Recovery and growth as Gooch & Housego reorganises manufacturing

Announces results for the year ended 30 September which saw sales up 23% to a record £44.7m (2009: £36.4m) and adjusted pre-tax profits surge 94% to £6m (£3.1m), chief executive Gareth Jones said the changes had included outsourcing, contract manufacturing and the establishment of strategic partnerships in addition to investment in people and specialist manufacturing equipment; in particular to meet the different needs and expectations of the company's new aerospace & defence and life sciences customers. "As fast as output increased it was matched by further increases in demand as different market sectors and geographical regions emerged from recession, and as we won new business in new markets," Jones reported. As Gooch & Housego began to supply increasingly complex products, its requirements had expanded and it was no longer possible or desirable to manufacture everything in-house. "Recognising that Gooch & Housego's strength lies in the leadership position it occupies in certain key aspects of optical technology, we chose some time ago not to compete in those fields where we felt that we could not add to the state-of-the-art or that had become commoditised. However, such products are frequently part of the sub-assemblies that we are now manufacturing, and as result we have developed a network of key suppliers, many of whom we would have regarded as competitors until quite recently. This supply-chain has provided Gooch & Housego with greater and more flexible capacity, enabling shorter response times and the ability to increase output more quickly and at lower cost than would have previously been possible. To support this activity we began the implementation of the aerospace industry's '21st Century Supply Chains' (SC21) improvement programme with sponsorship from one of our key customers." In addition to developing a supply-chain Gooch & Housego had also established strategic relationships with complementary businesses to develop new products or opportunities and to reduce costs. Looking ahead, Jones said: "The combination of a strong recovery and success in winning new business presented us with some major challenges in 2010, but also provided the opportunity to put Gooch & Housego firmly back on course. I am pleased that we were able to meet these challenges and as a result deliver some very positive results. With an order book at record levels and demand still rising we look forward to 2011." He said the company would continue its strategy of diversification and strengthen its position in the aerospace & defence and life sciences sectors as Gooch & Housego migrated from a largely component-level product set to modules, sub-assemblies and instruments in the future. Adding the necessary skills and resources in engineering, management and manufacturing would be a high priority, with increased capacity, reduced leadtimes and shorter development times as the main objectives. The company was considering bolt-on acquisitions which had to potential to help achieve its objectives more quickly and cost effectively, Jones added.