Gooch and Housego, a manufacturer of optical components and systems, has said trading conditions were 'more challenging than expected' in its Industrial Laser market sector during the first four months of the financial year and consequently profits for the year ending September 30th 2012 are likely to be significantly below its original expectations.
The firm said that sales of its Q-switch product during the four month period were below the level it had expected, and were significantly lower than the record levels achieved during the same period last year. This was largely attributed to a downturn in the microelectronics sector and softer demand from China.
"Although there are signs that demand is now showing some improvement, it is clear that the turbulent market conditions that prevailed last year resulted in excessive inventory build-up in some markets and that this has taken longer than anticipated to normalise," the firm said.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The company's management is taking action to reduce overall costs where possible, and further efficiencies are planned as it continues to consolidate and integrate the acquisitions made last year in the continuing programme to diversify the source of revenues in order to bring about a better balance to the business.
Chief Executive Gareth Jones said: "We continue to make good progress in our newer areas of business and we are currently engaged on a number of potentially high-value, long-term programmes in the Aerospace & Defence sector, some of which are anticipated to generate revenues in the second half of the current financial year."
Shares were down 24.49% to 350.00p by 08:28.
NR
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
