Gooch & Housego PLC ($GHH)

Good afternoon, and welcome to the Genco plc investor presentation. review -- before we begin, I'd like to submit the following poll. I'd now like to hand over to Charlie Peppiatt, CEO. Good afternoon, sir.

Lilly, thank you very much. Good afternoon, everybody, and thank you very much for attending this IMC meeting, where we will welcome you to talk about and report on G&H's interim results for the first half of the year ending the 31st of March 2026. Firstly, I'm very pleased to be able to introduce James Court, alongside me, our new CFO, who joined the group at the beginning of April. James and I will be following the agenda shown on the screen. After the highlights section, James will cover the group's first half results, and then I will provide a segmental review and progress update on the implementation and delivery of the group strategy, including outlook. We'll be opening up the session to Q&A at the end. I would now like to pause to be able to play a short overview and introductory video about GH. -- optoiberptstol thmseb.K.n... We continue to invest in our facilities and our capabilities, strengthening how we support customers within region and globally. Our technologies support innovation across industrial, semiconductor, aviation, space and defense as well as life sciences markets, where the highest levels of precision and mission-critical reliability are essential. What sets G&H apart is our ability to move from component level innovation to fully integrated systems, working in partnership with our customers to deliver performance where it matters most. We combine a proud heritage of world-beating optical solutions expertise and proactive investment to help our customers solve the most complex photonics challenges today and into the future. Turning to the highlights. During the first half of our financial year, we made further positive progress implementing the changes required across the business to support the group's margin growth plans. I'm pleased to be able to report on the strong performance that was achieved in the first half of the year against challenging macroeconomic backdrop. This is a testament to the progress the group is making delivering our strategy and the resilience and depth of experience across our leadership team in navigating complex market dynamics. I would like to take this opportunity to thank our many valued customers and strategic suppliers for their continued and growing confidence in G&H. I would also like to extend my sincere thanks and recognition to all of G&H's employees around the world for their hard work during the first half of the year. It is a privilege to lead such a talented workforce who remain committed to delivering our customer-focused strategy during a period of continual global challenges, many of which are unpredictable and require constant vigilance, speed and agility to address. As reported in our trading update at the beginning of April, demand from the group's aerospace and defense customers continued to be strong in H1. At the same time, our industrial markets showed encouraging signs that the recovery in semiconductors is now underway. And whilst we experienced several challenges in parts of the Life Sciences business, we expect to see activity normalize in this market. Revenues for the first half of the year increased to 15.5%, up to GBP 81.9 million compared to GBP 70.9 million in the prior period. We will take you through the performance by market sector in more detail later in the presentation. Adjusted operating profit for the period increased by 16.9% to GBP 7.2 million compared to GBP 6.2 million in the first half of the prior year. Following the acquisitions of Phoenix Optical and Global Photonics last financial year, I can report that the integration of these businesses is now largely complete. Commercial synergies are being realized, and we are expanding capacity at both of these sites to support the significant increase in demand that we are experiencing, especially from our aerospace and defense customers in Europe and North America. The order book continues to increase and provide stronger visibility for the group, up to GBP 167.3 million at the end of March compared to GBP 142.4 million at the end of the year and GBP 121.5 million at the same time as the prior year. G&H generated net cash from operations of GBP 3.9 million compared to GBP 2.6 million in the same period of 2025 and reflecting strategic investments made by the group, net debt increased to GBP 36.6 million compared to GBP 29.9 million at prior year-end, with a leverage ratio of 1.5x. Our expectations for the group's full-year performance remain unchanged, although due to continuing macroeconomic and geopolitical uncertainty, there is near-term execution risk. G&H has strong prospects for profitable growth in the coming years, supported by the progress we're making to accelerate the delivery of our strategy and underpinned by positive end market tailwinds for our technologies and capabilities. I will now pass you across to James, who will be taking you through the financial results for the first half of 2026 in more detail.

