REG - Judges ScientificPLC - Interim Results
18 September 2019
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon publication of this announcement via a regulatory information service ("RIS"), the inside information contained in this document is now considered to be in the public domain.
Judges Scientific plc
("Judges Scientific", "the Company", or "the Group")
Interim results for the six months ended 30 June 2019
Key financials **
§ Revenues increased 9% to a record £40.2 million (H1 2018: £37.0 million);
§ Adjusted*pre-tax profit increased 27% to £8.4 million (H1 2018: £6.6 million);
- Statutory pre-tax profit increased to £6.9 million (H1 2018: £4.2 million);
§ Adjusted* basic earnings per share increased 30% to 108.7p (H1 2018: 83.4p);
- Statutory basic earnings per share increased to 90.1p (H1 2018: 53.3p);
§ Interim dividend of 15.0p (H1 2018: 12.0p), an increase of 25%; covered 7 times by adjusted earnings;
§ Order intake increased 4% compared with H1 2018;
§ Order book at 13.2 weeks (H1 2018: 15.0 weeks);
§ Cash generated from operations increased to £8.5 million (H1 2018: £6.3 million);
§ Adjusted* net cash increased to £7.4 million as at 30 June 2019 (31 December 2018: £0.9 million);
- Statutory net cash increased to £7.2 million as at 30 June 2019 (31 December 2018: £0.7 million);
§ Cash balances increased to £20.8 million as at 30 June 2019 (31 December 2018: £15.7 million).
Outlook
§ Adjusted profit before tax and earnings per share anticipated to be ahead of FY 2019 expectations***.
* Adjusted earnings figures are stated before adjusting items relating to hedging of risks materialising after the end of the period, amortisation of acquired intangible assets, share based payments and acquisition-related costs. Adjusted net cash notionally includes acquisition-related payments which had yet to be settled at the balance sheet date and excludes subordinated debt owed by subsidiaries to non-controlling shareholders.
** In the absence of any material acquisition since 1 January 2018, this statement shows no distinction between total and organic performance.
*** Judges Scientific's compiled analyst forecast range for adjusted profit before tax (year to 31 December 2019): £14.8m to £15.1m, with an average consensus of £15.0m. The forecast range for Adjusted earnings per share: 184.7p to 190.5p, with an average consensus of 188.4p.
Alex Hambro, Chairman of Judges Scientific, commented:
"The delivery of record revenue, adjusted profit before tax, earnings per share, cash generation and dividends for the first half is testament to the Group's pursuit of operational excellence. Orders to date are in line with our expectations, despite a subdued second quarter. The strong first half financial performance and healthy order book give the Board confidence that full year adjusted profit before tax and EPS will exceed current consensus market expectations."
For further information please contact:
Judges Scientific
David Cicurel, CEO
Brad Ormsby, Group FD
Tel: +44 (0) 203 829 6970
Shore Capital (Nominated Adviser & Joint Broker)
Stephane Auton
Edward Mansfield
Sarah Mather
Tel: +44 (0) 20 7408 4090
Liberum (Joint Broker)
Bidhi Bhoma
Euan Brown
Alma (Financial Public Relations)
Rebecca Sanders-Hewett
Sam Modlin
Tel: +44 (0) 20 3100 2222
Tel: +44 (0) 20 3405 0205
Chairman's Statement
It is gratifying to be able to report record figures across revenues, adjusted profit before tax, adjusted earnings per share and dividends for the first half of 2019, maintaining the positive financial performance experienced since the second half of 2016.
The Group's results for the six-month period to 30 June 2019 omits any distinction between "total" and "organic" as no material acquisitions were completed in the period.
Revenues
Group revenues for the period increased 9% to a record £40.2 million (H1 2018: £37.0 million). Sales were particularly strong in North America (up 33%). After the pause observed in FY18, China/Hong Kong showed some improvement (up 5%) but the Rest of the World receded 8%. The UK was stable and the Rest of Europe up 2%. For followers of the status of Brexit and of the US/China trade tensions, the Rest of Europe (largely the EU27) represented 29% of the Group's revenue and North America plus China/HK represented 42%.
