Gooch & Housego PLC (AIM:GHH)'s shares dropped 20% after the company revised its 2024 profit forecast downwards, citing deeper and more prolonged inventory adjustments among its customers than initially expected.
Despite a growing order book, which increased to £128.5 million in the first four months of the financial year, and operational improvements, the specialist manufacturer of photonic components and systems anticipates adjusted profit before tax to fall approximately £3 million below previous expectations.
The company attributes the downward revision to reduced demand in the semiconductor market and delays or cancellations in certain US A&D programmes.
Nonetheless, Gooch & Housego remains optimistic about its medium-term growth prospects, bolstered by a strong order intake from medical diagnostic customers, new orders for armoured vehicle periscope systems, and a significant new customer in the sub-sea data communications market.
Shares in the company were off 122p at 488p.