Thank you, Charlie, and good afternoon, everyone. As this is my first opportunity to present G&H's results, I'd like to start by saying how thrilled I am to have joined such a high-quality business with unique technology, differentiated capabilities and clear momentum in a number of very attractive end markets. From my first impressions, there's lots to get stuck in, and I'm excited for the future of the group. So, turning to Slide 6 to cover the group financial performance. As Charlie highlighted earlier, the group delivered a strong first half performance. Organic revenue growth of 9.1% at constant currency was driven by excellent momentum in our Aerospace and Defense segment with Industrial and Life Science markets broadly flat. The reported growth of 15.5% shows the acceleration in Aerospace and Defense from the Global Photonics and Phoenix acquisitions. Gross margins decreased by 100 basis points to 29.4% as continued operational improvements were offset by a number of mixed headwinds in our fiber optic and Life Sciences businesses, combined with continued supply shortages of key materials, notably Germanium. We continue to invest in innovation with R&D spending increasing by GBP 400,000 to GBP 3.9 million. Development remains focused on our 6 vital few R&D work streams and progress in these areas has been positive. We have invested in engineering resources where necessary and continue to expect these projects to generate in excess of GBP 50 million of margin accretive revenue in the medium term. Adjusted operating profit margin increased by 10 basis points, reflecting the leverage effect of higher volume. After the impact of slightly higher finance charges following the recent acquisitions, this drives a strong increase in adjusted profit before tax, growing 13.9% compared with half 1 2025. This resulted in adjusted profit before tax of GBP 5.8 million with adjusted basic earnings per share up 1.4p at 16.4p. Our adjusted effective tax rate was 22.4%, in line with our expected medium-term range of around 25% non-underlying charges, which are excluded from our adjusted profit totaling GBP 2.4 million with a cash impact of GBP 0.8 million, primarily relating to ongoing acquisition and restructuring activity. One final thing on this slide, we are announcing an unchanged interim dividend of 4.9p per share. So, if we turn now to cash flow on Slide 7. Net cash flow from operating activities has improved significantly compared to half 1 2025 at GBP 1.8 million of cash generated. This reflects a slower increase in working capital, up GBP 4.9 million compared to an increase of GBP 6.7 million in half 1 2025, reflecting timing effects. The group continued its investment in strategic inventory of GBP 4.7 million, including Germanium, during a period of supply chain uncertainty. Receivables increased GBP 10.8 million following a particularly strong month in March with much of that balance already converted into cash early in the second half. Largely offsetting that was a GBP 7.2 million increase in trade creditor balances at period end. Investment in capital expenditure increased to GBP 4.3 million, up GBP 0.9 million on half 1 2025, reflecting continued focus on our 6 vital few R&D work streams, which, as mentioned above, are successfully driving new products to market. But we've also invested in machinery to accelerate production ramp-ups and to drive efficiency, particularly in our U.S. and U.K. aerospace and defense-focused manufacturing sites, which will underpin the ability to grow the top line. The higher net interest and tax is primarily driven by tax paid, an increase of GBP 1 million, with the remainder being the higher finance costs. As expected, net debt excluding lease liabilities has increased and at the end of March it was GBP 36.6 million or GBP 49.8 million, including leases. Our leverage as calculated for our banking covenant ratio remains comfortable at 1.5x EBITDA. This is well within our limit of 2.5x, and we predict this to reduce in half 2 as we continue to grow the profitability of the business. On the 12th of March, we extended our committed facilities from USD 60 million to USD 70 million in order to ensure we remain agile and allow us to make strategic inventory purchases at short notice. At the 31st of March '26, the group had drawn USD 54.8 million on its revolving credit facility, up from September 2025 position of USD 50.2 million, driven by the investment in working capital. Overall, we believe the group remains very well positioned from both a liquidity and balance sheet perspective to support future growth. So, turning now to Slide 8. I've added this slide as the accelerated pace in aerospace and defense markets has driven some material changes to the end market makeup of our business. In half 1, as is clear from the pie charts, Aerospace and Defense is the main driver of the 15.5% growth year-on-year and now represents 43% of total group revenues. Because of the increase in Aerospace and Defense, our Industrial market segment has shrunk as a proportion of total group revenue by 5 percentage points from 42% to 37%. But in absolute terms, the Industrial segment is still growing, but just not as fast as the Aerospace and Defense segment. Looking forward, though, we're seeing the semiconductor market is now also making a recovery. So, we expect this split to stabilize with both the Industrial and the Aerospace and Defense segments growing at more equal rates. Our Life Sciences business is also showing a reduction in share of group revenues, where the segment is showing a modest decline of 5.8% against half 1 2025 on an organic constant currency basis. This is due to a combination of disruption to our pole cell production from materials availability and in our medical diagnostics, where demand has temporarily reduced as end-of-life products are ramping down before new ones ramp up. Both of these situations are expected to improve through the second half and into FY 2027. Moving on to Slide 9, the operating margin slide. Overall operating margin improved from 8.7% to 8.8% in half 1 2026 compared to half 1 2025, as we can see in the waterfall here. Within that, I want to explain the movements by end market segment as this helps give a little more color to the progression. We can see from the first bar on the waterfall that the Industrial business was relatively static year-on-year, with revenue broadly flat and the margin was sustained compared to half 1 2025. Diving a little deeper into that, adverse mix was broadly offset by new higher profitability products and some outsourcing activities. Moving on. The recovery in Aerospace and Defense, which we'll talk about more in a few slides' time, is driving a 230 basis points increase to margin, and we expect this to be sustained going into half 2 and beyond. This reflects operational and NPI progress across our aerospace and defense-focused businesses, notably at the Moore Park, Keane and Ilminster sites. Life Sciences has faced a number of nonrepeating revenue headwinds in half 1, as I mentioned above, which have dropped through to the bottom line, and that's what's driving the decline we can see there. Finally, there's a smaller headwind on the cost base from inflationary pressures in the U.K. and U.S. and due to the addition and ongoing investments underway at our global Photonics site in Tampa. Thank you. I'll now hand it back to Charlie.

