Gooch & Housego Reports Strong Interim Results with Record Order Book

Gooch & Housego interim results: 15.5% revenue growth, better profits and a record order book

Gooch & Housego has put out a genuinely solid set of interim results for the six months to 31 March 2026. Revenue rose to £81.9 million, up 15.5%, while adjusted profit before tax increased to £5.8 million and adjusted basic earnings per share moved up to 16.4p.

For anyone new to the story, G&H makes photonics products – that is, optical and light-based components and systems used in areas like defence, industrial lasers, semiconductors and life sciences equipment. The big takeaway here is simple: demand is strong, especially in Aerospace & Defence, and the company now has much better visibility thanks to a record order book of £167.3 million.

Key H1 2026 numbers	H1 2026	H1 2025	Change
Revenue	£81.9 million	£70.9 million	+15.5%
Adjusted profit before tax	£5.8 million	£5.1 million	+13.9%
Adjusted basic EPS	16.4p	15.0p	+9.3%
Statutory profit before tax	£3.3 million	£2.9 million	+15.8%
Order book	£167.3 million	£142.4 million at September 2025	+16.5% constant currency
Net debt including IFRS 16	£49.8 million	£43.9 million at September 2025	Up £5.9 million

One useful point here is the company reports both statutory and adjusted numbers. Adjusted profit strips out items such as amortisation of acquired intangible assets and non-recurring costs, which management says better reflects the underlying trading performance.

Gooch & Housego Aerospace & Defence growth is the standout driver

The star of this update is clearly Aerospace & Defence. Revenue in that segment jumped 51.7% to £35.6 million, and adjusted operating profit surged to £3.6 million from just £0.6 million a year earlier.

That is a serious improvement, and it matters because it shows G&H’s strategic push into defence is starting to pay off properly. Recent acquisitions, including Phoenix Optical and Global Photonics, appear to be doing what they were supposed to do – adding capability, expanding regional manufacturing and helping win more work.

The company says demand is strong across the US and Europe, with particular momentum in infrared lens systems, optical assemblies, navigation systems and other defence-related optical products. There is also rising involvement in laser directed energy weapon programmes, which sounds futuristic but, more importantly for investors, points to exposure to long-cycle and potentially sticky defence budgets.

My view: this is the most encouraging part of the whole release. Defence customers value security of supply, regional production and technical know-how, and G&H seems to be strengthening all three. That tends to support more durable revenue than purely cyclical industrial markets.

Industrial markets show recovery, while Life Sciences is the weak spot in H1 2026

Industrial was steady rather than spectacular. Revenue rose 0.7% to £30.3 million, or 4.6% on an organic constant currency basis, and adjusted return on sales edged up to 12.7% from 12.6%.

That may not look exciting at first glance, but there is a positive read-across. Management says semiconductor markets are showing strengthening signs of recovery and order intake has increased significantly. If that continues, Industrial could become more of a growth contributor in the second half and beyond.

Life Sciences was the problem area. Revenue fell 7.7% to £16.0 million and operating profit returns dropped to 4.6% from 12.0%.

The reasons were very specific rather than vague hand-waving. G&H had disruption in Pockels Cells production due to materials availability, production yield issues at its Cleveland facility, and lower medical diagnostics revenues because of customer demand phasing. The company says production improved in the second quarter and should keep recovering in H2.

That is reassuring, but it is still the main drag in this update. Investors should watch closely to see whether the promised second-half recovery actually shows up in the numbers.

Why the £167.3 million Gooch & Housego order book matters for FY2026

The order book is arguably just as important as the profit line here. It rose to a record £167.3 million from £142.4 million at the September 2025 year end, with growth of 16.5% on an organic constant currency basis.

Management says this provides near full cover for expected FY2026 revenue. In plain English, that means a large chunk of this year’s expected sales are already sitting in the book, which reduces uncertainty and gives investors better visibility than G&H has historically had.

Even better, the growth was not confined to one market. Aerospace & Defence stayed very strong, Industrial order intake improved, and Life Sciences remains more mixed because of customer phasing and product transition activity.

That broader order book strength makes this update more convincing. A big order book driven by one hot niche can be fragile. A record order book spread across several markets is usually a healthier sign.

Margins, cash flow and net debt: solid progress, but not completely clean and simple

Adjusted operating profit rose 16.9% to £7.2 million, and adjusted operating margin improved slightly to 8.8% from 8.7%. That is progress, though only modest progress on margin.

The company is still aiming for mid-teens returns over the medium term, so there is more work to do. Still, the direction of travel looks right, especially with Aerospace & Defence now contributing far more meaningfully to profits.

Cash flow was decent rather than dazzling. Net cash generated from operating activities came in at £3.9 million, up from £2.6 million, but working capital increased by £4.9 million due to higher receivables and inventory.

Inventory rose partly because G&H is holding more materials such as germanium to protect against supply disruption. That makes strategic sense, but it also ties up cash.

• Net debt excluding IFRS 16 increased to £36.6 million
• Net debt including IFRS 16 rose to £49.8 million
• Leverage increased to 1.5x from 1.3x at September 2025
• The revolving credit facility was extended to US$70 million and runs to 31 March 2030

I would not call the debt position alarming, but it is worth watching. Borrowings are higher following acquisitions, interest costs rose to £1.6 million, and leverage has ticked up. The flip side is that facilities have been extended and the order book gives more confidence that debt remains manageable.

Dividend, outlook and what these Gooch & Housego results mean for investors

The interim dividend is unchanged at 4.9p per share. That is not a fireworks moment, but it does suggest the board is comfortable enough with trading and cash generation to hold the payout steady.

Crucially, full-year expectations are unchanged. In the current market, companies do not usually leave guidance alone unless they feel reasonably good about the second half.

There are still risks. Management highlighted tariff uncertainty, supply chain disruption, raw material availability and wider geopolitical instability. It also admitted the Group incurred higher tariffs on certain material purchases after qualifying several Chinese suppliers for specific raw materials.

On balance, though, this is a positive update. Revenue is growing, profits are improving, defence is firing, the order book is at a record high, and the board remains confident in further profitable growth.

If I were reading this as a retail investor, my conclusion would be: the investment case looks stronger than it did a year ago, but the next test is execution. G&H now needs to convert that chunky order book into cash, keep improving margins, and show that Life Sciences really does recover in H2. If it does that, these interim results could mark an important step forward.