the issued
ordinary share capital of the Company.
The Directors present their report together with the audited
consolidated financial statements for the year ended 30
September 2024. The Directors who held office during the
year and up to the date of this report are shown on pages
104 to 105. Additionally, Brian Phillipson was a non-executive
director until his retirement on 30 September 2024.
Directors’
Report
113
GOVERNANCE DIRECTORS’ REPORT
Treasury Policies
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risk to the Group that arises from operating in a number of foreign
currencies and to maximise interest income on cash deposits,
whilst maintaining the security of these deposits. As an
international group of companies, the main exposure is in respect
of foreign currency risk on the trading transactions undertaken
by group companies and on the translation of the net assets of
overseas subsidiaries. This exposure is principally to the US dollar.
Monthly cash management reporting and forecasting is in place
to facilitate management of this currency risk. The operations of
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All balances not immediately required for group operations are
placed on short-term deposit with leading international highly
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At a transactional level, the Group seeks to offset its exposure
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reviews to assess whether it would be appropriate for the Group
to enter into currency hedging contracts to mitigate the currency
risk. During the year, the Group also entered into contracts to sell
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The Group’s bank borrowings are denominated in US Dollars,
which acts as a partial hedge of a net investment against its
US Dollar denominated companies within the Group.
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Research and Development
The Group has a continuing commitment to a high level of research
and development and invested £7.8m in R&D in the year ended 30
September 2024 (2023: £7.4m). This commitment is to actively
develop new technologies and capabilities that will become a key
part of the Group’s future product portfolio and revenue.
Statement of Employment of Disabled Persons
The Group is committed to employment policies, which follow best
practice, based on equal opportunities for all employees, irrespective
of sex, race, colour, disability or marital status. Full and fair
consideration is given to applications for employment from disabled
persons, having regard to their particular aptitudes and abilities.
Employees who become disabled during their working life will be
retained in employment wherever possible and will be provided
help with any necessary rehabilitation and retraining. The Group
is prepared to modify procedures or equipment, wherever this is
practicable, so that full use can be made of an individual’s abilities.
Directors’ Indemnities
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Section 234 of the Companies Act 2006. The indemnity was in
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The Group also purchased and maintained throughout the
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respect of itself and its Directors.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report
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and regulation.
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VWDWHPHQWV IRU HDFK ƼQDQFLDO \HDU 8QGHU WKDW ODZ WKH 'LUHFWRUV
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accordance with UK-adopted international accounting standards.
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VWDWHPHQWV XQOHVV WKH\ DUH VDWLVƼHG WKDW WKH\ JLYH D WUXH DQG IDLU
view of the state of affairs of the Group and Company and of the
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statements, the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether applicable UK-adopted international accounting
standards have been followed, subject to any material departures
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• make judgements and accounting estimates that are reasonable
and prudent; and
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unless it is inappropriate to presume that the Group and
Company will continue in business.
The Directors are also responsible for safeguarding the assets of
the Group and Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting
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Company’s transactions and disclose with reasonable accuracy
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the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of
the Group’s website. Legislation in the United Kingdom governing
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differ from legislation in other jurisdictions.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
114
115
GOVERNANCE DIRECTORS’ REPORT
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statements, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the group and parent company’s performance, business model
and strategy.
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Report is approved:
• so far as the director is aware, there is no relevant audit
information of which the group and company’s auditors are
unaware; and
• they have taken all the steps that they ought to have taken as
a director in order to make themselves aware of any relevant
audit information and to establish that the group and parent
company’s auditors are aware of that information.
Stakeholder Engagement
The ways in which we have engaged with our stakeholders in the
year are set out in our S172 Statement and our ESG Report. Our
streamlined energy and carbon reporting can be found on page 78.
Going Concern
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FY2025. They have assessed the future funding requirements of
the Group and compared them with available borrowing facilities.
They have also reviewed forecast performance against our banking
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Group are given on page 68.
At 30 September 2024, the Group has a strong balance sheet with
net current assets of £46.8m. The Group’s cash and undrawn
committed and uncommitted facilities totalled £36.2m.
The Directors have reviewed severe but plausible downside
scenarios that estimate the potential impact of the principal risks
that the Group faces (see pages 99 to 101 of this report) on the
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and the resultant reduced demand in certain of the Group’s
markets, most notably commercial aerospace and the Industrial
laser market driven by softness in consumer end market demand.
They also included the effect of erosion of sales prices due to
competition, the impact of delays to our production ramp up, the
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customers, the potential impact of a cyber-attack and a reduction
in forecast revenue to illustrate the potential effect of a loss of key
personnel or inability to hire for a key role. The model also
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of one of our sites due to a legal non-compliance issue. Mitigating
actions including cost and capital expenditure savings, and an
extension of our payment terms with suppliers (in FY2025 only)
have been factored into this analysis.
This assessment covered not only the coming 12 month period but
also for the period to September 2027 in order to support the
Viability Statement given below.
We have compared the downside risk adjusted cash projections
and covenant performance against the Group’s available cash and
borrowing facilities and have been able to conclude that the Group
would continue to be able to operate even if a number of the risks
occurred simultaneously.
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that the Group has adequate resources to continue in operational
existence for at least 12 months from the date of approval of the
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Viability Statement
The Directors have also assessed the viability and long-term
prospects of the Group for the period to September 2027 taking
into account the Group’s current position and the potential impact
of the principal risk and uncertainties set out on pages 99 to 101
of this report.
Business planning processes within G&H require the preparation
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of the Group’s three-year strategic plan, a process in which all
functions are involved. The Group’s strategy is developed, and
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forecasts over a three year horizon.
The Group’s strategy is key to understanding its prospects. Further
details of the strategy can be found in the Strategic Report. By
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our sub assembly and systems capabilities, thereby reducing the
Group’s dependency upon the Industrial laser market and by
creating differentiated products and capabilities through our R&D
investment we are making the Group sustainable for the long term.
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the impact of many of the risks that the Group faces. Furthermore,
the Group’s revenue is not overly concentrated with any particular
customers or markets.
We have determined that the period to September 2027 represents
an appropriate period over which to provide the viability
statement as this aligns with the business cycle and order intake
trends of the Group.
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projections for the period covered by the viability statement,
testing it for the severe but plausible risks that the business faces.
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able to operate even if a number of the risks occurred
simultaneously.
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expectation that the Group will have adequate resources to
continue in operation over the period to September 2027.
Approved and signed on behalf of the Board of Directors by:
Charlie Peppiatt
Director
3 December 2024
A subcommittee of the Sustainability Committee is chaired by
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within the business in both the UK and the US. The sub-committee
meets at least four times a year, and the full committee meets at
least twice a year.
Role of the Committee
• The key objectives of the Committee are to ensure that the
Company’s strategy and operations are carried out in accordance
with our sustainability commitment, focusing on care for the
environment, people and the communities where we operate
whilst maintaining the economic stability of the company.
The Committee will align this work with appropriate frameworks
including the London Stock Exchange Guidance for Environmental,
Social and Governance reporting and will ensure the company
uses independent internationally recognised global disclosure
systems for all our stakeholders to score and help manage G&H
environmental impacts.
• During the year, the Committee agreed a number of workstreams
to focus on across various functional areas. Further details of
these workstreams are given in our Sustainability Report.
Sustainability
Committee
Report
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
116
The Sustainability Committee was
established in September 2023.
It comprises all members of the
Board together with Andy Back,
the Group’s Global Head of Quality
and Compliance.
Area of Focus for the Sustainability Committee During FY2024
• GHG Emissions and energy consumption, together with updates
on key improvement activities including use of solar power,
voltage optimisation, LED lighting and our transition to green
energy providers in the US.
• Progress against the Group’s ISO14001 roadmap.
• Other sustainability projects such as waste management,
recycling and use of sustainable packaging materials.
• Employee safety including numbers of work-related injuries,
lost workdays and recordable incidents.
• Employee numbers, employee turnover, diversity and employee
engagement.
• The extent of the Group’s charitable giving, volunteering and
education support.
• Customer satisfaction, on-time delivery and product
performance.
• Leadership and governance including board diversity, ethics and
anti-corruption training, trade compliance and risk management.
• Approval of the ESG disclosures in the Annual Report.
Membership and Attendance at Meetings Held in FY2024
Non-executive Directors
Susan Searle
2/2
Gary Bullard
2/2
Louise Evans
2/2
Jim Haynes
2/2
Brian Phillipson
2/2
Retired 30 September 2024
Executive Directors
Charlie Peppiatt
2/2
Chris Jewell
2/2
Approved by
Susan Searle
Chair of the Sustainability Committee
3 December 2024
117
GOVERNANCE AUDIT COMMITTEE REPORT
Membership
The Audit Committee is chaired by Louise Evans, a Chartered
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relevant experience. The Committee comprises Louise Evans,
Jim Haynes and Susan Searle and is considered to have had an
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accounting training and those from a general business background.
How the Committee Operates
The Committee met three times during the year as part of its
standard schedule to consider matters planned around the
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summarised below:
Non-executive Directors
Louise Evans
3/3
Susan Searle
3/3
Jim Haynes
3/3
Brian Phillipson
3/3
Retired 30 September 2024
At the invitation of the Committee, representatives of the external
auditors, PricewaterhouseCoopers LLP, attended meetings together
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and the Company Secretary. The Committee also seeks to meet
regularly with the external auditors without the Executive
Directors in attendance. During the year, the Committee met twice
with representatives from PricewaterhouseCoopers LLP without
others being present.
Responsibilities
The role and responsibilities of the Committee are set out in its
terms of reference, which are available on the Group’s website and
from the Company Secretary on request. The terms of reference
are reviewed annually by the Committee.
The principal responsibilities of the Committee are:
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assessment and reporting of risk;
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• Advising the Board on whether the Committee believes the
Annual Report taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Group’s performance, business model
and strategy;
• Considering and making recommendations to the Board as to the
appointment, reappointment or removal of the external auditors
and the approval of their remuneration and terms of engagement;
• Assessing the external auditors’ independence and objectivity
and the effectiveness of the audit process; and
• Reviewing the policy on the engagement of the external auditors
to supply non-audit services.
Audit
Committee
Report
AREA OF FOCUS
Going concern and viability
The Committee reviewed management’s going concern
assessment and viability statements.
CONCLUSION
The Committee reviewed management’s funding forecasts and the
stress testing that had been performed on them, based upon the
Group’s principal risks and uncertainties. The Committee concluded
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RQ D JRLQJ FRQFHUQ EDVLV DQG WKDW D YLDELOLW\ VWDWHPHQW FRQƼUPLQJ
that there is a reasonable expectation that the Group will have
adequate resources to continue in operation over the period to
September 2027 could be included in the Annual Report.
AREA OF FOCUS
Accounting for the disposal of EM4
CONCLUSION
The Committee has reviewed the accounting for and disclosure
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are appropriate.
AREA OF FOCUS
Inventories
The Committee reviewed management’s estimates in relation to
inventory valuation and obsolescence.
CONCLUSION
The Committee reviewed the level of inventory at the year end, which
has reduced in the year.
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UHƽHFWHG WKH ULVN RI LPSDLUPHQW
AREA OF FOCUS
Tax Accounting
The Committee reviewed the accounting for deferred taxation in
the year.
CONCLUSION
The Committee noted the prior year adjustment in respect of
deferred taxation assets on losses, including the related narrative
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AREA OF FOCUS
Fair, balanced understandable and
comprehensive reporting
CONCLUSION
The Committee has reviewed the Annual Report and is comfortable
that it provides a fair, balanced and understandable review of the
year ended 30 September 2024.
As part of this review, the Committee has considered the alternative
performance measures presented, and the degree of prominence
given thereto in relation to statutory measures. The Committee
has also considered the ESG disclosures and other reports to ensure
that a fair review has been given.
AREA OF FOCUS
Non-underlying items
The Committee considered the appropriateness of the measure
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transparency of items separately disclosed as non-underlying items.
CONCLUSION
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before tax provides a reasonable view of the underlying performance
of the Group and that there was transparent and consistent
disclosure of items shown separately as non-underlying items.
This was based on a review of the items added back in arriving
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companies from excluding charges and credits associated with the
pandemic from alternative performance measures had been followed.
AREA OF FOCUS
Goodwill impairment reviews
Management perform annual impairment reviews of the carrying
value of goodwill. These impairment reviews are based on future
SURMHFWHG FDVK ƽRZV DQG DUH WKHUHIRUH LQKHUHQWO\ MXGJPHQWDO
The Audit Committee reviewed the key judgements underpinning
the impairment reviews performed.
CONCLUSION
The Committee has reviewed the value in use calculations prepared
by management for the UK, US and ITL CGUs.
The Committee has reviewed the sensitivity disclosures in note 18
and concluded that they are appropriate.
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impairment has arisen.
Financial Reporting
During the year, the Audit Committee reviewed the appropriateness
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by management taking into account reports from management
and the external auditors. The main areas of focus considered by
the Committee during the year were as follows:
AREA OF FOCUS
Long term contract accounting
and revenue recognition
Some of the Group’s sites are engaged in long term development
contracts. These contracts must be traded based upon an estimate
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and judgement.
CONCLUSION
Approximately 3% of the Group’s revenue in the year was related to
long term contracts. The Committee considered the procedures in
place to monitor both the stage of completion and the outturn
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the procedures in place for the correct segregation of costs between
contracts.
After careful consideration the Committee concluded that the
judgements and estimates made in this regard were reasonable.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
118
119
GOVERNANCE AUDIT COMMITTEE REPORT
Financial Systems and Controls
The Committee reviewed the results of the
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team during the year. This work showed that
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internal controls. The Committee noted the areas
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DQG ZHUH VDWLVƼHG WKDW DQ DSSURSULDWH SODQ LV LQ
place to do so.
During the year, the Committee reviewed and
approved the latest delegation of authority
framework in order to ensure appropriate
controls are in place for the approval of certain
matters and actions relating to expenditure,
contractual exposure and other potential liabilities
to the Group.
The Committee also reviewed the latest risk
UHJLVWHU DQG LV VDWLVƼHG WKDW DSSURSULDWH PLWLJDWLQJ
actions have been taken.
External Auditors
Under its terms of reference, the Committee is
responsible for assessing the scope, fee, objectivity
and effectiveness of external audits and for making
a recommendation to the Board regarding the
appointment, reappointment or removal of the
auditors on an annual basis.
The Group’s auditors, PwC, do not provide
non-audit services to the business, and this
combined with a new engagement partner being
appointed for this year’s audit, together with
PwC’s other independence safeguards give the
committee assurance that their independence
and effectiveness is not affected.
Approval
Louise Evans
Chair of the Audit Committee
3 December 2024
Role of the Committee
• Reviews the composition of the Board and its committees.
• Considers succession planning for Directors and other senior
executives and in doing this considers diversity, experience,
knowledge and skills.
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candidates to be appointed to the Board.
• Considers the gender balance of those in senior management
and their direct reports.
Areas of Focus for the Nomination Committee During FY2024
• Succession planning for members of the Board.
• Diversity in the senior management team. Further details in this
regard can be found in our Corporate Governance Report.
• Appointment of Senior Independent Director following the
retirement of Brian Phillipson.
• Appointment of the external board evaluation service provider.
Nomination
Committee Report
The Nomination Committee, which consists of the
Chairman, all Non-executive Directors and the Chief
Executive Officer, is responsible for the composition
of the Board, and other senior management matters.
Membership and Attendance at Meetings Held in FY2024
Non-executive Directors
Gary Bullard
1/1
Susan Searle
1/1
Louise Evans
1/1
Jim Haynes
1/1
Brian Phillipson
1/1
Retired 30 September 2024
Executive Directors
Charlie Peppiatt
1/1
Approval
Gary Bullard
Chairman of the Nomination Committee
3 December 2024
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
120
GOVERNANCE NOMINATION COMMITTEE REPORT
121
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
122
Operation of the Remuneration Committee
It is an objective of the Group to attract and retain
high calibre Directors and employees and reward
them in a way which encourages the creation of
value for shareholders while also fully meeting the
expectations of shareholders and governance
VWDQGDUGV 7KH &KLHI 3HRSOH 2IƼFHU ű&32Ų DWWHQGV
the Committee meetings and works together with
the Committee Chair and Company Secretary to the
develop the meeting agendas. The CEO and CPO
submit proposals to the committee as appropriate
but do not take part in any decisions made. The
Committee has three scheduled meetings each year
to deal with ordinary business. In addition to these,
the Committee meets on an ad hoc basis when
necessary to deal with additional matters.
Membership and Meeting Attendance in FY2024
Non-executive Directors
Susan Searle (Chair)
5/5
Gary Bullard
5/5
Louise Evans
5/5
Jim Haynes
5/5
Brian Phillipson
5/5
Retired
30 September 2024
Annual Statement
Dear Shareholder
I was pleased to succeed Brian Phillipson as Chair of the
Remuneration Committee on 1 June 2024 and would
like to thank him for leaving everything in good order.
Detailed below is the the Remuneration Committee Report
for FY2024 which is divided into three sections, being:
• This Annual Statement, which summarises the work of
the Committee, remuneration outcomes in FY2024 and
how the Remuneration Policy will be operated for FY2025;
• The Remuneration Policy, which summarises the
Company’s current Remuneration Policy; and
• The Annual Report on Remuneration, which discloses how
the Remuneration Policy was implemented in FY2024.
Remuneration
Committee Report
123
GOVERNANCE REMUNERATION COMMITTEE REPORT
Advisors to the Committee
FIT Remuneration Consultants LLP (“FIT”) advised the
Remuneration Committee on certain matters during the year. FIT is
a member and signatory of the Remuneration Consultants Group
and voluntarily operates under the Code of Conduct in relation to
executive remuneration consulting in the UK, details of which can
be found at www.remunerationconsultantsgroup.com. FIT provides
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Activities during the year
• Reviewed the FY2023 Remuneration Committee Report prior to
its approval by the Board.
• Reviewed performance against the FY2023 annual bonus plan
targets and resulting awards and agreed the metrics and targets
for the FY2024 bonus plan.
• Reviewed and approved awards and targets for the FY2024 LTIP.
• Reviewed total reward for employees across the organisation.
• Reviewed our Gender Pay Gap reporting.
• Reviewed the level of diversity across the organisation.
• Monitored progress towards vesting of annual LTIP awards in
order to determine their effectiveness in terms of retention.
• Documented how the Committee intends our remuneration
schemes would operate in the event of a takeover of the Company.
Performance and Reward for FY2024
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continuing operations from £10.3m to £8.1m. This meant that
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short term incentive scheme were met. I am pleased to report that
very good progress was made in respect of the Executive Directors’
personal objectives and in executing the Company’s agreed
strategy. As a result, annual bonuses were awarded to the CEO and
CFO at 15% of salary. No LTIP awards vested in FY2024.
Implementing the Remuneration Policy for FY2025
In respect of the implementation of the Remuneration Policy for
the CEO and CFO in FY2025:
%DVH6DODU\ The Committee reviewed the Executive Directors’
salaries at its October 2024 meeting. It agreed to increase the
salary of both Charlie Peppiatt and Chris Jewell by 1.7% with effect
from 1 January 2025. This increase is in line with that given to the
wider UK workforce.
3HQVLRQ Pension provision will continue to be provided at 6% of
salary (workforce aligned).
$QQXDO%RQXV Annual bonus will continue to be capped at 100% of
salary albeit we have adjusted weightings to improve the linkage
with key drivers for our revised strategy and encouraging an
increased focus on reducing the second half weighting of our
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the bonus plan, with the EPS element reduced from 50% to 35%.
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number in the six months ending 31 March 2025. Personal
objectives will continue to account for the remaining 20%, and it
was agreed that these would be linked to the four pillars of the
Group’s revised strategy for the coming year. The performance
FULWHULD RI WKH ƼQDQFLDO HOHPHQWV ZLOO FRQWLQXH WR RSHUDWH VXFK WKDW
pay out will commence at achievement of 90% of the target with
maximum entitlement being achieved at 110% of target. Pay-out
will be linear between those two levels.
/7,3V LTIP Award levels for FY2025 will continue to be set at
120% of base salary for the CEO and CFO and vest after three
years, subject to achievement of performance targets and a
two-year post vesting holding period will operate. Performance
metrics will continue to be based on sliding scale Total Shareholder
Return (“TSR”) targets for 50% of awards, EPS targets for 40% of
awards and ESG targets for 10% of awards. TSR will continue to be
measured against the constituents of the AIM100.
6KDUHKROGLQJJXLGHOLQHV No changes have been made to our
shareholding guideline policy which is considered to be well
aligned to AIM best practice and which is detailed in the
Remuneration Policy section of this report.
Remuneration and Retention of the Wider Workforce
At the October 2024 Committee meeting, the Committee reviewed
the salary levels of the senior management team. It also reviewed
the proposed level of awards to be made to the senior management
team under the LTIP scheme. A key aim of this review continues to
be ensuring there is an appropriate alignment between the
remuneration of Directors and that of the senior management
WHDP 7KH &RPPLWWHH LV VDWLVƼHG WKDW WKLV LV WKH FDVH
We have been investing in our HR function globally in FY2024 and will
continue to do so. We have implemented Paylocity and now have
better tools available to enable us to monitor employee engagement.
7KH &RPPLWWHH LV FRQƼGHQW WKDW RXU FRPELQDWLRQ RI VDODU\ ERQXV
and annual long-term incentive schemes provides a good mix of
incentives and rewards in both the short, medium and long terms.
Furthermore, we believe our remuneration framework is effective
in driving behaviours that are consistent with our Group values and
strategy and is fully in line with external governance requirements
and expectations. The Committee believes that the remuneration
of the Executive Directors is appropriate based on its review of
industry reports on remuneration and input received from FIT
during the year. The company’s employee engagement programme
gives staff the opportunity to feedback to the Remuneration
Committee via Jim Haynes and / or the wider engagement
framework on matters related to staff and Executive Directors’
UHPXQHUDWLRQ 7KHUH ZDV QR VLJQLƼFDQW IHHGEDFN RQ ([HFXWLYH
Director remuneration during the year.
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clarity, simplicity, predictability, proportionality and avoids
reputational risk and therefore the Committee’s view is that the
factors outlined in Provision 40 of the UK Corporate Governance
Code have been adhered to;
The Committee values all feedback from shareholders and hopes
to receive your support at the forthcoming AGM.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
124
FY2025 POLICY AND APPROACH
The Remuneration Committee approved
a 1.7% increase to the Executive Directors’
salaries effective from 1 January 2025.
This increase is in line with that given to
the wider workforce.
FY2025 POLICY AND APPROACH
Up to 35% payable based on EPS on a
sliding scale between 90% and 100%
of target.
Up to 20% of bonus payable based on
RSHUDWLQJ FDVK ƽRZ RQ D VOLGLQJ VFDOH
between 90% and 110% of target.
25% of bonus payable for achieving a
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31 March 2025.
No changes to the personal
objectives element.
FY2025 POLICY AND APPROACH
No changes proposed.
PURPOSE AND LINK TO STRATEGY
Takes into account experience and
personal contribution to the Group’s
strategy.
Attracts and retains executives of
the quality required to deliver the
Group’s strategy.
FY2024 POLICY AND APPROACH
• Reviewed annually with changes effective
from 1 January if applicable
• Consideration given to individual and
Group performance
• General pay increases across the
wider workforce are also taken into
consideration
• Where the Group considers it appropriate
and necessary, larger increases may be
awarded in exceptional circumstances
FY2024 POLICY AND APPROACH
• Awarded annually.
• Based on broad performance measures.
• Up to 50% payable based on EPS on
a sliding scale between 90% and 110%
of target.
• Up to 30% of bonus payable based on
RSHUDWLQJ FDVK ƽRZ RQ D VOLGLQJ VFDOH
between 90% and 110% of target.
• Up to 20% of bonus payable for
achievement of personal objectives half
of which are linked to ESG metrics.
FY2024 POLICY AND APPROACH
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pension plan.
• Executive Directors are entitled to
employer pension scheme contributions
of 6% of salary, which is consistent with
the wider UK workforce.
OPPORTUNITY
Maximum of 100% of base salary.
OPPORTUNITY
Base salary increases are applied in line
with the outcome of the annual review.
OPPORTUNITY
6% of base salary from 1 October 2024.
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PURPOSE AND LINK TO STRATEGY
Incentivise achievement of short-term
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considers to be critical drivers of
business growth.
PURPOSE AND LINK TO STRATEGY
Provide employees with market
competitive pension scheme.
ELEMENT OF REMUNERATION
Base Salary
ELEMENT OF REMUNERATION
Annual Bonus
ELEMENT OF REMUNERATION
Pension
Remuneration Policy
The table below summarises our policy for
FY2024 and its implementation for FY2025:
125
GOVERNANCE REMUNERATION COMMITTEE REPORT
FY2025 POLICY AND APPROACH
No changes proposed.
FY2025 POLICY AND APPROACH
No changes proposed.
FY2024 POLICY AND APPROACH
• Awards vest after three years subject to
achievement of targets, and are then
subject to a two-year holding period.
• TSR relative to the performance of the
AIM100 for 50% of awards, with full vesting
for performance in the upper quartile.
• The EPS target accounts for 40% of
awards. Full vesting at 15% EPS growth
per annum.
• 15% growth per annum target is in line with
the Board’s objective of doubling the size
of the Group over a period of 5 years.
• Achievement of the Group’s ESG agenda
accounts for 10% of awards.
• Awards may vest pro rata following
retirement.
OPPORTUNITY
Award levels are determined by reference
to an individual’s position and performance.
Annual awards of 120% of base salary for
the CEO and the CFO.
Maximum award of 300% of base salary
where an exceptional case may arise (e.g.
on recruitment).
