7th Dec 2005 07:02
Gooch & Housego PLC07 December 2005 FOR IMMEDIATE RELEASE 07 December 2005 GOOCH & HOUSEGO PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 Gooch & Housego PLC, the specialist manufacturer of acousto-optic andelectro-optic devices, precision optical components, crystals, and instrumentsfor measuring optical radiation, today announces preliminary results for theyear ended 30 September 2005. Highlights • Turnover and profits up substantially on the previous year due to strong performance by each of the Group companies. • Group turnover for the year increased by 19% to £22.32m (2004 : £18.81m) • Profit before tax increased by 42% to £4.68m * (2004 : £3.30m) • Basic EPS increased by 40% to 16.1p (2004 : 11.5p) • Basic EPS, before goodwill amortisation, rose to 18.0p (2004 : 13.2p) • Year end total net funds of £2.37m (2004 : £0.33m) • Total dividend increased by 8% to 3.9p (2004 : 3.6p) * After goodwill amortisation of £339k (2004 : £307k) Gareth Jones, Chief Executive of Gooch & Housego, commented: "We are pleased with the way Gooch & Housego has performed, exceeding the recordresults of the previous year. Each of the Group companies has made a valuablecontribution to the substantial sales and profits increase we have achieved.Having now secured land and buildings for further development, we are lookingforward to future growth." For further information: Gareth Jones / Ian Bayer 01460 52271Gooch & Housego PLC Nick HyslopOriel Securities 020 7710 7600 Tim ThompsonBuchanan Communications 020 7466 5000 Chairman's Statement 2005 Summary The past year has been significant for Gooch & Housego. Sales and profitsincreased substantially over the previous year, which was itself a record yearfor the Group. Each of the Group companies performed well and made a valuablecontribution to this excellent result. In the UK, Gooch & Housego succeeded insecuring land and buildings for the development of a new state-of-the-artfactory and headquarters after many years of searching. On a sad note, Mr Gooch,co-founder of the company and its inspiration throughout its history, passedaway in September. He will be missed by all. Financial Results For the year ended 30 September 2005, Group turnover increased by 19% to £22.32m(2004 : £18.81m). Profit before tax, after charging goodwill amortisation of£339k (2004 : £307k) increased by 42% to £4.68m (2004 : £3.30m). Basic earningsper share increased by 40% to 16.1p (2004 : 11.5p) and basic earnings per share,before goodwill amortisation, rose to 18.0p from last years 13.2p. The Group's improved sales results were led by Gooch & Housego (G&H) with salesup by £0.96m to £7.61m (2004 : £6.65m). All of the US subsidiaries returnedimproved sales with Optronic Laboratories Inc (OLI) improving by £0.44m to£3.08m (2004 : £2.64m), Cleveland Crystals Inc (CCI) improved by £0.37m to£4.46m (2004 : £4.09m) and NEOS Technologies Inc (NEOS) returned a smallimprovement with sales of £5.18m (2004 : £5.15m). Our German subsidiary,Landwehr Electronic GmbH was included for a full year for the first time andrecorded sales of £1.99m (2004 (2 months) : £0.27m). Operating profits of the Group improved by £1.38m. OLI increased operatingprofits by £0.23m to £0.38m (2004 : £0.15m) while CCI improved operating profitsby £0.18m to £0.78m (2004 : £0.60m). NEOS returned operating profits of £1.62m(2004 : £1.71m). Landwehr's first full year of trading as part of the Groupreturned operating profits of £85k (2004 (2 months) : £21k). G&H had a mostsuccessful year with operating profits up by £1.00m to £1.94m (2004 : £0.90m). The Group's financial position remains strong with net funds inflow, before loanrepayments, of £1.93m (2004 : £1.00m). The Group has total net funds of £2.37m(2004 : £0.33m). An overall tax rate of 38% for the year (2004 : 37%) is as a result of higherrates of US tax and the effect of non-allowable charge for goodwillamortisation. Dividends Reflecting the Group's improved performance the Directors are proposing a finaldividend of 2.6p, making a total for the year of 3.9p. This represents anincrease of 8% over last years total of 3.6p and is covered 4.1 times bypost-tax earnings. The shares are expected to go ex-dividend on 14 December2005, and following approval at the Annual General Meeting on 15 February 2006,the dividend will be paid to Shareholders on 16 February 2006. Operations - UK The challenge for our UK operations has been to increase output and maintainquality and efficiency despite the increasingly cramped conditions in ourIlminster factory. I am pleased to be able to report that this challenge hasbeen met, and that thanks to the organisational skills of our senior managementteam and sterling