Sales were boosted by efforts throughout the Group to further pursue operational excellence; in particular, management strived to reduce customer delivery lead times. As a consequence, sales in the first half accelerated ahead of order intake, resulting in a small reduction of the order book.
Order intake
As previously announced, order intake in the first half was consistent with the Group's expectations for the year, showing a progression of 4.2% on the same period last year. Due to the aforementioned acceleration of sales, the order book stood at a healthy 13.2 weeks of sales at 30 June 2019 against 14.4 weeks at the beginning of 2019 and 15.0 weeks at 30 June 2018.
Order intake was weak in the UK (22% below H1 2018) and solid in the Rest of Europe (5% above H1 2018), with double digit increases in the other major trading zones. North America was up 10%, China/HK up 13% and the Rest of the World up 13% versus H1 2018. This illustrates both the time gap between receipt of orders and their subsequent delivery, and the volatility of orders by geography over short periods.
Profits
The increased profitability was driven by revenue growth, the continuing favourable foreign exchange environment and the aforementioned efforts to optimise all aspects of our businesses. Contribution to EBITA and central costs advanced by 22% which led to a 27% increase in adjusted pre-tax profit to £8.4 million (H1 2018: £6.6 million). Return on Total Invested Capital ("ROTIC") advanced to 31.0% for the trailing 12 months ended 30 June 2019 (30 June 2018: 24.2%).
The 1.2 week order book compression contributed around half of the increased performance, which is not of a recurring nature.
Adjusted basic earnings per share progressed 30% to 108.7p (H1 2018: 83.4p) and adjusted diluted earnings per share grew similarly from 82.1p to 107.0p.
Your Directors continue to show adjusted figures, prepared consistently with past reports, in order to communicate to shareholders what is, in the Directors' opinion, the true operating performance of the Group. The total adjustments of £1.5 million (H1 2018: £2.4 million) consist primarily of a £1.4 million charge for amortisation of acquired intangible assets arising through acquisition. The adjusting items reduce profit before tax from £8.4 million to £6.9 million (H1 2018: £4.2 million) and earnings per share to 90.1p basic and 88.6p diluted (H1 2018: 53.3p basic and 52.4p diluted).
Cashflow and net debt
Cash flow during the first half of 2019 mirrored the trading accomplishment, with cash from operations of £8.5 million (H1 2018: £6.3 million) representing 98% of adjusted operating profit (H1 2018: 92%). The interim balance sheet includes cash balances of £20.8 million and adjusted net cash of £7.4 million, from £0.9 million at the beginning of 2019.
Dividend
In accordance with the Company's dividend policy and in view of the positive performance in the period, the Board is declaring an interim dividend of 15.0p (2018: 12.0p), which will be paid on Friday 1 November 2019 to shareholders on the register on Friday 4 October 2019. The shares will go ex-dividend on Thursday 3 October 2019. The interim dividend is covered 7 times by adjusted earnings (2018: 7 times).
Outlook
As noted in our trading update, the Group's order intake, whilst in line with expectations overall, experienced a small contraction in the second quarter. Since the period end order intake has recovered to a satisfactory level, maintaining a healthy order book. We continue to remain cautious about the ongoing macro-economic and political uncertainty and its potential impact on the future performance of the Group.
We do not expect a second half weighting similar to recent years, mostly in view of the aforementioned compression of the order book in the first half. Notwithstanding this - and concerns relating to the economic outlook - the strong financial performance in the first half and the healthy order book give the Board confidence that adjusted profit before tax and EPS will exceed current consensus market expectations for the year as a whole.