REQUIREMENT
In-employment:
CEO: 200% of salary
CFO: 100% of salary
Post cessation: 100% of salary for one year
post cessation.
FY2024 POLICY AND APPROACH
• In-employment: The CEO and CFO are
required to hold 200% and 100% of
salary respectively in G&H shares to be
built up through shares vesting under the
LTIP over time.
• Post cessation: Executive Directors are
required to hold shares with a value
of 100% of salary for one year post
cessation (excluding shares already held
on appointment, any shares vesting in
relation to the LTIP granted prior to
30 September 2021, or those purchased
by Directors).
PURPOSE AND LINK TO STRATEGY
Incentivise executive performance over
the longer term.
Performance measures linked to the
long-term strategy of the business and
the creation of shareholder value over the
longer term.
PURPOSE AND LINK TO STRATEGY
To promote share ownership for
Executive Directors.
ELEMENT OF REMUNERATION
Long Term
Incentive Plan (LTIP)
ELEMENT OF REMUNERATION
Shareholding
Guidelines
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
126
Remuneration
Executive Directors are paid a base salary together with annual bonus payments based on the
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([HFXWLYH 'LUHFWRUV SDUWLFLSDWH LQ D ORQJWHUP LQFHQWLYH VFKHPH DQG UHFHLYH EHQHƼWV LQ NLQG LQFOXGLQJ
medical expenses and insurance.
Non-executive directors are paid a fee to attend board meetings and to serve as members of the Board
as well as the Audit, Nomination, Remuneration and Sustainability committees. Further payments may
be made in respect of additional services provided at the request of the Group. No such further payments
were made in FY2024 or FY2023. The Board approved an increase to the Non-executive Directors’
salaries of 1.7% with effect from 1 January 2025.
%HQHƼWV
Executive Directors receive private health insurance, life assurance and long-term disability insurance.
Directors’ Remuneration (Audited)
2024
Basic pay
Performance
related bonus
%HQHƼWV
in kind
Pension
contribution
Sub-total
2024
7RWDOƼ[HG
remuneration
Total variable
remuneration
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Executive
C Peppiatt
414
59
22
–
495
436
59
C Jewell
298
44
11
10
363
319
44
Non-executive
G Bullard
96
–
–
–
96
96
–
B Phillipson1
54
–
–
–
54
54
–
L Evans
50
–
–
–
50
50
–
J Haynes
50
–
–
–
50
50
–
S Searle
50
–
–
–
50
50
–
1,012
103
33
10
1,158
1,055
103
2023
Basic pay
Performance
related bonus
%HQHƼWV
in kind
Pension
contribution
Sub-total
2023
7RWDOƼ[HG
remuneration
Total variable
remuneration
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Executive
C Peppiatt
405
250
25
–
680
430
250
C Jewell
286
175
11
10
482
307
175
Non-executive
G Bullard
87
–
–
–
87
87
–
B Phillipson
49
–
–
–
49
49
–
L Evans
49
–
–
–
49
49
–
J Haynes
49
–
–
–
49
49
–
S Searle2
25
–
–
–
25
25
–
950
425
36
10
1,421
996
425
The above disclosure has been audited.
1 Brian Phillipson was paid on a mid-month to mid-month payroll cycle until his retirement when
he was paid to the end of the month.
2 Susan Searle was appointed 3 April 2023.
Annual Report
on Remuneration
127
GOVERNANCE REMUNERATION COMMITTEE REPORT
2024 Performance Related Bonuses
%RQXVHV LQ ZHUH EDVHG RQ (36 RQ RSHUDWLQJ FDVK ƽRZ DQG RQ SHUVRQDO VWUDWHJLF
REMHFWLYHV 'HWDLOV RI WKH SHUIRUPDQFH DFKLHYHG DJDLQVW WKH (36 DQG FDVK ƽRZ WDUJHWV DUH VKRZQ LQ WKH
table below:
Financial targets
Threshold
target
Maximum
target
% payable
at max
Performance
outcome
% bonus
awarded
EPS target (adjusted diluted)
35.0p
42.8p
50%
25.1p
–
$GMXVWHG RSHUDWLQJ FDVK ƽRZ
target
£23.9m
£29.3m
30%
£16.7m
–
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No discretion was applied to these outcomes.
Personal strategic objectives, which accounted for 20% of the bonus opportunity, were set at the start of
the year. These were subject to review and approval by the Remuneration Committee. They are focused
on a range of activities which are key to enabling our strategic objectives.
Details of the objectives set are summarised in the table below:
&KDUOLH3HSSLDWW&(2
&KULV-HZHOO&)2
• Establish dynamic high-performance teams and a purpose-led
culture to ensure G&H is a safe, engaging, diverse and inclusive
place to work.
• To contribute to the delivery of the Group’s ESG agenda for FY24
• Drive the strategy to deliver exceptional G&H customer experience
to ensure sustainable margin growth through the cycle.
• Oversee the implementation of the strategy to deliver superior
operational execution through operational excellence, optimised
supply chains, outsourcing and continuous improvement
activity across the business
• Oversee value creation through introduction of technology and
platform solutions delivering sustainable margin growth.
• To contribute to the delivery of the Group’s ESG agenda for FY24.
Ŷ 7R FRQWLQXH WR OHDG WKH LPSURYHPHQW RI WKH JURXSŮV ƼQDQFLDO
control environment, including making a number of changes to
key personnel
• To support the delivery of portfolio change in line with the
Group’s strategy
The view of the Remuneration Committee is that excellent progress was made against the objectives set.
Following due discussion at the October 2024 Remuneration Committee meeting, the Committee
approved achievement levels of 15% out of the maximum 20% of the bonus for the CEO Charlie Peppiatt
and 15% for Chris Jewell.
Directors’ Pension Arrangements
The rate of Group pension contributions for executive directors is 6%. The policy is in line with the UK
Corporate Governance Code 2018 which recommends that contribution rates for Executive Directors, or
payments in lieu thereof, should be aligned with those available to the workforce.
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&KDUOLH 3HSSLDWW DQG &KULV -HZHOO KDYH ERWK VDFULƼFHG DOO RU SDUW RI WKHLU HQWLWOHPHQW WR *URXS SHQVLRQ
contributions of 6% of basic salary in exchange for a corresponding increase in basic pay.
Directors’ Contracts
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WZHOYH PRQWKVŮ QRWLFH DQG WKH &KLHI )LQDQFLDO 2IƼFHUŮV FRQWUDFW LV VXEMHFW WR VL[ PRQWKVŮ QRWLFH 7KH
Chairman and non-executive directors do not have contracts of service.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
128
Malus and Clawback
Both the Long Term Incentive Plan and Annual Bonus scheme have malus and clawback clauses. These
clauses permit the Remuneration Committee to reduce or cancel amounts due under these schemes at
DQ\ WLPH SULRU WR SD\PHQW RU XS WR WKUHH \HDUV DIWHU SD\PHQW LI VSHFLƼF FLUFXPVWDQFHV DSSO\ 7KHVH
circumstances include the Director being dismissed for gross misconduct, the results of the Group being
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Remuneration Committee believe there to be circumstances giving rise to a reputational risk arising for
the Group. The long term incentive plan also includes malus and clawback clauses related to corporate
failure and/or insolvency. The Committee does also have a degree of discretion to apply malus and
FODZEDFN WR VLWXDWLRQV QRW VSHFLƼFDOO\ GHƼQHG LI FRQVLGHUHG DSSURSULDWH
Long Term Incentive Plan (Audited)
There were no vesting or exercises under the Long Term Incentive Plan by the Directors in either the year
ended 30 September 2023 or 30 September 2024.
Director Shareholdings (Audited)
7KH 'LUHFWRUVŮ EHQHƼFLDO LQWHUHVWV LQ WKH LVVXHG RUGLQDU\ VKDUH FDSLWDO RI WKH &RPSDQ\ ZHUH DV IROORZV
Number of shares at
30 September 2024
% of salary
As at 30 September 2024
Number of shares at
30 September 2023
% of salary
As at 30 September 2023
Executive Directors
Charlie Peppiatt
7,000
7%
5,000
6%
Chris Jewell
5,715
8%
5,715
10%
Non-executive Directors
Gary Bullard
59,205
N/A
38,581
N/A
Louise Evans
473
N/A
473
N/A
Jim Haynes
2,500
N/A
–
–
Susan Searle
2,700
N/A
2,700
N/A
Brian Phillipson1
3,460
N/A
3,460
N/A
1 Brian Phillipson retired on 30 September 2024.
Shareholding Guidelines
Executive Directors are required to maintain a qualifying interest in the ordinary shares of the Company.
7KH &KLHI ([HFXWLYH 2IƼFHU DQG WKH &KLHI )LQDQFLDO 2IƼFHU DUH UHTXLUHG WR KROG DQG RI VDODU\
respectively in G&H shares, a holding which is expected to be built up through shares vesting under the
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shareholding has been achieved, other than sale of shares to satisfy tax obligations.
Executive Directors are required to hold shares with a value of 100% of salary for a period of one year post
cessation of employment at G&H. This requirement does not apply to shares already held by Executive
Directors on appointment or those purchased by Directors.
The shares purchased via the Bonus scheme for Chris Jewell in the year ended 30 September 2022 will not
be considered to be a personal purchase and therefore will not be excepted from the holding requirements.
129
GOVERNANCE REMUNERATION COMMITTEE REPORT
The Gooch & Housego Long Term Incentive Plan (Audited)
Having reached the end of its ten year life, the existing Gooch & Housego LTIP was renewed for a further
ten years and adopted by the Board on 19 September 2023. A number of changes were made to the LTIP
rules to modernise and align with best and market practice. Those changes included the introduction of
a dividend equivalent provision and enhancing malus and clawback provisions to add corporate failure
and insolvency triggers, in line with the current UK Corporate Governance Code. We did not make any
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plan, awards will be made annually to Directors and key employees based on a percentage of salary or
management grade. Subject to the satisfaction of the required TSR, EPS and ESG performance criteria,
these grants were to vest three years after the grant date. For any vesting shares in relation to all extant
awards, after sales to satisfy tax obligations, 50% must be held for a further year and 50% must be held
for a further two years. The exercise price of all awards is nil.
Number of ordinary shares under option
Date of
At
Awarded
Exercised
Lapsed
At
Expiry
grant
01.10.2023
in year
in year
30.09.2024
Date
Executive
C Peppiatt
09.01.2023
175,090
–
–
–
175,090
09.01.2026
C Peppiatt
10.01.2024
–
82,615
–
–
82,615
10.01.2027
C Jewell
07.01.2021
22,839
–
–
(22,839)
–
N/A
C Jewell
13.01.2022
24,360
–
–
–
24,360
13.01.2025
C Jewell
09.01.2023
70,698
–
–
–
70,698
09.01.2026
C Jewell
10.01.2024
–
61,156
–
–
61,156
10.01.2027
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standard dilution limit of 10% of the Company’s issued share capital over a 10 year period, and the
Company will continue to do so.
The Gooch & Housego PLC Save As You Earn Scheme (Audited)
The Gooch & Housego PLC Save As You Earn Scheme was established in February 2021 and was open
to all UK employees. There were no grants of options under the SAYE scheme during the year ended
30 September 2023 or 2024. The 2021 grant matured in the year ended 30 September 2024, and
because of the reduction in share price during the vesting period, Chris Jewell’s contributions were
refunded to him and his options lapsed.
Number of ordinary shares under option
Date of
At
Awarded
Exercised
Lapsed
At
Expiry
grant
01.10.2023
in year
in year
30.09.2024
Date
Executive
C Jewell
26.03.2021
310
–
–
(310)
–
26.03.2025
During the year ended 30 September 2024, £715,000 (2023: £337,000) was charged to the income
statement in respect of the IFRS 2 share-based payments charge on all share option schemes and a
charge of £165,000 (2023: charge: nil) in respect of employer’s national insurance contributions,
based on a year end share price of £4.02 (2023: £4.95).
Susan Searle
Chair of the Remuneration Committee
3 December 2024
Financial
Statements
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
130
132 Independent Auditors’ Report
140 Group Income Statement
141 Group Statement of Comprehensive Income
142 Group Balance Sheet
143 Group Statement of Changes in Equity
144 Group Cash Flow Statement
145 Notes to the Group Cash Flow Statement
147 Notes to the Group Financial Statements
176 Company Balance Sheet
177 Company Statement of Changes in Equity
178 Company Cash Flow Statement
179 Notes to the Company Cash Flow Statement
180 Notes to the Company Financial Statements
130–191
FINANCIAL STATEMENTS
131
Image: SpaceX/Unsplash
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
132
To the members of
Gooch & Housego PLC
Independent
Auditors’ Report
Report on the audit of the financial statements
Opinion
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• give a true and fair view of the state of the Group’s and of the
Company’s affairs as at 30 September 2024 and of the Group’s
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then ended;
• have been properly prepared in accordance with UK-adopted
international accounting standards as applied in accordance
with the provisions of the Companies Act 2006; and
• have been prepared in accordance with the requirements of the
Companies Act 2006.
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Annual Report, which comprise: the Group and Company Balance
Sheets as at 30 September 2024; the Group Income Statement,
the Group Statement of Comprehensive Income, the Group and
Company Cash Flow Statements, the notes to the Group and
Company Cash Flow Statements and the Group and Company
Statements of Changes in Equity for the year then ended; and the
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policy information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in
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statements section of our report. We believe that the audit
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provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the
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statements in the UK, which includes the FRC’s Ethical Standard,
as applicable to other listed entities of public interest, and we
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these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
We have provided no non-audit services to the Company
or its controlled undertakings in the period under audit.
133
FINANCIAL STATEMENTS INDEPENDENT AUDITORS’ REPORT
Our audit approach
Overview
Audit scope
• The UK audit team performed full scope audit procedures in
respect of one operating unit based in the USA (Gooch & Housego
(Palo Alto) LLC, and three operating units in the UK (Integrated
Technologies Limited, Gooch & Housego (Torquay) Limited and
Gooch & Housego (UK) Limited).
• Additional procedures were also performed at Group level in
respect of centralised processes and functions, including the
audit of consolidation journals and discontinued operations
considerations with respect to EM4 Inc. Audit procedures were
performed by the UK audit team over certain other balances and
transactions within the Company, Gooch & Housego PLC, Gooch
& Housego (Ohio) LLC and G&H US Holdings Ltd, along with
analytical procedures on all of the remaining reporting units.
• Taken together, these reporting units (post consolidation entries)
account for 83% of the Group’s revenue.
Key audit matters
• Recoverability of the Group goodwill (Group).
• Recoverability of the Company’s investments in subsidiaries
(Company).
Materiality
• Overall Group materiality: £1,359,000 (2023: £1,484,000)
based on 1% of continuing Group revenues.
• Overall Company materiality: £676,500 (2023: £545,000)
based on 1% of total assets.
• Performance materiality: £1,019,000 (2023: £1,117,500) (Group)
and £507,250 (2023: £408,000) (Company).
The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
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Key audit matters
Key audit matters are those matters that, in the auditors’
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those which had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters, and any comments we
make on the results of our procedures thereon, were addressed
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and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
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of intangible assets and goodwill, which was a key audit matter
last year, is no longer included because of the lack of acquisition
activity in the year, with no material changes to the provisional
fair values disclosed in the 2023 annual report in respect of prior
year acquisitions. Otherwise, the key audit matters below are
consistent with last year.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
134
HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
We obtained management’s assessment of the recoverable amount of each cash generating unit,
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the appropriateness of key assumptions. We considered the methodology used by management
in performing the assessments and challenged key inputs.
• We have obtained evidence behind the forecasts in order to challenge the key judgements and
estimates;
• We have agreed the impairment model to the Board approved 3-year strategic plan and tested
the mathematical accuracy of the model;
• We have compared revenue forecasts against current order books, including verifying a sample
of orders to customer purchase orders. We have further assessed whether the forecast
revenues and EBITDA margins are reasonable by comparing them to historical trends and by
considering the accuracy of management’s historic forecasting;
• We have considered plausible downside sensitivities to assess if there is still appropriate
headroom under different scenarios;
• We have used our in-house valuation experts to consider the appropriateness of the discount rate
and long-term growth rate used compared to the wider market and sector benchmarks; and
• We have also assessed the reasonableness of the assumed long-term growth rate in light of
external market studies relevant to the Group.
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reasonable and concur with the assessment performed. We consider that the carrying value of
the goodwill balance is fairly stated based on materiality and that the disclosures in the Financial
Statements are appropriate.
KEY AUDIT MATTER
As at 30 September 2024, the Group Balance
Sheet includes £54.1m of intangible assets
(2023: £59.7m), of which £40.0m is goodwill
(2023: £45.1m), and £14.1m amortised
intangible assets (2023: £14.6m).Goodwill in
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recoverable amount of these balances is
subjective due to the inherent uncertainty
involved in forecasting and discounting future
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and discount rates. The sensitivity of these key
assumptions are detailed in note 18,
Intangible assets.
Recoverability of the Group goodwill (Group)
HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
We have considered whether there are any indicators of impairment, including comparing
to current market capitalisation. In order to support management’s conclusion that there are
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within the cash generating units of the Goodwill impairment assessment (Group). We concur
with the assessment performed and consider the carrying value of the investment balance
to be fairly stated.
KEY AUDIT MATTER
As at 30 September 2024, investments in
subsidiaries included in the Company Balance
Sheet was £42.1m (2023: £43.2m).In
accordance with the requirements of IFRS
(IAS36 – Impairment of Assets), at the end of
each reporting period management are
required to assess whether there is any
indication that the Company’s investments in
subsidiaries may be impaired. As a result of this
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Recoverability of the Company’s investments
in subsidiaries (Parent)
135
FINANCIAL STATEMENTS INDEPENDENT AUDITORS’ REPORT
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
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statements as a whole, taking into account the structure of the
group and the company, the accounting processes and controls,
and the industry in which they operate.
The Group has seven main operating units located in the United
States of America (USA) and the United Kingdom (UK), each
of which contribute more than 5% of Group revenues. The
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UHVSRQVLEOH IRU WKH ƼQDQFLDO UHSRUWLQJ RI *RRFK +RXVHJR 3/&
(the “Company”). Gooch & Housego (Palo Alto) LLC and Gooch
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components due to the revenues earned and the highly material
balances within these entities. Full-scope audits of each of these
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Additional procedures were also performed at Group level in
respect of centralised processes and functions, including the audit
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by the UK audit team over certain other balances and transactions
within the Company, Gooch & Housego PLC, Gooch & Housego
(Ohio) LLC and G&H US Holdings Ltd, along with analytical
procedures on all of the remaining reporting units. Our audit
addressed components making up 83% of the Group’s revenues
with the audit of all components being performed by the Group
engagement team.
For the purposes of the Company audit this consists of one
reporting unit which was subject to a full scope audit in accordance
with our Company materiality.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to
understand the extent of the potential impact of climate risk on
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performing our audit procedures for any indicators of the impact of
climate risk. Our procedures did not identify any material impact as
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statements. We also reviewed management’s consideration of the
impact of climate events occurring on the Group’s ability to
continue as a going concern.
Materiality
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materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to
determine the scope of our audit and the nature, timing and extent of
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and disclosures and in evaluating the effect of misstatements, both
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Based on our professional judgement, we determined materiality
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Overall materiality
How we determined it
FINANCIAL STATEMENTS –
GROUP
£1,359,000
(2023: £1,484,000).
FINANCIAL STATEMENTS –
GROUP
1% of continuing Group
revenues.
FINANCIAL STATEMENTS –
COMPANY
£676,500
(2023: £545,000).
FINANCIAL STATEMENTS –
COMPANY
1% of total assets
Rationale for benchmark applied
FINANCIAL STATEMENTS –
GROUP
Overall materiality in the current
year has been based on 1% of
the Group’s revenue. This is in
line with the prior year and is
considered the most appropriate
benchmark given management’s
focus on the growth of this metric,
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relative to the scale of the Group.
FINANCIAL STATEMENTS –
COMPANY
We determined our materiality
based on total assets, which is
more applicable than a
performance-related measure as
the Company is primarily an
investment holding Company for
the Group and does not have any
revenues as a result.
For each component in the scope of our Group audit, we allocated
a materiality that is less than our overall Group materiality. The
range of materiality allocated across components was between
£500,000 and £1,280,000.
We use performance materiality to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
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we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 75% (2023: 75%)
of overall materiality, amounting to £1,019,000 (2023: £1,117,500)
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e IRU WKH FRPSDQ\ ƼQDQFLDO VWDWHPHQWV
In determining the performance materiality, we considered a
number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and
concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with those charged with governance that we would report
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(group audit) (2023: £74,200) and £33,800 (company audit)
(2023: £35,600) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
136
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s and the
Company’s ability to continue to adopt the going concern basis of
accounting included:
• Evaluation of management’s going concern assessment and
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liquidity and covenant compliance over the going concern period.
• Evaluation of stress testing performed by management in their
downside scenario and consideration of whether the stresses
applied are appropriate for assessing going concern.
• Validation of the terms of the current banking facilities.
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material uncertainties relating to events or conditions that,
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Group’s and the Company’s ability to continue as a going concern
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statements are authorised for issue.
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directors’ use of the going concern basis of accounting in the
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However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the Group’s and
the Company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the
UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the
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appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual
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thereon. The directors are responsible for the other information.
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information and, accordingly, we do not express an audit opinion
or, except to the extent otherwise explicitly stated in this report,
any form of assurance thereon.
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responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
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or otherwise appears to be materially misstated. If we identify an
apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a
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misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We
have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also
considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the
audit, the information given in the Strategic report and Directors’
Report for the year ended 30 September 2024 is consistent with
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with applicable legal requirements.
In light of the knowledge and understanding of the Group and
Company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the
Strategic report and Directors’ Report.
137
FINANCIAL STATEMENTS INDEPENDENT AUDITORS’ REPORT
Corporate governance statement
ISAs (UK) require us to review the directors’ statements in relation
to going concern, longer-term viability and that part of the
corporate governance statement relating to the Company’s
compliance with the provisions of the UK Corporate Governance
Code, which the Listing Rules of the Financial Conduct Authority
specify for review by auditors of premium listed companies.
Our additional responsibilities with respect to the corporate
governance statement as other information are described in the
Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
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statements and our knowledge obtained during the audit, and we
have nothing material to add or draw attention to in relation to:
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assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal
risks, what procedures are in place to identify emerging risks and
an explanation of how these are being managed or mitigated;
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they considered it appropriate to adopt the going concern basis
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material uncertainties to the Group’s and Company’s ability to
continue to do so over a period of at least twelve months from
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• The directors’ explanation as to their assessment of the Group’s
and Company’s prospects, the period this assessment covers and
why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the period
of its assessment, including any related disclosures drawing
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Our review of the directors’ statement regarding the longer-term
viability of the Group and Company was substantially less in
scope than an audit and only consisted of making inquiries and
considering the directors’ process supporting their statement;
checking that the statement is in alignment with the relevant
provisions of the UK Corporate Governance Code; and considering
ZKHWKHU WKH VWDWHPHQW LV FRQVLVWHQW ZLWK WKH ƼQDQFLDO VWDWHPHQWV
and our knowledge and understanding of the Group and Company
and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the corporate
JRYHUQDQFH VWDWHPHQW LV PDWHULDOO\ FRQVLVWHQW ZLWK WKH ƼQDQFLDO
statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess
the Group’s and Company’s position, performance, business
model and strategy;
• The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems;
and
• The section of the Annual Report describing the work of the audit
committee.
We have nothing to report in respect of our responsibility to report
when the directors’ statement relating to the Company’s
compliance with the Code does not properly disclose a departure
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Rules for review by the auditors.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
138
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5HVSRQVLELOLWLHVRIWKHGLUHFWRUVIRUWKHƼQDQFLDOVWDWHPHQWV
As explained more fully in the Statement of Directors’
Responsibilities, the directors are responsible for the preparation
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IUDPHZRUN DQG IRU EHLQJ VDWLVƼHG WKDW WKH\ JLYH D WUXH DQG IDLU
view. The directors are also responsible for such internal control as
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statements that are free from material misstatement, whether due
to fraud or error.
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for assessing the Group’s and the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or the Company
or to cease operations, or have no realistic alternative but to do so.
$XGLWRUVŮUHVSRQVLELOLWLHVIRUWKHDXGLWRIWKHƼQDQFLDOVWDWHPHQWV
Our objectives are to obtain reasonable assurance about whether
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misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
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the economic decisions of users taken on the basis of these
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Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud,
is detailed below.
Based on our understanding of the Group and industry, we
LGHQWLƼHG WKDW WKH SULQFLSDO ULVNV RI QRQFRPSOLDQFH ZLWK ODZV DQG
regulations related to health and safety and employment laws, and
we considered the extent to which non-compliance might have a
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those laws and regulations that have a direct impact on the
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reporting regulations, taxation legislation and the Companies Act
2006. We evaluated management’s incentives and opportunities
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the risk of override of controls), and determined that the principal
risks were related to posting unusual journal entries to increase
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which could be subject to management bias.
Audit procedures performed by the engagement team included:
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with governance over instances of fraud and compliance with
laws and regulations, including consideration of actual or
potential litigation and claims;
• Reviewing board and sub-committee meeting minutes for
evidence of breaches of regulations;
• Evaluation of management’s controls designed to prevent and
detect irregularities, in particular the whistleblowing policy and
employee code of conduct;
• Challenging assumptions and judgements made by management
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• Identifying and testing journal entries, in particular journal
entries posted with unexpected account combinations
• Designing audit procedures to incorporate unpredictability
around the nature, timing or extent of our testing; and
Ŷ 5HYLHZLQJ ƼQDQFLDO VWDWHPHQW GLVFORVXUHV DQG WHVWLQJ WR
supporting documentation to assess compliance with applicable
laws and regulations.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related
WR HYHQWV DQG WUDQVDFWLRQV UHƽHFWHG LQ WKH ƼQDQFLDO VWDWHPHQWV
Also, the risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited
number of items for testing, rather than testing complete
populations. We will often seek to target particular items for
testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about
the population from which the sample is selected.
