REG - Judges ScientificPLC - Interim Results
19/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240919:nRSS7769Ea&default-theme=true
RNS Number : 7769E Judges Scientific PLC 19 September 2024
Judges Scientific plc
("Judges Scientific", "the Company", or "the Group")
Interim results for the six months ended 30 June 2024
Subdued organic trading; three acquisitions completed and
10% increase to interim dividend
Judges Scientific, the group focused on acquiring and developing companies in
the scientific instrument sector, announces its unaudited interim results for
the six months ended 30 June 2024.
Key financials
Period ended 30 June H1 2024 H1 2023 Change
Revenue £60.8m £61.3m -1%
Adjusted* pre-tax profit £10.8m £12.8m -16%
Adjusted* basic earnings per share 123.7p 152.8p -19%
Cash generated from operations £7.8m £11.5m -32%
Interim dividend per share 29.7p 27.0p 10%
Statutory pre-tax profit £5.8m £3.0m***
Statutory basic earnings per share 63.3p 15.6p***
As at: 30 Jun 2024 31 Dec 2023
Adjusted* net debt £52.3m £45.2m
Cash balances £6.9m £13.7m
Statutory net debt £54.9m £51.6m
Other financial highlights
· Subdued trading across the Group set against a backdrop of
difficult market conditions and record prior year comparatives.
· Organic** revenue decreased 3% against H1 2023.
· Organic** order intake down 4% compared with H1 2022.
· Organic** order book at 17.2 weeks (H1 2023: 22.4 weeks).
Strategic highlights:
· Completion of two small acquisitions: Luciol and Rockwash for a
combined consideration of £4m plus maximum earn-out of up to £4.2m plus
excess cash.
Post period highlights:
· Completion of Magsputter acquisition for £12.3m plus excess
cash.
· Extension and increase of our banking facility to £140m
including £50m accordion.
· New Geotek coring contract for an early 2025 expedition.
· Strengthening of Judges Executive team following the recruitment
of Dr Ian Wilcock as Group Commercial Director.
Outlook
· Stronger second half expected for the Group.
· Some recovery in order intake in first few months of H2,
including 2025 coring contract.
· No change to existing guidance for the full year, but continued
challenging market conditions and short-term vulnerability to the timing of
orders and revenue.
* 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 debt includes acquisition-related cash payables which
had yet to be settled at the balance sheet date and excludes IFRS 16 debt.
** Organic denotes Group performance excluding the businesses which were not
part of the Group on 1 January 2023.
*** Restatement amends statutory comparative figures only. See note 13 for
further details.
Alex Hambro, Chairman of Judges Scientific, commented:
"As announced already, several of our Group businesses have experienced a
challenging first half, driven by difficult market conditions and the deferral
of some projects into H2 or 2025.
In spite of the trading disappointment, the Group has again demonstrated its
resilience and its financial strength. With the completion of three
acquisitions since the start of the year, the further strengthening of our
management team, and a 10% increase to the interim dividend, we continue to
build on our model of delivering long-term shareholder value."
Investor Presentation
Judges Scientific is hosting a webinar, available to all existing and
potential shareholders, covering the interim results for the six months to 30
June 2024, on 19 September at 16:30 UK time. Investors can register for the
webinar here: https://bit.ly/JDG_H124_results_webinar
(https://bit.ly/JDG_H124_results_webinar)
For further information please contact:
Judges Scientific plc Shore Capital (Nominated Adviser & Joint Broker)
David Cicurel, CEO Stephane Auton
Brad Ormsby, CFO Harry Davies-Ball
Tel: +44 (0) 20 3829 6970 Tel: +44 (0) 20 7408 4090
Panmure Liberum (Joint Broker) Investec Bank plc (Joint Broker)
Edward Mansfield Virginia Bull
Nikhil Varghese Carlton Nelson
Josh Borlant Tel: +44 (0) 20 7597 4000
Tel : +44 (0) 20 3100 2222
Alma (Financial Public Relations)
Sam Modlin
Joe Pederzolli
Rebecca Sanders-Hewett
Sarah Peters
Tel: +44 (0) 20 3405 0205
judges@almastrategic.com (mailto:judges@almastrategic.com)
Notes to editors:
Judges Scientific plc (AIM: JDG), is a group focused on acquiring and
developing companies in the scientific instrument sector. The Group now
consists of 25 businesses acquired since 2005.
The acquired companies are primarily UK-based with products sold worldwide to
a diverse range of markets including: higher education institutions,
scientific research facilities, manufacturers and regulatory authorities.
The UK is a recognised centre of excellence for scientific instruments. The
Group has received five Queen's Awards for innovation and export.
The Group's companies predominantly operate in global niche markets, with long
term growth fundamentals and resilient margins.
Judges Scientific maintains a policy of selectively acquiring businesses that
generate sustainable profits and cash. Shareholder returns are created
through the reduction of debt, organic growth and dividends.
For further information, please visit www.judges.uk.com
(http://www.judges.uk.com)
Chairman's statement
Trading in the first half of 2024, as already announced, has been subdued
against a backdrop of difficult market conditions and versus record prior year
comparatives. The challenging environment has impacted trading across our
Group, with a general softening of order intake and the deferral of some
projects into the second half of the current year or until 2025.
