2021 AGM trading update

Current trading and outlook

During the first four months of the financial year we have seen improved levels of demand across the industrial laser sector. In line with previously reported trends there have been continuing high levels of demand for fibre optics, hi- reliability fibre couplers and our A&D capabilities. Life sciences has continued to grow strongly.

Asian markets have led the recovery in industrial lasers, though US and European markets are also now demonstrating encouraging trends. The roll out of new technologies, such as 5G, has fuelled demand led growth, building on the previously reported recovery in semiconductors.

Our A&D order book remains robust with new UK optical system orders, which have built on our existing US A&D contracts.

Medical diagnostics has continued to demonstrate good growth and we are now seeing improved levels of demand for our medical laser products, which were affected by the reduction in non- COVID-19 procedures in FY2020.

All of our manufacturing sites remain fully open. We have established effective working practices which prioritise the health and safety of our staff, customers and suppliers. Nevertheless travel restrictions and the need for some of our employees to self-isolate has presented some operational challenges.

The Group’s cash generation has remained robust and the net debt of the Group has further reduced during the first four months of the financial year, despite the payment of the final earn out associated with the acquisition of the ITL business.

As at 31 January 2021 our order book was at £95.0 million (31 January 2020: £94.1 million), an increase of 1.0%, or 3.3% at constant currency, compared with the same time last year.