James, thank you. I'm going to spend a bit of time here moving and providing more detail on the segmental update. And firstly, we're going to turn to our Aerospace and Defense business. As James covered, this segment is now accounting for 43% of the group's revenues, up from 33% in the prior year, and this is expected to continue to grow in the coming years. Aerospace and Defense revenues in the first half were GBP 35.6 million, up 51.7% compared to GBP 23.5 million in the same period last year, and that's an increase of 26% on an organic constant currency basis. Through the focused deployment of our new strategy, operating profit in the first half jumped to 36 -- sorry, to GBP 3.6 million compared to GBP 0.6 million in the prior year and a loss of GBP 1.6 million in the first half of 2024. For the first time, this sector was a major contributor to the group's profitability with an operating profit margin of 10.2%, a 760-basis points improvement on the same period last year. The significant volume growth in Aerospace and Defense has been achieved by a more focused go-to-market strategy in all regions, the successful transition of a number of new projects moving into mass production and improved productivity and output at several of our sites. This was complemented by synergy benefits from the defense-focused acquisitions of Artemis, Phoenix Optical and Global Photonics, starting to gain traction, especially around advanced laser protection and our enhanced germanium fabrication capabilities that we can now offer alongside our superior optical system solutions. The performance in this segment could have been even stronger if it were not for the negative impact experienced in the first quarter due to the material availability challenges caused by ongoing restrictions on germanium and other optical materials due to the retaliatory measures imposed by the Chinese government in response to U.S. tariffs. Despite this variable supply, the business has worked hard to optimize its supply chain by making strategic investments, and we are now in a better position. Demand across the sector remains strong as key allied nations continue to prioritize the enhancement of defensive capabilities in response to the evolving global security environment. We continue to strengthen and grow well established positions in sighting systems and periscopes, target designation, countermeasures, navigation and range finding, advanced optomechanical subsystems and space-based optical communications. The group is also seeing an increased involvement in laser-directed energy programs, where our precision optical and subsystems capabilities are supporting the development of next-generation defense technologies for allied naval and land-based applications. We've also seen an increase in demand for the group's infrared lens systems and optical assemblies for counter-manned aerial systems, short-range air defense and near-earth orbit applications, all areas where our precision optical expertise and vertically integrated manufacturing capabilities provide a differentiated offering. The continued recovery and production ramp-up within the commercial aviation market is also driving increased demand for G&H's ring laser gyroscope products with customers seeking reliable supply partners capable of supporting higher build rates and long-term program requirements. Operational improvements at our Moore Park facility have enabled increased throughput and enhanced production efficiency to support this growing demand. The aerospace and defense order book continued to grow. up to GBP 73.8 million at the end of March, an increase of 38% on the same period in the prior year, and this is now accounting for 44% of the group's total order book. We expect this to continue to expand during the second half of FY '26 as we secure new orders for multiyear defense programs. On the next page, moving on to our Industrial business. Revenues in this segment of GBP 30.3 million were broadly flat compared to the same period of the prior year. Adjusted operating profit was also flat in this segment during the period at GBP 3.8 million with an operating margin of 12.7%, driven by an adverse mix impact that was offset by accretive new products and outsourcing benefits. Despite ongoing macroeconomic uncertainties, we saw improvement in our industrial laser and semiconductor markets in the period, and the recovery in the latter is now underway. Encouragingly, order intake across this sector has increased significantly with the industrial order book returning to historic levels, up 49.2% on the same period in the prior year to GBP 56.1 million and up 35% on September 2026. This was underpinned by demand from customers in the microelectronics, subsea data cable, sensing and semiconductor processing sectors. The increased capacity and technical skill that's required to