Despite unfavourable trading conditions, the Group has continued to execute
its strategy, and completed two small acquisitions in the first six months: PE
Fiberoptics acquired Luciol Instruments SA and Geotek acquired Rockwash
Geodata Limited. These deals were followed by the post-period acquisition of
Magsputter Limited, and the appointment of Dr Ian Wilcock to the Board as
Group Commercial Director, reinforcing the strength of Judges' executive team.
Order intake
Organic* order intake was down 4% against the first half of 2023. This was a
strong comparative prior period as orders had climbed 14%, supported by the
emergence of China from repeated lockdowns.
Organic intake was subdued in most of our trading regions, particularly
in China/Hong Kong, which decreased by 65%, bringing it back to two thirds of
its 2022 level; North America was down 7%. The UK fared better, ahead by 8%,
with Europe up by 2%; the Rest of the World increased by 31%. The best
absolute performances were Singapore (its progress equalled a third of the
China/Hong Kong decline), Germany, Angola, Brazil, Australia, Canada and the
Czech Republic. The weakest absolute performances were recorded in China/Hong
Kong, the US, Pakistan, Poland, Malaysia and Japan.
The Organic order book was maintained at 17.2 weeks from its year-end position
(31 December 2023: 17.0 weeks; 30 June 2023: 22.4 weeks). This reflects the
resolution of the supply chain issues. The second half of 2023 saw the final
catch up of deliveries, and the stability in the first half suggests that
progress in sales must now be driven by improved order intake rather than
order book compression.
Revenues
Total Group revenues were down 1% at £60.8m (H1 2023: £61.3m) and included
contributions from the recently acquired Henniker, Bossa Nova and Luciol.
As order intake became the main driver of revenues again, during the first
half some businesses made excellent progress with intake, some businesses
maintained revenues despite a lack of order intake, while others suffered
reduced sales due to weak demand. Of those businesses seeing weakened demand,
most hold significant trading relations with China. Another feature of the
period has been the postponement of some projects to the second half of 2024
or into 2025.
Organic revenues declined 3% to £58.8m (H1 2023: £60.6m). The only region to
progress was the Rest of Europe, up by 3%. The UK was marginally down by 1%,
North America declined by 4%, the Rest of the World by 7% and China/Hong Kong
by 9%. The best absolute performance was seen in the Czech Republic, Belgium,
India and Malaysia, while the worst absolute performances were in Brazil,
Sweden, Australia and China/Hong Kong.
As previously announced, Geotek's performance was weaker than H1 2023, which
had included some residual income from its 2022 coring expedition. The
positive extension of existing, and entry into new, digitalisation contracts
occurred too late to impact the H1 results meaningfully.
Profits
Profitability was affected by the reduced revenues amplified by the high fixed
cost base of the Group's operations. Adjusted operating profit receded 13%
to £12.3m (H1 2023: £14.2m) and Adjusted pre-tax profit 16%
to £10.8m (H1 2023: £12.8m). The EBITA contribution of the Organic
businesses declined 14% versus H1 2023.
Return on Total Invested Capital ("ROTIC") reduced to 20.7% against 22.8%
for the trailing 12 months ended 30 June 2023.
Adjusted basic earnings per share decreased by 19% to 123.7p (H1 2023: 152.8p)
and Adjusted diluted earnings per share reduced similarly to 121.6p from
150.3p. Adjusted Earnings per share were still affected for half of the period
by the increase in UK corporation tax rates to 25%.
The Directors continue to publish Adjusted figures alongside the statutory
results, 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 pre-tax adjustments of £5.0m (H1
2023: £9.8m restated) consists primarily of a £4.2m charge for
amortisation (H1 2023: £6.1m) of acquired intangible assets arising through
acquisition. These adjusting items reduce profit before tax
from £10.8m to £5.8m (H1 2023: £12.8 to £3.0m restated) and result in
earnings per share of 63.3p basic and 62.3p diluted (H1 2023: 15.6p per share
basic and 15.3p per share diluted).
Corporate activity
On 1 February 2024, the Group acquired 100% of the share capital of Luciol
Instruments SA ("Luciol"), a company specialising in instruments to test
fibreoptics, based in Mies, Vd, Switzerland. The initial consideration
was CHF 2.0m paid in cash on completion plus excess cash. A cash earn-out
capped at CHF 0.5m will be paid if and to the extent that Luciol exceeds an
average EBIT of CHF 0.5m in the four years ending on 31 December 2024 or 2025
at a multiple of four times the excess.
On 27 June 2024, the Group acquired 100% of the share capital of Rockwash
Geodata Ltd ("Rockwash"), a Llandudno based company specialising in rock
cuttings and chippings digitalisation, for an initial cash consideration
of £2.25m plus excess cash plus an earnout capped at £3.75m. The earnout
will be paid if and to the extent that Rockwash exceeds an EBIT of £0.375m in
2024 or 2025 at a multiple of six times the excess.
Cashflow and net debt
Group cash flow was disappointing as a legacy of the recent supply issues.