The Hon. Alexander Hambro
Chairman
17 September 2019
Condensed consolidated interim statement of comprehensive income
Note
Adjusted
£000
Adjusting
items
£000
Six months to
30 June
2019
£000
Six months to
30 June
2018
£000
Year to
31 December
2018
£000
Revenue
3
40,169
-
40,169
36,962
77,868
Operating costs
(31,539)
-
(31,539)
(30,102)
(63,137)
Adjusted operating profit
3
8,630
-
8,630
6,860
14,731
Adjusting items
4
-
(1,480)
(1,480)
(2,350)
(4,045)
Operating profit/(loss)
8,630
(1,480)
7,150
4,510
10,686
Interest income
49
-
49
12
41
Interest expense
4
(257)
(25)
(282)
(290)
(539)
Profit/(loss) before tax
8,422
(1,505)
6,917
4,232
10,188
Taxation (charge)/credit
(1,316)
265
(1,051)
(556)
(1,053)
Profit/(loss) for the period
7,106
(1,240)
5,866
3,676
9,135
Attributable to:
Owners of the parent
6,750
(1,158)
5,592
3,283
8,495
Non-controlling interests
356
(82)
274
393
640
Profit/(loss) for the period
7,106
(1,240)
5,866
3,676
9,135
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Retirement benefits actuarial (loss)/gain
(250)
128
168
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign subsidiaries
16
20
66
Other comprehensive (expense)/income for the period, net of tax
(234)
148
234
Total comprehensive income for the period
5,632
3,824
9,369
Attributable to:
Owners of the parent
5,358
3,431
8,729
Non-controlling interests
274
393
640
Pence
Pence
Pence
Earnings per share - adjusted
Basic
5
108.7
83.4
183.4
Diluted
5
107.0
82.1
180.6
Earnings per share - total
Basic
5
90.1
53.3
137.5
Diluted
5
88.6
52.4
135.4
Condensed consolidated interim balance sheet
Note
30 June
2019
£000
30 June
2018
£000
31 December
2018
£000
ASSETS
Non-current assets
Goodwill
14,650
14,650
14,650
Other intangible assets
6
3,989
6,861
5,373
Property, plant and equipment
5,460
5,534
5,524
Right-of-use leased assets
2
2,610
-
-
Deferred tax assets
775
713
719
27,484
27,758
26,266
Current assets
Inventories
11,926
11,424
10,502
Trade and other receivables
11,610
13,708
13,231
Cash and cash equivalents
20,780
14,365
15,727
44,316
39,497
39,460
Total assets
71,800
67,255
65,726
LIABILITIES
Current liabilities
Trade and other payables
(12,988)
(13,961)
(13,977)
Borrowings
(3,047)
(3,081)
(3,058)
Right-of-use lease liabilities
2
(650)
-
-
Current tax liabilities
(2,572)
(3,680)
(2,204)
(19,257)
(20,722)
(19,239)
Non-current liabilities
Borrowings
(10,541)
(13,642)
(11,968)
Right-of-use lease liabilities
2
(1,900)
-
-
Deferred tax liabilities
(1,215)
(1,661)
(1,477)
Retirement benefit obligations
10
(2,162)
(2,094)
(1,836)
(15,818)
(17,397)
(15,281)
Total liabilities
(35,075)
(38,119)
(34,520)
Net assets
36,725
29,136
31,206
EQUITY
Share capital
7
311
309
310
Share premium
15,359
15,000
15,164
Other reserves
2,137
2,075
2,121
Retained earnings
18,295
10,282
13,049
Equity attributable to owners of the parent
36,102
27,666
30,644
Non-controlling interests
623
1,470
562
Total equity
36,725
29,136
31,206
Condensed consolidated interim statement of changes in equity
Share
capital
£000
Share
premium
£000
Other
reserves
£000
Retained
earnings
£000
Total attributable
to owners
of parent
£000
Non-
controlling
interests
£000
Total
equity
£000
At 1 January 2019
310
15,164
2,121
13,049
30,644
562
31,206
Adjustment arising from change in non-controlling interest
-
-
-
(204)
(204)
(213)
(417)
Issue of share capital
1
195
-
-
196
-
196
Share-based payments
-
-
-
108
108
-
108
Transactions with owners
1
195
-
(96)
100
(213)
(113)
Profit for the period
-
-
-
5,592
5,592
274
5,866
Retirement benefit actuarial loss
-
-
-
(250)
(250)
-
(250)
Foreign exchange differences
-
-
16
-
16
-
16
Total comprehensive income for the period
-
-
16
5,342
5,358
274
5,632
At 30 June 2019
311
15,359
2,137