efforts of the entire workforce we have been able tosubstantially increase both sales and profits. The growth in the precision optics business has been particularly noteworthy,and a number of significant orders from European and US customers have confirmedthat in certain key areas G&H is truly world-class. While the ever-presentcompetition from the Far East is very real, by recognising and developing ourkey strengths we have been able to carve out a valuable, and growing, nichemarket for G&H optical components. Sales of acousto-optic devices have increased again this year, with the Q-switchcontinuing to be the dominant product. A process of continuous productdevelopment, some of which has generated patentable intellectual property,ensures that Gooch & Housego's world-leading position in the Q-switch marketremains firm. We have also stepped up our research and development efforts inother areas, made possible by the recruitment of a further two research anddevelopment scientists. The new factory is essential for the continued growth of the UK operations.While we will leave our town centre location with mixed feelings, thisdevelopment represents a long-awaited opportunity to expand our UK precisionoptics and acousto-optics operations in what will be ideal conditions. Inparticular, the factory is being designed and equipped to extend ourcapabilities in the areas we have identified as key to our future success.Overall, the amount of useable space will more than double compared to ourcurrent facilities, and there will be ample room for future expansion whenneeded. Plans for the new facility have been submitted for approval, which we expect tobe granted in December or January. We are targeting to have the new facilityready for occupation by September 2006, with relocation scheduled for thefollowing month. The budget for the project, including the purchase of the land,is £4 million. In the meantime, recognising our urgent need to increasecapacity, we have constructed a new polishing facility in one of the existingbuildings on the site, and we are in the process of installing a new thin-filmcoating plant at a cost in excess of £200k using space freed-up in the existingfactory. Overseas Operations Optronic Laboratories Inc The emphasis over the last few years on broadening the product range andstrengthening sales and marketing has yielded benefits this year with asustained higher level of sales throughout the year, and a correspondingimprovement in profits. The OL770 family of products has taken off this year andis now making a significant contribution to total sales. It is reaching a morediverse market than that addressed by OLI's traditional high-end research-gradeproducts, demonstrating that the demand exists for a top quality product pricedand specified to appeal to industrial and commercial users. In parallel withadditions to the OL770 range, further upgrades, improvements and new productreleases have been made, ensuring that OLI maintains its position as a leader inthe optical radiation measurement field. With the aim of further broadening its product range, OLI has investigated anumber of new technologies during the year. The most promising of these has thepotential to form the basis of a new range of spectroradiometric instruments andsources, the first examples of which could reach the market in the coming year. Cleveland Crystals Inc A strong performance by Cleveland Crystals Inc (CCI) again this year reflectsthe company's leading position in its three spheres of activity - crystals forinertial confinement fusion (ICF), electro-optic devices (Pockels cells) andnon-linear optical materials. Each of these highly specialised areas haspresented problems and challenges, which CCI has successfully overcome to finishthe year ahead of budget. The market for Pockels cells and non-linear materials has been relatively flat.By providing better products than its competitors and by overcoming some toughtechnical challenges CCI has been able to increase its market share and open thedoor to new opportunities. Despite federal budget uncertainties earlier in the year (recently resolved),the demand for ICF crystals has been steady and output has been in line with thelong-term targets. Establishing and maintaining a volume production capabilityfor these uniquely large and difficult crystals (the only such capabilityworldwide) has been a major challenge. Work has already started on increasingthe size and capacity of the ICF crystal facility to meet future demand. NEOS Technologies Inc Following on from a year of high growth in 2004, the challenge for NEOS was tosustain the performance into 2005 in a flatter market. The fact that NEOS hasmanaged