Cash generated from operations amounted to £7.8m (H1 2023: £11.5m)
representing 63% of Adjusted operating profit (H1 2023: 81%). Cash conversion
is an essential element of our business model and restoring it to the
pre-Covid levels is a priority.
The interim balance sheet includes cash balances of £6.9m; the increased
flexibility of our debt facility reduces the requirement to hold large cash
balances. Adjusted net debt grew to £52.3m from the beginning of 2024 (31
December 2023: £45.2m); £7m related to acquisitions and £3m on capex.
Dividend
In accordance with the Company's policy of increasing dividends by no less
than 10% per annum, the Board is declaring an interim dividend of 29.7p (2023:
27p), which will be paid on Friday 8 November 2024 to shareholders on the
register on Friday 11 October 2024. The shares will go ex-dividend on
Thursday 10 October 2024. The interim dividend is covered 4.2 times by
Adjusted earnings (2023: 5.7 times).
Post balance sheet events
Post period-end, the Group has made further strategic progress, highlighting
the resilience of the Group's business model.
On 1 July 2024, the Group amended and extended its multi-bank facility, which
now amounts to £140m (including a £50m accordion), compared with £100m
(including a £20m accordion). The facility was extended by two years and now
expires on 1 July 2028, adding increased capability to the Group's deal-making
capacity.
On 15 August 2024, the Group acquired 100% of the shares of Magsputter
Limited, the holding company of Teer Coatings Limited, a company manufacturing
top-of-the-range physical vapour deposition instruments and providing
specialised coating services. The consideration was £12.3m (excluding excess
cash), equal to six times adjusted EBIT for the year ended 31 January 2024 of
£1.74m, plus the independent valuation of the property. The Board expects the
Acquisition to be immediately earnings enhancing.
On 28 August 2024, Geotek signed a binding contract for its next coring
expedition; this expedition will take place in the first half of 2025 and the
revenue arising from this contract will be of a similar magnitude to recent
coring contracts.
On 2 September 2024, we were pleased to welcome Dr Ian Wilcock to the Board
as Group Commercial Director, further reinforcing the executive team. Ian is
experienced in successfully leading divisions in large scientific groups and
will join Mark Lavelle and Dr Tim Prestidge in the pursuit of excellence at
our businesses.
Outlook
The World is still in a very nervous place, a trend that is not ideal for the
scientific community which thrives on free exchange and a cosmopolitan
atmosphere. Our sector is also sensitive to efforts to control sovereign debt
and the potential impact on research spending. More positively, exchange rates
have remained favourable to our export driven business.
Your Board expects the second half to show significant improvement, with
several agreements signed too late to impact the first half but contributing
to the second. With the signature of a 2025 coring contract, our order intake
is now 3% ahead of YTD 2023. The Board is not revising its current guidance
for the full year performance, but remains mindful of the challenging market
conditions and current short-term vulnerability to the timing of orders and
revenue.
In spite of the trading disappointment in the first half, the Group has again
demonstrated its resilience and its financial strength with the completion of
three acquisitions since the start of the year and a 10% increase to the
interim dividend, thus continuing to build on our model of delivering
long-term shareholder value.
The Hon. Alexander Hambro
Chairman
19 September 2024
Condensed consolidated interim statement of comprehensive income
Note Adjusted Adjusting Adjusted Adjusting Year to
£m items 30 June £m items 31 December
£m 2024 restated 30 June 2023
£m £m 2023 £m
restated
£m
Revenue 3 60.8 - 60.8 61.3 - 61.3 136.1
Operating costs 3,4 (48.5) (5.1) (53.6) (47.1) (6.9) (54.0) (114.5)
Operating profit/(loss) 12.3 (5.1) 7.2 14.2 (6.9) 7.3 21.6
Interest income 0.2 - 0.2 0.1 - 0.1 0.4
Interest expense 4 (1.7) 0.1 (1.6) (1.5) (2.9) (4.4) (8.6)
Profit/(loss) before tax 10.8 (5.0) 5.8 12.8 (9.8) 3.0 13.4
Taxation (charge)/credit (2.5) 1.0 (1.5) (2.8) 1.0 (1.8) (3.5)
Profit/(loss) for the period 8.3 (4.0) 4.3 10.0 (8.8) 1.2 9.9
Attributable to:
Owners of the parent 8.2 (4.0) 4.2 9.8 (8.8) 1.0 9.5
Non-controlling interests 0.1 - 0.1 0.2 - 0.2 0.4
Profit/(loss) for the period 8.3 (4.0) 4.3 10.0 (8.8) 1.2 9.9
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Retirement benefits actuarial (loss)/gain (1.4) 0.2 0.1
Deferred tax on retirement benefits actuarial (loss)/gain 0.3 - -
Items that may be reclassified subsequently to profit or loss
Exchange (loss)/gain on translation of foreign subsidiaries - (0.1) (0.1)
Other comprehensive (loss)/income for the period, net of tax (1.1) 0.1 -
Total comprehensive income for the period 3.2 1.3 9.9
Attributable to:
Owners of the parent 3.1 1.1 9.5
Non-controlling interests 0.1 0.2 0.4
Pence Pence Pence Pence Pence
restated
Earnings per share - adjusted
Basic 5 123.7 152.8 374.6
Diluted 5 121.6 150.3 368.5
Earnings per share - total
Basic 5 63.3 15.6 145.8
Diluted 5 62.3 15.3 143.5
The statement of comprehensive income for the period to 30 June 2023 was
restated for adjustment to the measurement of the fair value of the contingent
consideration recognised in the Geotek acquisition to align with an amendment
recorded in the 2023 Annual Report and Accounts. See note 13 for further
details.