18,295
36,102
623
36,725
Share
capital
£000
Share
premium
£000
Other
reserves
£000
Retained
earnings
£000
Total attributable
to owners
of parent
£000
Non-
controlling
interests
£000
Total
equity
£000
At 1 January 2018
307
14,529
2,055
6,688
23,579
1,077
24,656
Issue of share capital
2
471
-
-
473
-
473
Share-based payments
-
-
-
183
183
-
183
Transactions with owners
2
471
-
183
656
-
656
Profit for the period
-
-
-
3,283
3,283
393
3,676
Retirement benefit actuarial gain
-
-
-
128
128
-
128
Foreign exchange differences
-
-
20
-
20
-
20
Total comprehensive income for the period
-
-
20
3,411
3,431
393
3,824
At 30 June 2018
309
15,000
2,075
10,282
27,666
1,470
29,136
Share
capital
£000
Share
premium
£000
Other
reserves
£000
Retained
earnings
£000
Total attributable
to owners
of parent
£000
Non-
controlling
interests
£000
Total
equity
£000
At 1 January 2018
307
14,529
2,055
6,688
23,579
1,077
24,656
Dividends
-
-
-
(2,103)
(2,103)
(162)
(2,265)
Adjustment arising from change in non-controlling interest
-
-
-
(518)
(518)
(993)
(1,511)
Issue of share capital
3
635
-
-
638
-
638
Share-based payments
-
-
-
319
319
-
319
Transactions with owners
3
635
-
(2,302)
(1,664)
(1,155)
(2,819)
Profit for the year
-
-
-
8,495
8,495
640
9,135
Retirement benefit actuarial gain
-
-
-
168
168
-
168
Foreign exchange differences
-
-
66
-
66
-
66
Total comprehensive income for the year
-
-
66
8,663
8,729
640
9,369
At 31 December 2018
310
15,164
2,121
13,049
30,644
562
31,206
Condensed consolidated interim cashflow statement
Six months to
30 June
2019
£000
Six months to
30 June
2018
£000
Year to
31 December
2018
£000
Cashflows from operating activities
Profit after tax
5,866
3,676
9,135
Adjustments for:
Financial instruments measured at fair value: Hedging contracts
(12)
22
56
Share-based payments
108
183
319
Depreciation of property, plant and equipment
367
373
746
Depreciation of right-of-use leased assets
395
-
-
Amortisation of intangible assets
1,384
2,145
3,633
(Profit)/loss on disposal of property, plant and equipment
(28)
-
18
Foreign exchange gains on foreign currency loans
-
(18)
(18)
Interest income
(49)
(12)
(41)
Interest expense
257
263
485
Retirement benefit obligation net interest cost
25
27
54
Contributions to defined benefit plans
-
-
(236)
Tax recognised in income statement
1,051
556
1,053
Increase in inventories
(1,424)
(1,044)
(122)
Decrease/(increase) in trade and other receivables
1,486
(1,881)
(1,404)
(Decrease)/increase in trade and other payables
(937)
1,989
2,000
Cash generated from operations
8,489
6,279
15,678
Finance costs paid
(256)
(266)
(525)
Tax paid
(947)
(115)
(2,351)
Net cash from operating activities
7,286
5,898
12,802
Cashflows from investing activities
Paid on acquisition of new subsidiaries
-
(599)
(599)
Gross cash inherited on acquisition
-
-
-
Acquisition of subsidiaries, net of cash acquired
-
(599)
(599)
Purchase of property, plant and equipment
(314)
(557)
(955)
Proceeds from the sale of property, plant and equipment
28
-
18
Interest received
49
12
41
Net cash used in investing activities
(237)
(1,144)
(1,495)
Cashflows from financing activities
Proceeds from issue of share capital
196
473
638
Repayments of borrowings
(1,440)
(1,518)
(3,183)
Repayments of right-of-use lease liabilities
(362)
-
-
Equity dividends paid
-
-
(2,103)
Share repurchase - non-controlling interest in subsidiary
(417)
-
(1,511)
Dividends paid - non-controlling interest in subsidiary
-
-
(162)
Net cash used in financing activities
(2,023)
(1,045)
(6,321)
Net change in cash and cash equivalents
5,026
3,709
4,986
Cash and cash equivalents at start of period
15,727
10,681
10,681
Exchange movements
27
(25)
60
Cash and cash equivalents at end of period
20,780
