Optical components firm Gooch & Housego has set its sights on conquering China after snapping up Glenrothes lens maker Spanoptic in a £6.6 million deal earlier this year.
AIM-listed G&H expects to use Spanoptic’s existing connections in the Far East to help it drive future growth.
The news came as the company, which has its headquarters in Ilminster in Somerset, has reported a near 20% jump in profits, with pre-tax returns stretched to £9.7m.
Revenues also climbed 3.9% on the year, to £63.3m.
Spanoptic is one of the UK’s leading manufacturers of spherical and aspherical lenses and diffractive optics, with applications in ultraviolet, visible and infrared spectra.
But Gooch & Housego believes it can also provide a valuable beachhead into the Asian market.
“This year has seen a number of initiatives to increase our penetration of Far Eastern markets,” the company’s preliminary results report said.
“Over the past 25 years, Gooch & Housego has grown its business in Japan with the assistance of its distribution partners.
“In addition to the new relationships in China that came with the acquisition of Spanoptic, we have strengthened our applications engineering team there and opened a sales office in Singapore during 2013.”
Chief executive Gareth Jones said G&H had made “considerable” progress in line with its strategy to create a more balanced business with better growth potential across broader markets.
“Gooch & Housego has taken a number of important initiatives in the past year a re-focussing of research and development and sales and marketing, the creation of the Systems Technology Group and the identification of new markets such as space photonics,” he said.
“When combined with the acquisitions of Spanoptic and Constelex, these initiatives provide Gooch & Housego with the means to deliver growth in a flat economy, and the ability to respond to, and benefit from, market recovery.
“With excellent customer relationships, and a strong pipeline of new products, G&H is well-positioned to deliver sustained growth and continued margin improvement.”
The strong results, which saw the company’s dividend per share rise by 21.2% to 6.3p and basic earnings per share rise 13.5% to 27.7p, do not include the cost of purchasing Spanoptic or Greek photonic specialist Constelex.
Both acquisitions came at the end of the year and will be included in the next set of results.
Spanoptic was founded in 1976 by John Bryden, boasts 62 employees and posted pre-tax profits of £1m in the last year.
It had long enjoyed a good working relationship with G&H, before Mr Bryden’s retirement prompted takeover talks.
At the time of the deal, Mr Jones stressed it was “business as usual” at the Eastfield Industrial Estate firm, with G&H keen to retain the expertise of the workforce.
In his chairman’s statement, G&H’s Dr Julian Blogh said the firm’s 18.3% jump in profits was down to increased volumes and efficiency savings, despite greater expenditure on research and development.
“I am pleased to report that your company made good strategic progress in the last 12 months on many fronts, against a challenging market backdrop,” he said.