A further description of our responsibilities for the audit of
WKH ƼQDQFLDO VWDWHPHQWV LV ORFDWHG RQ WKH )5&ŮV ZHEVLWH DW
ZZZIUFRUJXNDXGLWRUVUHVSRQVLELOLWLHV
This description forms part of our auditors’ report.
8VHRIWKLVUHSRUW
This report, including the opinions, has been prepared for and
only for the Company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other
purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
139
FINANCIAL STATEMENTS INDEPENDENT AUDITORS’ REPORT
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
• we have not obtained all the information and explanations we
require for our audit; or
• adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
Ŷ FHUWDLQ GLVFORVXUHV RI GLUHFWRUVŮ UHPXQHUDWLRQ VSHFLƼHG E\ ODZ
are not made; or
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the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Colin Bates (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Bristol
3 December 2024
Other required reporting
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
140
30 September 2024
30 September 2023*
Continuing operations
Note
Underlying
Non-underlying
(Note 13)
Total
Underlying
Non-underlying
(Note 13)
Total
£’000
£’000
£’000
£’000
£’000
£’000
Revenue
6
135,990
–
135,990
135,041
–
135,041
Cost of revenue
(94,341)
–
(94,341)
(94,746)
–
(94,746)
*URVVSURƼW
41,649
–
41,649
40,295
–
40,295
Research and development
expense
(7,828)
–
(7,828)
(7,372)
–
(7,372)
Sales and marketing expenses
(8,474)
–
(8,474)
(8,942)
–
(8,942)
Administration expenses
(15,674)
(3,690)
(19,364)
(12,724)
(4,278)
(17,002)
Other income
8
829
–
829
835
–
835
2SHUDWLQJSURƼW
6
10,502
(3,690)
6,812
12,092
(4,278)
7,814
Finance income
11
40
–
40
11
–
11
Finance costs
11
(2,435)
(209)
(2,644)
(1,766)
(57)
(1,823)
3URƼWEHIRUHLQFRPHWD[
expense
8,107
(3,899)
4,208
10,337
(4,335)
6,002
Income tax expense
12
(1,537)
606
(931)
(1,846)
701
(1,145)
3URƼWIURPFRQWLQXLQJ
operations
6,570
(3,293)
3,277
8,491
(3,634)
4,857
Loss after tax from
discontinued operations
–
(9,654)
(9,654)
–
(809)
(809)
3URƼW ORVV IRUWKH\HDU
6,570
(12,947)
(6,377)
8,491
(4,443)
4,048
Earnings/(loss) per share
From continuing operations
Basic earnings per share
15
25.5p
(12.8p)
12.7p
33.9p
(14.5p)
19.4p
Diluted earnings per share
15
25.1p
(12.6p)
12.5p
33.5p
(14.3p)
19.2p
From continuing and
discontinued operations
Basic earnings/(losses)
per share
15
25.5p
(50.2p)
(24.7p)
33.9p
(17.8p)
16.1p
Diluted earnings/(losses
per share
15
25.1p
(49.8p)
(24.7p)
33.5p
(17.5p)
16.0p
*The results for the year ended 30 September 2023 have been re-presented to show the effect of discontinued operations.
Group Income
Statement
For the year ended 30 September 2024
141
FINANCIAL STATEMENTS GROUP FINANCIAL STATEMENTS
2024
2023
Note
£’000
£’000
/RVV SURƼWIRUWKH\HDU
(6,377)
4,048
Other comprehensive income/(expense) – items that may be
UHFODVVLƼHGVXEVHTXHQWO\WRSURƼWRUORVV
*DLQV RQ FDVK ƽRZ KHGJHV
27
126
1,287
Exchange differences on translation of foreign operations
27
(4,844)
(6,259)
Exchange differences on translation of discontinued operation
132
244
Other comprehensive expense for the year net of tax
(4,586)
(4,728)
Total comprehensive expense for the year attributable
to the shareholders of Gooch & Housego PLC
(10,963)
(680)
Arising from:
Continuing operations
(1,441)
(115)
Discontinued operations
(9,522)
(565)
Total comprehensive expense for the year attributable
to the shareholders of Gooch & Housego PLC
(10,963)
(680)
Group Statement of
Comprehensive Income
For the year ended 30 September 2024
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
142
2024
As restated
2023
As restated
2022
Note
£’000
£’000
£’000
Non-current assets
Property, plant and equipment
16
37,915
41,818
42,447
Right of use assets
17
9,180
9,932
5,063
Intangible assets
18
51,051
59,729
47,939
98,146
111,479
95,449
Current assets
Inventories
19
30,631
37,582
37,073
Trade and other receivables
20
30,908
34,075
35,598
Cash and cash equivalents
21
6,622
7,294
5,999
68,161
78,951
78,670
Current liabilities
Trade and other payables
22
(18,075)
(21,156)
(22,765)
Borrowings
23
(10)
(10)
(64)
Lease liabilities
23
(1,289)
(1,443)
(1,732)
Income tax liabilities
(2,005)
(581)
(578)
(21,379)
(23,190)
(25,139)
Net current assets
46,782
55,761
53,531
Non-current liabilities
Borrowings
23
(22,563)
(28,157)
(18,730)
Lease liabilities
23
(8,570)
(9,394)
(4,539)
Provisions for other liabilities and charges
24
(1,429)
(1,582)
(848)
Deferred consideration
32
–
(870)
–
Deferred income tax liabilities
25
(3,978)
(5,223)
(3,827)
(36,540)
(45,226)
(27,944)
Net assets
108,388
122,014
121,036
Shareholders’ equity
Called up share capital
26
5,159
5,159
5,008
Share premium account
27
16,051
16,051
16,000
Merger reserve
27
11,561
11,561
7,262
Cumulative translation reserve
27
5,101
9,813
15,828
Hedging reserve
27
141
15
(1,272)
Retained earnings
27
70,375
79,415
78,210
Total equity
108,388
122,014
121,036
7KH ƼQDQFLDO VWDWHPHQWV IRU *RRFK +RXVHJR 3/& UHJLVWHUHG QXPEHU
00526832, on pages 140 to 175 were approved by the Board of
Directors on 3 December 2024 and signed on its behalf by:
Charlie Peppiatt
Director
Chris Jewell
Director
Group Balance
Sheet
As at 30 September 2024
143
FINANCIAL STATEMENTS GROUP FINANCIAL STATEMENTS
Note
Called up share
capital
£’000
Share
premium
account
£’000
Merger
reserve
£’000
Retained
earnings
£’000
Hedging
reserve
£’000
Cumulative
translation
reserve
£’000
Total
equity
£’000
At 1 October 2022
5,008
16,000
7,262
75,715
(1,272)
15,828
118,541
Restatement
2, 25
–
–
–
2,495
–
–
2,495
As restated
5,008
16,000
7,262
78,210
(1,272)
15,828
121,036
3URƼW IRU WKH ƼQDQFLDO \HDU
–
–
–
4,048
–
–
4,048
Other comprehensive
income/(expense) for
the year
–
–
–
–
1,287
(6,015)
(4,728)
Total comprehensive
income/ (expense) for
the year
–
–
–
4,048
1,287
(6,015)
(680)
Dividends
14
–
–
–
(3,180)
–
–
(3,180)
Shares issued
26
151
51
4,299
–
–
–
4,501
Share-based payments
28
–
–
–
337
–
–
337
Total contributions by and
GLVWULEXWLRQVWRRZQHUV
of the parent recognised
directly in equity
151
51
4,299
(2,843)
–
–
1,658
At 30 September 2023
5,159
16,051
11,561
79,415
15
9,813
122,014
At 1 October 2023
5,159
16,051
11,561
79,415
15
9,813
122,014
/RVV IRU WKH ƼQDQFLDO \HDU
–
–
–
(6,377)
–
–
(6,377)
Other comprehensive
income/(expense) for
the year
–
–
–
–
126
(4,712)
(4,586)
Total comprehensive
income/(expense) for
the year
–
–
–
(6,377)
126
(4,712)
(10,963)
Dividends
14
–
–
–
(3,378)
–
–
(3,378)
Share-based payments
28
–
–
–
715
–
–
715
Total contributions by and
GLVWULEXWLRQVWRRZQHUV
of the parent recognised
directly in equity
–
–
–
(2,663)
–
–
(2,663)
At 30 September 2024
5,159
16,051
11,561
70,375
141
5,101
108,388
Group Statement of
Changes in Equity
For the year ended 30 September 2024
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
144
2024
2023
£’000
£’000
&DVKƽRZVIURPRSHUDWLQJDFWLYLWLHV
Cash generated from operations
14,247
16,164
Income tax (paid) / repaid
(62)
2
Net cash generated from operating activities
14,185
16,166
&DVKƽRZVIURPLQYHVWLQJDFWLYLWLHV
Acquisition of subsidiaries, net of cash acquired
(351)
(11,697)
Disposal of subsidiaries, net of cash disposed
1,665
–
Purchase of property, plant and equipment
(3,526)
(6,257)
Sale of property, plant and equipment
–
516
Purchase of intangible assets
(1,716)
(1,062)
Interest received
40
11
Net cash used in investing activities
(3,888)
(18,489)
&DVKƽRZVIURPƼQDQFLQJDFWLYLWLHV
Drawdown of borrowings
4,731
19,154
Repayment of borrowings
(8,046)
(8,378)
Principal elements of lease payments
(1,715)
(1,624)
Interest paid
(2,487)
(1,784)
Dividends paid to ordinary shareholders
(3,378)
(3,180)
1HW FDVK XVHG LQ JHQHUDWHG IURP ƼQDQFLQJ DFWLYLWLHV
(10,895)
4,188
Net (decrease) / increase in cash
(598)
1,865
Cash at beginning of the year
7,294
5,999
Exchange losses on cash
(74)
(570)
Cash at the end of the year
6,622
7,294
Group Cash Flow
Statement
For the year ended 30 September 2024
145
FINANCIAL STATEMENTS GROUP FINANCIAL STATEMENTS
Reconciliation of cash generated from operations
2024
2023
£’000
£’000
3URƼWEHIRUHLQFRPHWD[IURPFRQWLQXLQJRSHUDWLRQV
4,208
6,002
Loss before income tax from continuing operations
(9,876)
(982)
Adjustments for:
- Amortisation of acquired intangible assets
2,002
1,672
- Amortisation of other intangible assets
1,755
1,692
- Loss on disposal of subsidiary
8,910
–
- Loss on disposal of property, plant and equipment
128
234
- Depreciation
7,732
7,652
- Share based payment charge
715
337
- Amounts claimed under the RDEC
(392)
(200)
- Finance income
(40)
(11)
- Finance costs
2,696
1,784
Total
23,506
13,160
&KDQJHVLQZRUNLQJFDSLWDO
- Inventories
257
(1,291)
- Trade and other receivables
863
1,005
- Trade and other payables
(4,711)
(1,730)
Total
(3,591)
(2,016)
Cash generated from operating activities
14,247
16,164
5HFRQFLOLDWLRQRIQHWFDVK RXWƽRZ LQƽRZWRPRYHPHQWVLQQHWGHEW
2024
2023
£’000
£’000
(Decrease) / increase in cash in the year
(598)
1,865
Drawdown of borrowings
(4,731)
(19,154)
Repayment of borrowings and leases
10,243
10,298
&KDQJHV LQ QHW GHEW UHVXOWLQJ IURP FDVK ƽRZV
4,914
(6,991)
New leases
(3,116)
(3,305)
Translation differences
2,913
1,443
Non cash movements
(664)
(392)
Leases disposed of with subsidiary
1,853
–
Acquired debt due after 1 year
–
(54)
Acquired leases
–
(3,345)
Movement in net debt in the year
5,900
(12,644)
Net debt at 1 October
(31,710)
(19,066)
Net debt at 30 September
(25,810)
(31,710)
Notes to the Group
Cash Flow Statement
For the year ended 30 September 2024
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
146
Analysis of net debt
At 1 Oct 2023
&DVK ƽRZ
New leases
Exchange
movement
Disposal of
subsidiary
Non-cash
movement
At 30 Sep 2024
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cash at bank and in hand
7,294
(157)
-
(74)
(441)
-
6,622
Debt due within 1 year
(10)
8,046
-
-
-
(8,046)
(10)
Debt due after 1 year
(28,157)
(4,731)
-
2,373
-
7,952
(22,563)
Leases
(10,837)
2,197
(3,116)
614
1,853
(570)
(9,859)
Net debt
(31,710)
5,355
(3,116)
2,913
1,412
(664)
(25,810)
At 1 Oct 2022
&DVK ƽRZ
New leases
Exchange
movement
Arising on
acquisition
Non-cash
movement
At 30 Sep 2023
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cash at bank and in hand
5,999
1,865
-
(570)
-
-
7,294
Debt due within 1 year
(64)
8,378
-
1
-
(8,325)
(10)
Debt due after 1 year
(18,730)
(19,154)
-
1,552
(54)
8,229
(28,157)
Leases
(6,271)
1,920
(3,305)
460
(3,345)
(296)
(10,837)
Net debt
(19,066)
(6,991)
(3,305)
1,443
(3,399)
(392)
(31,710)
The non-cash movements in the above tables include debt
arrangement fees and movements between amounts due
within one year and after one year due to the lapse of time.
Notes to the Group
Cash Flow Statement Continued
For the year ended 30 September 2024
147
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
Notes to the Group
Financial Statements
For the year ended 30 September 2024
*HQHUDOLQIRUPDWLRQ
Gooch & Housego PLC (the Company) is a public limited company
limited by shares incorporated and domiciled in the United
Kingdom. The Company is listed on the Alternative Investment
Market (AIM) of the London Stock Exchange. The address of the
UHJLVWHUHG RIƼFH RI WKH &RPSDQ\ LV JLYHQ RQ SDJH
7KH FRQVROLGDWHG ƼQDQFLDO VWDWHPHQWV RI WKH *URXS IRU WKH \HDU
ended 30 September 2024 comprise the Company, Gooch &
Housego PLC, and its subsidiaries (together referred to as the Group).
A listing of the Company’s subsidiaries is set out on page 183.
The Group is a manufacturer of specialist optoelectronic
components, materials and systems and specialist instrumentation
and life sciences devices. The Group has manufacturing facilities in
the United Kingdom and the United States.
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liabilities at fair value and in accordance with UK adopted
International Accounting Standards and with the requirements of
the Companies Act 2006 as applicable to companies reporting
under those standards.
Discontinued operations
The results for the year ended 30 September 2023 have been
re-presented to show the effect of discontinued operations related to
the disposal of EM4 LLC in the year ended 30 September 2024.
Prior year adjustment
During the year, we performed a review of our deferred tax
accounting across each of the jurisdictions in which we operate.
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recognised a deferred tax asset in respect of accumulated trading
losses in our US tax group. Accordingly we have restated the balance
sheet as at 30 September 2022 to recognise additional deferred
tax assets of £2.5m in respect of losses. In accordance with IAS12,
we have also netted deferred tax assets and deferred tax liabilities
where they relate to taxes levied by the same taxation authority
on the same taxable entity. The effect of this was to net deferred
tax assets of £4.7m and £4.5m against the deferred tax liabilities
as at 30 September 2023 and 30 September 2022 respectively.
There is no effect from this adjustment on the income statement
for the year ended 30 September 2023 or 2024.
Going concern
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concern basis.
The Directors have reviewed the budget for FY2025 and the
strategic plan for FY2026. They have assessed the future funding
requirements and covenant performance of the Group and
compared them with available borrowing facilities.
At 30 September 2024 the Group has a strong balance sheet with
net current assets of £46.8m. The Group’s cash and undrawn
available facilities totalled £36.2m.
The Directors have reviewed severe but plausible downside
scenarios that estimate the potential impact of the principal risks
that the Group faces (see pages 99 to 101 of this report) on the
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and the resultant reduced demand in certain of the Group’s markets,
most notably commercial aerospace and the industrial laser market
driven by softness in consumer end market demand. They also
included the effect of erosion of sales prices due to competition, the
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on input costs which cannot be passed on to customers, the potential
impact of a cyber-attack and a reduction in forecast revenue to
illustrate the potential effect of a loss of key personnel or inability to
hire for a key role. The model also considered the loss of revenue
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non-compliance issue. Mitigating actions including cost and capital
expenditure savings, and an extension of our payment terms with
suppliers (in FY2025 only) have been factored into this analysis.
This assessment covered not only the coming 12 month period but
also for the period to September 2027 in order to support the
Viability Statement given on page 115.
We have compared the downside risk adjusted cash and banking
covenant projections and against the Group’s available cash and
borrowing facilities and have been able to conclude that the Group
would continue to be able to operate even if a number of the risks
occurred simultaneously.
The Directors have also considered the potential impact of climate
change on going concern and have concluded that there is not
expected to be any material impact on the business during the
going concern period
As a result of the assessments undertaken the Directors are
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operational existence for at least 12 months from the date of
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GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
148
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The following amended standards and interpretations were effective
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• International Tax Reform – Pillar Two Model Rules – amendments
to IAS 12
• Deferred Tax related to Assets and Liabilities arising from a Single
Transaction – amendments to IAS 12; and
• Disclosure of Accounting Policies – Amendments to IAS1 and IFRS
Practice Statement 2.
None of the amendments to the above standards had a material
impact on the Financial Statements.
Certain amendments to accounting standards have been published
that are not mandatory for 30 September 2024 reporting periods
and have not been early adopted by the Group. These amendments
are not expected to have a material impact on the Group in the
current or future reporting periods.
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The principal accounting policies adopted in the preparation of the
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consistently applied to all of the years presented, unless
otherwise stated.
Consolidation
Subsidiaries are entities that are directly or indirectly controlled by
the Group. Control exists where the Group has the power to govern
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that are currently exercisable or convertible are taken into account.
The purchase method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of a business
combination is measured as the fair value of the assets given,
equity instruments issued, the fair value of contingent or deferred
consideration and liabilities incurred or assumed at the date of
exchange. Costs directly attributable to the business combination
are charged to the income statement. The excess of the costs of a
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assets acquired is recorded as goodwill. If the cost of a business
combination is less than the fair value of the net assets of the
subsidiary acquired, the difference is recognised directly in the
income statement. Should the fair value of contingent or deferred
consideration vary from the actual value on settlement date, the
difference is recognised directly in the income statement.
Where deferred consideration is payable in cash, the amount is
discounted to present value at the date of acquisition, using the
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which arises on the discounted consideration between the
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costs and treated as a non-underlying item.
Transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are
also eliminated but considered an impairment indicator of the
asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies
adopted by the Group.
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Gooch & Housego (UK) Limited (05890426), Gooch & Housego
(Torquay) Limited (04381203), Spanoptic Limited (SC192283), Kent
Periscopes Limited (05417618), G&H US Holdings Limited
(06382710), G&H Property Holdings Limited (04649035), Integrated
Technologies Limited (01300238), Integrated Technologies
(Holdings) Limited (02635933), VITL Limited (08473871), ORF
Limited (01873862), Artemis Optical Limited (00514290) and
Artemis Optical (Holdings) Limited (06552780) are exempt from
WKH UHTXLUHPHQW WR ƼOH DXGLWHG ƼQDQFLDO VWDWHPHQWV E\ YLUWXH RI
Section 479A of the Companies Act 2006. As part of this process, the
Company has provided statutory guarantees to these subsidiaries.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker,
who oversees the allocation of resources and the assessment of
operating segment performance. The chief operating decision
maker in determining a business or operating segment is the Board
of Directors.
Foreign currency translation
a. Functional and presentation currency
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Sterling, which is the Group’s presentation currency. Items included
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measured using the currency of the primary economic environment
in which the entity operates (the ‘functional currency‘).
b. Transactions and balances
Foreign currency transactions are translated into an entity’s
functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the
translation at balance sheet exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in
the income statement, except when deferred in equity as qualifying
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c. Subsidiaries
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functional currency different from the presentation currency are
translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance sheet;
• income and expenses for each income statement are translated
at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
• all resulting exchange differences are recognised in other
comprehensive income and as a separate component of equity.
149
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
On consolidation, exchange differences arising from the
translation of the net investment in foreign operations, and of
borrowings and other currency instruments designated as hedges
of such investments, are taken to shareholders’ equity. When a
foreign operation is partially disposed of or sold, exchange
differences that were recorded in equity are recognised in the
income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of
a foreign entity are treated as assets and liabilities of the foreign
entity and translated at the closing rate.
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Property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
No depreciation is charged on freehold land or capital work in
progress. Certain plant used in the manufacturing process which
is constructed from precious metals is not depreciated.
Depreciation on other assets is calculated to allocate their cost
over their estimated useful lives, as follows:
• Freehold buildings
2-3% Straight-line
• Leasehold property
over term of lease Straight-line
• Plant and machinery
6-20% Straight-line
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• Motor vehicles
25% Reducing balance
The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date. Where an
asset’s carrying amount is greater than its estimated recoverable
amount, the asset’s carrying amount is written down immediately
to its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs to sell or an asset’s value in use.
Intangible assets
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Goodwill represents the excess of the cost of a business
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the acquired business. Goodwill arising from business
combinations is included in ‘intangible assets’.
Goodwill is tested annually for impairment and carried at cost
less accumulated impairment losses. The impairment testing
requires an estimation of the ‘value in use’ of the cash-
generating unit (the CGU) to which goodwill is allocated using
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is recognised immediately as an expense to the income
statement and is not subsequently reversed.
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a business segment or an operating entity, as appropriate.
Further information is given in note 18.
Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
b. Capitalised R&D, patents and licenses
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of patents and trademarks are capitalised and carried at cost less
accumulated amortisation. Amortisation is calculated using the
straight-line method to allocate the cost over their useful
economic lives of 5 – 10 years and are charged to Research and
Development in the income statement.
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carried at cost less accumulated amortisation. Amortisation is
calculated using the straight line method to allocate the cost
over their useful economic lives of 5 – 10 years.
Expenditure on research activities, undertaken with the prospect
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understanding, is recognised as an expense as incurred.
Development costs incurred after the point at which the
commercial and technical feasibility of the product have been
proven, and the decision to complete the development has been
taken and resources made available, are capitalised. The
expenditure capitalised includes the cost of materials, direct
labour and
an appropriate proportion of overheads.
Capitalised development expenditure is stated at cost less
accumulated amortisation and impairment losses. Development
costs are amortised using the straight line method over their
estimated useful life lives, which is typically 5 years, and are
charged to Research and Development in the income statement.
F&RPSXWHUVRIWZDUH
Costs associated with developing or maintaining computer
software programmes are recognised as an expense as incurred.
Costs that are directly associated with the development of
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exceeding costs beyond one year, are capitalised and recognised
as intangible assets. Costs include the software development
employee costs and an appropriate portion of relevant
overheads.
Acquired computer software and licences are capitalised on
the basis of the costs incurred to acquire and bring to use the
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Capitalised software costs are amortised using the straight line
method over their estimated useful lives of up to 5 years and
charged to Administration in the income statement.
d. Acquired customer relationships, orderbooks and brands
Other acquired intangible assets are stated at fair value less
accumulated amortisation and impairment losses.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
150
The useful life of each of these assets is assessed based on the
differing natures of each of the intangible assets acquired.
Amortisation is charged on a straight-line basis over the
estimated useful life of the assets acquired and charged to
administration in the Income Statement.
• Customer relationships
up to 10 years
• Brand names
up to 10 years
• Order books
up to 2 years
Government grants
Government grants are accounted for on an accruals basis. Grants
are credited to the income statement over the life of the project.
Where grants are used to fund the acquisition of property, plant
and equipment, the grant is initially credited to deferred income
then credited to the income statement over the estimated
economic life of the asset.
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The Group assesses at each balance sheet date whether an asset
may be impaired. If any such indicator exists, the Group tests for
impairment by estimating the recoverable amount which is the
higher of the value in use and the fair value less costs to sell.
If the recoverable amount is less than the carrying value of the
asset, the asset is impaired and the carrying value is reduced
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other than goodwill which have suffered an impairment are
reviewed for possible reversal of the impairment at each
balance sheet date.
Inventories
Inventories are stated at the lower of weighted average cost and
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progress comprises design costs, raw materials, direct labour,
other direct costs and related production overheads (based on
normal operating capacity). It excludes borrowing costs. Net
realisable value is the estimated selling price in the ordinary
course of business, less applicable variable selling expenses.
Trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment for expected
credit losses.
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expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and contract assets. To measure
the expected credit losses, trade receivables have been grouped
based on shared credit risk characteristics and the days past due.
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over a period of 24 months prior to the reporting date and the
corresponding historical credit losses experienced within this
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and forward-looking information on macroeconomic factors
affecting the ability of the customers to settle the receivables.
Cash and cash equivalents
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statement includes cash in hand and deposits held on call with
banks with original maturities of three months or less.
Trade payables
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
Borrowings
Borrowings are recognised initially at fair value, net of transaction
costs incurred. Borrowings are subsequently stated at amortised
cost; any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in the income
statement over the period of the borrowings using the effective
interest method.
Borrowing costs which are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as
part of the cost of that asset.