14,365
15,727
Notes to the interim report
1. General information and basis of preparation
The Judges Scientific plc Group's principal activities comprise the design, manufacture and sale of scientific instruments. The subsidiaries are grouped into two segments: Materials Sciences and Vacuum.
The financial information set out in this Interim Report for the six months ended 30 June 2019 and the comparative figures for the six months ended 30 June 2018 are unaudited. The Interim Report has been prepared in accordance with IAS 34 'Interim Financial Reporting'. The Interim Report does not contain all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2018, which have been prepared in accordance with IFRS as adopted by the European Union.
The financial information for the year ended 31 December 2018 set out in this Interim Report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2018 have been filed with the Registrar of Companies. The Auditor's Report in respect of those financial statements was unqualified and did not contain statements under section 498 of the Companies Act 2006.
Judges Scientific plc is the Group's ultimate parent company. The Company is a public limited company incorporated and domiciled in the United Kingdom. Its registered office and principal place of business is 52c Borough High Street, London SE1 1XN and the Company's shares are quoted on the Alternative Investment Market. The Interim Report is presented in Sterling, which is the functional currency of the parent company. The Interim Report has been approved for issue by the Board of Directors on 17 September 2019.
2. Significant accounting policies
The Interim Report has been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 December 2018, except for the taxation policy where, for the purposes of the interim results, the tax charge on adjusted business performance is calculated by reference to the estimated effective rate for the full year.
IFRS 16 'Leases' (effective date 1 January 2019)
The Group has adopted IFRS 16 'Leases' as of 1 January 2019. The modified retrospective approach was applied on transition. Prior period comparatives have not been restated, and there was no adjustment to equity on transition.
IFRS 16 requires the capitalisation of operating leases, such as the Group's building and vehicle leases, as right-of-use leased assets with an offsetting financial liability. The Group has elected to measure the right-of-use leased assets at an amount equal to the lease liabilities adjusted for any prepaid or accrued lease payments that existed at the date of transition. Right-of-use assets and liabilities are presented separately in the Consolidated Balance Sheet.
The weighted average incremental borrowing rate used to measure lease liabilities is 4.25%
In the Consolidated Statement of Comprehensive Income the previous rental charge has been replaced with a combination of depreciation from the right-of-use leased assets and an interest charge from the lease liabilities. The effect for the period ended 30 June 2019 is as follows:
Six months to
30 June
2019
£000
Rental lease charges under previous accounting standard
408
Depreciation of right-of-use leased assets
(395)
Increase in operating profit due to IFRS 16
13
Interest charge from right-of-use liabilities
(45)
Decrease in profit before tax due to IFRS 16
(32)
Decrease in earnings per share due to IFRS 16
(0.42p)
In the year of adoption operating profit increases, but profit before tax decreases, and earnings per share is reduced. Assuming no further changes to the Group's leases, the increase in operating profit will endure, however in future years the interest charge will reduce as the discount unwinds.
