Gooch & Housego

Website: Gooch & Housego
Index: AIM
EPIC: GHH
Supersector: Industrial Goods and Services
Sector: Electronic and Electrical Equipment
Subsector: Electrical Components and Equipment
Market Cap: £192.69M
Payout Frequency: Semi-Annual

Gooch & Housego Dividend Analysis and Summary

Dividend details (Gooch & Housego PLC, AIM: GHH)

Proposed final dividend: 8.3p per share (unchanged YoY)
Total dividend for FY2025: 13.2p per share (unchanged YoY)
Ex-dividend date: 29/01/2026 (derived from record date)
Record date: 30/01/2026
Payment date: 06/03/2026
AGM approval: 27/02/2026 (final dividend subject to approval)
Dividend cover: ~2.7x on adjusted EPS (35.4p adj. EPS vs 13.2p DPS); ~1.0x on statutory EPS (13.7p)
Payout ratio: ~37% of adjusted EPS (~96% of statutory EPS)
Yield: n/a (share price not provided)

Context from results and cash flow

Revenue up 10.7% to £150.5m; adjusted operating profit up 37.3% to £14.4m; adjusted PBT £11.9m (+46.8%).
Operating cash flow: £9.4m (down from £14.2m) due to working capital build, notably germanium inventory.
Estimated free cash flow (after capex and intangibles) ~£3.0m vs dividends paid in year of £3.5m ? sub-1x FCF cover for FY2025.
Net debt (incl. IFRS 16): £43.9m; bank net debt: £29.9m; leverage 1.3x (within 2.5x covenant); interest cover 8.9x.
Order book: £142.4m (+36%), with 80%+ billable in FY2026, supporting near-term visibility.

Dividend sustainability and growth outlook

Sustainability: Supported by stronger earnings momentum and a large order book, but tempered by weak FCF cover in FY2025 (working capital/inventory heavy) and higher net debt after M&A and inventory build.
Growth trajectory: Flat DPS YoY signals a cautious stance. The Board explicitly notes ongoing review of dividend policy to potentially reinvest some dividend to fund growth/capex. Near-term dividend growth looks muted until inventory normalises and cash conversion improves.
Coverage: Adjusted EPS cover is comfortable (~2.7x), but statutory EPS cover (~1.0x) and FCF cover (<1x) argue for prudence. Management expects inventory reduction in FY2026, which could improve cash cover.
Balance sheet/capital allocation: Leverage is moderate and within covenants, but capex rising and continued portfolio/M&A activity mean capital is being directed to growth and integration, limiting scope for dividend increases in the near term.

Structural changes and policy signals

Acquisitions: Phoenix Optical (Oct 2024) and Global Photonics (May/Jun 2025) integrated; focus on A&D scaling and US capability.
Portfolio actions: Exit of Pockels Cells for medical lasers; small Shanghai site wind-down complete.
Leadership changes: CFO transition to interim; Chair intends to step down in FY2026. Governance steady but transitions to monitor.
Policy: Board states dividend policy is under review; final dividend kept flat given planned increase in capex to deliver the order book.

Risks and flags relevant to dividend stability

Working capital/supply chain: Elevated inventories (incl. germanium) and supply-chain/tariff disruptions; management flags germanium availability as a key variable for FY2026.
End-market cyclicality: Industrial/semiconductor recovery now expected H2 FY2026; any delay could weaken cash conversion.
Debt and integration: Higher net debt post acquisitions; ongoing integration and restructuring costs (non-underlying) could pressure near-term cash.
Litigation and one-offs: Provision for local employment litigation; further non-underlying costs would dilute statutory cover.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
23/01/2025	28/02/2025	Final	8.30p	GBX
19/06/2025	25/07/2025	Interim	4.90p	GBX

Total (Annual Dividends Per Share): 13.20p

Dividend Yield = Annual Dividends Per Share (13.20p) ÷ Share Price (700p) = 1.89%

Ex Dividend Date	Payment Date	Type	Amount	Currency
29/01/2026	06/03/2026	Final	8.3000p	GBX
19/06/2025	25/07/2025	Interim	4.90p	GBX
23/01/2025	28/02/2025	Final	8.30p	GBX
20/06/2024	26/07/2024	Interim	4.90p	GBX
18/01/2024	23/02/2024	Final	8.20p	GBX
22/06/2023	28/07/2023	Interim	4.80p	GBX
19/01/2023	24/02/2023	Final	7.90p	GBX
23/06/2022	29/07/2022	Interim	4.70p	GBX
20/01/2022	25/02/2022	Final	7.70p	GBX
24/06/2021	30/07/2021	Interim	4.50p	GBX
23/01/2020	28/02/2020	Final	7.20p	GBX
20/06/2019	26/07/2019	Interim	4.30p	GBX
24/01/2019	01/03/2019	Final	7.10p	GBX
21/06/2018	27/07/2018	Interim	4.20p	GBX
25/01/2018	02/03/2018	Final	6.50p	GBX
22/06/2017	17/07/2017	Interim	3.70p	GBX
15/12/2016	03/03/2017	Final	5.70p	GBX
23/06/2016	18/07/2016	Interim	3.30p	GBX
17/12/2015	03/03/2016	Final	5.20p	GBX
25/06/2015	20/07/2015	Interim	3.00p	GBX
18/12/2014	05/03/2015	Final	4.60p	GBX
25/06/2014	21/07/2014	Interim	2.60p	GBX
05/02/2014	28/02/2014	Final	4.00p	GBX
19/06/2013	26/07/2013	Interim	2.30p	GBX

Year	Interim	Final	Currency	Total	Change
2024	4.900	8.300	GBX	13.200	1.530
2023	4.800	8.200	GBX	13.000	3.170
2022	4.700	7.900	GBX	12.600	3.270
2021	4.500	7.700	GBX	12.200	6.080
2019	4.300	7.200	GBX	11.500	1.760
2018	4.200	7.100	GBX	11.300	10.780
2017	3.700	6.500	GBX	10.200	13.330
2016	3.300	5.700	GBX	9.000	9.750
2015	3.000	5.200	GBX	8.200	13.880
2014	2.600	4.600	GBX	7.200	14.280
2013	2.300	4.000	GBX	6.300

Number of Shares:

Payment	Paid	Amount
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