build our more complex fiber optic assemblies and modules has been enabled by transferring production of high reliability fiber coupler products to carefully qualified contract manufacturing partners. Due to the phasing of several contracts, module production was actually lower in H1 than the prior year. However, this is expected to increase again in H2 with our production facilities and skilled operators well prepared for the ramp-up of this higher value-added work. Turning to Life Sciences. Revenues from this segment dropped by 7.7% in H1. This lower revenue, combined with a reduction in production yields and supply chain challenges, meant that operating profits in the first half declined to GBP 0.7 million, an operating margin of 4.6% compared to 12% in the same period of last year. Revenues from our medical diagnostics markets have reduced principally due to demand phasing of several medical device programs. Certain customers saw equipment deployment delays, and these came through due to slower-than-expected qualification and installation phases. Other customers in in vitro diagnostics device sector have also remained in the clinical trial and regulatory approval phase longer than planned, with volume production now expected to contribute from FY 2027. During the last year, the group made the decision to end of life the majority of our Polycell product lines for the medical and aesthetic laser markets. This last time buy activity created the expected elevated short-term demand in these products during the period, which unfortunately coincided with material supply constraints and crystal growth yield challenges at the group's Cleveland facility. Action has been taken to identify alternative material sources and improve in-house production performance. Output started to increase at the end of the second quarter, and this continued into Q3 with full recovery expected throughout the second half. With these factors significantly affecting performance in the first half of the year, the Life Sciences margins are expected to return to more normalized levels in the second half, and the medium-term outlook for this segment is positive with encouraging development in commercial activities over the last quarter, reflected in the order book. I'd now like to spend a little bit of time providing an update on the group's strategy. G&H's strategy remains focused on delivering sustainable margin growth by following a clearly executable path to mid-teen returns over the medium term. G&H is becoming a more innovative, customer-focused technology company delivered responsibly by making a better world with Photonics. The first half of 2026 was another positive step forward on that journey. We are laser-focused on ensuring G&H remains a first choice for all our stakeholders, including our employees, customers, shareholders, ecosystem partners and the communities in which we operate. This will be achieved by offering differentiated performance through continuing to focus on the 4 key strategic priorities that are shown on the slide through our people by creating a high-performance, purpose-led culture across the whole company, from self-help activities to improve customer experience and operational execution. Thirdly, through developing our advanced photonics technology and technical know-how more effectively to accelerate our time to market for new products into commercially attractive applications. And finally, by applying greater discipline and rigor in the application of resources to deliver accretive growth, both organically and inorganically. We have refocused on the business to invest in higher-margin products and sectors at the same time as addressing nonperformance in combination with making several exciting speed-to-value acquisitions. Turning to the next page, I would like to provide an update on the progress underway in our Aerospace and Defense business. Through the focused deployment of the strategy I've just referred to, I'm pleased to report that the turnaround of the group's A&D business continues to progress positively. The return on sales in this segment has improved by more than 18 percentage points since the launch of our new strategy, and this is expected to continue over the coming years. G&H's upgraded aerospace and defense team delivered these planned benefits through operational improvements, productivity gains, supply chain action, cybersecurity compliance and disciplined customer-focused new product introduction and R&D activities. The group's Aerospace and Defense business is now uniquely positioned to meet increased demand from existing customers, capture new business opportunities and become a full optical and photonic system solution provider for allied nations and defense primes globally. This has been accelerated by the successful implementation of our portfolio strategy, focused on