The following is a reconciliation of total operating lease commitments at 31 December 2018 to the right-of-use lease liabilities and assets recognised at 1 January 2019:
1 January 2019
£000
Total operating lease commitments disclosed at 31 December 2018
3,363
Adjustments to commitments disclosures
(155)
Right-of-use lease liabilities before discounting
3,208
Discounted using incremental borrowing rate
(296)
Right-of-use lease liabilities recognised at 1 January 2019
2,912
Adjustments for prepaid rent at 31 December 2018
135
Adjustments for accrued rent at 31 December 2018
(42)
Right-of-use leased assets recognised at 1 January 2019
3,005
Changes in the right-of-use leased assets for the six months ended 30 June 2019 were as follows:
Six months to
30 June
2019
£000
Right-of-use leased assets recognised at 1 January 2019
3,005
Depreciation
(395)
Right-of-use leased assets as at 30 June 2019
2,610
Changes in the right-of-use lease liabilities for the six months ended 30 June 2019 were as follows:
Six months to
30 June
2019
£000
Right-of-use lease liabilities recognised at 1 January 2019
2,912
Interest accrued
45
Interest paid
(45)
Repayments of right-of-use lease liabilities
(362)
Right-of-use lease liabilities as at 30 June 2019
2,550
Split between:
Current
650
Non-current
1,900
3. Segmental analysis
For the period ended 30 June 2019
Note
Materials
Sciences
£000
Vacuum
£000
Unallocated
items
£000
Total
£000
Revenue
15,929
24,240
-
40,169
Operating costs
(12,702)
(17,566)
(1,271)
(31,539)
Adjusted operating profit
3,227
6,674
(1,271)
8,630
Adjusting items
4
(1,480)
Operating profit
7,150
Net interest expense
(233)
Profit before tax
6,917
Income tax charge
(1,051)
Profit for the period
5,866
For the period ended 30 June 2018
Note
Materials
Sciences
£000
Vacuum
£000
Unallocated
items
£000
Total
£000
Revenue
16,295
20,667
-
36,962
Operating costs
(12,988)
(15,991)
(1,123)
(30,102)
Adjusted operating profit
3,307
4,676
(1,123)
6,860
Adjusting items
4
(2,350)
Operating profit
4,510
Net interest expense
(278)
Profit before tax
4,232
Income tax charge
(556)
Profit for the period
3,676
For the year ended 31 December 2018
Note
Materials
Sciences
£000
Vacuum
£000
Unallocated
items
£000
Total
£000
Revenue
35,058
42,810
-
77,868
Operating costs
(27,018)
(33,445)
(2,674)
(63,137)
Adjusted operating profit
8,040
9,365
(2,674)
14,731
Adjusting items
4
(4,045)
Operating profit
10,686
Net interest expense
(498)
Profit before tax
10,188
Income tax charge
(1,053)
Profit for the year
9,135
Unallocated items relate to the Group's head office costs.
Segment assets and liabilities
At 30 June 2019
Materials
Sciences
£000
Vacuum
£000
Unallocated
items
£000
Total
£000
Assets
16,694
26,790
28,316
71,800
Liabilities
(8,077)
(13,366)
(13,632)
(35,075)
Net assets
8,617
13,424
14,684
36,725
Capital expenditure
78
224
12
314
Depreciation of property, plant and equipment
90
262
15
367
Depreciation of right-of-use leased assets
186
182
27
395
Amortisation
651
733
-
1,384
At 30 June 2018
Materials
Sciences
£000
Vacuum
£000
Unallocated
items
£000
Total
£000
Assets
19,445
24,704
23,106
67,255
Liabilities
(9,491)
(14,826)
(13,802)
(38,119)
Net assets
9,954
9,878
9,304
29,136
Capital expenditure
122
435
-
557
Depreciation of property, plant and equipment
122
233
18
373
Amortisation
775
1,370
-
2,145
At 31 December 2018
Materials
Sciences
£000
Vacuum
£000
Unallocated
items
£000
Total
£000
Assets
17,275
24,410
24,041
65,726
Liabilities
(7,888)
(11,838)
(14,794)
(34,520)
Net assets
9,387
12,572
9,247
31,206
Capital expenditure
185
770
-
955
Depreciation of property, plant and equipment
231
481
34
746
Amortisation
1,519
2,114
-
3,633
Unallocated items are borrowings, intangible assets and goodwill arising on acquisition, deferred tax, defined benefit obligations and parent company net assets.
