Optics specialist suffers ‘significant drop in demand’

The AIM-listed company said that earnings for the year to 30 September 2009 were likely to be materially lower than original expectations. The most significant impact had been felt in the company's key acousto-optics & electro-optics (see picture) business unit where demand for acousto-optic Q-switches for general industrial, semiconductor and microelectronic applications has decreased by between a quarter and a half. Gooch & Housego, headquartered at Ilminster, Somerset said its order book remained strong, but customers were significantly reducing their monthly requirements as they experienced a similar reduction in demand for their laser systems. The effect is being felt on a global basis with the US, European and Asia-Pacific markets all affected. Indications were that demand will remain depressed for the foreseeable future. Other sectors of the business, particularly those serving the aerospace, defence and life sciences markets have been less affected. In view of the decrease in sales steps were being taken to realign the cost base of the company with the greatest savings taking place in the affected divisions. Gooch & Housego said it was in discussions with its bankers, The Royal Bank of Scotland , concerning the impact of currency issues that affect, and may continue to affect, certain of its bank covenant calculations. Although, the directors were confident that the company would meet its bank interest and debt repayment obligations as they fall due, the company believed that it was not appropriate to finalise its accounts for the year ended 30 September 2008 until the discussions with its bankers have been satisfactorily completed.