divesting non-core parts of the business and adding carefully selected complementary bolt-on acquisitions. Turning to the next page, I will provide an update on the progress we're making with recent M&A activity. The integration of the 2 most recent acquisitions is now largely complete and the enhanced offering the group provides through these 2 additions has been key to helping secure new orders from defense customers on both sides of the Atlantic. The defense-focused investments made through the speed-to-value acquisitions of Artemis, Phoenix Optical and Global Photonics, previously known as ME Opta U.S., combined with our existing enhanced capabilities have significantly strengthened the group's position in the defense market at a really critical time. This demonstrates our commitment to expanded manufacturing capacity and technical capability of broader integrated optical solutions offering to meet the increasingly regionalized supply chain requirements of allied nations. G&H now has credible and qualified manufacturing and technical capability in the U.K. aligned to Western European customer requirements as well as a dedicated and scalable U.S.-based footprint supporting North America's growing demand, where made in the U.S.A. is a prerequisite for accelerated growth. The combination of these businesses with the group's existing capabilities continues to support new customer opportunities and reinforces our position as a strategic supplier with the aerospace -- within the aerospace and defense market. Turning to the third key strategic pillar of value creation from Photonics technology. We continue to refine our customer-focused technology roadmaps to deploy platform design solutions, accelerating time to market where G&H has technology-led differentiation. Spending on R&D of GBP 3.9 million in the first half of the year, as covered by James earlier, was up 11% compared to the prior year, supporting the increased contribution expected from new products in coming years. Our fiber optics engineering group sees successful customer take-up on cutting-edge next-generation fiber optic modules for semiconductor fabrication, high-reliability submarine amplification, environmental sensing and medical diagnostics. Notably, during the period, our Photonics Solutions engineering group in the U.S.A. made significant progress with the development of our thin-film lithium niobate offering for electronic warfare, AI data centers and quantum system applications. Over the medium term, we expect these 6 focused R&D work streams shown on the slide to deliver more than GBP 50 million of margins of accretive new business from next-generation product introductions. Turning to the final section, I'd like to provide an update on the outlook for the group. The group entered the second half with an order book of GBP 167.3 million, following order intake in the first half of more than GBP 100 million, both at record levels for the group and providing near full revenue cover for FY 2026. After much anticipation, our semiconductor markets are starting to show encouraging signs of recovery and growth. We are seeing strong demand from the aerospace and defense markets in Europe and the U.S. with spending commitments from the U.K. still expected to convert to orders at some point. The group has proactively managed the resourcing of key raw materials used across several of our production processes where availability has been restricted either by retaliatory measures in response to U.S. tariffs or the geopolitical tensions that we see more prevalently. The supply side situation does remain fluid, especially for germanium, where availability is still lumpy and delivery variable. Consequently, the group remains vigilant around sourcing, supply chain resilience, and inventory planning. And finally, in summary, value creation synergies from the recent acquisitions are underway and being realized. As a result of the operational and supply chain improvements made over the last couple of years, the group is well positioned to benefit from increasing demand levels in aerospace and defense, semiconductor, and other key markets. Recent life sciences production disruptions are expected to ease through the second half of the year and normalize into FY 2027. Targeted investments are being made to address bottlenecks and increase capacity to support increased customer demand. And while mindful of the current uncertain macroeconomic and geopolitical landscape, G&H's healthy growing order book, strengthening market positions and differentiated Photonics expertise aligned to structural growth drivers from megatrends, all provide us with confidence in our ability to deliver further progress on our journey to mid-teen returns over the medium term. Thank you. That brings our presentation materials to an end, and I'd like to hand back to Lilly.