Geographic analysis
Six months to
30 June
2019
£000
Six months to
30 June
2018
£000
Year to
31 December
2018
£000
UK (domicile)
4,539
4,541
10,729
Rest of Europe
11,780
11,499
23,156
North America
13,294
9,972
20,884
China/Hong Kong
3,648
3,467
7,716
Rest of the world
6,908
7,483
15,383
Revenue
40,169
36,962
77,868
4. Adjusting items
Six months to
30 June
2019
£000
Six months to
30 June
2018
£000
Year to
31 December
2018
£000
Amortisation of intangible assets
1,384
2,145
3,633
Financial instruments measured at fair value: Hedging contracts
(12)
22
56
Share-based payments
108
183
319
Acquisition costs
-
-
37
Total adjusting items within operating profit
1,480
2,350
4,045
Retirement benefits obligation net interest cost
25
27
54
Total adjusting items
1,505
2,377
4,099
Taxation
(265)
(435)
(1,085)
Total adjusting items net of tax
1,240
1,942
3,014
Attributable to:
Owners of the parent
1,158
1,857
2,834
Non-controlling interests
82
85
180
1,240
1,942
3,014
5. Earnings per share
Note
Six months to
30 June
2019
£000
Six months to
30 June
2018
£000
Year to
31 December
2018
£000
Profit for the period attributable to owners of the parent
Adjusted profit
6,750
5,140
11,329
Adjusting items
4
(1,158)
(1,857)
(2,834)
Profit for the period
5,592
3,283
8,495
Pence
Pence
Pence
Earnings per share - adjusted
Basic
108.7
83.4
183.4
Diluted
107.0
82.1
180.6
Earnings per share - total
Basic
90.1
53.3
137.5
Diluted
88.6
52.4
135.4
Number
Number
Number
Issued Ordinary shares at start of the period
7
6,196,678
6,141,128
6,141,128
Movement in Ordinary shares during the period
7
24,163
43,050
55,550
Issued Ordinary shares at end of the period
7
6,220,841
6,184,178
6,196,678
Weighted average number of shares in issue
6,207,925
6,162,943
6,176,315
Dilutive effect of share options
101,158
96,928
96,800
Weighted average shares in issue on a diluted basis
6,309,083
6,259,871
6,273,115
Adjusted basic earnings per share is calculated on the adjusted profit, which is presented before any adjusting items, attributable to the Company's shareholders divided by the weighted average number of shares in issue during the period.
Adjusted diluted earnings per share is calculated on the adjusted basic earnings per share, adjusted to allow for the issue of Ordinary shares on the assumed conversion of all dilutive options and any other dilutive potential Ordinary shares. The calculation is based on the treasury method prescribed in IAS 33. This calculates the theoretical number of shares that could be purchased at the average middle market price in the period out of the proceeds of the notional exercise of outstanding options. The difference between this theoretical number and the actual number of shares under option is deemed liable to be issued at nil value and represents the dilution.
Total earnings per share is calculated as above whilst substituting total profit for adjusted profit.