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Group has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
Derivatives and hedging activities
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the underlying exposure to foreign exchange risk. The Group does
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Financial instruments are initially recognised at fair value on the
date that a contract is entered into and are subsequently
remeasured at their fair value. The Group documents the
relationship between the hedging instrument and the hedged item
and, on a periodic basis, assesses whether the hedge is effective.
The hedges entered into during FY2024 have been assessed as
effective and therefore the Group has applied hedge accounting.
Accordingly, movements in the fair value of the hedges have been
recorded in reserves.
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deferred tax.
Current tax is the expected tax payable on the taxable income for
the year using rates enacted at the balance sheet date, and any
adjustments to tax payable in respect of prior years.
Amounts claimed under the Research and Development Expenditure
Credit scheme have been recognised within other income.
Deferred income tax is provided in full, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated
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accounted for, if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor
WD[DEOH SURƼW RU ORVV
151
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
Deferred income tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the balance sheet
date and are expected to apply when the related deferred income
tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is
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the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising
on investments in subsidiaries, except where the timing of the
reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not reverse in
the foreseeable future.
Deferred income tax is recognised in the income statement except
to the extent that it relates to items recognised directly in other
comprehensive income and equity, in which case it is recognised in
other comprehensive income and equity.
In the UK and US, the Group is entitled to a tax deduction for
amounts treated as compensation on exercise of certain employee
share options under each jurisdiction’s tax rules. As explained
under “Share options” below, a compensation expense is recorded
in the Group’s income statement over the period from the grant
date to the vesting date of the relevant options. As there is a
temporary difference between the accounting and tax bases, a
deferred income tax asset is recorded. The deferred income tax
asset arising is calculated by comparing the estimated amount of
tax deduction to be obtained in the future (based on the Group’s
share price at the balance sheet date) with the cumulative amount
of the compensation recorded in the income statement. If the
amount of estimated future tax deduction exceeds the cumulative
amount of the remuneration expense at the statutory rate, the
excess is recorded directly in equity.
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a. Pension obligations
The Group operates money purchase pension schemes for UK
employees and Section 401(k) plans for US employees. For
employees in Continental Europe and Asia, we engage local payroll
agencies to ensure local regulations are complied with. The Group
pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis.
The Group has no further payment obligations once the
contributions have been paid. The contributions are recognised as
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are due. Prepaid contributions are recognised as an asset to the
extent that a cash refund or a reduction in the future payments is
available.
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The Group recognises a liability and an expense for bonuses and
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adjustments. The Group recognises a provision where
contractually obliged or where there is a past practice that has
created a constructive obligation.
c. Share options
The Group operates a number of share option schemes which
are all accounted for as equity-settled schemes. In accordance
with IFRS 2 the fair value of the employee services received in
exchange for the grant of the options is recognised as an expense
in the income statement. The total amount to be expensed over
the vesting period is determined by reference to the fair value
of the options granted, excluding the impact of any non-market
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vesting conditions are included in assumptions about the number
of options that are expected to vest.
Employer’s National Insurance in the United Kingdom and
equivalent taxes in other jurisdictions are payable on the exercise
of certain share options. In accordance with IFRS 2, this is treated
as a cash-settled transaction. A provision is made, calculated using
the fair value of the Group’s shares at the balance sheet date,
pro-rated over the vesting period of the options.
At each balance sheet date, for awards with non-market vesting
conditions, the entity revises its estimates of the number of
options that are expected to vest. It recognises the impact of the
revision to original estimates, if any, in the income statement, with
a corresponding adjustment to equity. The fair value of the options
under the Gooch & Housego Long Term Incentive Plan and the
Gooch & Housego Employee Stock Purchase Plan are determined
by using the Monte Carlo option pricing model. The fair value of
options under the Go och & Housego Save As You Earn Scheme
are determined by using the Black-Scholes option pricing model.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium when the options are exercised.
Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events; it is probable
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obligation; and the amount has been reliably estimated.
The Group monitors and assesses its warranty provision
requirement on a continuing basis. The provision for other
liabilities and charges provides for the anticipated cost of repair
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repair and replacement costs. In addition the Directors will also
assess expected changes in future costs based on current
information.
Non underlying items
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to an event that falls outside the ordinary activities of the business
and where individually or in aggregate they have a material impact
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restricted to: restructuring and site closure costs, costs related to
acquisitions, adjustments to the fair value of acquisition related
items such as contingent consideration, acquired intangible asset
amortisation or impairment and other items due to their
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GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
152
Leases
The Group assesses whether a contract is or contains a lease, at
inception of the contract. The Group recognises a right-of-use
asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short-term
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and leases of low value assets. For these leases, the Group
recognises the lease payments as an operating expense on a
straight-line basis over the term of the lease unless another
systematic basis is more representative of the time pattern in
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The lease liability is initially measured at the present value of the
lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the lessee’s incremental borrowing
rate is used, being the rate that the lessee would have to pay to
borrow the funds necessary to obtain an asset of similar value in a
similar economic environment with similar terms and conditions.
Lease payments included in the measurement of the lease
liability comprise:
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less any lease incentives;
• variable lease payments that depend on an index or rate, initially
measured using the index or rate at the commencement date; and
• payments of penalties for terminating the lease, if the lease term
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The lease liability is subsequently measured by increasing the
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The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:
• the lease term has changed or there is a change in the
assessment of exercise of a purchase option, in which case the
lease liability is remeasured by discounting the revised lease
payments using a revised discount rate;
• the lease payments change due to changes in an index or rate or
a change in expected payment under a guaranteed residual value,
in which case the lease liability is remeasured by discounting the
revised lease payments using the initial discount rate (unless the
OHDVH SD\PHQWV FKDQJH LV GXH WR D FKDQJH LQ D ƽRDWLQJ LQWHUHVW
rate, in which case a revised discount rate is used);
Ŷ D OHDVH FRQWUDFW LV PRGLƼHG DQG WKH OHDVH PRGLƼFDWLRQ LV QRW
accounted for as a separate lease, in which case the lease liability
is remeasured by discounting the revised lease payments using a
revised discount rate. The Group did not make any such
adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before
the commencement day less any lease incentives received and
any initial direct costs. They are subsequently measured at cost
less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of
lease term and useful life of the underlying asset.
Variable rents that do not depend on an index or rate are not
included in the measurement of the lease liability and the
right-of-use asset. The related payments are recognised as an
expense in the period in which the event or condition that triggers
those payments occurs and are included in the line “Other
operating expenses” in the Income Statement.
For short-term leases (leases with a term of 12 months or less)
and leases of low-value assets, the Group has opted to recognise
a lease expense on a straight-line basis as permitted by IFRS 16.
This expense is presented within operating expenses in the
Income Statement.
As a practical expedient, IFRS 16 permits a lessee not to separate
non-lease components, and instead account for any lease and
associated non-lease components as a single arrangement.
The Group has not used this practical expedient.
Share capital
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Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from
the proceeds.
Revenue recognition
The majority of the Group’s revenue is derived from the sale
of components and subsystems to customers. Revenue is
UHFRJQLVHG DW WKH WUDQVDFWLRQ SULFH WKDW LV H[SHFWHG WR ƽRZ WR
the Group and recognised at a point in time when the Group has
transferred control to the customer in line with the incoterms
agreed with the customer.
Revenue is shown net of value-added tax, returns, rebates and
discounts and after eliminating sales within the Group.
Revenue is recognised to depict the transfer of control over
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WKH DPRXQW RI FRQVLGHUDWLRQ VSHFLƼHG LQ D FRQWUDFW ZLWK D FXVWRPHU
to which the Group expects to be entitled in exchange for those
goods or services. Revenue represents sales, net of discounts, and
excluding value added tax and other sales related taxes. Performance
obligations are unbundled in each contractual arrangement if they
are distinct from one another. The contract price is allocated to the
distinct performance obligations based on the relative standalone
selling prices of the goods or services. The way in which the Group
VDWLVƼHV LWV SHUIRUPDQFH REOLJDWLRQV YDULHV E\ EXVLQHVV DQG PD\ EH
on shipment, delivery, as services are rendered or on completion of
services depending on the nature of the product/service and terms
of the contract which govern how control passes to the customer.
Where the contract price is allocated to distinct performance
obligations, revenue is recognised at a point in time or, in cases
where there is a single performance obligation in relation to
several products and services, these are treated as long term
contracts, and revenue is recognised over time as appropriate.
153
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
A contract asset is recognised when the Group’s right to
consideration is conditional on something other than the passage
of time, for example the completion of future performance
obligations under the terms of the contract with the customer.
In some instances, the Group receives payments from customers
based on a billing schedule, as established in the contract, which
may not match the pattern of performance under the contract.
In this instance, a contract asset or contract liability is recognised
depending on the phasing of payment in relation to
the performance.
Interest income
Interest income is recognised on a time-proportion basis using the
effective interest method.
Dividend distribution
Dividend distributions to the Company’s shareholders are
UHFRJQLVHG DV D OLDELOLW\ LQ WKH *URXSŮV ƼQDQFLDO VWDWHPHQWV LQ WKH
period in which the dividends are approved by the Company’s
shareholders.
Earnings per share
Basic earnings per share is calculated by dividing:
Ŷ WKH SURƼW DWWULEXWDEOH WR WKH RZQHUV RI WKH &RPSDQ\ H[FOXGLQJ
any costs of servicing equity other than ordinary shares;
• by the weighted average number of ordinary shares outstanding
GXULQJ WKH ƼQDQFLDO \HDU DGMXVWHG IRU ERQXV HOHPHQWV LQ RUGLQDU\
shares issued during the year and excluding treasury shares.
'LOXWHG HDUQLQJV SHU VKDUH DGMXVWHG WKH ƼJXUHV XVHG LQ WKH
determination of basic earnings per share to consider:
Ŷ WKH DIWHULQFRPH WD[ HIIHFW RI LQWHUHVW DQG RWKHU ƼQDQFLQJ FRVWV
associated with dilutive potential ordinary shares; and
• the weighted average number of additional ordinary shares that
would have been outstanding, assuming the conversion of all
dilutive potential ordinary shares.
&ULWLFDODFFRXQWLQJHVWLPDWHVDQGMXGJPHQWV
7KH SUHSDUDWLRQ RI ƼQDQFLDO VWDWHPHQWV LQ DFFRUGDQFH ZLWK
International Financial Reporting Standards (IFRS) requires the
Directors to make critical accounting estimates and judgments
WKDW DIIHFW WKH DPRXQWV UHSRUWHG LQ WKH ƼQDQFLDO VWDWHPHQWV
and accompanying notes. These estimates and judgments are
continually evaluated and are based on historical experiences
and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The resulting
accounting estimates will on occasions fail to equal actual results.
7KH HVWLPDWHV DQG DVVXPSWLRQV WKDW KDYH VLJQLƼFDQW ULVN RI
causing a material adjustment to the carrying amounts of assets
DQG OLDELOLWLHV ZLWKLQ WKH QH[W ƼQDQFLDO \HDU DUH RXWOLQHG EHORZ
Critical accounting estimates
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The Group tests goodwill for impairment at least annually. This
requires an estimation of the value in use of the cash generating
units (the CGUs) to which goodwill is allocated. The value in use
FDOFXODWLRQV DUH EDVHG RQ IRUHFDVW FDVK ƽRZV RI WKH &*8
discounted at the appropriate weighted average cost of capital.
7KHVH FDOFXODWLRQV KDYH D QXPEHU RI VLJQLƼFDQW YDULDEOHV LQFOXGLQJ
forecast revenue and margins, working capital movements and
maintenance capital expenditure levels. The calculations are
also sensitive to the discount rate used. Further details are
given in note 18.
Inventory provision
The Group continually monitors and assesses the provision for old
and slow moving inventory. Factors considered by the Directors
include the expected future usage and the potential obsolescence
and deterioration of the Inventory.
The provision for inventory obsolescence amounts to 19.3%
of the gross inventory value (2023: 20.2%). The Directors are
VDWLVƼHG WKDW WKLV SURYLVLRQ LV DSSURSULDWH $Q LQFUHDVH LQ WKH
provision amounting to 2% of the gross inventory value would
increase the provision by £0.8m.
Further detail is given in note 19.
Critical accounting judgements
Non-underlying items
7UDQVDFWLRQV DUH FODVVLƼHG DV QRQXQGHUO\LQJ ZKHUH LQ WKH RSLQLRQ
of the Directors they relate to an event that falls outside the
ordinary activities of the business and where individually or in
DJJUHJDWH WKH\ KDYH D PDWHULDO LPSDFW RQ WKH ƼQDQFLDO VWDWHPHQWV
Details of our accounting policy in respect of non-underlying items
are given on page 119. Further details of the non-underlying items
LGHQWLƼHG E\ PDQDJHPHQW DUH JLYHQ LQ QRWH
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
154
6HJPHQWDODQDO\VLV
7KH *URXSŮV VHJPHQWDO UHSRUWLQJ UHƽHFWV WKH LQIRUPDWLRQ WKDW
management uses within the business. The business is divided into
three market sectors, being A&D, Life Sciences and Industrial,
together with the Corporate cost centre.
The Industrial business segment primarily comprises the Industrial
laser market for use in the semiconductor and microelectronic
industries, but also includes other Industrial applications such as
PHWURORJ\ WHOHFRPPXQLFDWLRQV DQG VFLHQWLƼF UHVHDUFK )XUWKHU
information can be found in our Operations Review on pages 52 to 62.
A&D
Life Sciences
Industrial
Corporate
Total
For year ended 30 September 2024
£’000
£’000
£’000
£’000
£’000
Revenue
Total revenue
37,563
34,918
70,631
–
143,112
Inter and intra-division
(3,104)
(1,334)
(2,684)
–
(7,122)
External revenue
34,459
33,584
67,947
–
135,990
Divisional expenses
(33,426)
(27,875)
(57,298)
910
(117,689)
EBITDA¹
1,033
5,709
10,649
910
18,301
EBITDA %
3.0%
17.0%
15.7%
–
13.5%
Depreciation and amortisation
(2,547)
(1,786)
(3,428)
(1,726)
(9,487)
2SHUDWLQJ ORVV SURƼWEHIRUHDPRUWLVDWLRQRI
acquired intangible assets
(1,514)
3,923
7,221
(816)
8,814
Amortisation of acquired intangible assets
–
–
–
(2,002)
(2,002)
2SHUDWLQJ ORVV SURƼW
(1,514)
3,923
7,221
(2,818)
6,812
2SHUDWLQJ ORVV SURƼW PDUJLQ
(4.4%)
11.7%
10.6%
–
5.0%
Add back non-underlying items and amortisation of
acquired intangibles
322
704
626
2,038
3,690
$GMXVWHG RSHUDWLQJ ORVV SURƼW
(1,192)
4,627
7,847
(780)
10,502
$GMXVWHG ORVV SURƼW PDUJLQ
(3.5%)
13.8%
11.5%
–
7.7%
1HW ƼQDQFH FRVWV
(188)
(67)
(232)
(2,117)
(2,604)
/RVV 3URƼWEHIRUHLQFRPHWD[H[SHQVH
(1,702)
3,856
6,989
(4,935)
4,208
Transactions between segments consist of the sale of products for resale.
The basis of accounting for these transactions is the same as for external revenue.
A&D
Life Sciences
Industrial
Corporate
Total
For year ended 30 September 2023
£’000
£’000
£’000
£’000
£’000
Revenue
Total revenue
28,893
35,132
78,326
–
142,351
Inter and intra-division
(1,554)
(2,139)
(3,617)
–
(7,310)
External revenue
27,339
32,993
74,709
–
135,041
Divisional expenses
(27,712)
(28,535)
(61,784)
926
(117,105)
EBITDA¹
(373)
4,458
12,925
926
17,936
EBITDA %
(1.4%)
13.5%
17.3%
–
13.3%
Depreciation and amortisation
(1,930)
(1,129)
(3,497)
(1,894)
(8,450)
2SHUDWLQJ ORVV SURƼWEHIRUHDPRUWLVDWLRQRI
acquired intangible assets
(2,303)
3,329
9,428
(968)
9,486
Amortisation of acquired intangible assets
–
–
–
(1,672)
(1,672)
2SHUDWLQJ ORVV SURƼW
(2,303)
3,329
9,428
(2,640)
7,814
2SHUDWLQJ ORVV SURƼW PDUJLQ
(8.4%)
10.1%
12.6%
–
5.8%
Add back non-underlying items and amortisation of
acquired intangibles
455
983
1,168
1,672
4,278
$GMXVWHG RSHUDWLQJ ORVV SURƼW
(1,848)
4,312
10,596
(968)
12,092
$GMXVWHG ORVV SURƼW PDUJLQ
(6.8%)
13.1%
14.2%
–
9.0%
1HW ƼQDQFH FRVWV
(70)
(67)
(172)
(1,503)
(1,812)
/RVV 3URƼWEHIRUHLQFRPHWD[H[SHQVH
(2,373)
3,262
9,256
(4,143)
6,002
¹EBITDA = Earnings before interest, tax, depreciation and amortisation
Management have added back the amortisation and impairment of acquired intangibles and goodwill, restructuring
costs, site closure costs in the above analysis. This has been shown because the Directors consider the analysis to
be more meaningful excluding the impact of these non-underlying expenses.
All of the amounts recorded are in respect of continuing operations.
As can be seen below the amortisation of acquired intangible
assets has not been split by the three market sectors used for the
segmental reporting of the rest of the group income statement
as the information used by management and provided to the
Board (the Chief Operating Decision Maker) in respect of the
group balance sheet is set out by location. This is why the
Analysis of net assets on page 155 is provided by location
155
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
6HJPHQWDODQDO\VLV FRQWLQXHG
$QDO\VLVRIUHYHQXHE\W\SH
For year ended 30 September 2024
Industrial
Life Sciences
A&D
Total
£’000
£’000
£’000
£’000
Revenue from long term contracts
1,718
154
1,963
3,835
Revenue from products recognised at point of sale
66,229
33,430
32,496
132,155
Total revenue
67,947
33,584
34,459
135,990
For year ended 30 September 2023
Industrial
Life Sciences
A&D
Total
£’000
£’000
£’000
£’000
Revenue from long term contracts
972
1,326
1,522
3,820
Revenue from products recognised at point of sale
73,737
31,667
25,817
131,221
Total revenue
74,709
32,993
27,339
135,041
Contract assets are disclosed in note 20 and contract liabilities are disclosed in note 22.
All of the contract liability balance at the beginning of the year was recognised as revenue
in the current year. There is no loss allowance held against contract assets (2023: nil).
The timing of receipts related to revenue from long term contracts can vary to that recognised
at point of sale. Long term contracts tend to have a payment due on inception of the contract
followed by a series of milestone payments whereas point of sale revenue is usually settled on
30 to 60 day terms.
The information used by management and provided to the Board (the Chief Operating
Decision Maker) in respect of the group balance sheet is set out by location.
This is why the analysis of net assets below is provided by location.
The transaction prices allocated to the remaining performance obligations
XQVDWLVƼHG RU SDUWLDOO\ VDWLVƼHG DV DW 6HSWHPEHU ZHUH DV IROORZV
2024
2023
£’000
£’000
Within one year
1,863
4,645
More than one year
6,460
7,266
8,323
11,911
$QDO\VLVRIQHWDVVHWVE\ORFDWLRQ
2024
2024
2024
2023
2023
2023
Assets
Liabilities
Net Assets
Assets
Liabilities
Net Assets
£’000
£’000
£’000
£’000
£’000
£’000
United Kingdom
79,846
(35,743)
44,103
83,107
(47,308)
35,799
USA
86,276
(22,013)
64,263
106,209
(20,503)
85,706
Continental Europe
83
(148)
(65)
198
(84)
114
$VLD 3DFLƼF
102
(15)
87
916
(521)
395
166,307
(57,919)
108,388
190,430
(68,416)
122,014
For the year to 30 September 2024 non-current asset additions were £3.0m (2023: £4.0m)
for the UK and for the USA £7.0m (2023: £6.6m). There were no additions to non-current
DVVHWV LQ UHVSHFW RI (XURSH eQLO RU WKH $VLD 3DFLƼF UHJLRQ eQLO 7KH YDOXH RI
non-current assets in the USA was £64.3m (2023: £66.2m) and in the United Kingdom
eP eP 7KHUH ZHUH QR QRQFXUUHQW DVVHWV LQ (XURSH RU WKH $VLD3DFLƼF UHJLRQ
$QDO\VLVRIUHYHQXHE\GHVWLQDWLRQ
2024
2023
£’000
£’000
United Kingdom
36,849
27,146
North America
46,601
47,568
Continental Europe
27,202
33,674
$VLD 3DFLƼF DQG 2WKHU
25,338
26,653
Total revenue
135,990
135,041
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
156
([SHQVHVE\QDWXUH
Note
2024
2023
£’000
£’000
Raw materials and consumables
50,190
50,444
Employee costs
9
59,299
62,527
Other operating charges
13,892
18,175
Depreciation on property, plant and equipment
6,203
6,129
Depreciation on right of use assets
1,529
1,522
Amortisation of acquired intangible assets
2,001
1,672
Amortisation of other intangible assets
1,756
1,692
Loss on disposal of subsidiary
33
9,236
–
Net losses on foreign exchange
68
300
144,174
142,461
2WKHULQFRPH
2024
2023
£’000
£’000
Grants receivable
288
414
Amounts claimed under the RDEC
392
200
Other income
149
221
829
835
Other income relates to sales of certain materials used in production which need to be
reprocessed periodically.
(PSOR\HHEHQHƼWH[SHQVH
2024
2023
£’000
£’000
Wages and salaries
46,938
50,632
Social security costs
4,549
4,459
Share based payment charge
715
337
Medical and other insurance
4,204
4,386
Other pension costs
2,893
2,713
59,299
62,527
The monthly average number of employees during the year was:
2024
2023
Number
Number
Manufacturing
675
721
6DOHV ƼQDQFH DQG DGPLQLVWUDWLRQ
236
236
911
957
Key management compensation
2024
2023
£’000
£’000
6DODULHV DQG RWKHU VKRUWWHUP EHQHƼWV
3,812
3,760
Share based payments
715
337
Other pension costs
186
167
4,713
4,264
Key management comprise the Executive Board and the management layer reporting directly
to the Executive Directors.
Directors’ remuneration, including the highest paid Director, has been included on
page 126 of the Remuneration Committee Report.
157
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
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PricewaterhouseCoopers LLP’s remuneration comprised:
2024
2023
£’000
£’000
)HHV SD\DEOH WR WKH *URXSŮV DXGLWRUV IRU WKH DXGLW RI WKH SDUHQW FRPSDQ\ DQG FRQVROLGDWHG ƼQDQFLDO VWDWHPHQWV
- the parent company
95
95
WKH FRQVROLGDWHG ƼQDQFLDO VWDWHPHQWV
277
260
372
355
)LQDQFHLQFRPHDQGFRVWV
2024
2023
£’000
£’000
Finance income comprises:
- Bank interest
40
11
40
11
Finance costs comprise:
- Bank interest
(1,978)
(1,487)
- Lease interest
(509)
(297)
- Unwind of discount on deferred consideration
(209)
(57)
(2,696)
(1,841)
,QFRPHWD[H[SHQVH
Analysis of tax charge in the year
2024
2023
£’000
£’000
Current taxation
UK Corporation tax
1,963
843
Overseas tax
(212)
703
Adjustments in respect of prior years
107
(1,130)
Total current tax
1,858
416
Deferred tax
Origination and reversal of temporary differences
(321)
(176)
Adjustments in respect of prior years
(606)
874
Change to UK tax rate
–
31
Total deferred tax
(927)
729
Income tax expense per income statement
931
1,145
Income tax on discontinuing operations
(222)
(173)
The taxation expense for the year is lower (2023: lower) than the standard rate of corporation
tax in the UK. An explanation of the differences is detailed below:
2024
2023
£’000
£’000
3URƼWEHIRUHLQFRPHWD[H[SHQVH
4,208
6,002
3URƼW EHIRUH LQFRPH WD[ DW WKH VWDQGDUG UDWH RI WD[ RI IRU WKH \HDU
1,052
1,320
Permanent differences
15
30
Adjustments in respect of foreign tax rates
70
6
Effect of UK rate change on deferred tax balances
–
31
Losses not recognised
566
–
Other timing differences
(273)
14
Adjustments in respect of prior years
(499)
(256)
Total tax expense
931
1,145
In the Spring Budget 2021, the UK Government announced that from 1 April 2023, the
UK corporation tax rate would increase from 19% to 25%. The weighted average UK tax
rate applicable for the Group in the year ended 30 September 2024 therefore increased
from 22% to 25%.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
158
,QFRPHWD[H[SHQVH FRQWLQXHG
There was no income tax relating to items included in other comprehensive
income (2023: nil).
)DFWRUVDIIHFWLQJWKHIXWXUHWD[FKDUJH
Overseas tax losses of £18.8m (2023: £14.1m as restated) and UK tax losses of
£2.7m (2023: £1.7m) are available against future profits of the Group.
The utilisation of these losses is not sufficiently certain to recognise a deferred tax asset.
1RQXQGHUO\LQJLWHPV
2024
2023
£’000
£’000
,QFOXGHGZLWKLQDGPLQLVWUDWLRQH[SHQVHV
Amortisation of acquired intangible assets
2,002
1,672
Acquisitions costs
228
1,156
Restructuring costs
911
571
Site closure costs
549
879
3,690
4,278
,QFOXGHGZLWKLQƼQDQFHFRVWV
Unwind of discount on deferred consideration
209
57
209
57
,QFOXGHGZLWKLQWD[DWLRQ
Tax effect of the non-underlying items above
(606)
(747)
(606)
(747)
Further detail in respect of the amortisation of acquired intangible assets is given in the
accounting policies and note 18.
