Good morning!

A quick whizz through this morning, as I have to head into London for meetings this afternoon.


Judges Scientific (LON:JDG)

Share price: 1475p (up 2.6% today)
No. shares: 6.1m
Market cap: £90.0m

Interim results to 30 Jun 2015 - this is an acquisitive small group of scientific instrument companies. Results today look rather poor, with adjusted pre-tax profit down 18.5% to £3.3m, and adjusted EPS down 18.3% to 41.1p, despite turnover being up 13.7% to £24.9m (note that the profit margin is still good though, at 13.3% of turnover).

However, the outlook comments are more positive;

"These mid-year figures reflect the weak order intake experienced throughout much of 2014 and the first quarter of this year. I am pleased to report, however, that order intake in the last six months has shown a significant improvement which will bear fruit in the second half. Meanwhile, the acquisition of Armfield illustrates Judges' continuing ability to execute its growth strategy, utilising the Group's cash generation. As a consequence the Board remains confident in the ability of the Group to meet market expectations for the full year."
...The second half has commenced positively, aided by the strong mid-year order book. Organic order intake in the third quarter is well ahead of last year, albeit less buoyant than in Q2 2015. Overall order intake since the beginning of the year is consistent with the Group's sales budget and your Board remains confident in the ability of the Group to meet market expectations for the full year.

When assessing outlook comments, you have to think about the specific company, and how reliable/trustworthy the management are, based on what they have said & done before. Do they tell it like it is? (good). Or are they always bullish, but often disappoint? (bad). I've followed JDG for years now, and am very satisfied that management commentary can be relied upon as being truthful, and straightforward.

Also think about the outlook comments themselves. Is it a general fuzzy warm feeling they are expressing, with no specifics (bad)? Or are they giving facts & figures which justify optimism (good) - e.g. quoting order book figures, or increases.

So in this case, whilst I am usually sceptical of companies which have a bad H1, and promise to make it up in H2, in this case I'm inclined to believe that the company is indeed likely to hit…

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