6. Other intangible assets
The following tables show the significant additions to and amortisation of intangible assets:
Carrying
amount at
1 January
2019
£000
Amortisation
£000
Carrying
amount at
30 June
2019
£000
Distribution agreements
310
(110)
200
Research and development
2,458
(552)
1,906
Brand and domain names
2,235
(512)
1,723
Customer relationships
370
(210)
160
Total
5,373
(1,384)
3,989
Carrying
amount at
1 January
2018
£000
Amortisation
£000
Carrying
amount at
30 June
2018
£000
Distribution agreements
606
(158)
448
Research and development
3,712
(702)
3,010
Brand and domain names
3,705
(973)
2,732
Customer relationships
983
(312)
671
Total
9,006
(2,145)
6,861
Carrying
amount at
1 January
2018
£000
Amortisation
£000
Carrying
amount at
31 December
2018
£000
Distribution agreements
606
(296)
310
Research and development
3,712
(1,254)
2,458
Brand and domain names
3,705
(1,470)
2,235
Customer relationships
983
(613)
370
Total
9,006
(3,633)
5,373
7. Share capital
Movements in the Group's Ordinary shares in issue are summarised as follows:
Ordinary shares of 5p each
Six months to
30 June 2019
Number
Six months to
30 June 2018
Number
Year to
31 December
2018
Number
Issued and fully paid
Start of the period
6,196,678
6,141,128
6,141,128
Exercise of share options
24,163
43,050
55,550
End of the period
6,220,841
6,184,178
6,196,678
During the first six months of 2019 the following allotments took place:
• 24,163 Ordinary shares were issued to satisfy the exercise of share options as follows:
• on 5 February 2019 when the mid-market share price was 2,660.0p;
• on 22 February 2019 when the mid-market share price was 2,700.0p;
• on 29 March 2019 when the mid-market share price was 2,690.0p;
• on 3 April 2019 when the mid-market share price was 2,720.0p;
• on 12 April 2019 when the mid-market share price was 3,070.0p;
• on 26 April 2019 when the mid-market share price was 3,175.0p;
• on 3 May 2019 when the mid-market share price was 3,115.0p;
• on 8 May 2019 when the mid-market share price was 3,105.0p; and
• on 3 June 2019 when the mid-market share price was 3,090.0p.
8. Changes in net cash
Changes in net cash for the six months ended 30 June 2019 were as follows:
1 January
2019
£000
Cashflow
£000
Non-cash
items
£000
30 June
2019
£000
Cash at bank and in hand
15,727
5,026
27
20,780
Bank debt
(14,836)
1,440
(2)
(13,398)
Net cash including senior debt
891
6,466
25
7,382
Subordinated debt to non-controlling shareholders
(190)
-
-
(190)
Total net cash
701
6,466
25
7,192
Subordinated debt to non-controlling shareholders
190
-
-
190
Adjusted net cash
891
6,466
25
7,382
Non-cash items primarily represent foreign exchange differences on foreign currency bank balances.
9. Acquisitions
On 29 March 2019 PE.fiberoptics Limited ("PFO"), one of the Company's subsidiaries, acquired the remaining shares of a third party shareholder for a consideration of £0.4 million. As a result, the Group's interest in PFO increased from 67.5% to 74.5%.
10. Defined benefit scheme
The Group's defined benefit pension scheme liability has increased to £2.2 million compared to £1.8 million at 31 December 2018, due to a decrease of 0.5% in the discount rate to 2.3% from 2.8% at 31 December 2018.
11. Dividends
During the period, the Company paid no dividends (Period to 30 June 2018: £nil).
The Company paid a final dividend of 28.0p per share totalling £1.7 million to shareholders on 5 July 2019 relating to the financial year ended 31 December 2018 (22.0 p per share totalling £1.4 million relating to the financial year ended 31 December 2017).
The Company will pay an interim dividend for 2019 of 15.0p per share (2018: interim dividend of 12.0p per share) on 1 November 2019 to shareholders on the register on 4 October 2019. The shares will go ex-dividend on 3 October 2019.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDIR VDLFFKKFLBBK
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