Acquisition costs of £0.2m (2023: £1.2m) related to costs incurred in relation to the
acquisitions of GS Optics and Artemis in the year ended 30 September 2023.
Restructuring costs of £0.9m (2023: £0.6m) associated with the restructuring of the Group’s
operating model and the costs incurred to establish our contract manufacturing partners
capability to manufacture both acousto optic and fibre optic products.
Site closure costs of £0.5m (2023: £0.9m) related to the wind down of the Group’s small
facility in Shanghai. In the year ended 30 September 2023, the costs related to both the
closure of the Shanghai facility and the transfer of the Group’s ITL business’ US operation
from its site in Virginia into the GS Optics campus in Rochester.
Details of the loss on the disposal of EM4 LLC during the year are given in note 33.
159
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
'LYLGHQGV
2024
2023
£’000
£’000
Final 2023 dividend: 8.2p per share (Final 2022 dividend paid in 2023: 7.7p)
2,114
1,978
2024 Interim dividend of 4.9p per share (2023: 4.8p per share)
1,264
1,202
3,378
3,180
7KH 'LUHFWRUV KDYH SURSRVHG D ƼQDO GLYLGHQG RI S SHU VKDUH PDNLQJ WKH WRWDO GLYLGHQG SDLG
DQG SURSRVHG LQ UHVSHFW RI WKH ƼQDQFLDO \HDU S S SHU VKDUH 7KH WRWDO
YDOXH RI WKH SURSRVHG ƼQDO GLYLGHQG LV e e
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7KH FDOFXODWLRQ RI HDUQLQJV SHU S 2UGLQDU\ 6KDUH LV EDVHG RQ WKH SURƼW IRU WKH \HDU XVLQJ DV D
divisor the weighted average number of Ordinary Shares in issue during the year. The weighted
average number of shares for the year ended 30 September 2024 is given below:
2024
2023
Number of shares used for basic earnings per share
25,786,397
25,085,805
Number of dilutive shares – impact of share options granted
394,682
272,361
Number of shares used for dilutive earnings per share
26,181,079
25,358,166
A reconciliation of the earnings used in the earnings per share calculation is set out below:
2024
2023
£’000
pence per share
£’000
pence per share
Basic earnings per share from continuing operations
3,277
12.7p
4,857
19.4p
Amortisation of acquired intangible assets (net of tax)
1,540
5.9p
1,175
4.7p
Acquisition costs
195
0.8p
1,071
4.3p
Site closure costs
658
2.6p
728
2.9p
Restructuring costs (net of tax)
743
2.9p
600
2.4p
Unwind of discount on deferred consideration
157
0.6p
59
0.2p
Total adjustments net of income tax expense
3,293
12.8p
3,633
14.5p
Adjusted basic earnings per share
6,570
25.5p
8,490
33.9p
Basic diluted earnings per share
3,277
12.5p
4,857
19.2p
Adjusted diluted earnings per share
6,570
25.1p
8,490
33.5p
Basic and diluted loss per share from discontinuing operations
(9,654)
(37.4p)
(810)
(3.2p)
Basic and diluted earnings / (losses) per share before amortisation and other adjustments has
been shown because, in the opinion of the Directors, it provides a useful measure of the trading
performance of the Group.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
160
3URSHUW\SODQWDQGHTXLSPHQW
Capital work in
progress
Freehold land
and buildings
Leasehold
property
Plant and
machinery
)L[WXUHV ƼWWLQJV
and computers
Motor
vehicles
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cost or valuation
At 1 October 2022
2,975
9,513
23,282
50,054
5,632
102
91,558
Acquisitions
40
–
26
1,867
147
–
2,080
Additions
2,715
434
180
2,337
541
–
6,207
Disposals
–
(1,528)
(119)
(5,911)
(545)
(2)
(8,105)
5HFODVVLƼFDWLRQ
(2,326)
–
54
1,984
78
–
(210)
Exchange rate differences
(102)
(8)
(1,642)
(1,779)
(144)
(4)
(3,679)
At 30 September 2023
3,302
8,411
21,781
48,552
5,709
96
87,851
Additions
2,057
–
302
1,319
454
–
4,132
Disposals
–
–
(12)
(353)
(1,647)
(11)
(2,023)
Disposal of subsidiary
(132)
–
(674)
(2,598)
(297)
–
(3,701)
5HFODVVLƼFDWLRQ
(2,607)
(22)
163
3,558
172
–
1,264
Exchange rate differences
(229)
(10)
(1,558)
(2,134)
(148)
(5)
(4,084)
At 30 September 2024
2,391
8,379
20,002
48,344
4,243
80
83,439
Accumulated depreciation
At 1 October 2022
–
3,082
9,082
32,745
4,134
68
49,111
Charge for the year
–
263
1,389
3,929
537
11
6,129
Disposals
–
(921)
(118)
(5,754)
(422)
(2)
(7,217)
5HFODVVLƼFDWLRQ
–
–
6
(6)
–
–
–
Exchange rate differences
–
(8)
(666)
(1,212)
(102)
(2)
(1,990)
At 30 September 2023
–
2,416
9,693
29,702
4,147
75
46,033
Charge for the year
–
216
1,313
4,011
652
11
6,203
Disposals
–
–
(11)
(351)
(1,581)
(2)
(1,945)
Disposal of subsidiary
–
–
(350)
(1,836)
(167)
–
(2,353)
5HFODVVLƼFDWLRQ
–
(3)
15
(139)
43
(2)
(86)
Exchange rate differences
–
(8)
(744)
(1,318)
(256)
(2)
(2,328)
At 30 September 2024
–
2,621
9,916
30,069
2,838
80
45,524
Net book value
At 30 September 2022
2,975
6,431
14,200
17,309
1,498
34
42,447
At 30 September 2023
3,302
5,995
12,088
18,850
1,562
21
41,818
At 30 September 2024
2,391
5,758
10,086
18,275
1,405
–
37,915
No interest was capitalised in the year (2023: £Nil).
161
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
5LJKWRIXVHDVVHWV
Fixtures and
ƼWWLQJV
Motor
vehicles
Land and
buildings
Plant and
machinery
Total
£’000
£’000
£’000
£’000
£’000
Cost
At 1 October 2022
43
45
9,163
93
9,344
Acquisitions
42
–
2,656
679
3,377
Additions
25
13
3,237
–
3,275
Exchange rate differences
(3)
–
(586)
(8)
(597)
At 30 September 2023
107
58
14,470
764
15,399
Additions
–
–
3,078
–
3,078
Disposal of subsidiary
–
–
(3,329)
–
(3,329)
Exchange rate differences
(3)
–
(1,080)
(7)
(1,090)
At 30 September 2024
104
58
13,139
757
14,058
Accumulated depreciation
At 1 October 2022
22
43
4,126
90
4,281
Charge for the year
12
3
1,492
15
1,522
Exchange rate differences
(2)
–
(326)
(8)
(336)
At 30 September 2023
32
46
5,292
97
5,467
Charge for the year
5
4
1,447
73
1,529
Disposal of subsidiary
–
–
(1,741)
–
(1,741)
Exchange rate differences
(2)
–
(367)
(8)
(377)
At 30 September 2024
35
50
4,631
162
4,878
Net book value
At 30 September 2022
21
2
5,037
3
5,063
At 30 September 2023
75
12
9,178
667
9,932
At 30 September 2024
69
8
8,508
595
9,180
,QWDQJLEOHDVVHWV
Goodwill
Acquired
customer
relationships
and order books
Acquired
brands
Capitalised
R&D, patents
and licences
Computer
software
Total
£’000
£’000
£’000
£’000
£’000
£’000
Cost
At 1 October 2022
59,328
20,020
4,420
5,682
5,198
94,648
Acquisitions
11,354
3,259
1,410
–
–
16,023
Additions
–
–
–
605
524
1,129
Disposals
–
–
–
–
(64)
(64)
5HFODVVLƼFDWLRQV
–
–
–
202
8
210
Exchange rate differences
(2,775)
(1,037)
(106)
(13)
(127)
(4,058)
At 30 September 2023
67,907
22,242
5,724
6,476
5,539
107,888
Additions
–
–
–
1,015
391
1,406
Adjustments
90
–
–
–
–
90
Disposals
(2,635)
(2,573)
(613)
(49)
(128)
(5,998)
5HFODVVLƼFDWLRQV
–
–
–
303
17
320
Exchange rate differences
(3,321)
(996)
(188)
(12)
(25)
(4,542)
At 30 September 2024
62,041
18,673
4,923
7,733
5,794
99,164
Accumulated amortisation and impairment
At 1 October 2022
23,712
13,729
2,947
3,514
2,807
46,709
Charge for the year
–
1,400
272
898
794
3,364
Disposals
–
–
–
–
(64)
(64)
5HFODVVLƼFDWLRQV
–
–
–
–
8
8
Exchange rate differences
(860)
(774)
(77)
(9)
(138)
(1,858)
At 30 September 2023
22,852
14,355
3,142
4,403
3,407
48,159
Charge for the year
–
1,637
364
922
834
3,757
Disposals
–
(1,597)
(327)
(49)
(126)
(2,099)
Exchange rate differences
(808)
(777)
(82)
(9)
(28)
(1,704)
At 30 September 2024
22,044
13,618
3,097
5,267
4,087
48,113
Net book value
At 30 September 2022
35,616
6,291
1,473
2,168
2,391
47,939
At 30 September 2023
45,055
7,887
2,582
2,073
2,132
59,729
At 30 September 2024
39,997
5,055
1,826
2,466
1,707
51,051
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
162
,QWDQJLEOHDVVHWV FRQWLQXHG
Goodwill is allocated to the operating regions as follows: US £24.8m and UK £5m.
The goodwill relating to the ITL business, which has sites in Ashford, UK and Rochester,
86 LV eP 7KH &*8V UHƽHFW RXU RSHUDWLQJ PRGHO EHLQJ UHJLRQDOO\ EDVHG
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.
The impairment testing requires an estimation of the recoverable amount of the CGU, being the
higher of the cash-generating unit’s fair value less costs of disposal and its value in use. The value
LQ XVH FDOFXODWLRQV XVH FDVK ƽRZ SURMHFWLRQV EDVHG RQ WKH ODWHVW EXGJHW DQG WKUHH \HDU VWUDWHJLF
plan projections approved by the Board. The near term strategic plan is supported by detailed
customer and product analysis. In the medium term forecast sales growth rates are based on
past experience adjusted for the strategic direction and near term investment priorities within
each CGU. The key assumptions include growth rates in the key markets and customer demand
IRU SURGXFW OLQHV YDOLGDWHG E\ UHIHUHQFH WR WKLUG SDUW\ PDUNHW JURZWK SURMHFWLRQV &DVK ƽRZ
forecasts are determined based on historic experience of operating margins, adjusted for the
impact of changes in product mix and delivered cost-saving initiatives. The projections do not
LQFOXGH WKH EHQHƼWV RI DQ\ IXWXUH SODQQHG UHVWUXFWXULQJ RU SURGXFW RXWVRXUFLQJ DFWLYLW\
The following key assumptions were made:
Cash Generating Unit
$YHUDJHDQQXDOJURZWK
in revenue from
FY2024 to FY2026
$YHUDJHDQQXDOJURZWK
in revenue from
FY2027 to FY2029
*URZWKLQWR
perpetuity
Average operating
margin to FY2027
Pre Tax
Discount Rate
UK
14.0%
3.0%
2.0%
14.8%
16.4%
US
9.7%
3.0%
2.0%
16.3%
15.8%
Ashford (ITL)
8.3%
3.0%
2.0%
13.2%
16.4%
The headroom on the value in use calculations is summarised for each of the cash generating
units below:
Cash Generating Unit
Headroom
UK
£29.4m
US
£39.7m
Ashford (ITL)
£2.9m
Management have performed various sensitivities on the value in use calculations which
underpin the goodwill valuations. These include increases to the discount rates and reductions
to the planned growth rates, the effects of which are summarised below:
Cash Generating Unit
Effect on value in use
of an increase of 1%
in the discount rate
Effect of a 1% reduction in
JURZWKSHUDQQXPIURP
FY2024 to FY2027
Effect of a 1% reduction in
JURZWKSHUDQQXPIURP
FY2027 to FY2029
Effect of a 5% reduction
in operating margin from
FY2025 to FY2027
UK
(£6.3m)
(£1.5m)
(£3.7m)
(£8.8m)
US
(£10.7m)
(£1.8m)
(£4.0m)
(£9.8m)
Ashford (ITL)
(£2.1m)
(£0.5m)
(£1.2m)
(£2.8m)
,QYHQWRULHV
2024
2023
£’000
£’000
Raw materials
11,645
15,887
Work in progress
15,946
16,936
Finished goods
3,040
4,759
30,631
37,582
The cost of inventories recognised as an expense and included in cost of revenue amounted to
£50.2m (2023: £54.2m).
2024
2023
£’000
£’000
At 1 October
9,488
7,744
(Disposed) / acquired
(890)
452
(Decrease) / increase in provision
(930)
1,518
Exchange rate movement
(330)
(226)
At 30 September
7,338
9,488
The Group’s banking facilities are secured on certain of its assets including inventory.
163
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
7UDGHDQGRWKHUUHFHLYDEOHV
2024
2023
£’000
£’000
Trade receivables
27,500
27,804
Other receivables
860
1,557
Contract assets
1,009
3,168
Prepayments
1,539
1,546
30,908
34,075
The carrying amount of the Group’s trade and other receivables is denominated in the following currencies:
2024
2023
£’000
£’000
Pound Sterling
10,730
9,926
US Dollar
18,321
22,711
Euro
1,848
1,438
Other
9
–
30,908
34,075
The ageing of trade receivables and contract assets by due date is as follows:
2024
2023
£’000
£’000
Current
21,219
21,170
1 to 3 months
5,581
8,078
Over 3 months
2,350
2,226
29,150
31,474
Less provision for impairment
(640)
(502)
Net trade receivables and contract assets
28,510
30,972
None of the trade receivables are with customers where we have had any history of default.
The movement on the provision for impairment of trade receivables and contract assets is as follows:
2024
2023
£’000
£’000
At 1 October
502
554
(Disposed) / Acquired
(32)
25
Increase / (release) of provision
189
(199)
Increase in provision
–
140
Exchange rate movement
(19)
(18)
At 30 September
640
502
The provision for expected credit loss amounts to 0.5% of current balances, 3.5% of balances in the 1 – 3
month category, and 15% of balances greater than 3 months old.
&DVKDQGFDVKHTXLYDOHQWV
2024
2023
£’000
£’000
Cash at bank and on hand
6,622
7,294
7UDGHDQGRWKHUSD\DEOHV
2024
2023
£’000
£’000
Trade payables
5,577
5,889
Contract liabilities
853
764
Other taxation and social security
1,299
905
Accruals
8,633
12,615
Deferred contingent consideration
1,563
828
Deferred consideration
150
155
18,075
21,156
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
164
%RUURZLQJVDQGOHDVHOLDELOLWLHV
2024
2023
£’000
£’000
Current:
Bank borrowings
10
10
Leases
1,289
1,443
1,299
1,453
Non-current:
Bank borrowings
22,563
28,157
Leases
8,570
9,394
31,133
37,551
7RWDOERUURZLQJVDQGOHDVHOLDELOLWLHV
32,432
39,004
The carrying values of the bank borrowings and leases are not materially different from their fair
YDOXHV DQG DUH LQFOXGHG DV SDUW RI WKH IDLU YDOXH GLVFORVXUH IRU DOO ƼQDQFLDO LQVWUXPHQWV LQ QRWH
G&H’s primary lending bank is NatWest Bank. The Group’s facilities comprise a committed
$50m (£37.4m) dollar revolving credit facility (2023: $60m) and an uncommitted $20m
e P ƽH[LEOH DFTXLVLWLRQ IDFLOLW\ P $W 6HSWHPEHU WKH EDODQFH GUDZQ
on the revolving credit facility was $30.4m (£22.7m) (2023: $34.6m (£28.3m)) and on the
ƽH[LEOH DFTXLVLWLRQ IDFLOLW\ QLO QLO
The revolving credit facility is committed until 31 March 2027 and attracts an interest rate of
between 1.6% (at leverage of less than or equal to 1:1) and 2.1% (at leverage of more than 2:1)
DERYH WKH 86 'ROODU 62)5 UDWH VSHFLƼHG E\ WKH EDQN GHSHQGHQW XSRQ WKH *URXSŮV OHYHUDJH
ratio, payable on rollover dates.
The Group’s banking facilities are secured on certain of its assets including land and buildings,
property plant and equipment and inventory.
0DWXULW\ SURƼOH RI EDQN ERUURZLQJV
2024
2023
£’000
£’000
Within one year
10
10
%HWZHHQ RQH DQG ƼYH \HDUV
26,670
35,230
26,680
35,240
0DWXULW\ SURƼOH RI OHDVH OLDELOLWLHV
2024
2023
£’000
£’000
Within one year
1,929
2,009
%HWZHHQ WZR DQG ƼYH \HDUV
7,674
8,481
$IWHU ƼYH \HDUV
2,129
3,528
11,732
14,018
Details of lease interest charges and right of use assets are given in notes 11 and 17 respectively.
7KH WRWDO FDVK RXWƽRZ LQ UHVSHFW RI OHDVHV LQ WKH \HDU HQGHG 6HSWHPEHU ZDV eP
(2023: £1.9m)
165
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
3URYLVLRQVIRURWKHUOLDELOLWLHVDQGFKDUJHV
The movements in the Group provision for other liabilities and charges during the year
are as follows:
2024
2023
£’000
£’000
At 1 October
1,582
848
Utilised during year
(167)
(282)
Increase in year
36
1,027
Exchange movements
(22)
(11)
At 30 September
1,429
1,582
The Group provision for other liabilities and charges includes amounts provided for the
DQWLFLSDWHG FRVW RI UHSDLU DQG UHFWLƼFDWLRQ RI SURGXFWV XQGHU ZDUUDQW\ EDVHG RQ NQRZQ
exposures and historical occurrences. The Group offers warranty periods ranging up to
10 years on some of its products.
'HIHUUHGWD[DVVHWVDQGOLDELOLWLHV
The movements in the Group’s deferred tax assets and liabilities during the year are as follows:
2024
Restated
2023
£’000
£’000
At 1 October
(5,223)
(6,322)
Restatement
–
2,495
As restated
(5,223)
(3,827)
Credited / (charged) to the income statement
927
(556)
On disposals / acquisitions
226
(912)
Exchange movements
92
72
Net liability at 30 September
(3,978)
(5,223)
The current portion of the deferred tax liability is £1.4m (2023: £1.6m)
7KH GHIHUUHG WD[ SURYLGHG IRU LQ WKH ƼQDQFLDO VWDWHPHQWV LV GLVFORVHG XQGHU WKH IROORZLQJ
balance sheet headings and can be analysed as follows:
2024
Restated
2023
£’000
£’000
Deferred income tax assets
Intangible assets
340
100
IFRS16 Leases
219
319
Provisions
2,044
1,759
Losses
2,079
2,281
4,682
4,459
Deferred income tax liabilities
Property, plant and equipment
(5,209)
(6,338)
Intangible assets
(2,904)
(2,837)
Other timing differences
(547)
(507)
(8,660)
(9,682)
Deferred tax balance at 30 September
(3,978)
(5,223)
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
166
'HIHUUHGWD[DVVHWVDQGOLDELOLWLHV FRQWLQXHG
The movement on the deferred tax balances by category is shown below:
Intangible
assets
IFRS16
leases
Provisions
Losses
Property, plant
and equipment
Intangible
assets
Other timing
differences
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
At 1 October 2022 as previously reported
225
352
1,392
–
(6,203)
(2,088)
–
(6,322)
Restatement
–
–
–
2,495
–
–
–
2,495
As restated
225
352
1,392
2,495
(6,203)
(2,088)
–
(3,827)
(Charged)/credited to income statement
(129)
(17)
442
–
(239)
(106)
(507)
(556)
On acquisitions
–
14
(12)
–
(250)
(664)
–
(912)
Exchange movements
4
(30)
(63)
(214)
354
21
–
72
At 30 September 2023
100
319
1,759
2,281
(6,338)
(2,837)
(507)
(5,223)
Credited/charged to income statement
54
(73)
413
–
797
(143)
(121)
927
On disposals
193
–
–
–
–
–
33
226
Exchange movements
(7)
(27)
(128)
(202)
332
76
48
92
At 30 September 2024
340
219
2,044
2,079
(5,209)
(2,904)
(547)
(3,978)
Overseas tax losses of £18.8m (2023: £14.1m as restated) and UK tax losses of £2.7m (2023:
eP DUH DYDLODEOH WR RIIVHW DJDLQVW IXWXUH SURƼWV RI WKH *URXS 7KH *URXS KDV QRW UHFRJQLVHG D
deferred income tax asset of £5.4m (2023: £4.0m as restated) in respect of these losses due to
uncertainty as to whether they will be utilised within the foreseeable future.
No deferred tax has been provided in relation to unremitted earnings from overseas subsidiaries
on the basis that no incremental tax charge is currently anticipated to arise upon remittance of
these earnings to the UK.
&DOOHGXSVKDUHFDSLWDO
2024
2023
2024
2023
Number
Number
£’000
£’000
Issued and fully paid ordinary shares of 20p each
At 1 October
25,786,397
25,040,919
5,159
5,008
Shares issued and fully paid
–
745,478
–
151
At 30 September
25,786,397
25,786,397
5,159
5,159
No shares were allotted under share option schemes during the year ended 30 September 2024
(2023: 11,275).
The company does not have a limited amount of authorised capital.
5HVHUYHV
Share premium
account
Merger
reserve
Cumulative
translation reserve
Hedging
reserve
Retained
earnings
£’000
£’000
£’000
£’000
£’000
At 1 October 2022 as previously reported
16,000
7,262
15,828
(1,272)
75,715
Restatement
–
–
–
–
2,495
As restated
16,000
7,262
15,828
(1,272)
78,210
3URƼW IRU WKH ƼQDQFLDO \HDU
–
–
–
–
4,048
Premium on shares issued
51
4,299
–
–
–
Dividends paid
–
–
–
–
(3,180)
Fair value of share options
–
–
–
–
337
Currency hedge fair value
–
–
–
1,287
–
Currency translation differences
–
–
(6,015)
–
–
At 30 September 2023
16,051
11,561
9,813
15
79,415
At 1 October 2023
16,051
11,561
10,027
15
76,920
Restatement
–
–
(214)
–
2,495
As restated
16,051
11,561
9,813
15
79,415
/RVV IRU WKH ƼQDQFLDO \HDU
–
–
–
–
(6,377)
Dividends paid
–
–
–
–
(3,378)
Fair value of share options
–
–
–
–
715
Currency hedge fair value
–
–
–
126
–
Currency translation differences
–
–
(4,712)
–
–
At 30 September 2024
16,051
11,561
5,101
141
70,375
167
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
6KDUHRSWLRQV
The Group operates the Gooch & Housego Long Term Incentive Plan (the LTIP), the Gooch & Housego Save As You
Earn Scheme, the Gooch & Housego ESPP scheme and the Gooch & Housego PLC Restricted Stock Units Plan.
A reconciliation of total share option movements across these schemes is shown below:
2024
2023
Number
Weighted average
exercise price (£)
Number
Weighted average
exercise price (£)
Outstanding at 1 October
668,062
0.33
457,515
0.84
Awarded
290,179
–
409,782
–
Exercised
–
–
(11,275)
(4.64)
Adjustment
–
–
2,323
4.64
Lapsed
(211,516)
(1.01)
(190,283)
(0.36)
Outstanding at 30 September
746,725
0.01
668,062
0.33
Exercisable at 30 September
–
–
–
–
The adjustment shown for the year ended 30 September 2023 related to the ESPP scheme. Under this
scheme, the exercise price of options was not set until the scheme matured. It was not therefore possible to
quantify the exact number of options until the scheme matured.
The weighted average remaining contractual life of the options outstanding at 30 September 2024 was 2.5
years (2023: 2.7 years).
The total charge for the year relating to share options was £715,000 (2023: £337,000), all of which related to
equity-settled share based payment transactions.
The Gooch & Housego Long Term Incentive Plan
The Gooch & Housego 2013 Long Term Incentive Plan was adopted on 9 April 2013 and reached the end of
its life in the year ended 30 September 2023. The Board approved a new scheme on 19 September 2023,
under which awards will be made annually to key employees based on a percentage of salary. Subject to the
satisfaction of the required Total Shareholder Return, Earnings Per Share and ESG performance criteria, these
grants will vest upon publication of the results of the Group three years after the grant date.
The Long Term Incentive Plan Awards were valued using the Monte Carlo option pricing model. The expected
volatility used in the model was based on the historical volatility of the Company’s share price over the three
years prior to the grant date.
The details of awards extant as at 30 September 2024 are summarised below:
Grant date
10 Jan 2024
9 Jan 2023
13 Jan 2022
No. of options granted
290,179
409,782
142,380
Expected volatility
38%
44%
46%
Risk free rate
3.85%
2.00%
0.76%
Option term
3 years
3 years
3 years
Fair value (£)
1,361,943
1,537,338
1,119,282
Exercise price
nil
nil
nil
Expected dividend yield
2.2%
2.1%
1%
Share price at grant date
596p
530p
1175p
A reconciliation of LTIP option movements is shown below:
2024
2023
Number
Weighted average
exercise price (£)
Number
Weighted average
exercise price (£)
Outstanding at 1 October
623,650
–
398,317
–
Awarded
290,179
–
409,782
–
Lapsed
(167,570)
–
(184,449)
–
Outstanding at 30 September
746,259
–
623,650
–
Exercisable at 30 September
–
–
–
–
The weighted average fair value of options granted in the year was 448.0p per option (2023: 375.0p per option).