That's great. As you can see, we have received a number of questions throughout today's presentation. And if I may just start off with the first question here, which reads as follows. How much of the order book represents high-margin long-term defense programs versus shorter-term work?

Let me take that one. I think it is absolutely the case that particularly reflecting the increase we are seeing in our aerospace and defense order book, there is an increase in the long-term defense programs that are being awarded to the group, specifically in Europe and the U.S. with spending commitments from the U.K. expected to convert at some point.

That's great. Just turning to the next question. What role does the Life Sciences division play in the group's long-term growth strategy?

Thank you, Lee. I mean, again, if you're right, if I take that one, James, to start with. I mean, I think, firstly, we are obviously seeing significant growth in our aerospace and defense. And with the recovery in semi, as James covered earlier, we're seeing, again, the growth and the recovery in our industrial markets. We have had a difficult first half in Life Sciences. I want to stress very clearly that that's not a declining trend, that is a temporary disruption. So as much as our Life Sciences business is becoming the smaller of the 3 markets for us, it remains very important. And GNH's biphotonic technology and the capabilities are really at the core of enabling many of life science and health care customers' requirements for a host of things from optical coherence tomography, microscopy, and other point-of-care diagnostics. So, it remains an important part of the group's activity.

That's great. Are supply chain issues now a structural feature or expected to ease?

Great question. And I think this is something of a crystal ball gazing one, isn't it? Clearly, over the last few years, we've seen the structural challenges in supply chain increase for a number of global geopolitical macroeconomic reasons. And I think what we can see at the moment is that they will continue to remain at that macro level. What we are doing about that, though, is we're sharing up our supply chain, making sure we're really investing in those key supplier relationships to get as much commitment and as much certainty around what is just generally a risky geopolitical situation at the moment.

How are the acquired companies performing versus expectations? Are the acquisitions performing ahead of your original expectations?

Should I take that one as well? Okay. So, I think that what the acquisitions have done is actually they've delivered more in terms of business opportunity and more in terms of sort of synergies from capabilities than we had originally expected. And that's resulting in higher demand. What I would say, though, is that due to needing some more operational improvements in those businesses, we're probably tracking slightly behind where we thought we would be financially, but actually the potential there is significantly higher.

I mean I think James has covered it very well. All I would add is in complete -- concurring with what he said, -- but the order book at both of the most recent acquisitions has more than doubled under G&H ownership, sort of emphasizing and giving some substance to the point of the opportunities that are being created from them.

Just turning to the next question. What are your priorities for capital allocation over the next 12 months?

Another finance one there probably, I think. I think as we probably highlighted in the presentation already, quite clearly, there's 2 main areas. It's into R&D into the Vital 6 to help develop those -- that future road map and bringing new products with higher value add, higher margins to market. But also we're investing in capacity and capability where we've seen such an increase in our order book across all 3 segments really, but notably the aerospace and defense, there is just a requirement to make sure that there's more capacity in those sites, and we're investing to make sure that we can deliver reliably for our customers.

I mean I think I would just add as well in coming up third behind those 2, we do remain on the lookout for appropriate, value-accretive value-added bolt-on acquisitions to help accelerate the strategy and the delivery of our mid-teen aspirations. And sometimes one is not always in control of the timing of that. It would be fair to say, certainly through the first half of the year, we've been completely focused on value creation through recent investments that have been made.

Thank you. And the next question we have here is, how strong is pricing power across A&D and Industrial? Is there any evidence of margin lag from cost inflation versus pricing realization in FY '26?

Yes, sure. So, the pricing power, I think, as the business is developing itself into more value-add parts of our customers' product mix is really growing. And I think that's a good trend that we're on. We see that where we're exposed into longer-term contracts, there are potentially pockets where we've been exposed to inflation. And what we've done actually is we've been changing the way we're doing some of our contracts to make sure that we're not exposed to those kinds of things going forward. So that is an ongoing process. And so, the combination of having slightly tighter contract management and having a better proposition to the market should enable better pricing power going forward.

Is A&D now the core of the equity story?

Let me start with that one. No, I think that would be the answer. I think A&D is a very significant part of the equity story, and it's one that we've been very focused on getting right because this was a part of the group that was not performing and was loss-making several years ago. So, I think we are absolutely seeing enormous opportunity for taking our value proposition into the aerospace and defense market and doing that, as was described in the presentation, from the U.K. for Western European allies and in North America for the U.S. and North American primes. But we are also seeing what we do in semiconductor, what we do in our industrial space, for sensing for high reliability fiber optic submarine cabling as also very critical to what we do. And I think having that diversification is also a really important part of the equity story. And there are 2 growth engines rather than 1. And as I mentioned earlier, that also will be contributed by a Life Sciences business unit and division that is complementary to that, albeit smaller.