a small increase in sales under these conditions (and with a factoryrelocation at the start of the year) is an excellent result. The rapid growth in output over the last few years has put pressure on theinfrastructure at NEOS. The new factory has helped a great deal in this respect.The slight reduction in profits this year reflects the investments NEOS has madein strengthening the team and introducing product and quality improvements, aswell as the costs associated with the relocation. Profits nevertheless continueto be strong at NEOS. Landwehr Electronic GmbH In its first full year as part of Gooch & Housego, Landwehr Electronic GmbH(Landwehr) has made a positive contribution to the Group. Sales showed a markedimprovement over the previous year, while profits, although up, were impacted bythe higher costs arising from the investment in new personnel. During the pastyear the team at Landwehr has been significantly strengthened with the additionof three senior engineers. By increasing the resources in research anddevelopment and applications engineering, the objective is to accelerate newproduct development and increase sales of Group products in Germany. The other significant contribution made by Landwehr is the injection ofstate-of-the-art radio-frequency electronics technology. This has proved to beinvaluable in the past year in meeting the increasingly stringent requirementsof our customers. Looking forward, this is likely to become even more importantas we rationalise our product range and ensure compliance with the Restrictionof Use of Hazardous Substances (RoHS) requirements. Prospects The challenge facing Gooch & Housego in the coming year is to sustain the growthin profits that we have maintained for the last two years. Looking forward,trading conditions are likely to be no more favourable than they were last year,with demand from our existing customer base remaining relatively flat. In orderto sustain or increase growth we must therefore sell a wider range of productsto our existing customers, introduce new products and develop new applicationsbeyond our traditional markets. We are active on all of these fronts. In acousto-optics, the largest segment of Group sales, we must continue to adaptto the changing demands of our customers and ensure compliance with newstandards. The trend in the world of industrial and medical lasers is towardshitherto unprecedented levels of performance and reliability. As lasers become"black box" components in complex and expensive systems used in criticalapplications (e.g. semiconductor processing and operating theatres),reliability, repeatability and consistency are absolutely essential. Although wehave enjoyed a solid reputation for quality, this, and the need to comply withthe RoHS directive, is driving a Group-wide review of our products and of ourquality, design and manufacturing procedures. A consequence of this will begreater product rationalisation, and further integration of our acousto-opticactivities at G&H, NEOS and Landwehr. A fully coordinated approach to worldwidesales will be a further benefit of an integrated business. Our long-term strategy is to overlay our materials and component activities witha new tier of optoelectronic products that bring together optics, electronicsand software into high-added-value instruments and systems. This will beachieved through a combination of internal research and development, andacquisition. This year, under the guidance of our Group Chief Scientist, we havesuccessfully coordinated complex research and development projects acrossseveral Group companies. These projects have demonstrated the ability of theGroup as a whole to develop sophisticated products that are beyond thecapability of any one company. In the process we have become more focussed onthe generation of intellectual property and several patents will be filed as aresult of recent innovations. We plan to launch several new products in thecourse of the coming year that will affirm our strategy of moving up the valuechain. We will increase Group-level research and development in the coming year. Underlying the development of new products is an ongoing process of analysingcurrent and future trends in optoelectronics, and identifying those that play tothe strengths of the Group. A by-product of this process is the identificationof potential partners and acquisition targets. It is the view of the board that G&H should have an independent non-executiveChairman. Several potential candidates for this post have been considered, butthe right person has yet to be identified. Efforts to recruit a new Chairmanhave therefore been stepped-up with the aim of filling this important positionin the