Condensed consolidated interim balance sheet
Note 30 June 30 June 31 December
2024 2023 2023
£m restated £m
£m
ASSETS
Non-current assets
Goodwill 6 57.7 54.8 54.8
Other intangible assets 7 35.3 41.0 35.6
Property, plant and equipment 22.2 16.7 19.8
Right-of-use leased assets 6.1 6.5 6.6
Retirement benefit surplus 11 - 1.5 1.4
121.3 120.5 118.2
Current assets
Inventories 27.9 28.4 26.5
Trade and other receivables 27.5 25.7 25.1
Cash and cash equivalents 6.9 14.6 13.7
62.3 68.7 65.3
Total assets 183.6 189.2 183.5
LIABILITIES
Current liabilities
Trade and other payables (21.0) (26.5) (24.6)
Payables relating to acquisitions 9 (1.2) (1.6) (0.5)
Borrowings 10 (6.3) (6.2) (6.2)
Right-of-use lease liabilities (1.2) (1.2) (1.2)
Current tax liabilities (1.9) (3.3) (2.5)
(31.6) (38.8) (35.0)
Non-current liabilities
Payables relating to acquisitions 9 (2.7) - -
Borrowings 10 (49.0) (56.8) (52.2)
Right-of-use lease liabilities (5.3) (5.5) (5.7)
Deferred tax liabilities (7.6) (8.6) (8.0)
(64.6) (70.9) (65.9)
Total liabilities (96.2) (109.7) (100.9)
Net assets 87.4 79.5 82.6
EQUITY
Share capital 8 0.3 0.3 0.3
Share premium 19.1 17.6 17.7
Other reserves 26.9 26.9 26.9
Retained earnings 41.0 34.3 37.5
Equity attributable to owners of the parent 87.3 79.1 82.4
Non-controlling interests 0.1 0.4 0.2
Total equity 87.4 79.5 82.6
The 30 June 2023 balance sheet has been restated to adjust the initial
goodwill and equity component of contingent consideration payable which was
recognised in the Geotek acquisition to align with an amendment recorded in
the 2023 Annual Report and Accounts. See note 13 for further details.
Condensed consolidated interim statement of changes in equity
Share Share Other Retained Total Non- Total
capital premium reserves earnings attributable controlling equity
£m £m £m £m to owners interests £m
of parent £m
£m
At 1 January 2024 0.3 17.7 26.9 37.5 82.4 0.2 82.6
Dividends - - - - - (0.2) (0.2)
Issue of share capital - 1.4 - - 1.4 - 1.4
Purchase of own shares for Company reward scheme - - - (0.1) (0.1) - (0.1)
Tax on Company reward scheme shares awarded - - - (0.1) (0.1) - (0.1)
Share-based payments - - - 0.6 0.6 - 0.6
Transactions with owners - 1.4 - 0.4 1.8 (0.2) 1.6
Profit for the period - - - 4.2 4.2 0.1 4.3
Retirement benefit actuarial loss - - - (1.1) (1.1) - (1.1)
Foreign exchange differences - - - - - - -
Total comprehensive income for the period - - - 3.1 3.1 0.1 3.2
At 30 June 2024 0.3 19.1 26.9 41.0 87.3 0.1 87.4
At 1 January 2023 0.3 17.2 4.1 32.7 54.3 0.2 54.5
Issue of share capital - 0.4 22.9 - 23.3 - 23.3
Purchase of own shares for Company reward scheme - - - (0.1) (0.1) - (0.1)
Tax on Company reward scheme shares awarded - - - (0.1) (0.1) - (0.1)
Share-based payments - - - 0.6 0.6 - 0.6
Transactions with owners - 0.4 22.9 0.4 23.7 - 23.7
Profit for the period restated - - - 1.0 1.0 0.2 1.2
Retirement benefit actuarial gain - - - 0.2 0.2 - 0.2
Foreign exchange differences - - (0.1) - (0.1) - (0.1)
Total comprehensive income for the period - - (0.1) 1.2 1.1 0.2 1.3
At 30 June 2023 0.3 17.6 26.9 34.3 79.1 0.4 79.5
At 1 January 2023 0.3 17.2 4.1 32.7 54.3 0.2 54.5
Dividends - - - (5.7) (5.7) (0.4) (6.1)
Issue of share capital - 0.5 22.9 - 23.4 - 23.4
Purchase of own shares for Company reward scheme - - - (0.1) (0.1) - (0.1)
Tax on Company reward scheme shares awarded - - - (0.1) (0.1) - (0.1)
Deferred tax on share-based payments - - - (0.1) (0.1) - (0.1)
Share-based payments - - - 1.2 1.2 - 1.2
Transactions with owners - 0.5 22.9 (4.8) 18.6 (0.4) 18.2
Profit for the year - - - 9.5 9.5 0.4 9.9
Retirement benefit actuarial gain - - - 0.1 0.1 - 0.1
Foreign exchange differences - - (0.1) - (0.1) - (0.1)
Total comprehensive income for the period - - (0.1) 9.6 9.5 0.4 9.9
At 31 December 2023 0.3 17.7 26.9 37.5 82.4 0.2 82.6
The statement of comprehensive income for the period to 30 June 2023 was
restated for adjustment to the measurement of the fair value of the contingent
consideration recognised in the Geotek acquisition to align with an amendment
recorded in the 2023 Annual Report and Accounts. See note 13 for further
details.
