Hi folks,

Thank you for the useful suggestions and all the comments, as always.

Today I have covered:

Judges Scientific (LON:JDG)

  • Share price: 3679p (+7%)
  • No. of shares: 6.2 million
  • Market cap: £228 million

Interim Results

These are fine results and the outlook for the full year is ahead of expectations.

Financial Review

The company does what all companies should do, and states what the expectations were: adjusted PBT of £14.8 million to £15.1 million.

To find the new forecast, you have to look up a broker note. I have done this, and the new forecast is for FY 2019 adjusted PBT of £16.5 million.

What's really impressive to me about these results is that they are organic. In the company's words:

In the absence of any material acquisition since 1 January 2018, this statement shows no distinction between total and organic performance.

Revenue is up 9%, adjusted PBT is up 27%, and the performance looks even better on a statutory basis, i.e. without making any adjustments.

This is because the company's amortisation charge dropped significantly compared to the prior year (perhaps due to the lack of M&A activity?)

On a cash flow basis, the performance is great: £7.3 million of (after-tax) cash from operating activities, with only £300k spent on capex. Such a low capex number doesn't look sustainable, but it's still a fantastic cash flow performance for the six-month period.

The company acknowledges that it has enjoyed a benefit from exchange rates. Perhaps it could show revenue at constant FX in future, to help us see the underlying result?

Order intake

As many readers will know, Judges is an acquirer of scientific businesses, in a similar vein to Scientific Digital Imaging (LON:SDI).

It has a brilliant track record of buying small businesses at cheap multiples, using some debt, and then paying off the debt with internally generated cash flow, thereby building huge value for shareholders.

The order book is an important measure used by the company in shareholder communications. At the end of H1, it stood at 13.2 weeks of sales, which the company describes as "healthy" but which…

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