first half of 2006. In summary, I believe that the necessary steps are being taken to create aframework to support the continued growth of G&H. We are working hard tomaximise the potential of existing products, while in parallel developinginnovative new products and evaluating new market opportunities that willunderpin longer-term growth. Finally, I would like to thank the directors and all employees of the Group forthe contribution they have made to an excellent result. It is the quality of thepeople that makes G&H the success it is. GCW Jones GROUP PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 30 SEPTEMBER 2005 +--------------------------------------------------+-----------+---+-----------+| | 2005 | | 2004 |+--------------------------------------------------+-----------+---+-----------+| |(unaudited)| | || | | | |+--------------------------------------------------+-----------+---+-----------+| | £'000 | | £'000 |+--------------------------------------------------+-----------+---+-----------+| | | | |+--------------------------------------------------+-----------+---+-----------+|Turnover | 22,315 | | 18,812 |+--------------------------------------------------+-----------+---+-----------+|Trading expenditure | (17,552) | | (15,429) |+--------------------------------------------------+-----------+---+-----------+| | | | |+--------------------------------------------------+-----------+---+-----------+|Operating profit | 4,763 | | 3,383 |+--------------------------------------------------+-----------+---+-----------+| | | | |+--------------------------------------------------+-----------+---+-----------+|Other interest receivable and similar income | 41 | | 25 |+--------------------------------------------------+-----------+---+-----------+| | | | |+--------------------------------------------------+-----------+---+-----------+|Interest payable and similar charges | (126) | | (110) || | ---------| | ---------|+--------------------------------------------------+-----------+---+-----------+| | | | |+--------------------------------------------------+-----------+---+-----------+|Profit on ordinary activities before taxation | 4,678 | | 3,298 |+--------------------------------------------------+-----------+---+-----------+| | | | |+--------------------------------------------------+-----------+---+-----------+|Tax on profit on ordinary activities | (1,779) | | (1,235) || | ---------| | ---------|+--------------------------------------------------+-----------+---+-----------+| | | | |+--------------------------------------------------+-----------+---+-----------+|Profit on ordinary activities after taxation | 2,899 | | 2,063 |+--------------------------------------------------+-----------+---+-----------+| | | | |+--------------------------------------------------+-----------+---+-----------+|Dividends on equity shares | (702) | | (648) || | ---------| | ---------|+--------------------------------------------------+-----------+---+-----------+| | | | |+--------------------------------------------------+-----------+---+-----------+|Retained profit for the financial year | 2,197 | | 1,415 || | =========| | =========|+--------------------------------------------------+-----------+---+-----------+| | | | |+--------------------------------------------------+-----------+---+-----------+|Basic earnings per share | 16.1p | | 11.5p |+--------------------------------------------------+-----------+---+-----------+|Basic earnings per share before goodwill | 18.0p | | 13.2p ||amortisation | | | |+--------------------------------------------------+-----------+---+-----------+|Diluted earnings per share | 15.9p | | 11.5p |+--------------------------------------------------+-----------+---+-----------+|Diluted earnings per share before goodwill | 17.8p | | 13.2p ||amortisation | | | |+--------------------------------------------------+-----------+---+-----------+|Dividend per share | 3.9p | | 3.6p |+--------------------------------------------------+-----------+---+-----------+|All operations undertaken by the group during the current year are ||continuing. ||================================================ |+------------------------------------------------------------------------------+ Gooch & Housego PLC GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFOR THE YEAR ENDED 30 SEPTEMBER 2005 2005 2004 (unaudited) £'000 £'000 --------- --------- Profit for the financial year 2,899 2,063 Currency translation differences on foreign currencynet 234 (588)investments --------- ---------Total recognised gains and losses for the financial 3,133 1,475year ========= ========= No note of historical cost profit for the Group or the Company has