Condensed consolidated interim cashflow statement
Six months Six months Year to
to 30 June to 30 June 31 December
2024 2023 2023
£m restated £m
£m
Cashflows from operating activities
Profit after tax 4.3 1.2 9.9
Adjustments for:
Financial instruments measured at fair value: interest rate swaps (0.1) (1.1) 1.2
Share-based payments 0.6 0.6 1.2
Depreciation of property, plant and equipment 1.0 0.8 1.9
Depreciation of right-of-use leased assets 0.7 0.6 1.3
Amortisation of acquired intangible assets 4.2 6.1 11.8
Amortisation of internally generated intangible assets 0.3 0.1 0.4
Interest income (0.2) (0.1) (0.3)
Interest expense 1.5 1.4 3.0
Interest payable on right-of-use lease liabilities 0.2 0.1 0.4
Fair value movement on contingent consideration - 4.0 4.0
Retirement benefit obligation net interest cost - - (0.1)
Tax recognised in the Consolidated Statement of Comprehensive Income 1.5 1.8 3.5
Increase in inventories (1.0) (5.9) (5.1)
(Increase)/decrease in trade and other receivables (1.2) 1.4 (0.3)
(Decrease)/increase in trade and other payables (4.0) 0.5 (1.5)
Cash generated from operations 7.8 11.5 31.3
Tax paid (3.2) (1.7) (4.8)
Net cash from operating activities 4.6 9.8 26.5
Cashflows from investing activities
Paid on acquisition of subsidiaries (4.0) (3.2) (3.1)
Paid in respect of surplus working capital (0.7) - (1.2)
Paid in respect of earn out (0.2) (17.5) (17.5)
Gross cash inherited on acquisition 1.4 1.5 1.5
Acquisition of subsidiaries, net of cash acquired (3.5) (19.2) (20.3)
Purchase of property, plant and equipment (3.0) (1.6) (4.7)
Capitalised development costs (0.6) (0.6) (1.2)
Interest received 0.2 0.1 0.3
Net cash used in investing activities (6.9) (21.3) (25.9)
Cashflows from financing activities
Proceeds from issue of share capital 1.4 0.1 0.5
Purchase of own shares for Company reward scheme (0.1) (0.1) (0.1)
Tax on shares awarded under Company reward scheme (0.1) (0.1) (0.1)
Finance costs paid (1.5) (1.4) (3.0)
Repayments of borrowings (3.1) (3.1) (9.2)
Repayments of right-of-use lease liabilities (0.9) (0.6) (1.6)
Proceeds from bank loans - 10.5 12.0
Equity dividends paid - - (5.7)
Dividends paid to non-controlling interest (0.2) - (0.4)
Net cash from financing activities (4.5) 5.3 (7.6)
Net change in cash and cash equivalents (6.8) (6.2) (7.0)
Cash and cash equivalents at the start of the period 13.7 20.8 20.8
Exchange movements - - (0.1)
Cash and cash equivalents at the end of the period 6.9 14.6 13.7
The Condensed consolidated interim cashflow statement for the period to 30
June 2023 was restated for adjustment to the measurement of the fair value of
the contingent consideration recognised in the Geotek acquisition to align
with an amendment recorded in the 2023 Annual Report and Accounts. See note 13
for further details.
Notes to the interim results
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 2024 and the comparative figures for the six months ended 30
June 2023 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 2023, which have been prepared in accordance
with international accounting standards in conformity with the requirements of
the Companies Act 2006 (IFRS).
The financial information for the year ended 31 December 2023 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 2023 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 18 September 2024.
Going concern
The consolidated financial statements have been prepared on a going concern
basis. The Group ended the first half of 2024 with adjusted net debt of
£52.3m compared to adjusted net debt of £45.1m at 31 December 2023, after
paying £4.2m in cash in respect of the Luciol and Rockwash acquisitions (see
note 9). The Group uses adjusted net debt rather than statutory net debt for
this comparison, as this figure includes actual cash liabilities arising from
acquisitions. The increase in net debt resulted from the aforementioned
acquisitions and their corresponding expected earnout payments, payment of our
fair share of tax (£1.5m) and ongoing investment into capital expenditure
(including property refurbishment) for the businesses (£3.0m) partially
offset by cash generation.