Sounds great. A&D's 52% increase in revenue in the period is the standout divisional result. Has this strong and record growth continued in H2?

So the 52% increase in revenue was probably the standout result. Thank you to whoever asked the question for pointing out. On an organic basis, the growth was about half that. It was about 26% year-on-year. What we saw to bridge between the organic and the reported was actually some of the acquisitions came in, in half 2 2025. And so therefore, we've got a different set of comparators. So I would expect the future trajectory to be more on that organic growth rate, but still very strong. I mean, clearly, we're still seeing an expansion, and we're seeing the order book growing.

That's great. And the final question we've got here is for you, James. What are your early impressions of G&H -- and what are your top 3 priorities in the role?

Cool -- interesting question. So, as I already said at the start of my slides, this is an amazing company with some really great technology. And I've worked in the aerospace and defense, high-tech manufacturing industry before. But what we've got in this business here, I think the number of people with PhDs and doctorate and being at the really cutting-edge end of research and development to understand things that literally no one else can do is fascinating. And I think not just that technical ability, but the culture in the business is actually one where everyone wants to succeed, everyone wants to do the right thing. It's really -- that's lived day-to-day in the business and people are here to make a difference and to try and drive that forward, which I'm sure they're going to do. So that's really been my first impression. all the sites I've been around so far, and I've been around all the U.K. ones and one of the U.S. ones and shortly be doing a trip around the rest of them all the people have got absolutely that ability and that mentality, which means you can generally move mountains, which is great. I think the second part of the question was about top 3 priorities. The position the business is in at the minute in the cycles that we're in and the acquisitions it's done, we're really in a position where growth is kind of at the forefront of what we need to do and to deliver on turning that order book into a strong profitable revenue stream. So finance supporting the right decisions in the business, the right ability to stand next to the business and help advise them on how to do that more cost effectively, how to improve things over time, how to then -- with some of the acquisitions where we're still truing up exactly where manufacturing is going to take place and making sure that we're maximizing the synergies to sit alongside the teams on the project management side to advise on those business cases on the best way of doing things and get the best financial return from it. So that's the first one. The second one I sort of alluded to there a little bit is the team. I think the team have -- we've got a really great team of strong finance people that are all there to change things rather than just to come to work and then go home again with a paycheck at the end of the day. But it's to make sure that, that team know exactly what good looks like in terms of supporting the business and to kind of -- to be able to do that on a consistent way across the different sites and the different divisions that we've got so that we're making sure that we're doing things in one way and doing it the best way possible. Finally, the third area, I guess, is a question I'm surprised I've not been asked is working capital. It's clear there's a reasonably large amount of value on the balance sheet in this business. It's not just in inventory, but it is predominantly in inventory, I guess. It's clear that with the supply chain issues that were alluded to earlier with another of the questions is that we've got a slightly more difficult supply chain to manage than potentially you would have had in historical times. And we're also managing that through a period of significant growth in the business. So, it's actually balancing out that piece in the short term, I think, to make sure that we're not going to jeopardize production. But equally, we don't want to have too much cash tied up in that. And so, for me, it's really getting under the skin of that and understanding it and working out where we should be placing our bets in terms of having inventory and where actually we should be releasing some of that and turning it into cash in the business.

That's great. Thank you for answering all those questions you have from investors. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide their feedback, which is particularly important to the company, Charlie, can I please just ask you for a few closing comments?

Yes, certainly. Firstly, just to say a big thank you for joining this update on the performance of G&H in the first half of our financial year for 2026. I'd just like to reiterate G&H has strong prospects for profitable growth in the coming years, supported by the progress we're making to accelerate the delivery of our strategy and underpinned by positive end market tailwinds for our technologies and capabilities. So again, your interest in the business is appreciated, and we look forward to being able to speak to you at another one of these IMC events in the future. Thank you.

That's great. Thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company.