beenpresented as the difference between the reported profit and the historical costprofit is immaterial. Gooch & Housego PLC GROUP BALANCE SHEETAS AT 30 SEPTEMBER 2005 2005 2004 (unaudited) £'000 £'000 £'000 £'000 --------- --------- --------- ---------FIXED ASSETSIntangible assets 4,893 5,151Tangible assets 5,499 4,239 --------- --------- 10,392 9,390 CURRENT ASSETSStocks 3,872 3,690Debtors 3,490 3,395Asset held for resale - 525Cash at bank and in hand 3,532 2,543 --------- --------- 10,894 10,153 CREDITORS : amounts falling duewithin one (4,375) (5,249)year --------- --------- NET CURRENT ASSETS 6,519 4,904 --------- --------- TOTAL ASSETS LESS CURRENT LIABILITIES 16,911 14,294 CREDITORS : amounts falling due aftermore (740) (559)than one yearPROVISIONS FOR LIABILITIES AND (177) (172)CHARGES --------- --------- 15,994 13,563 ========= ========= CAPITAL AND RESERVESCalled up share capital 3,600 3,600Share premium account 3,404 3,404Revaluation reserve 308 308Profit and loss account 8,682 6,251 --------- --------- EQUITY SHAREHOLDERS' FUNDS 15,994 13,563 ========= ========= Gooch & Housego PLC GROUP CASH FLOW STATEMENTFOR THE YEAR ENDED 30 SEPTEMBER 2005 2005 2004 Note (unaudited) £'000 £'000 £'000 £'000 -------- --------- -------- --------- Cash inflow from operatingactivities (i) 5,467 4,789 Returns on investments andservicing of financeInterest received 44 25Interest paid (109) (90)Interest element of hirepurchase (19) (19)contracts (84) -------- --------Net cash outflow from returnsoninvestments and servicing of (84)finance Taxation UK tax paid (337) (227)Overseas tax paid (1,376) (1,085) -------- --------Cash outflow from taxation (1,713) (1,312) Capital expenditure andfinancial investment Purchase of tangible fixed (1,677) (1,101)assetsSale of tangible fixed assets 621 13 -------- -------- Net cash outflow from capitalexpenditure and financialinvestment (1,056) (1,088) Acquisitions (20) (591)Acquisition ofsubsidiaryNet overdraft acquired onacquisition - (142) -------- --- -------- Net cash outflow from (20) (733)acquisition Equity dividends paid (666) (576) --------- --------- Cash inflow before financing 1,928 996 Financing New Bank loans 204 399Repayment of bank loan (1,163) (719)Capital element of hirepurchase (120) (50)contracts -------- --------Net cash outflow from financing (1,079) (370) --------- ---------Increase in cash in the year (ii) 849 626 (iii) ========= ========= Gooch & Housego PLC NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2005 (i) Reconciliation of operating profit to net cash inflow from operating activities +------------------------------------------------+-------------+-------------+| | 2005 | 2004 |+------------------------------------------------+-------------+-------------+| |(unaudited) | |+------------------------------------------------+-------------+-------------+| | £'000 | £'000 || | ----------| ----------|+------------------------------------------------+-------------+-------------+| | | |+------------------------------------------------+-------------+-------------+|Operating profit | 4,763 | 3,383 |+------------------------------------------------+-------------+-------------+|Amortisation of goodwill | 339 | 307 |+------------------------------------------------+-------------+-------------+|Amortisation of debt issue costs | 16 | 16 |+------------------------------------------------+-------------+-------------+|Depreciation | 436 | 439 |+------------------------------------------------+-------------+-------------+|Increase in stocks | (185) | (234) |+------------------------------------------------+-------------+-------------+|Increase in debtors | (76) | (528) |+------------------------------------------------+-------------+-------------+|Increase in creditors | 174 | 1,406 || | ----------| ----------|+------------------------------------------------+-------------+-------------+| | 5,467 | 4,789 || | ==========| ==========|+------------------------------------------------+-------------+-------------+ (ii) Reconciliation of net cash outflow to movement in net funds/(debt) 2005 2004 (unaudited) £'000 £'000 ----------- ---------- Increase in cash in the year 849 626Cash outflow from decrease indebt and lease financing 1,079 370 ----------- ---------- Changes in net debt resulting from cash flows 1,928 996 New hire purchase contracts (101) (40)Movement in debt issue costsLoans acquired upon (16) (16)acquisition - (375)Translation difference 233 74 ----------- ---------- Movement in net debt in the year 2,044 639 Net funds/(debt) at 1 October 2004 327 (312) ----------- ---------- Net funds at 30 September 2005 2,371 327 =========== ========== NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2005 (continued) (iii) Analysis of net funds +-------------------+--------+--------+----------+----------+-----------+| | At | | | | At |+-------------------+--------+--------+----------+----------+-----------+| | 1 Oct | Cash |Exchange |Non-cash | 30 Sep |+-------------------+--------+--------+----------+----------+-----------+| | 2004 | flow |Movement |Movement | 2005 |+-------------------+--------+--------+----------+----------+-----------+| | | | | |(unaudited)|| | | | | | |+-------------------+--------+--------+----------+----------+-----------+| | £'000 | £'000 | £'000 | £'000 | £'000 || | -------| -------| -------| -------| -------|+-------------------+--------+--------+----------+----------+-----------+| | | | | | |+-------------------+--------+--------+----------+----------+-----------+|Cash in hand and at| 2,543 | 749 | 240 | - | 3,532 ||bank | | | | | |+-------------------+--------+--------+----------+----------+-----------+|Bank overdraft | (100) | 100 | - | - | - |+-------------------+--------+--------+----------+----------+-----------+| | | | | | |+-------------------+--------+--------+----------+----------+-----------+|Debt due after 1 | (370) | (204) | (21) | 17 | (578) ||year | | | | | |+-------------------+--------+--------+----------+----------+-----------+|Debt due within 1 |(1,412) | 1,163 | 9 | (33) | (273) ||year | | | | | |+-------------------+--------+--------+----------+----------+-----------+|Hire Purchase | (334) | 120 | 5 | (101) | (310) |+-------------------+--------+--------+----------+----------+-----------+| | | | | | |+-------------------+--------+--------+----------+----------+-----------+| | | | | | || | -------| -------| -------| -------| -------|+-------------------+--------+--------+----------+----------+-----------+| | 327 | 1,928 | 233 | (117) | 2,371 || | =======| =======| =======| =======| =======|+-------------------+--------+--------+----------+----------+-----------+ NOTES TO THE PRELIMINARY ANNOUNCEMENTFOR THE YEAR ENDED 30 SEPTEMBER 2005 1. Basis of preparation The unaudited financial information contained in this preliminary announcementdoes not comprise statutory accounts within the meaning of Section 240 of theCompanies Act 1985. The figures in this preliminary announcement have been prepared under generallyaccepted accounting policies in the United Kingdom. The accounting policiesadopted are those set out in the Annual Report and Accounts for the year ended30 September 2004 which includes the unqualified report of the independentauditors and which have been filed with the Registrar of Companies. 2. Segmental reporting The analysis of turnover by destination is as follows: +--------------------------------------------+-------------+-------------+| | 2005 | 2004 |+--------------------------------------------+-------------+-------------+| |(unaudited) | |+--------------------------------------------+-------------+-------------+| | £'000 | £'000 || | ----------| ----------|+--------------------------------------------+-------------+-------------+| | | |+--------------------------------------------+-------------+-------------+|United Kingdom | 2,921 | 2,862 |+--------------------------------------------+-------------+-------------+|North America | 10,539 | 10,037 |+--------------------------------------------+-------------+-------------+|Continental Europe | 4,669 | 2,854 |+--------------------------------------------+-------------+-------------+|Other | 4,186 | 3,059 |+--------------------------------------------+-------------+-------------+| | | || | ----------| ----------|+--------------------------------------------+-------------+-------------+| | 22,315 | 18,812 || | ==========| ==========|+--------------------------------------------+-------------+-------------+ The trading results by subsidiary are as follows: G&H NEOS CCI OLI LE Total 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 unaudited unaudited unaudited unaudited unaudited unaudited £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------ ------ Total 8,532 6.836 5,484 5,293 4,489 4,098 3,204 2,766 2,159 290 23,868 19,283turnoverInter-segmentsales (924) (182) (304) (144) (30) (4) (123) (123) (172) (18) (1,553) (471) ------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ------ ------Sales tothird 7,608 6,654 5,180 5,149 4,459 4,094 3,081 2,643 1,987 272 22,315 18,812parties ====== ===== ===== ===== ===== ===== ===== ===== ===== ===== ====== ====== Operatingprofit beforeinterest andtaxation 1,900 904 1,621 1,710 780 597 377 151 85 21 4,763 3,383 Net interestpayable (85) (85) ------ ------Group profitbeforetaxation 4,678 3,298 ====== ====== NOTES TO THE PRELIMINARY ANNOUNCEMENTFOR THE YEAR