The Directors have considered the potential ongoing impact of the heightened
political tensions globally and of continuing higher levels of interest rates
and inflation. The Group is in a strong financial position with solid cash
balances, low gearing and a robust future order book enabling it to face the
challenge of the continued uncertain global economic environment. The
Directors have planned for reasonably foreseeable worsening scenarios
including a repetition of the same level of reduction in orders in 2024 as
happened after the first outbreak of Covid-19 in 2020, which would not cause
any significant challenges to the Group's continued existence.
The Directors therefore have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable
future. They therefore continue to adopt the going concern basis in preparing
the Interim Report.
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 2023, 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.
3. Segmental analysis
For the period ended 30 June 2024 Note Materials Vacuum Head office Total
Sciences £m £m £m
£m
Revenue 28.7 32.1 - 60.8
Operating costs (23.8) (23.2) (1.5) (48.5)
Adjusted operating profit 4.9 8.9 (1.5) 12.3
Adjusting items 4 (5.1)
Operating profit 7.2
Net interest expense (1.4)
Profit before tax 5.8
Income tax charge (1.5)
Profit for the period 4.3
For the period ended 30 June 2023 Note Materials Vacuum Head office Total
Sciences £m £m restated
£m £m
Revenue 31.0 30.3 - 61.3
Operating costs (23.7) (21.4) (2.0) (47.1)
Adjusted operating profit 7.3 8.9 (2.0) 14.2
Adjusting items 4 (6.9)
Operating profit 7.3
Net interest expense (4.3)
Profit before tax 3.0
Income tax charge (1.8)
Profit for the period 1.2
For the year ended 31 December 2023 Note Materials Vacuum Head office Total
Sciences £m £m £m
£m
Revenue 72.5 63.6 - 136.1
Operating costs (51.9) (45.0) (4.4) (101.3)
Adjusted operating profit 20.6 18.6 (4.4) 34.8
Adjusting items 4 (13.2)
Operating profit (21.6)
Net interest expense (8.2)
Profit before tax 13.4
Income tax charge (3.5)
Profit for the year 9.9
Unallocated items relate to the Group's head office costs.
Segment assets and liabilities
At 30 June 2024 Materials Vacuum Head office Total
Sciences £m £m £m
£m
Assets 57.9 43.3 82.4 183.6
Liabilities (33.8) (11.3) (51.1) (96.2)
Net assets 24.1 32.0 31.3 87.4
Capital expenditure 1.3 1.7 - 3.0
Depreciation of property, plant and equipment 0.6 0.4 - 1.0
Depreciation of right-of-use leased assets 0.4 0.3 - 0.7
Amortisation of acquired intangible assets 4.0 0.2 - 4.2
Amortisation of internally generated intangible assets 0.2 0.1 - 0.3
At 30 June 2023 Materials Vacuum Head office Total
Sciences £m restated restated
£m £m £m
Assets 50.4 40.9 97.9 189.2
Liabilities (28.3) (13.7) (67.7) (109.7)
Net assets 22.1 27.2 30.2 79.5
Capital expenditure 0.8 0.8 - 1.6
Depreciation of property, plant and equipment 0.4 0.4 - 0.8
Depreciation of right-of-use leased assets 0.4 0.2 - 0.6
Amortisation of acquired intangible assets 5.8 0.3 - 6.1
Amortisation of internally generated intangible assets - 0.1 - 0.1
At 31 December 2023 Materials Vacuum Head office Total
Sciences £m £m £m
£m
Assets 52.8 41.6 89.1 183.5
Liabilities (24.1) (13.1) (63.7) (100.9)
Net assets 28.7 28.5 25.4 82.6
Capital expenditure 2.2 2.5 - 4.7
Depreciation of property, plant and equipment 1.1 0.7 0.1 1.9
Depreciation of right-of-use leased assets 0.9 0.4 - 1.3
Amortisation of acquired intangible assets 11.1 0.7 - 11.8
Amortisation of internally generated intangible assets 0.1 0.3 - 0.4
Head office items are borrowings, intangible assets and goodwill arising on
acquisition, deferred tax, defined benefit obligations and parent company net
assets.