The weighted average remaining contractual life of LTIP options outstanding at 30 September 2023 was 2.5
years (2023: 2.8 years).
The total share-based payments charge for the year ended 30 September 2024 relating to the LTIP scheme
was £869,000 (2023: £197,000).
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
168
6KDUHRSWLRQV FRQWLQXHG
The Gooch & Housego PLC Save As You Earn Scheme
The Gooch & Housego PLC Save As You Earn Scheme was established in February 2021 and
ZDV RSHQ WR DOO 8. HPSOR\HHV 8QGHU WKH VFKHPH HPSOR\HHV FKRRVH WR VDYH D Ƽ[HG PRQWKO\
amount from their net pay of between £5 and £100. At the start of the savings period,
participants are awarded options at a discount of 10% to the market value at that date. At the
end of the three-year savings period, participants can either withdraw their savings or exercise
their options to acquire shares at the option price. 31,749 options were granted under this
scheme on 26 March 2021.
2024
2023
Number
Weighted average
exercise price (£)
Number
Weighted average
exercise price (£)
Outstanding at 1 October
18,862
11.59
24,697
11.59
Awarded
(18,397)
11.59
(5,835)
11.59
Outstanding at 30 September
465
11.59
18,862
11.59
Exercisable at 30 September
465
11.59
–
–
There were no options granted under the Save As You Earn Scheme in the year ended 30
September 2024 or 30 September 2023.
Share options outstanding at the end of the year expire one year after their respective vesting
dates and have the following exercise prices:
Number of share options
Exercise price per share option
2024
2023
G&H PLC Save As You Earn Scheme
£11.59
465
18,862
The weighted average remaining contractual life of SAYE options outstanding at
30 September 2024 was 0.5 years (2023: 0.5 years).
The total share-based payments charge for the year ended 30 September 2024 relating to
the SAYE scheme was a credit of £10,000 (2023: charge £18,000).
Gooch & Housego PLC Restricted Stock Units (RSUs)
An award of restricted stock units was made to a senior US based employee in the year ended
30 September 2022. These lapsed in full in the year when the employee resigned from the
Group in the year ended 30 September 2024.
2024
2023
Number
Weighted average
exercise price (£)
Number
Weighted average
exercise price (£)
Outstanding at 1 October
25,549
–
25,549
–
Lapsed
(25,549)
–
–
–
Outstanding at 30 September
–
–
25,549
–
Exercisable at 30 September
–
–
–
–
Share options outstanding at the end of the year expire one year after their respective vesting
dates and have the following exercise prices:
Number of share options
Exercise price per share option
2024
2023
Restricted stock units
–
–
25,549
The weighted average remaining contractual life of Restricted Stock Units outstanding
at 30 September 2023 was 1.3 years.
The total share-based payments credit for the year ended 30 September 2024 relating
to the Restricted Stock Units Plan was £144,000 (2023: £98,000 charge).
169
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
)LQDQFLDOLQVWUXPHQWV
7KH *URXSŮV ƼQDQFLDO LQVWUXPHQWV FRPSULVH EDQN ERUURZLQJV FDVK DW EDQN OHDVHV DQG
various items such as trade receivables and trade payables that directly arise from its
RSHUDWLRQV 7KH PDLQ ULVNV DULVLQJ IURP WKH *URXSŮV ƼQDQFLDO LQVWUXPHQWV DUH LQWHUHVW
rate risk, liquidity risk and foreign currency risk.
2SHUDWLRQV DUH ƼQDQFHG WKURXJK D PL[WXUH RI UHWDLQHG SURƼWV FDVK UHVHUYHV EDQN
borrowings and leases. Other than leases the Board’s policy is to use variable rate
borrowings whenever possible.
7KH FXUUHQF\ SURƼOH IRU WKH *URXSŮV ƼQDQFLDO DVVHWV DQG OLDELOLWLHV DUH VHW RXW EHORZ
Financial assets
Financial liabilities
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Pound Sterling
2,413
3,680
894
1,220
US Dollars
3,887
3,171
31,537
37,784
Euro
371
387
–
–
Yen
92
71
–
–
6,763
7,309
32,431
39,004
7KH ƼQDQFLDO DVVHWV OLVWHG LQ WKH DERYH WDEOH DUH VXEMHFW WR ƽRDWLQJ UDWHV RI LQWHUHVW 7KH LQWHUHVW
UDWHV RQ WKH ƼQDQFLDO OLDELOLWLHV DUH SURYLGHG LQ 1RWH 7KH ƼQDQFLDO DVVHWV LQFOXGH FDVK DW
EDQN DQG GHULYDWLYH ƼQDQFLDO LQVWUXPHQWV EXW H[FOXGH VKRUWWHUP UHFHLYDEOHV SUHSD\PHQWV
DQG RWKHU UHFHLYDEOHV 7KH ƼQDQFLDO OLDELOLWLHV LQFOXGH EDQN ERUURZLQJV OHDVH OLDELOLWLHV DQG
GHULYDWLYH ƼQDQFLDO LQVWUXPHQWV 2WKHU VKRUWWHUP SD\DEOHV DUH H[FOXGHG IURP WKLV GLVFORVXUH
&DVK DQG EDQN ERUURZLQJV DUH VWDWHG DW DPRUWLVHG FRVW 'HULYDWLYH ƼQDQFLDO LQVWUXPHQWV
being currency contracts, are valued at level 2 fair values based on the present value of future
FDVK ƽRZV EDVHG RQ WKH IRUZDUG H[FKDQJH UDWHV DW WKH EDODQFH VKHHW GDWH /HDVH OLDELOLWLHV DUH
KHOG DW IDLU YDOXH EDVHG RQ GLVFRXQWHG FDVK ƽRZV XVLQJ D FXUUHQW ERUURZLQJ UDWH
Capital risk management
Management considers capital as equity, as shown in the Group balance sheet, excluding
net debt.
The Group’s objectives when managing capital are to safeguard the Group’s ability
• to continue as a going concern;
Ŷ WR SURYLGH UHWXUQV IRU VKDUHKROGHUV DQG EHQHƼWV IRU RWKHU VWDNHKROGHUV DQG
• to maintain an optimal capital structure to reduce the cost of capital.
7KH %RDUG LV VDWLVƼHG WKDW WKHVH REMHFWLYHV KDYH EHHQ PHW GXULQJ WKH \HDU $FWLRQV WDNHQ
GXULQJ WKH \HDU WR DFKLHYH WKHVH REMHFWLYHV DUH RXWOLQHG LQ WKH &KLHI ([HFXWLYH 2IƼFHUŮV 5HYLHZ
In order to maintain or adjust the capital structure, the Group may
• adjust the amount of dividends paid to shareholders;
• return capital to shareholders;
• issue new shares;
• sell assets to reduce debt; and
Ŷ YDU\ WKH OHYHO RI GHEW ƼQDQFLQJ
While the Group’s debt to equity ratio is consistently monitored, changes in the Group’s need
for capital and the selection of the source and funding of capital are assessed against a
number of criteria which may have a direct effect on the Group debt to equity ratio.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
170
)LQDQFLDOLQVWUXPHQWV FRQWLQXHG
The Group’s capital needs include, but are not solely limited to, its
• investment in non-current assets;
• investment in working capital; and
• acquisition of businesses, technologies and other intangible assets.
The criteria against which the Group’s capital needs are assessed
include, but are not limited to,
Ŷ DYDLODELOLW\ RI DQG FRVW RI GHEW ƼQDQFLQJ
Ŷ DELOLW\ WR UDLVH HTXLW\ ƼQDQFLQJ DW DQ DFFHSWDEOH VKDUH SULFH DQG
• ratio of debt to equity.
Capital risk management
Management considers capital as equity, as shown in the Group
balance sheet, excluding net debt.
The Group’s objectives when managing capital are to safeguard
the Group’s ability
• to continue as a going concern;
Ŷ WR SURYLGH UHWXUQV IRU VKDUHKROGHUV DQG EHQHƼWV IRU RWKHU
stakeholders; and
• to maintain an optimal capital structure to reduce the cost
of capital.
7KH %RDUG LV VDWLVƼHG WKDW WKHVH REMHFWLYHV KDYH EHHQ PHW GXULQJ
the year. Actions taken during the year to achieve these objectives
DUH RXWOLQHG LQ WKH &KLHI ([HFXWLYH 2IƼFHUŮV 5HYLHZ
In order to maintain or adjust the capital structure, the Group may
• adjust the amount of dividends paid to shareholders;
• return capital to shareholders;
• issue new shares;
• sell assets to reduce debt; and
Ŷ YDU\ WKH OHYHO RI GHEW ƼQDQFLQJ
While the Group’s debt to equity ratio is consistently monitored,
changes in the Group’s need for capital and the selection of the
source and funding of capital are assessed against a number
of criteria which may have a direct effect on the Group debt to
equity ratio.
The Group’s capital needs include, but are not solely limited to, its
• investment in non-current assets;
• investment in working capital; and
• acquisition of businesses, technologies and other intangible assets.
The criteria against which the Group’s capital needs are assessed
include, but are not limited to,
Ŷ DYDLODELOLW\ RI DQG FRVW RI GHEW ƼQDQFLQJ
Ŷ DELOLW\ WR UDLVH HTXLW\ ƼQDQFLQJ DW DQ DFFHSWDEOH VKDUH SULFH DQG
• ratio of debt to equity.
Financial risks
7KH *URXSŮV DFWLYLWLHV H[SRVH LW WR D YDULHW\ RI ƼQDQFLDO ULVNV PDUNHW
ULVN LQFOXGLQJ IRUHLJQ H[FKDQJH ULVN DQG FDVK ƽRZ LQWHUHVW UDWH ULVN
credit risk and liquidity risk.
The Group’s overall risk management programme focuses on the
XQSUHGLFWDELOLW\ RI ƼQDQFLDO PDUNHWV DQG VHHNV WR PLQLPLVH SRWHQWLDO
DGYHUVH HIIHFWV RQ WKH *URXSŮV ƼQDQFLDO SHUIRUPDQFH :KHUH
FRQVLGHUHG DSSURSULDWH WKH *URXS ZLOO XVH GHULYDWLYH ƼQDQFLDO
instruments to hedge risk exposures. During the year ended 30
September 2024, the Group has entered into contracts to sell US
'ROODUV DQG EX\ 8. 6WHUOLQJ DW Ƽ[HG UDWHV DW VSHFLƼF GDWHV LQ WKH
future. At 30 September 2024, the Group had contracts to sell
$4.0m in the period to 30 September 2025. The fair value of these
contracts, an asset of £141,000, has been included within
receivables on the balance sheet (2023: contracts to sell $10.0m
in the period to 30 September 2024 with a fair value of £15,000).
i. Market risk
a. Foreign exchange risk
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to the US Dollar.
Foreign exchange risk arises from
• future commercial transactions;
• recognised assets and liabilities; and
• net investments in foreign operations.
During the year the Group has entered into contracts to hedge
foreign exchange risk as disclosed above.
The Group has certain investments in foreign operations, whose
net assets are exposed to foreign currency translation risk.
Currency exposure arising from the net assets of the Group’s
foreign operations is managed primarily through borrowings
denominated in the relevant foreign currencies.
$V D VLJQLƼFDQW DPRXQW RI WKH *URXSŮV SURƼW LV HDUQHG E\ LWV 86
VXEVLGLDULHV WKH *URXSŮV SURƼW LV VHQVLWLYH WR PRYHPHQWV LQ WKH
US Dollar exchange rate. If the average US Dollar exchange rate for
the year had been consistent with the closing exchange rate at 30
6HSWHPEHU ZLWK DOO RWKHU YDULDEOHV FRQVWDQW SRVW WD[ SURƼWV
for the year would have been £40,000 higher (2023: £221,000
higher) as a result of the translation in US Dollars.
Equity is more sensitive to movement in the US Dollar exchange rate
DV D VLJQLƼFDQW DPRXQW RI WKH *URXSŮV QHW DVVHWV DUH KHOG LQ WKH
Group’s US subsidiaries. If the US Dollar weakened by 10% against
Pound Sterling with all other variables held constant, the net assets
of the Group would be £3,944,000 lower (2023: £3,369,000 lower).
If the US Dollar strengthened by 10% against Pound Sterling with all
other variables held constant, the net assets of the Group would be
£4,335,000 higher (2023: £3,706,000 higher).
171
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
&RPPLWPHQWV
2024
2023
£’000
£’000
Capital commitments – authorised and contracted but not provided for
383
867
All capital commitments relate to property, plant and equipment.
5HODWHGSDUW\WUDQVDFWLRQV
No contracts or arrangements have been entered into during the year, nor existed
at the end of the year, in which a director or key manager had an interest.
Details of key management compensation are given in note 9.
%XVLQHVV&RPELQDWLRQV
Artemis Optical
On 21 July 2023, Gooch & Housego PLC acquired the entire issued share capital of Artemis
2SWLFDO +ROGLQJV /LPLWHG ű$UWHPLVŲ D WKLQƼOP FRDWLQJ FRPSDQ\ 7KLV DFTXLVLWLRQ HQKDQFHG
G&H’s product portfolio and creates new opportunities for vertical integration and the cross
selling of the Group’s combined capabilities.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
£’000
Purchase consideration
Cash paid
3,077
Ordinary shares issued
2,390
Contingent consideration
2,000
Deferred consideration
155
Discount on contingent consideration net of deferred tax
(270)
Total purchase consideration
7,352
The fair value of the 412,088 shares issued as part of the consideration paid for Artemis was
based on the published share price on 20 July 2023 of 580p per share.
Acquisition costs of £412,000 are included within administration expenses in the
income statement.
The assets and liabilities recognised as a result of the acquisition were as follows:
Final fair value
£’000
Cash
58
Trade and other receivables
723
Inventories
616
Plant and equipment
531
Right of use assets
1,172
Current tax assets
183
Loans
(54)
Lease liabilities
(1,121)
Intangible assets – customer relationships
1,959
Intangible assets – brand
524
Intangible assets – orderbook
173
Trade and other payables
(1,501)
Deferred tax liabilities
(900)
Add: goodwill
4,989
Net assets acquired
7,352
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
172
%XVLQHVV&RPELQDWLRQV FRQWLQXHG
There were no changes to the provisional fair value in the year.
7KH JRRGZLOO LV DWWULEXWDEOH WR WKH ZRUNIRUFH DQG WKH IXWXUH SURƼWDELOLW\ RI WKH DFTXLUHG EXVLQHVV
It will not be deductible for tax purposes.
In the event that certain pre-determined EBITDA targets were achieved by Artemis in the 12 month periods
ended 31 July 2024 and 31 July 2025, additional consideration of up to £2m was payable in cash on or
around 31 August 2024 and 31 August 2025. Deferred consideration of £343,000 was paid in the year
ended 30 September 2024.
The fair value of the remaining contingent consideration of £1,700,000 was estimated by calculating the
SUHVHQW YDOXH RI WKH IXWXUH H[SHFWHG FDVK ƽRZV 7KH HVWLPDWHV DUH EDVHG RQ D GLVFRXQW UDWH RI
The acquired business contributed revenues of £794,000 and net loss of £56,000 to the Group for the
period from 21 July 2023 to 30 September 2023.
,I WKH DFTXLVLWLRQ KDG RFFXUUHG RQ 2FWREHU FRQVROLGDWHG SURIRUPD UHYHQXH DQG SURƼW DIWHU WD[
for the year ended 30 September 2023 would have been £152.2m and £5.1m respectively.
2023
£’000
2XWƽRZ RI FDVK WR DFTXLUH VXEVLGLDU\ QHW RI FDVK DFTXLUHG
Cash consideration
3,077
Less cash acquired
(58)
1HW RXWƽRZ RI FDVK Ū LQYHVWLQJ DFWLYLWLHV
3,019
GS Optics LLC
On 20 June 2023, Gooch & Housego PLC acquired the entire issued share capital of GS Optics
LLC (“GS Optics”), a specialist in the custom design and manufacture of precision polymer optics
for use in the biomedical, machine vision and analytical instrument markets. This acquisition
increased G&H’s commercial footprint in high-growth areas within the large US life sciences
marking including ophthalmic lenses, surgical imaging and diagnostic instrumentation.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
£’000
Purchase consideration
Cash paid
8,678
Ordinary share issued
2,056
Deferred consideration
294
Total purchase consideration
11,028
The fair value of the 322,115 shares issued as part of the consideration paid for Artemis was
based on the published share price on 19 June 2023 of £6.36 per share.
Acquisition costs of £536,000 are included within administration expenses in the
income statement.
173
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
The assets and liabilities recognised as a result of the acquisition are as follows:
Provisional
fair value
Adjustment
Final
fair value
£’000
£’000
£’000
Trade and other receivables
856
–
856
Inventories
562
–
562
Right of use assets
2,205
–
2,205
Plant and equipment
1,549
(99)
1,450
Deferred tax asset
79
–
79
Intangible assets – customer relationships
1,127
–
1,127
Intangible assets – brand
886
–
886
Trade and other payables
(377)
–
(377)
Lease liabilities
(2,224)
–
(2,224)
Add: goodwill
6,365
99
6,464
Net assets acquired
11,028
–
11,028
7KH JRRGZLOO LV DWWULEXWDEOH WR WKH ZRUNIRUFH DQG WKH IXWXUH SURƼWDELOLW\ RI WKH DFTXLUHG
business. It will not be deductible for tax purposes.
In the event that certain pre-determined EBITDA targets were achieved by GS Optics in the 12
month period ended 31 December 2023, additional consideration of up to $1.85m might have
been payable in cash by 30 April 2024. This target was not met and no deferred contingent
consideration was assumed in the provisional purchase price allocation. £294,000 of the
non-contingent consideration was deferred and subsequently paid in November 2023.
The acquired business contributed revenues of £1,371,000 and net loss of £208,000 to the
Group for the period from 21 July 2023 to 30 September 2023.
If the acquisition had occurred on 1 October 2022, consolidated pro-forma revenue and
SURƼW DIWHU WD[ IRU WKH \HDU HQGHG 6HSWHPEHU ZRXOG KDYH EHHQ eP DQG
£5.5m respectively.
2023
£’000
2XWƽRZ RI FDVK WR DFTXLUH VXEVLGLDU\ QHW RI FDVK DFTXLUHG
Cash consideration
8,678
Less cash acquired
–
1HW RXWƽRZ RI FDVK Ū LQYHVWLQJ DFWLYLWLHV
8,678
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
174
'LVSRVDORI(0//&
On 18 March 2024, Gooch & Housego PLC disposed of the entire share capital of its subsidiary
EM4 LLC to EMFOUR Acquisition Co. LLC, a subsidiary of a US-based global technology
company for total expected net consideration of up to £1.7m.
The total consideration payable of up to $12.0m comprised an initial cash consideration
of $5.25m (£4.2m) and deferred contingent consideration of up to $6.75m (£5.1m).
The deferred contingent consideration is based on the performance of the EM4 business
in the period ending 30 September 2025.
The Directors have shown the performance of the Boston business as a discontinued operation
LQ WKH LQFRPH VWDWHPHQW DQG WKH FRPSDUDWLYH ƼJXUHV KDYH EHHQ UHVWDWHG DFFRUGLQJO\
Details of the disposal consideration and the net assets disposed of are as follows:
£’000
Disposal consideration
Cash paid
4,154
Transaction fees
(674)
Working capital and debt adjustment
(714)
Cash disposed of
(441)
Employee liabilities settled direct from proceeds
(660)
Net disposal proceeds
1,665
Management have assessed the fair value of the deferred consideration to be nil.
Other disposal costs include certain staff costs and professional fees.
The details of the assets disposed of are as follows:
Book value
£’000
Right of use assets
1,588
Plant and equipment
1,348
Inventories
3,445
Trade and other receivables
2,537
Intangible assets – customer relationships
1,262
Trade and other payables
(616)
Lease liabilities
(1,639)
Add: goodwill
2,635
Net assets disposed of
10,560
Disposal costs
(341)
Loss on disposal
9,236
The income statement of the discontinued operation was as follows:
30 September
2024
30 September
2023
£’000
£’000
Revenue
4,343
13,435
Cost of revenue
(3,644)
(9,708)
*URVV SURƼW
699
3,727
Operating expenses
(1,287)
(4,691)
Operating loss
(588)
(964)
Interest payable
(52)
(18)
Loss before tax
(640)
(982)
Taxation
222
173
Loss after tax
(418)
(809)
7KH FDVK ƽRZV DWWULEXWDEOH WR WKH GLVFRQWLQXHG RSHUDWLRQ ZHUH DV IROORZV
30 September
2024
30 September
2023
£’000
£’000
Net cash generated from operating activities
50
1,444
Cash used in investing activities
(194)
(467)
&DVK XVHG LQ ƼQDQFLQJ DFWLYLWLHV
(198)
(463)
(Decrease) / increase in cash
(342)
514
175
FINANCIAL STATEMENTS NOTES TO THE GROUP FINANCIAL STATEMENTS
3RVWEDODQFHVKHHWHYHQWV
3KRHQL[2SWLFDO
On 30 October 2024, Gooch & Housego PLC acquired UK-based Phoenix Optical for a total
consideration of up to £6.75m. This comprised an initial cash consideration of £3.4m with
deferred contingent cash consideration of up to £3.35m, payable based upon Phoenix’s
SHUIRUPDQFH LQ WKH WKUHH \HDUV HQGLQJ -XQH ,Q LWV ƼQDQFLDO \HDU HQGHG -XQH
2024, Phoenix’s revenue was c£6.6m and its reported EBITDA was c£0.4m. As at the end of
June 2024, Phoenix had gross assets of £4.4m.
This acquisition G&H’s precision optics capabilities in its A&D markets and creates new
opportunities for the cross selling of the combined capabilities.
Due to the proximity of the acquisition to the reporting date, we have not yet completed
the fair value assessment of the assets acquired or the purchase price allocation in respect
of this acquisition.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
176
Company
Balance Sheet
As at 30 September 2024
2024
2023
Note
£’000
£’000
Non-current assets
Investments
5
42,062
43,181
Property, plant and equipment
6a
157
199
Investment properties
6b
3,093
3,173
Intangible assets
7
313
782
Deferred income tax assets
9
397
394
46,022
47,729
Current assets
Other receivables
8
20,658
17,496
Cash and cash equivalents
795
1,011
21,453
18,507
Current liabilities
Trade and other payables
10
(7,732)
(3,954)
Net current assets
13,721
14,553
Non-current liabilities
Deferred consideration
–
(870)
Deferred income tax liabilities
9
(23)
(76)
(23)
(946)
Net assets
59,720
61,336
Shareholders’ equity
Called up share capital
11
5,159
5,159
Share premium account
16,051
16,051
Merger reserve
8,890
8,890
Hedging reserve
141
15
Retained earnings
At 1 October
31,221
31,144
3URƼW ORVV IRU WKH \HDU
921
2,920
Other changes in retained earnings
(2,663)
(2,843)
29,479
31,221
Total equity
59,720
61,336
7KH ƼQDQFLDO VWDWHPHQWV RQ SDJHV WR ZHUH DSSURYHG E\ WKH %RDUG RI 'LUHFWRUV RQ
3 December 2024 and signed on its behalf by:
Charlie Peppiatt
Director
Chris Jewell
Director
Company number 00526832
177
FINANCIAL STATEMENTS COMPANY FINANCIAL STATEMENTS
Company Statement
of Changes in Equity
For the year ended 30 September 2024
Called up
share capital
Share premium
account
Merger
reserve
Hedging
reserve
Retained
earnings
Total
equity
Note
£’000
£’000
£’000
£’000
£’000
£’000
At 1 October 2022
5,008
16,000
4,591
(1,272)
31,144
55,471
3URƼW IRU WKH ƼQDQFLDO \HDU
–
–
–
–
2,920
2,920
Total comprehensive income for
the year
–
–
–
–
2,920
2,920
Shares issued
151
51
4,299
–
–
4,501
Dividends
4
–
–
–
–
(3,180)
(3,180)
Share based payments
–
–
–
–
337
337
*DLQ RQ FDVK ƽRZ KHGJH
–
–
–
1,287
–
1,287
Total contributions by and distributions
WRRZQHUVRIWKHSDUHQWUHFRJQLVHG
directly in equity
151
51
4,299
1,287
(2,843)
2,945
At 30 September 2023
5,159
16,051
8,890
15
31,221
61,336
At 1 October 2023
5,159
16,051
8,890
15
31,221
61,336
3URƼW IRU WKH ƼQDQFLDO \HDU
–
–
–
921
921
Total comprehensive expense for
the year
–
–
–
–
921
921
Dividends
4
–
–
–
–
(3,378)
(3,378)
Share based payments
–
–
–
–
715
715
/RVV RQ FDVK ƽRZ KHGJH
–
–
–
126
–
126
Total contributions by and distributions
WRRZQHUVRIWKHSDUHQWUHFRJQLVHG
directly in equity
–
–
–
126
(2,663)
(2,537)
At 30 September 2024
5,159
16,051
8,890
141
29,479
59,720
Company number 00526832
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
178
Company Cash
Flow Statement
For the year ended 30 September 2024
2024
2023
£’000
£’000
&DVKƽRZVIURPRSHUDWLQJDFWLYLWLHV
Cash (used in)/generated by operations
(256)
1,563
Income tax repaid
131
2
Net cash (used in)/generated by operating activities
(125)
1,565
&DVKƽRZVIURPLQYHVWLQJDFWLYLWLHV
Acquisition of subsidiaries
(351)
(3,077)
Purchase of property, plant and equipment
(35)
(7)
Interest received
15
6
Dividends received from subsidiaries
3,658
5,089
Net cash generated by investing activities
3,287
2,011
&DVKƽRZVIURPƼQDQFLQJDFWLYLWLHV
Dividends paid to ordinary shareholders
(3,378)
(3,180)
1HW FDVK XVHG E\ ƼQDQFLQJ DFWLYLWLHV
(3,378)
(3,180)
Net (decrease)/increase in cash
(216)
396
Cash at beginning of the year
1,011
615
Cash at the end of the year
795
1,011
Company number 00526832
179
FINANCIAL STATEMENTS COMPANY FINANCIAL STATEMENTS
Notes to the Company
Cash Flow Statement
For the year ended 30 September 2024
5HFRQFLOLDWLRQRIFDVK XVHGLQ JHQHUDWHGE\RSHUDWLRQV
2024
2023
£’000
£’000
3URƼWEHIRUHLQFRPHWD[
1,104
2,473
Adjustments for:
- Dividends received from subsidiaries
(3,658)
(5,089)
- Amortisation of intangible assets
490
500
- Depreciation
136
290
- Share based payment obligations
578
183
- Loss on disposal of investment of subsidiary
1,255
–
- Interest receivable
(16)
–
- Interest payable
209
–
Total
(1,006)
(4,116)
&KDQJHVLQZRUNLQJFDSLWDO
- Trade and other receivables
1,696
5,081
- Trade and other payables
(2,050)
(1,875)
Total
(354)
3,206
Cash (used in)/generated by operating activities
(256)
1,563
Analysis of net cash
At 1 Oct 2022
&DVK ƽRZ
At 30 Sep 2024
£’000
£’000
£’000
Cash at bank and in hand
1,011
(216)
795
Net cash
1,011
(216)
795
Analysis of net cash
At 1 Oct 2022
&DVK ƽRZ
At 30 Sep 2023
£’000
£’000
£’000
Cash at bank and in hand
615
396
1,011
Net cash
615
396
1,011
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
180
Notes to the Company
Financial Statements
For the year ended 30 September 2024
&RPSDQ\DFFRXQWLQJSROLFLHV
Basis of preparation
7KHVH ƼQDQFLDO VWDWHPHQWV KDYH EHHQ SUHSDUHG XQGHU WKH KLVWRULFDO
FRVW FRQYHQWLRQ DV PRGLƼHG E\ ƼQDQFLDO DVVHWV DQG OLDELOLWLHV DW IDLU
value and in accordance with UK adopted International Accounting
Standards and with the requirements of the Companies Act 2006
as applicable to companies reporting under those standards. The
ƼQDQFLDO VWDWHPHQWV KDYH EHHQ SUHSDUHG RQ D JRLQJ FRQFHUQ EDVLV
7KH 'LUHFWRUV KDYH UHYLHZHG WKH FXUUHQW ƼQDQFLDO IRUHFDVWV IRU
FY2025. The Company is a non-trading holding company which
is reliant on income from its subsidiary undertakings to continue
as a going concern. The Directors’ going concern assessment for
the Company therefore largely follows that for the Group.