ENDED 30 SEPTEMBER 2005 (Continued)3. Taxation The charge for taxation on the profit for the year is made up as follows:+--------------------------------------------+-------------+-------------+| | 2005 | 2004 |+--------------------------------------------+-------------+-------------+| |(unaudited) | |+--------------------------------------------+-------------+-------------+| | £'000 | £'000 || | ----------| ----------|+--------------------------------------------+-------------+-------------+| | | |+--------------------------------------------+-------------+-------------+|UK Corporation tax | 571 | 261 |+--------------------------------------------+-------------+-------------+|Overseas taxation | 1,180 | 930 |+--------------------------------------------+-------------+-------------+|Deferred taxation | 28 | 44 |+--------------------------------------------+-------------+-------------+| | | || | ----------| ----------|+--------------------------------------------+-------------+-------------+| | 1,779 | 1,235 || | ==========| ==========|+--------------------------------------------+-------------+-------------+ 4. Earnings per share The calculation of earnings per 20p Ordinary Share is based on the profit onordinary activities after taxation using as a divisor the weighted averagenumber of Ordinary Shares in issue during the year. For 2005 and 2004 the actualnumber of Ordinary Shares in issue throughout the year was 17,999,162. All shareoptions in respect of which the related performance criteria have been met as at30 September 2005 and 2004 and which have an exercise price lower than theaverage market price of the Group's share price in each year have been includedin the calculation of diluted earnings per share. The weighted average number ofshares in issue during the year, taking into account of the dilutive effect ofthe share options was 18,201,870 (2004 : 18,001,508). A reconciliation of theearnings used in the earnings per share calculation is set out below: +--------------------------+-------------------+--+-------------------+--+| | 2005 | | 2004 | |+--------------------------+-------------------+--+---------+---------+--+| | (unaudited) | | | | |+--------------------------+---------+---------+--+---------+---------+--+| | £'000 | p per | | £'000 | p per | || | --------| share | | --------| share | || | |-------- | | |-------- | |+--------------------------+---------+---------+--+---------+---------+--+| | | | | | | |+--------------------------+---------+---------+--+---------+---------+--+|Basic earnings per share | 2,899 | 16.1 | | 2,063 | 11.5 | |+--------------------------+---------+---------+--+---------+---------+--+| | | | | | | |+--------------------------+---------+---------+--+---------+---------+--+|Goodwill amortisation | 339 | 1.9 | | 307 | 1.7 | |+--------------------------+---------+---------+--+---------+---------+--+| | | | | | | |+--------------------------+---------+---------+--+---------+---------+--+|Basic earnings per share | | | | | | ||before | 3,238 | 18.0 | | 2,370 | 13.2 | ||goodwill amortisation | | | | | | |+--------------------------+---------+---------+--+---------+---------+--+| | | | | | | |+--------------------------+---------+---------+--+---------+---------+--+|Diluted earnings per share| 2,899 | 15.9 | | 2,063 | 11.5 | |+--------------------------+---------+---------+--+---------+---------+--+| | | | | | | |+--------------------------+---------+---------+--+---------+---------+--+|Goodwill amortisation | 339 | 1.9 | | 307 | 1.7 | |+--------------------------+---------+---------+--+---------+---------+--+| | | | | | | |+--------------------------+---------+---------+--+---------+---------+--+|Diluted earnings per share| | | | | | ||before goodwill | 3,238 | 17.8 | | 2,370 | 13.2 | ||amortisation | --------| --------| | --------| --------| |+--------------------------+---------+---------+--+---------+---------+--+|Basic and diluted earnings per share before goodwill amortisation has ||been shown because, in the opinion of the directors, it reflects the ||underlying performance of the group. |+------------------------------------------------------------------------+ NOTES TO THE PRELIMINARY ANNOUNCEMENTFOR THE YEAR ENDED 30 SEPTEMBER 2005 (Continued) 5. The final dividend will be paid on 16 th February 2006 to shareholderson the register at close of business on 16th December 2005. 6. Copies of the Report and Accounts will be despatched to shareholdersduring the week commencing 16th January 2006 and will also be available from theCompany Secretary, Gooch & Housego PLC, The Old Magistrates Court, Ilminster,Somerset. TA19 0AB. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Gooch & Housego