Geographic analysis Six months Six months Year to
to to 31 December
30 June 30 June 2023
2024 2023 £m
£m £m
UK (domicile) 7.8 7.3 14.7
Rest of Europe 17.3 16.0 33.7
North America 15.5 16.4 37.9
China/Hong Kong 6.4 6.7 18.4
Rest of the World 13.8 14.9 31.4
Revenue 60.8 61.3 136.1
4. Adjusting items
Note Six months Six months Year to
to to 31 December
30 June 30 June 2023
2024 2023 £m
£m restated
£m
Amortisation of acquired intangible assets 4.2 6.1 11.8
Share-based payments 0.6 0.6 1.2
Employment taxes arising from share-based payments - - -
Retirement benefits obligation costs 0.1 - -
Acquisition costs 9 0.2 0.2 0.2
Total adjusting items within operating profit 5.1 6.9 13.2
Fair value movement on contingent consideration - 4.0 4.0
Retirement benefits obligation net interest credit - - (0.1)
Financial instruments measured at fair value: interest rate swaps (0.1) (1.1) 1.2
Total adjusting items 5.0 9.8 18.3
Taxation (1.0) (1.0) (3.4)
Total adjusting items net of tax 4.0 8.8 14.9
Attributable to:
Owners of the parent 4.0 8.8 14.9
Non-controlling interests - - -
4.0 8.8 14.9
5. Earnings per share
Note Six months Six months Year to
to 30 June to 30 June 31 December
2024 2023 2023
£m restated £m
£m
Profit for the period attributable to owners of the parent
Adjusted profit 8.2 9.8 24.4
Adjusting items 4 (4.0) (8.8) (14.9)
Profit for the period 4.2 1.0 9.5
Pence Pence Pence
restated
Earnings per share - adjusted
Basic 123.7 152.8 374.6
Diluted 121.6 150.3 368.5
Earnings per share - total
Basic 63.3 15.6 145.8
Diluted 62.3 15.3 143.5
Note Number Number Number
Issued Ordinary shares at start of the period 8 6,615,717 6,369,746 6,369,746
Movement in Ordinary shares during the period 8 25,617 237,992 245,971
Issued Ordinary shares at end of the period 8 6,641,334 6,607,738 6,615,717
Weighted average number of shares in issue 6,629,848 6,411,767 6,514,028
Dilutive effect of share options 111,490 109,140 106,816
Weighted average shares in issue on a diluted basis 6,741,338 6,520,907 6,620,844
Adjusted basic earnings per share is calculated on the adjusted profit, which
excludes 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 share 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. Goodwill
The following tables show the additions to goodwill:
Total
£m
Carrying amount at 1 January 2024 54.8
Acquisitions (see note 9) 2.9
Carrying amount at 30 June 2024 57.7
Total
restated
£m
Carrying amount at 1 January 2023 53.6
Acquisitions 1.2
Carrying amount at 30 June 2023 54.8
Total
£m
Carrying amount at 1 January 2023 53.6
Acquisitions 1.2
Carrying amount at 31 December 2023 54.8
7. Other intangible assets
The following tables show the additions to, and amortisation of, intangible
assets:
Internally Acquired Acquired Acquired Acquired Total
generated technology sales order brand customer £m
development £m backlog and relationships
costs £m domain £m
£m names
£m
Carrying amount at 1 January 2024 2.9 19.4 - 1.5 11.8 35.6
Acquisitions (see note 9) 0.1 2.1 0.1 0.3 1.0 3.6
Additions 0.6 - - - - 0.6
Amortisation (0.3) (2.0) - (0.3) (1.9) (4.5)
Carrying amount at 30 June 2024 3.3 19.5 0.1 1.5 10.9 35.3
Internally Acquired Acquired Acquired Acquired Total
generated technology sales order brand customer £m
development £m backlog and relationships
costs £m domain £m
£m names
£m
Carrying amount at 1 January 2023 2.1 22.1 3.2 2.1 14.9 44.4
Acquisitions - 1.3 0.2 - 0.7 2.2
Additions 0.6 - - - - 0.6
Amortisation (0.1) (2.0) (1.8) (0.3) (2.0) (6.2)
Carrying amount at 30 June 2023 2.6 21.4 1.6 1.8 13.6 41.0
Internally Acquired Acquired Acquired Acquired Total
generated technology sales order brand customer £m
development £m backlog and relationships
costs £m domain £m
£m names
£m
Carrying amount at 1 January 2023 2.1 22.1 3.2 2.1 14.9 44.4
Acquisitions - 1.3 0.2 - 0.7 2.2
Additions 1.2 - - - - 1.2
Amortisation (0.4) (4.0) (3.4) (0.6) (3.8) (12.2)
Carrying amount at 31 December 2023 2.9 19.4 - 1.5 11.8 35.6
8. Share capital
Movements in the Group's Ordinary shares in issue are summarised as follows:
Ordinary shares of 5p each 2024 2023
£m £m
Allotted, called up and fully paid - Ordinary shares of 5p each
1 January: 6,615,717 shares (2023: 6,369,746 shares) 0.3 0.3
Exercise of share options: 25,617 shares (2023: 7,851 shares) - -
Issue of shares as settlement of acquisition costs: nil shares (2023: 2,278 - -
shares)
Issue of shares as settlement of earn-out: nil shares (2023: 227,863 shares) - -
30 June: 6,641,334 shares (2023: 6,607,738 shares) 0.3 0.3
9. Acquisitions
Acquisition of Henniker Scientific Limited
The maximum earn-out of £0.5m on the acquisition was achieved in full and was
settled in July 2024.
Acquisition of Luciol Instruments SA
On 1 February 2024, Judges Scientific acquired 100% of the entire issued
capital of Luciol Instruments SA ("Luciol") a company manufacturing and
selling instruments to measure optic fibre properties based in Mies,
Vd, Switzerland.
The purchase price of Luciol consists of:
- The initial consideration, paid in cash at completion, of CHF
2.0m;
- Contingent consideration up to a maximum of CHF 0.5m to be
satisfied in cash;
- The contingent consideration becomes payable on achievement of an
average minimum adjusted EBIT of CHF 0.5m for the four years to 31 December
2023 (or 2024 if higher) increasing pro rata on a 4:1 ratio until it reaches a
cap when an adjusted EBIT of CHF 0.625m is achieved; and
- An additional payment for excess cash at completion (surplus
working capital) over and above the ongoing requirements of the business and
will be covered by the cash inherited at completion.