The Company does not have any available external borrowing
facilities (2023: nil).
At 30 September 2024, the Company has a strong balance sheet
with net current assets of £13.7m.
The Directors have reviewed severe but plausible downside
scenarios that estimate the potential impact of the principal risks
WKDW WKH *URXS IDFHV RQ WKH ƼQDQFLDO IRUHFDVWV 7KHVH LQFOXGH WKH
impact of a possible recession and the resultant reduced demand
in certain of the Group’s markets, most notably commercial
aerospace and the industrial laser market driven by softness in
consumer end market demand. They also included the effect of
erosion of sales prices due to competition, the impact of delays
WR RXU SURGXFWLRQ UDPS XS WKH LPSDFW RI LQƽDWLRQ RQ LQSXW FRVWV
which cannot be passed on to customers, the potential impact of a
cyber-attack and a reduction in forecast revenue to illustrate the
potential effect of a loss of key personnel or inability to hire for a
NH\ UROH 7KH PRGHO DOVR FRQVLGHUHG WKH ORVV RI UHYHQXH DQG SURƼW
associated with a closure of one of the Group’s sites due to a legal
noncompliance issue. Mitigating actions including cost and capital
expenditure savings, and an extension of our payment terms with
suppliers (in FY2025 only) have been factored into this analysis.
We have compared the downside risk adjusted cash projections
and covenant performance against the Group’s available cash and
have been able to conclude that the Group would continue to be
able to operate even if a number of the risks occurred
simultaneously.
As a result of the assessments undertaken the Directors are
VDWLVƼHG WKDW WKH &RPSDQ\ KDV DGHTXDWH UHVRXUFHV WR FRQWLQXH LQ
operational existence for at least 12 months from the date of
DSSURYDO RI WKH ƼQDQFLDO VWDWHPHQWV )RU WKLV UHDVRQ WKH\ FRQWLQXH
WR DGRSW WKH JRLQJ FRQFHUQ EDVLV LQ SUHSDULQJ WKH ƼQDQFLDO
statements.The Directors do not believe there are any critical
accounting estimates or judgements that affect the amounts
UHSRUWHG LQ WKH FRPSDQ\ ƼQDQFLDO VWDWHPHQWV
New standards and interpretations not yet adopted
Ŷ 'HƼQLWLRQ RI $FFRXQWLQJ (VWLPDWHV Ū DPHQGPHQWV WR ,$6
• International Tax Reform – Pillar Tow Model Rules – amendments
to IAS 12
• Deferred Tax related to Assets and Liabilities arising from a
Single Transaction – amendments to IAS 12; and
• Disclosure of Accounting Policies – Amendments to IAS1 and
IFRS Practice Statement 2.
The principal accounting policies adopted in the preparation of the
ƼQDQFLDO VWDWHPHQWV DUH VHW RXW EHORZ 7KH SROLFLHV KDYH EHHQ
consistently applied to all of the years presented, unless
otherwise stated.
Pension schemes
The Company operates a money purchase pension scheme for
Directors and staff. The assets of the scheme are held in separately
administered funds. Contributions are recognised as an employee
EHQHƼW H[SHQVH LQ WKH LQFRPH VWDWHPHQW ZKHQ WKH\ DUH GXH
Prepaid contributions are recognised as an asset to the extent that
a cash refund or a reduction in the future payments is available.
Share options
The Company operates a number of share option schemes. In
accordance with IFRS 2 the fair value of the employee services
received in exchange for the grant of the options is recognised as an
expense in the income statement. The total amount to be expensed
over the vesting period is determined by reference to the fair value
of the options granted, excluding the impact of any non-market
YHVWLQJ FRQGLWLRQV IRU H[DPSOH SURƼWDELOLW\ WDUJHWV 1RQPDUNHW
vesting conditions are included in assumptions about the number
of options that are expected to vest.
Employer’s National Insurance in the United Kingdom and
equivalent taxes in other jurisdictions are payable on the exercise
of certain share options. In accordance with IFRS 2, this is treated
as a cash-settled transaction. A provision is made, calculated using
the fair value of the Company’s shares at the balance sheet date,
pro-rated over the vesting period of the options.
At each balance sheet date, for awards with non-market vesting
conditions, the entity revises its estimates of the number of
options that are expected to vest. It recognises the impact of the
revision to original estimates, if any, in the income statement, with
a corresponding adjustment to equity. The fair value of the options
under the Gooch & Housego 2013 Long Term Incentive Plan are
determined by using the Monte Carlo option pricing model.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium when the options are exercised.
181
FINANCIAL STATEMENTS NOTES TO THE COMPANY FINANCIAL STATEMENTS
Derivatives and hedging activities
7KH &RPSDQ\ WUDQVDFWV GHULYDWLYH ƼQDQFLDO LQVWUXPHQWV WR PDQDJH
the underlying exposure to foreign exchange risk. The Company does
QRW WUDQVDFW GHULYDWLYH ƼQDQFLDO LQVWUXPHQWV IRU WUDGLQJ SXUSRVHV
Financial instruments are initially recognised at fair value on
the date that a contract is entered into and are subsequently
remeasured at their fair value. The Company documents the
relationship between the hedging instrument and the hedged item
and, on a periodic basis, assesses whether the hedge is effective.
The hedges entered into during FY2024 have been assessed
as effective and therefore the Company has applied hedge
accounting. Accordingly, movements in the fair value of the
hedges have been recorded in reserves.
Deferred tax
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
OLDELOLWLHV DQG WKHLU FDUU\LQJ DPRXQWV LQ WKH FRQVROLGDWHG ƼQDQFLDO
statements. However, the deferred income tax is not accounted
for, if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of
WKH WUDQVDFWLRQ DIIHFWV QHLWKHU DFFRXQWLQJ QRU WD[DEOH SURƼW RU ORVV
Deferred income tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the balance sheet
date and are expected to apply when the related deferred income
tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is
SUREDEOH WKDW IXWXUH WD[DEOH SURƼW ZLOO EH DYDLODEOH DJDLQVW ZKLFK
the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising
on investments in subsidiaries, except where the timing of the
reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not reverse in
the foreseeable future.
Deferred income tax is recognised in the income statement except
to the extent that it relates to items recognised directly in other
comprehensive income and equity, in which case it is recognised in
other comprehensive income and equity.
In the UK and US, the Company is entitled to a tax deduction for
amounts treated as compensation on exercise of certain employee
share options under each jurisdiction’s tax rules. As explained under
“Share options” on the previous page, a compensation expense is
recorded in the Company’s income statement over the period from
the grant date to the vesting date of the relevant options. As there
is a temporary difference between the accounting and tax bases, a
deferred income tax asset is recorded. The deferred income tax asset
arising is calculated by comparing the estimated amount of tax
deduction to be obtained in the future (based on the Company’s
share price at the balance sheet date) with the cumulative amount
of the compensation recorded in the income statement. If the
amount of estimated future tax deduction exceeds the cumulative
amount of the remuneration expense at the statutory rate, the
excess is recorded directly in equity.
Foreign currency translation
a. Functional and presentation currency
7KH ƼQDQFLDO VWDWHPHQWV DUH SUHVHQWHG LQ 3RXQGV 6WHUOLQJ ZKLFK
is the Company’s presentation currency.
b. Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
balance sheet exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income
VWDWHPHQW H[FHSW ZKHQ GHIHUUHG LQ HTXLW\ DV TXDOLI\LQJ FDVK ƽRZ
hedges and qualifying net investment hedges.
Investments
Investments are stated at cost less provision for any impairment
LQ YDOXH :KHUH RYHUVHDV ERUURZLQJ LV UHTXLUHG WR ƼQDQFH WKH
investment in overseas subsidiaries, the investment is retranslated
at the exchange rate ruling at the balance sheet date.
Investment properties
The Company adopts the cost model and shows investment
properties at cost less accumulated depreciation and any
accumulated impairment losses. As investment properties are
RFFXSLHG E\ D VXEVLGLDU\ WKH\ GR QRW PHHW WKH GHƼQLWLRQ RI
investment properties for the Group. Depreciation on investment
properties is calculated to allocate their cost over their estimated
useful lives at 2-3% on a straight line basis.
Property, plant and equipment
Property, plant and equipment is stated at historical purchase cost
less accumulated depreciation. Cost includes expenditure that is
directly attributable to the acquisition of the items. No depreciation
is charged on freehold land or capital work in progress. Depreciation
on other assets is calculated to allocate their cost over their
estimated useful lives, as follows:
Plant and machinery
6-20%
Straight line
)L[WXUHV DQG ƼWWLQJV
6WUDLJKW OLQH
Computer equipment
25-33% Straight line
Intangible assets
Intangible assets include costs relating to computer systems
development, computer software and other intangible assets.
These costs are amortised over their useful economic lives
as follows:
Computer software
5 years Straight line
Systems
5 years Straight line
Patents & Licences (other)
3 years Straight line
Trade payables
Trade payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
Other receivables
Other receivables, which largely comprise amounts due from
subsidiary companies, are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment of expected
credit losses.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
182
Dividend distribution
Dividend distributions to the Company’s shareholders are recognised
DV D OLDELOLW\ LQ WKH &RPSDQ\ŮV ƼQDQFLDO VWDWHPHQWV LQ WKH SHULRG LQ
which the dividends are approved by the Company’s shareholders.
Share capital
2UGLQDU\ VKDUHV DUH FODVVLƼHG DV HTXLW\
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Capital risk management
Details of the ways in which the Company manages capital risk
DUH JLYHQ LQ QRWH WR WKH *URXS ƼQDQFLDO VWDWHPHQWV
Critical accounting estimates and judgements
Carrying value of investments
The Directors have assessed the carrying value of the Company’s
investments during the year. The assessment requires an estimate
of the recoverable amount of the investment, which is based on
IRUHFDVW FDVK ƽRZV DQG LV WKHUHIRUH LQKHUHQWO\ XQFHUWDLQ 6HH QRWH
5 for details of the carrying value of investments.
&RPSDQ\SURƼWDQGORVVDFFRXQW
Gooch & Housego PLC has taken advantage of section 408(3) of
WKH &RPSDQLHV $FW DQG KDV QRW LQFOXGHG LWV RZQ SURƼW DQG
ORVV DFFRXQW LQ WKHVH ƼQDQFLDO VWDWHPHQWV 7KH &RPSDQ\ŮV SURƼW
loss after tax was £921,000 (2023: £2,920,000).
Fees payable to the Company auditors for the statutory audit for
the year amounted to £95,000 (2023: £95,000).
(PSOR\HHEHQHƼWH[SHQVH
2024
2023
£’000
£’000
Wages and salaries
2,824
3,681
&RPSHQVDWLRQ IRU ORVV RI RIƼFH
–
37
Social security costs
298
224
Medical and other insurances
64
28
Share based payments
579
183
Other pension costs
67
82
3,832
4,235
The monthly average number of employees during the year was:
2024
2023
Number
Number
Sales and marketing
10
11
Operations
4
5
Finance and administrative
7
7
21
23
Directors’ remuneration and key management compensation
2024
2023
£’000
£’000
Directors’ remuneration
1,115
1,375
Share based payments
579
162
Medical and other insurances
23
26
Company car allowance
10
10
Directors’ pension scheme
contributions
10
10
1,737
1,583
The aggregate emoluments of the highest paid Director were
£495,000 (2023: £680,000). Further information is included
in the Remuneration Committee report on page 126.
The aggregate gain on Directors’ share option exercises in the
year was nil (2023: nil).
7KH QXPEHU RI 'LUHFWRUV ZKR DUH DFFUXLQJ UHWLUHPHQW EHQHƼWV
under a money purchase pension scheme is 1 (2023: 1).
'LYLGHQGV
2024
2023
£’000
£’000
Final 2023 dividend paid: 8.2p per share
(Final 2022 dividend paid in 2023: 7.7p)
2,114
1,978
2024 Interim dividend of 4.9p per share
(2023: 4.8p per share)
1,264
1,202
3,378
3,180
7KH 'LUHFWRUV KDYH SURSRVHG D ƼQDO GLYLGHQG RI S SHU VKDUH
making the total dividend paid and proposed in respect of the
ƼQDQFLDO \HDU S S SHU VKDUH 7KH WRWDO YDOXH
RI WKH SURSRVHG ƼQDO GLYLGHQG LV e e
,QYHVWPHQWV
2024
2023
£’000
£’000
Cost and net book value at 1 October
43,181
35,674
Additions related to share based
payments for subsidiary employees
136
154
Additions
–
18,381
Transfer to subsidiary
–
(11,028)
Disposal of investment in group company
(1,255)
–
Cost and net book value at 30 September
42,062
43,181
The Company acquired the entire share capital of GS Optics LLC
on 20 June 2023. The investment was immediately transferred
at cost to G&H US Holdings Limited, a fully owned subsidiary of
the Company.
The company acquired the entire share capital of Artemis Optical
Holdings Limited on 21 July 2023. Further details are given in
QRWH WR WKH *URXS ƼQDQFLDO VWDWHPHQWV 7KH FRQVLGHUDWLRQ
payable was cash of £3,077,000, ordinary shares of £2,390,000,
contingent consideration of £1,730,000 and deferred
consideration of £155,000.
The disposal in the year ended 30 September 2024 related to the
disposal of EM4 Inc. Further detail is given in note 33 to the Group
ƼQDQFLDO VWDWHPHQWV
183
FINANCIAL STATEMENTS NOTES TO THE COMPANY FINANCIAL STATEMENTS
COMPANY NAME
Gooch & Housego (UK) Limited*
Kent Periscopes Limited*
EM4 Inc.
G&H (Property) Holdings Limited*
Integrated Technologies Limited
Integrated Technologies (Holdings)
Limited
Integrated Electronic Systems
(Shanghai) Ltd
Gooch & Housego (Ohio) LLC
Gooch & Housego (Keene) LLC
G&H Holdings (Delaware) Inc.
VITL Limited*
Gooch & Housego (Torquay) Limited*
Spanoptic Limited*
Gooch & Housego (California) LLC
G&H Capital Holdings (Florida) LLC
Gooch & Housego (Deutschland)
GmbH*
Gooch & Housego (Palo Alto) LLC
G&H (US Holdings) Limited*
ORF Limited
Wave Optronics Limited
Artemis Optical Holdings Ltd*
% OWNERSHIP
OF ORDINARY
SHARES
Dowlish Ford, Ilminster, Somerset, TA19 0PF
6 Ffordd Richard Davies St Asaph, LL17 0LJ
7 Oak Park Drive, Bedford, MA 01730, USA
Dowlish Ford, Ilminster, Somerset, TA19 0PF
Viking House, Ellingham Way, Ashford, TN23 6NF
Viking House, Ellingham Way, Ashford, TN23 6NF
T3-11 Factory Building Unit 201, 5001 Huadong
Road, Shanghai 201201 China
676 Alpha Drive, Highland Heights, OH44143, USA
17A Bradco. Street, Keene, NH 03431 USA
676 Alpha Drive, Highland Heights, OH44143, USA
Viking House, Ellingham Way, Ashford, TN23 6NF
Dowlish Ford, Ilminster, Somerset, TA19 0PF
Telford Road, Glenrothes, KY7 4 NX
5390 Kazuko Court, Moorpark, CA93021, USA
676 Alpha Drive, Highland Heights, OH44143, USA
Berliner Allee 55, 22850 Norderstedt, Germany
44247 Nobel Dr, Fremont, CA94538, USA
Dowlish Ford, Ilminster, Somerset, TA19 0PF
Viking House, Ellingham Way, Ashford, TN23 6NF
Viking House, Ellingham Way, Ashford, TN23 6NF
1 Western Wood Way, Langage Science Park,
Plympton, Plymouth, PL7 5BG
REGISTERED OFFICE
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
ACTIVITY
Manufacturer of acousto-optic products and
precision optics
Non-trading company
0DQXIDFWXUHU RI ƼEUH RSWLFV SURGXFWV
Property holding company
Development and manufacture of high quality
medical and in vitro diagnostic devices
Non-trading company
Development and manufacture of high quality
medical and in vitro diagnostic devices
Manufacturer of electro-optic products
and crystals
Designer and manufacturer of optical and
opto-mechanical subsystems
Holding company
Holding company
0DQXIDFWXUHU RI ƼEUHRSWLF SURGXFWV
Non-trading company
Manufacturer of precision optics
Gooch & Housego Japan KK*
Level 4, Nikko Shiken Building, 3-2-3 Sakae,
Nagoya, Japan
100%
Provider of sales and customer
service functions
Chromodynamics LLC
434 S Dallas Ave Pittsburgh PA15208, USA
100%
Dormant company
Non-trading company
Provider of sales and customer
service functions
Manufacturer of acousto-optic, electro-optic
DQG ƼEUH RSWLF FRPSRQHQWV DQG V\VWHPV
Holding company
Non-trading company
Dormant company
Holding company
Artemis Optical Ltd
GS Optics LLC
1 Western Wood Way, Langage Science Park,
Plympton, Plymouth, PL7 5BG
Viking House, 408 St Paul Street, Rochester,
New York, 14605, USA
100%
100%
7KLQƼOP FRDWLQJ FRPSDQ\
Design and manufacture of precision
polymer optics
G&H ITL (US) Inc.
Viking House, 408 St Paul Street, Rochester,
New York, 14605, USA
100%
Development and manufacture of high quality
medical and in vitro diagnostic devices
The subsidiary companies at 30 September 2024, all of which are
wholly owned either directly or indirectly, are listed below:
The directors believe that the carrying value of the investments is supported by
their underlying net assets.
*these investments are held directly by Gooch & Housego PLC. All UK subsidiaries
DUH H[HPSW IURP WKH UHTXLUHPHQW WR ƼOH DXGLWHG ƼQDQFLDO VWDWHPHQWV E\ YLUWXH RI
Section 479A of the Companies Act 2006. As part of this process, the Company
has provided statutory guarantees to these subsidiaries.
,QYHVWPHQWV FRQWLQXHG
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
184
D3URSHUW\SODQWDQGHTXLSPHQW
Plant and
machinery
Fixtures and
ƼWWLQJV
Computer
equipment
Total
£’000
£’000
£’000
£’000
Cost or valuation
At 1 October 2022
3,987
1,392
233
5,612
Additions
–
–
7
7
At 30 September 2023
3,987
1,392
240
5,619
Additions
–
–
14
14
At 30 September 2024
3,987
1,392
254
5,633
Accumulated depreciation
At 1 October 2022
3,647
1,355
211
5,213
Charge for the year
152
36
19
207
At 30 September 2023
3,799
1,391
230
5,420
Charge for the year
47
1
8
56
At 30 September 2024
3,846
1,392
238
5,476
Net book value
At 30 September 2022
340
37
22
399
At 30 September 2023
188
1
10
199
At 30 September 2024
141
–
16
157
E,QYHVWPHQWSURSHUWLHV
Investment Properties
£’000
Cost or valuation
At 1 October 2022
4,432
At 30 September 2023
4,432
At 30 September 2024
4,432
Accumulated depreciation
At 1 October 2022
1,176
Charge for the year
83
At 30 September 2023
1,259
Charge for the year
80
At 30 September 2024
1,339
Net book value
At 30 September 2022
3,256
At 30 September 2023
3,173
At 30 September 2024
3,093
The fair value of the investment property is not materially different to the book value
disclosed above. Income received from subsidiary companies in respect of the property
in the year ended 30 September 2024 was £125,000 (2023: £125,000).
185
FINANCIAL STATEMENTS NOTES TO THE COMPANY FINANCIAL STATEMENTS
,QWDQJLEOHDVVHWV
Systems
Computer
software
Patents and
licences
Total
£’000
£’000
£’000
£’000
Cost or valuation
At 1 October 2022
2,200
1,101
64
3,365
Additions
–
–
–
–
At 30 September 2023
2,200
1,101
64
3,365
Additions
–
21
–
21
At 30 September 2024
2,200
1,122
64
3,386
Accumulated amortisation
At 1 October 2022
1,130
889
64
2,083
Charge for the year
440
60
–
500
At 30 September 2023
1,570
949
64
2,583
Charge for the year
440
50
–
490
At 30 September 2024
2,010
999
64
3,073
Net book value
At 30 September 2022
1,070
212
–
1,282
At 30 September 2023
630
152
–
782
At 30 September 2024
190
123
–
313
2WKHUUHFHLYDEOHV
2024
2023
£’000
£’000
Prepayments and accrued income
112
417
Intercompany receivables
20,546
17,079
20,658
17,496
'HIHUUHGWD[
The movement in the deferred tax assets and liabilities during the year was as follows:
2024
2023
£’000
£’000
At 1 October
318
315
Credited to the income statement
56
93
Arising on acquisition
–
(90)
At 30 September
374
318
The deferred tax provided for in the financial statements can be analysed as follows:
2024
2023
£’000
£’000
Property, plant and equipment
353
339
Intangible assets
44
55
Other timing differences
(23)
(76)
374
318
All movements on deferred tax were recognised in the income statement in the year ended 30 September
2024 and 30 September 2023.
The current portion of the deferred tax asset is £0.1m (2023: £0.1m).
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
186
7UDGHDQGRWKHUSD\DEOHV
2024
2023
£’000
£’000
Trade payables
239
313
Amounts owed to group undertakings
5,072
1,230
Deferred consideration
1,713
980
Accruals and deferred income
708
1,431
7,732
3,954
Amounts owed to group undertakings are unsecured and due within one year. Non trading
amounts owed to US group undertakings are charged interest at the SOFR rate applicable
for the year. Non-trading amounts owed to UK group undertakings are charged interest at
rates specified in the loan agreements.
&DOOHGXSVKDUHFDSLWDO
2024
2023
2024
2023
Number
Number
£’000
£’000
Allotted, issued and fully paid
At 1 October
25,786,397
25,040,919
5,159
5,008
Shares issued and fully paid
–
745,478
–
151
At 30 September
25,786,397
25,786,397
5,159
5,159
11,275 shares were allotted under share option schemes during the year
ended 30 September 2023. The remaining 734,203 shares issued in the
year were issued as part consideration for the acquisitions of GS Optics
and Artemis Optical Holdings Limited.
The company does not have a limited amount of authorised capital.
187
FINANCIAL STATEMENTS NOTES TO THE COMPANY FINANCIAL STATEMENTS
)LQDQFLDOLQVWUXPHQWV
The Company’s financial instruments comprise cash at bank, financial derivatives and various
items such as trade receivables and trade payables that directly arise from its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity
risk and foreign currency risk.
The Board’s policy on these risks and capital risk management is set out in note 29 to the
Group financial statements.
Operations are financed through a mixture of retained profits, cash reserves, group borrowings
and leases. The Board’s policy is to use variable rate borrowings whenever possible.
