UPDATE: Gooch & Housego To Hire Staff To Meet Increased Orders

8th Jun 2010 14:13

(Adds CEO, analyst comment) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Optical components and systems maker Gooch & Housego PLC (GHH.LN) said Tuesday it has sufficient capacity to meet surging demand for its products, but will likely have to hire more staff so it can meet customer orders. Since the firm's half year end, demand has continued to rise, particularly from clients in the aerospace & defense and life sciences markets. It marks a distinct turnaround from a year before, when the group scrapped its midway dividend as earnings came under pressure following a fall away in demand across its markets. While its half-year results were up against weak comparatives, the company said recent trends have been so positive that it hired 20 staff in its second quarter and invested in more manufacturing equipment following growing demand from Far East clients in particular. "We've set ourselves quite a considerable challenge. As long as it doesn't get out of hand it's quite a good problem to have," Chief Executive Gareth Jones told Dow Jones Newswires Tuesday. He said the company will likely hire another 10 manufacturing staff in the second half but doesn't need to open another factory as it continues to use spare capacity at its six manufacturing sites and two research and development facilities across the globe. "We're fully utilizing capacity which is good for efficiency reasons but not if it starts to push out lead times," Jones said. "As long as we continue to respond in this way we expect that by the end of the second half we will be rolling in lead times and capacity will be rising faster than demand." The firm's first half, ended March 31, with pretax profit up to GBP1.7 million from just GBP39,000 a year earlier, while revenue rose to GBP20.4 million from GBP18.8 million, boosted by a number of new business wins. Arden Partners' kept a "buy" rating on the stock and in a note to clients said it expects to upgrade its fiscal 2010 pretax profit forecast for Gooch & Housego to around GPB4.5 million, from GBP4 million currently. It said it also expects to upgrade its fiscal 2011 pretax profit forecast by about the same amount. Gooch & Housego said it is likely to increasingly work with third-party suppliers to keep pace with demand and develop other products that will further speed its growth. "Rather than materially raising headcount we're going to look to our suppliers to do more of the lower level operation and we're going to become more of a systems integrator," CEO Jones said. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [email protected] (END) Dow Jones Newswires June 08, 2010 09:13 ET (13:13 GMT)