- Gooch & Housego reported a fall in pre-tax profits and cut its outlook for the full-year as the photonic components & systems manufacturer reined in its expectations for a recovery in the industrial laser market amid the ongoing US-China trade war.

The company also said that Chief Operating Officer, Alex Warnock had decided to step down from the role and the Board after the end of its current financial year.

Given the revised industrial laser outlook, the company lowered its adjusted profit before tax guidance for 2019 by about £3.5m to 4.0m.

The downgrade comes as demand for critical components looked likely to deteriorate before steadying, with the company now assuming that industrial laser business would not return to 'normal' levels in 2019, as previously expected.

The downturn in demand for critical components -- used in industrial lasers for microelectronic manufacturing -- particularly from China, had been exacerbated by the ongoing US-China trade war.

For the 6 months ended 31 March, statutory pre-tax profits fell 71.8% to £1.5m even as revenue increase 7.4% to £59.7m.

But the company offered up some optimism as its in hi-reliability fibre couplers, which had benefited from investment made in first half, was expected to show a step change in second half, with the company anticipating a threefold increase in demand over the next three years, compared to 2018.

The company had a record half year order book of £93.2m, as at 31 March 2019, an increase of 10.0% compared with the same period last year.

The interim dividend increased to 4.3p from 4.2p a share from a year earlier.

'Trading in the last six months has reflected trends previously reported. G&H has long been aware of the risks associated with the cyclical nature of the microelectronics sector and more recently the continued impact of the US/ China trade dispute. Our industrial laser order book has increased since our last update, but we now forecast the industrial laser business will not return to 'normal' levels in FY 2019,' said Mark Webster, Chief Executive Officer of Gooch & Housego.

'The non- industrial laser business is expected to perform in line with management's expectations. Our fibre optics business generally is performing strongly and in particular we are investing in further capacity to take advantage of the multi- year strong demand growth for hi- reliability fibre couplers.'

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