The currency profile for the Company’s financial assets and liabilities are set out below.
Financial assets
Financial liabilities
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Pound Sterling
558
900
–
–
US Dollars
336
118
–
–
Euro
42
8
–
–
936
1,026
–
–
The financial assets listed in the above table are subject to floating rates of interest.
The financial assets include cash at bank and derivative financial instruments but exclude
short-term receivables, prepayments and other receivables. The financial liabilities include
derivative financial instruments. Other short-term payables are excluded from this disclosure.
At the year end, the Company had contracts to sell $4.0m in the period to 30 September
2025 (2023: contracts to sell $10m in the period to 30 September 2024). The fair value
of these contracts, of £141,000, has been included in payables on the balance sheet
(2023: £15,000 asset).
Cash and bank borrowings are stated at amortised cost. Derivative financial instruments,
being currency contracts, are valued at level 2 fair values based on the present value of future
cash flows based on the forward exchange rates at the balance sheet date.
6KDUHRSWLRQV
The Company operates the Gooch & Housego 2013 Long Term Incentive Plan (the 2013 LTIP),
the Gooch & Housego Save As You Earn Scheme, the Gooch & Housego ESPP scheme and the
Gooch & Housego PLC Restricted Stock Units Plan.
A reconciliation of total share option movements across these schemes is shown below:
2024
2023
Number
Weighted average
exercise price (£)
Number
Weighted average
exercise price (£)
Outstanding at 1 October
668,062
0.33
457,515
0.84
Awarded
290,179
–
409,782
–
Exercised
–
–
(11,275)
(4.64)
Adjustment
–
–
2,323
4.64
Lapsed
(211,516)
(1.01)
(190,283)
(0.36)
Outstanding at 30 September
746,725
0.01
668,062
0.33
Exercisable at 30 September
–
–
–
–
The adjustment shown above relates to the ESPP scheme. Under this scheme, the exercise
price of options was not set until the scheme matured. It was not therefore possible to
quantify the exact number of options until the scheme matured.
The weighted average remaining contractual life of the options outstanding at 30 September
2024 was 2.5 years (2023: 2.7 years).
The total charge for the year relating to share options was £579,000 (2023: £183,000), all of
which related to equity-settled share based payment transactions.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
188
6KDUHRSWLRQV FRQWLQXHG
The Gooch & Housego 2013 Long Term Incentive Plan
The Gooch & Housego 2013 Long Term Incentive Plan was adopted on 9 April 2013 and
reached the end of its life in the year ended 30 September 2023. The Board approved a
new scheme on 19 September 2023 ], under which awards will be made annually to key
employees based on a percentage of salary. Subject to the satisfaction of the required
Total Shareholder Return, Earnings Per Share and ESG performance criteria, these grants
will vest upon publication of the results of the Group three years after the grant date.
The Long Term Incentive Plan Awards were valued using the Monte Carlo option pricing
model. The expected volatility used in the model was based on the historical volatility of
the Company’s share price over the three years prior to the grant date.
The details of awards extant as at 30 September 2024 are summarised below:
Grant date
10 Jan 2024
9 Jan 2023
13 Jan 2022
No. of options granted
290,179
409,782
142,380
Expected volatility
38%
44%
46%
Risk free rate
3.85%
2.00%
0.76%
Option term
3 years
3 years
3 years
Fair value (£)
1,361,943
1,537,338
1,119,282
Exercise price
nil
nil
nil
Expected dividend yield
2.2%
2.1%
1%
Share price at grant date
596p
530p
1175p
A reconciliation of LTIP option movements is shown below:
2024
2023
Number
Weighted average
exercise price (£)
Number
Weighted average
exercise price (£)
Outstanding at 1 October
623,650
–
398,317
–
Awarded
290,179
–
409,782
–
Exercised
–
–
–
–
Lapsed
(167,570)
–
(184,449)
–
Outstanding at 30 September
746,259
–
623,650
–
Exercisable at 30 September
–
–
–
–
The weighted average fair value of options granted in the year was 448.0p per option
(2023: 375.0p per option).
The weighted average remaining contractual life of LTIP options outstanding at
30 September 2024 was 2.5 years (2023: 2.8 years).
The total share-based payments charge for the year ended 30 September 2024
relating to the 2013 LTIP scheme was £578,000 (2023: £175,000).
189
FINANCIAL STATEMENTS NOTES TO THE COMPANY FINANCIAL STATEMENTS
6KDUHRSWLRQV FRQWLQXHG
The Gooch & Housego PLC Save As You Earn Scheme
The Gooch & Housego PLC Save As You Earn Scheme was established in February 2021
DQG LV RSHQ WR DOO 8. HPSOR\HHV 8QGHU WKH VFKHPH HPSOR\HHV FKRRVH WR VDYH D Ƽ[HG
monthly amount from their net pay of between £5 and £100. At the start of the savings
period, participants are awarded options at a discount of 10% to the market value at that
date. At the end of the three-year savings period, participants can either withdraw their
savings or exercise their options to acquire shares at the option price. 31,749 options were
granted under this scheme on 26 March 2021.
2024
2023
Number
Weighted average
exercise price (£)
Number
Weighted average
exercise price (£)
Outstanding at 1 October
18,862
11.59
24,697
11.59
Lapsed
(18,397)
11.59
(5,835)
11.59
Outstanding at 30 September
465
11.59
18,862
11.59
Exercisable at 30 September
465
11.59
–
–
There were no options granted under the Save As You Earn Scheme in the year ended
30 September 2024 or 30 September 2023.
Share options outstanding at the end of the year expire one year after their respective
vesting dates and have the following exercise prices:
Number of share options
Exercise price per share option
2024
2023
G&H PLC Save As You Earn Scheme
£11.59
465
18,862
The weighted average remaining contractual life of SAYE options outstanding at
30 September 2024 was 0.5 years (2023: 0.5 years).
The total share-based payments credit for the year ended 30 September 2024
relating to the SAYE scheme was £1,000 (2023: £18,000 charge).
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
190
6KDUHRSWLRQV FRQWLQXHG
Gooch & Housego PLC Restricted Stock Units (RSUs)
An award of restricted stock units was made to a senior US based employee in the year
ended 30 September 2022. These lapsed in full in the year when the employee resigned
from the Group in the year ended 30 September 2024.
2024
2023
Number
Weighted average
exercise price (£)
Number
Weighted average
exercise price (£)
Outstanding at 1 October
25,549
–
25,549
–
Lapsed
(25,549)
–
–
–
Outstanding at 30 September
–
–
25,549
–
Exercisable at 30 September
–
–
–
–
Share options outstanding at the end of the year expire one year after their respective
vesting dates and have the following exercise prices:
Number of share options
Exercise price per share option
2024
2023
Restricted stock units
–
–
25,549
The weighted average remaining contractual life of Restricted Stock Units outstanding at
30 September 2023 was 1.3 years.
The total share-based payments charge for the year ended 30 September 2024 relating
to the Restricted Stock Units Plan was £nil (2023: £nil).
191
FINANCIAL STATEMENTS NOTES TO THE COMPANY FINANCIAL STATEMENTS
5HODWHGSDUW\GLVFORVXUHV
The company recharges certain costs to, and is recharged certain costs by, its subsidiary
companies in the ordinary course of business. The closing balances due from and to the
subsidiary companies are shown in notes 8 and 10 respectively.
The amounts recharged to Gooch & Housego PLC by group undertakings during
the year ended 30 September were:
2024
2023
£’000
£’000
EM4 Inc
–
44
Gooch & Housego (Palo Alto) LLC
93
88
Gooch & Housego (Ohio) LLC
78
–
Gooch & Housego (UK) Limited
34
31
Gooch & Housego (Torquay) Limited
21
28
Gooch & Housego (Deutschland) GmBH
210
385
Gooch & Housego Japan KK
387
319
823
895
The amounts recharged by Gooch & Housego PLC to group undertakings during
the year ended 30 September were:
2024
2023
£’000
£’000
EM4 Inc
–
660
Gooch & Housego (Ohio) LLC
1,142
645
Gooch & Housego (UK) Limited
1,010
1,247
Gooch & Housego (California) LLC
411
533
Gooch & Housego (Palo Alto) LLC
1,496
1,707
Gooch & Housego (Keene) LLC
439
504
Gooch & Housego (Torquay) Limited
1,290
1,301
Integrated Technologies Limited
642
629
G&H ITL (US) Inc.
197
–
GS Optics LLC
257
–
Artemis Optical Limited
286
–
7,170
7,226
The amounts receivable from/(payable to) subsidiary undertakings
as at 30 September were:
2024
2023
£’000
£’000
G&H (US Holdings) Limited
11,284
7,339
Gooch & Housego (UK) Limited
7,137
8,569
Gooch & Housego (Palo Alto) LLC
–
(501)
Spanoptic Limited
(91)
(115)
Artemis Optical Limited
1,666
1,152
Gooch & Housego (Deutschland) GmBH
(503)
(592)
Gooch & Housego Japan KK
(21)
(20)
Integrated Technologies Limited
(757)
18
Gooch & Housego (Torquay) Limited
(3,198)
–
15,517
15,850
During the year Gooch & Housego PLC received dividends of £3.5m and £0.2 respectively
from Integrated Technologies Holdings Limited and G&H Property Holdings Limited.
In the prior year, Gooch & Housego PLC received dividends of £3.5m, £0.1m, £0.4m,
£0.4m, £0.4m and £0.3m respectively from Gooch & Housego (Torquay) Limited, G&H
(Property) Holdings Limited, Gooch & Housego (Ohio) Limited, Gooch & Housego (Palo
Alto) LLC, G&H Holdings (Delaware) Inc and Integrated Technologies Limited.
The total dividend received from subsidiary undertakings during the year was £3.7m
(2023: £5.1m).
No other material contracts or arrangements have been entered into during the year, nor
existed at the end of the year, in which a director or key manager had a material interest.
Shareholder
Information
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
192
194 Company Information
195 Expected Financial Calendar
196 Notice of Annual General Meeting
199 Notes
192–200
SHAREHOLDER INFORMATION
193
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
194
Nominated Adviser and Broker
Investec Bank PLC
2 Gresham Street
London
EC2V 7QP
Legal Advisers
Burges Salmon LLP
One Glass Wharf
Temple Quay
Bristol
BS2 0ZX
Independent Auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
2 Glass Wharf
Temple Quay
Bristol
BS2 0FR
Registrars
Link Asset Services
65 Gresham Street
London
EC2V 7NQ
Company Secretary
Gareth J Crowe
Registered Office
Dowlish Ford
Ilminster
Somerset
TA19 0PF
United Kingdom
Company Number
00526832
Company
Information
Legal
Information
Company Secretary
and Registered Office
195
SHAREHOLDER INFORMATION COMPANY INFORMATION
Expected
Financial Calendar
Annual General
Meeting
Financial Year End
Interim Results
Announcement
Preliminary
Announcement
of Results for
the Year Ending
30 September 2025
24
February
2025
30
September
2025
June
2025
December
2025
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
196
Notice of Annual
General Meeting
Form of proxy
You will not receive a form of proxy for the 2025 AGM in the post. Instead,
you can vote online at www.signalshares.com. To register you will need
your Investor Code, which can be found on your share certificate.
Alternatively, you can vote via the LinkVote+ app or CREST. You will still be
able to attend and vote in person at the AGM and you may also request a
hard copy proxy form from our Registrars.
Should you require assistance please contact our registrar Link Group at
shareholderenquiries@linkgroup.co.uk or on 0371 664 0300.
Calls are charged at the standard geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international rate. Lines are open between
9.00 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales.
197
SHAREHOLDER INFORMATION NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of the Company
will be held at Dowlish Ford, Ilminster, Somerset, TA19 0PF on
24 February 2025 at 11.00 a.m. for the following purposes:
To consider and, if thought fit, to pass the following resolutions as
Ordinary Resolutions:
1 7R UHFHLYH WKH $QQXDO 5HSRUW DQG ƼQDQFLDO VWDWHPHQWV IRU
WKH ƼQDQFLDO \HDU HQGHG 6HSWHPEHU WRJHWKHU
with the Directors’ Report and Auditors’ Report thereon.
To receive and approve the Remuneration Committee
Report set out on pages 122 to 129 of the Annual Report and
Financial Statements, comprising the Annual Statement, the
Remuneration Policy and the Annual Report on Remuneration
IRU WKH ƼQDQFLDO \HDU HQGHG 6HSWHPEHU
7R GHFODUH D ƼQDO GLYLGHQG DV UHFRPPHQGHG E\ WKH 'LUHFWRUV
RI S SHU RUGLQDU\ VKDUH IRU WKH ƼQDQFLDO \HDU HQGHG
September 2024, payable on 28 February 2025 to those
members whose names appear in the Company’s register of
members at the close of business on 24 January 2025.
To re-elect Gary Bullard as a Director.
To re-elect Charlie Peppiatt as a Director.
6 To re-elect Chris Jewell as a Director.
7 To re-elect Louise Evans as a Director.
8 To re-elect Jim Haynes as a Director.
9 To re-elect Susan Searle as a Director
10 To re-appoint PricewaterhouseCoopers LLP as Auditors to hold
RIƼFH IURP WKH FRQFOXVLRQ RI WKLV PHHWLQJ WR WKH FRQFOXVLRQ RI
the next meeting at which the Company’s annual accounts and
reports are laid before the Company.
11 7R DXWKRULVH WKH 'LUHFWRUV WR Ƽ[ WKH UHPXQHUDWLRQ RI WKH $XGLWRUV
THAT the Directors of the Company be, and they are hereby,
generally and unconditionally authorised in accordance
with section 551 of the Companies Act 2006 (the “Act”), in
substitution for any existing authority to the extent unused,
to exercise all the powers of the Company to allot shares in
the Company or grant rights to subscribe for or to convert any
security into shares in the Company on, and subject to, such
terms as the Directors may determine. The authority hereby
conferred shall, subject to section 551 of the Act, be for a period
commencing on the date of the passing of this Resolution
and expiring at the conclusion of the next Annual General
Meeting of the Company or 24 May 2026 (whichever is the
earlier) unless reviewed, varied or revoked by the Company in
General Meeting and the maximum nominal amount of shares
which may be allotted pursuant to such authority shall be
£1,719,093 (representing approximately one third of the total
ordinary share capital of the Company in issue at 3 December
2024). The Directors shall be entitled under such authority
to make at any time prior to the expiry of such authority any
offer or agreement which would or might require shares in the
Company to be allotted after the expiry of such authority and
the Directors may allot shares in pursuance of such offer or
agreement as if such authority had not expired.
Gooch & Housego PLC
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
198
D THAT the Directors of the Company be, and they are hereby,
generally and unconditionally empowered pursuant to section
570 of the Companies Act 2006 (the “Act”), in substitution for
any existing authority to the extent unused, to allot equity
VHFXULWLHV DV GHƼQHG LQ VHFWLRQ RI WKH $FW IRU FDVK SXUVXDQW
to the authority conferred by Resolution 12 above as if section
561 of the Act did not apply to such allotment, provided that
the power hereby conferred shall be limited to:
(i) the allotment of equity securities in connection with an
RIIHU RI VHFXULWLHV RSHQ IRU DFFHSWDQFH IRU D SHULRG Ƽ[HG E\
the Directors, by way of rights to the holders of ordinary
shares in proportion (as nearly as may be) to the respective
numbers of ordinary shares held by them on a record date
Ƽ[HG E\ WKH 'LUHFWRUV DQG VXEMHFW WR VXFK H[FOXVLRQV RU
other arrangements as the Directors may deem necessary
or expedient to deal with legal or practical problems under
the laws of any overseas territory or the requirements of
any regulatory body or any stock exchange in any territory
or in connection with fractional elements or otherwise
howsoever; and
(ii) otherwise than pursuant to sub-paragraph (i) above, the
allotment of equity securities up to an aggregate nominal
amount of £257,864 (representing approximately 5 per
cent. of the total ordinary share capital of the Company in
issue at 3 December 2024); and
(b) THAT the Directors of the Company be authorised in
addition to any authority granted under Resolution 13(a) to
DOORW HTXLW\ VHFXULWLHV DV GHƼQHG LQ VHFWLRQ RI WKH $FW
for cash under the authority conferred by Resolution 12 above
as if section 561 of the Act did not apply to any such allotment,
provided that the power hereby conferred shall be:
(i) limited to the allotment of equity securities up to an
aggregate nominal amount of £257,864 (representing
approximately 5 per cent. of the total ordinary share
capital of the Company in issue at 3 December 2024); and
(ii) XVHG RQO\ IRU WKH SXUSRVH RI ƼQDQFLQJ RU UHƼQDQFLQJ
if the authority is to be used within 6 months after the
original transaction) a transaction which the Directors
determine to be an acquisition or other capital investment
of a kind contemplated by the Statement of Principles on
Disapplying Pre-Emption Rights most recently published
by the Pre-Emption Group prior to the date of this notice.
The powers hereby conferred in this Resolution 13 shall expire
at the conclusion of the next Annual General Meeting of the
Company or 24 May 2026 (whichever is the earlier), save
that the Company may before such expiry make an offer or
agreement which would or might require equity securities in
the Company to be allotted after such expiry and the Directors
may allot equity securities in pursuance of such offer or
agreement as if the power conferred hereby had not expired.
THAT the Company be and is hereby generally and
unconditionally authorised for the purposes of section 701
of the Companies Act 2006 (the “Act”) to make one or more
market purchases (within the meaning of section 693(4) of the
Act) of fully paid ordinary shares of £0.20 each in the capital of
the Company on such terms and in such manner as the
Directors may determine, provided that:
(a) the maximum aggregate number of ordinary shares hereby
authorised to be purchased is 2,578,640 (representing
approximately 10 per cent. of the total ordinary share capital
of the Company in issue at 3 December 2024);
(b) the minimum price (exclusive of expenses) which may be
paid for each ordinary share is 20 pence per share;
(c) the maximum price (exclusive of expenses) which may be paid
for each ordinary share shall not be more than the higher of:
(i) 5 per cent. above the average of the middle market
quotations for an ordinary share as derived from the AIM
VHFWLRQ RI WKH /RQGRQ 6WRFN ([FKDQJH 'DLO\ 2IƼFLDO /LVW IRU
WKH ƼYH EXVLQHVV GD\V LPPHGLDWHO\ SUHFHGLQJ WKH GDWH RQ
which the ordinary share is contracted to be purchased; and
(ii) the higher of the price of the last independent trade and
the higher current independent bid on the trading venue
where the purchase is carried out.
(d) unless previously renewed, varied or revoked, the authority
hereby conferred shall expire at the conclusion of the next
Annual General Meeting of the Company or 24 May 2026
(whichever is the earlier); and
(e) the Company may, pursuant to the authority hereby
conferred, enter into a contract to purchase ordinary shares
which would, will or might be executed wholly or partly after
the expiry of such authority and the Company may make a
purchase of ordinary shares in pursuance of such contract
as if the authority conferred hereby had not expired.
By order of the Board
Gareth J Crowe
Company Secretary
3 December 2024
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Registered Number: 00526832
To consider and, if thought fit, to pass the following
resolutions as Special Resolutions:
199
SHAREHOLDER INFORMATION NOTICE OF ANNUAL GENERAL MEETING
Notes
1 A member is entitled to appoint one or more proxies to exercise
all or any of the member’s rights to attend, speak and vote at the
meeting. A proxy need not be a member of the Company but
must attend the meeting for the member’s vote to be counted.
If a member appoints more than one proxy to attend the
meeting, each proxy must be appointed to exercise the rights
attached to a different share or shares held by the member.
Resolution 2 is an advisory vote only. The Remuneration
Committee Report is set out on pages 122 to 129 of the Annual
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Resolutions 1 to 12 (inclusive) are proposed as Ordinary
Resolutions. This means that for those resolutions to be passed,
more than half of the votes cast on such resolutions must be in
favour of such resolutions. Resolutions 13 and 14 are proposed
as Special Resolutions. This means that for those resolutions
to be passed, at least three-quarters of the votes cast on such
resolutions must be in favour of such resolutions.
Shareholders are entitled to appoint another person as a proxy
to exercise all or part of their rights to attend and to speak and
vote on their behalf at the Meeting. A shareholder may appoint
more than one proxy in relation to the Meeting provided that
each proxy is appointed to exercise the rights attached to a
different ordinary share or ordinary shares held by that
shareholder. A proxy need not be a shareholder of the
Company. However, please see Note 1 above.
In the case of joint holders, where more than one of the joint
holders purports to appoint a proxy, only the appointment
submitted by the most senior holder will be accepted. Seniority
is determined by the order in which the names of the joint
holders appear in the Company’s Register of Members in respect
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6 A vote withheld is not a vote in law, which means that the vote
will not be counted in the calculation of votes for or against the
resolution. If no voting indication is given, your proxy will vote
or abstain from voting at his or her discretion. Your proxy will
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to any other matter which is put before the Meeting.
7 You can vote by proxy either:
• by logging on to ZZZVLJQDOVKDUHVFRP and following
the instructions;
• via the LinkVote+ app (refer to the notes below);
• in the case of CREST members, by utilising the CREST
electronic proxy appointment service in accordance with
the procedures set out below; or
• by submitting a paper proxy form (refer to the notes below).
Any power of attorney or other authority under which the proxy
is submitted must be returned to the Company’s Registrars,
Link Group, PXS1, Central Square, 29 Wellington Street, Leeds,
LS1 4DL. If a paper form of proxy is requested from the registrar,
it should be completed and returned to Link Group, PXS1,
Central Square, 29 Wellington Street, Leeds, LS1 4DL to be
received not less than 48 hours before the time of the meeting.
If you need help with voting online, or require a paper proxy
form, please contact our Registrar, Link Group by email at
shareholderenquiries@linkgroup.co.uk, or you may call Link on
0371 664 0300. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. We are open
between 09:00 – 17:30, Monday to Friday excluding public
holidays in England and Wales. Submission of a Proxy vote shall
not preclude a member from attending and voting in person at
the meeting in respect of which the proxy is appointed or at any
adjournment thereof.
8 For an electronic proxy appointment to be valid, the
appointment must be received by the Company’s Registrar,
Link Group, no later than 11.00am on 20 February 2025.
9 Only those members registered on the register of members
of the Company at close of business on 20 February 2025
(or, if the meeting is adjourned, 48 hours before the time of the
adjourned meeting) shall be entitled to attend and vote at the
meeting in respect of the number of shares registered in their
name at that time. Changes to the register of members after
the relevant deadline shall be disregarded in determining the
rights of any person to attend and vote at the meeting.
However, please see Note 1 above.
GOOCH & HOUSEGO PLC ANNUAL REPORT 2024
200
10 LinkVote+ is a free app for smartphone and tablet provided by
Link Group (the company’s registrar). It offers shareholders the
option to submit a proxy appointment quickly and easily online,
as well as real-time access to their shareholding records. The
app is available to download on both the Apple App Store and
Google Play, or by scanning the relevant QR code opposite.
11 CREST members who wish to appoint a proxy or proxies
through the CREST electronic proxy appointment service
may do so for the meeting and any adjournment(s) thereof
by using the procedures described in the CREST Manual.
CREST personal members or other CREST sponsored
members, and those CREST members who have appointed
a voting service provider(s), should refer to their CREST
sponsor or voting service provider(s), who will be able to
take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using
the CREST service to be valid, the appropriate CREST message
(a CREST Proxy Instruction) must be properly authenticated
in accordance with Euroclear UK & International Limited’s
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such instruction, as described in the CREST Manual (available
via ZZZHXURFOHDUFRP). The message, regardless of whether
it constitutes the appointment of a proxy, or is an amendment
to the instruction given to a previously appointed proxy must,
in order to be valid, be transmitted so as to be received by the
issuer’s agent (ID RA10) by the latest time(s) for receipt of
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For this purpose, the time of receipt will be taken to be the time
(as determined by the time stamp applied to the message by
the CREST Application Host) from which the issuer’s agent is
able to retrieve the message by enquiry to CREST in the
manner prescribed by CREST. After this time, any change of
instructions to proxies appointed through CREST should be
communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors
or voting service providers should note that Euroclear UK &
International Limited does not make available special procedures
in CREST for any particular messages. Normal system timings
and limitations will therefore apply in relation to the input of
CREST Proxy Instructions. It is the responsibility of the CREST
member concerned to take (or, if the CREST member is a CREST
personal member or sponsored member or has appointed a
voting service provider(s), to procure that his CREST sponsor
or voting service provider(s) take(s)) such action as shall be
necessary to ensure that a message is transmitted by means
of the CREST system by any particular time. In this connection,
CREST members and, where applicable, their CREST sponsors
or voting service providers are referred, in particular, to those
sections of the CREST Manual concerning practical limitations
of the CREST system and timings (ZZZHXURFOHDUFRP).
The Company may treat as invalid a CREST Proxy Instruction
in the circumstances set out in Regulation 35(5)(a) of the
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Unless otherwise indicated on the form of proxy, CREST voting
or any other electronic voting channel instruction, the proxy
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withhold from voting.
16 Voting on each of the resolutions to be put to the forthcoming
AGM will be conducted by way of a poll, rather than on a show
of hands. The results of the poll will be announced through the
Regulatory Information Service and will be available on the
Company’s website as soon as practicable following the
conclusion of the AGM.
17 Any electronic address provided either in this Notice or in any
related documents may not be used to communicate with the
Company for any purposes other than those expressly stated.
Notes Continued
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Design: thinkassociates.co.uk
Gooch & Housego PLC
Dowlish Ford, Ilminster
TA19 0PF, United Kingdom
T: +44 (0)1460 256440
E: info@gandh.com
gandh.com