The summary provisional fair value of the cost of this acquisition (in
Sterling) includes the components stated below:
Consideration £m
Initial cash consideration 1.8
Contingent consideration 0.5
2.3
Gross cash inherited on acquisition 0.7
Cash retained in the business -
Payment in respect of surplus working capital 0.7
Total consideration 3.0
Acquisition-related transaction costs charged to operating costs 0.1
On 27 March 2024 Judges paid CHF 0.2m in relation to the Luciol earn out. A
further CHF 0.3m is still payable dependent on Luciol's future performance.
The summary provisional fair values recognised for the assets and liabilities
acquired from Luciol during the period are as follows:
Book value Accounting Fair value Fair value
£m policy adjustments £m
alignments £m
£m
Intangible assets - - 0.9 0.9
Inventories 0.4 0.1 (0.1) 0.4
Trade and other receivables 0.3 - - 0.3
Cash and cash equivalents 0.7 - - 0.7
Total assets 1.4 0.1 0.8 2.3
Trade payables (0.1) - - (0.1)
Deferred tax liabilities - - (0.2) (0.2)
Total liabilities (0.1) - (0.2) (0.3)
Net identifiable assets and liabilities 1.3 0.1 0.6 2.0
Total consideration 3.0
Goodwill recognised 1.0
The intangible assets recognised reflect recognition of acquired customer
relationships, the value of the brand and the acquired technology. A
significant amount of the value of the acquired business is attributable to
its workforce and sales knowhow and contributes to the goodwill recognised
upon acquisition. £1.0m of goodwill has been allocated to the Materials
Sciences segment.
The majority of the deferred tax liabilities recognised represent the tax
effect which will result from the amortisation of the intangible assets,
estimated using the tax rate substantively enacted at the balance sheet date.
Acquisition of Rockwash Geodata
On 27 June 2024, Judges Scientific acquired 100% of the entire issued capital
of Rockwash Geodata Ltd ("Rockwash") a company specialising in rock cuttings
and chippings digitalisation.
The purchase price of Rockwash consists of:
- The initial consideration, paid in cash at completion, of £2.2m;
- Contingent consideration up to a maximum of £3.8m to be satisfied
in cash;
- The contingent consideration becomes payable on achievement of an
average minimum adjusted EBIT of £0.4m for the year ended 31 December 2024
(or 2025 if higher) increasing pro rata on a 6:1 ratio until it reaches a cap
when an adjusted EBIT of £1.0m is achieved; and
- An additional payment for excess cash (surplus working capital) at
completion over and above the ongoing requirements of the business and will be
covered by the cash inherited at completion.
The summary provisional fair value of the cost of this acquisition includes
the components stated below:
Consideration £m
Initial cash consideration 2.2
Contingent consideration 2.7
Gross cash inherited on acquisition 0.7
Cash retained in the business (0.3)
Payment in respect of surplus working capital 0.4
Total consideration 5.3
Acquisition-related transaction costs charged to operating costs 0.1
The Group expects the earnout to be paid in full in relation to Rockwash's
2025 results. The contingent consideration has been discounted in arriving at
the amount in the table above.
The summary provisional fair values recognised for the assets and liabilities
acquired from Rockwash during the period are as follows:
Book value Accounting Fair value Fair value
£m policy adjustments £m
alignments £m
£m
Intangible assets 0.1 - 2.6 2.7
Property, plant and equipment 0.4 - - 0.4
Right-of-use leased assets - 0.1 - 0.1
Deferred tax assets - - - -
Current tax recoverable - - - -
Inventories - - - -
Trade and other receivables 0.9 - (0.2) 0.7
Cash and cash equivalents 0.7 - - 0.7
Total assets 2.1 0.1 2.4 4.6
Trade payables (0.3) - - (0.3)
Deferred tax liabilities (0.1) - (0.6) (0.7)
Right-of-use lease liabilities - (0.1) - (0.1)
Current tax liability (0.1) - - (0.1)
Total liabilities (0.5) (0.1) (0.6) (1.2)
Net identifiable assets and liabilities 1.6 - 1.8 3.4
Total consideration 5.3
Goodwill recognised 1.9
The intangible assets recognised reflect recognition of acquired customer
relationships, the value of the acquired future committed order book, together
with the acquired technology. A significant amount of the value of the
acquired business is attributable to its workforce and sales knowhow and
contributes to the goodwill recognised upon acquisition. £1.9m of goodwill
has been allocated to the Materials Sciences segment.
The majority of the deferred tax liabilities recognised represent the tax
effect which will result from the amortisation of the intangible assets,
estimated using the tax rate substantively enacted at the balance sheet date.
Acquisition of Magsputter Limited (post-balance sheet event)
Post-period end, on 15 August 2024, Judges Scientific acquired 100% of the
shares of Magsputter Limited, the holding company of Teer Coatings Limited
and the building they occupy for an initial cash consideration of £12.3m. An
additional payment will be made to reflect any excess working capital over and
above the ongoing requirements of the business which will be covered by the
business's existing cash resources. Due to the timing of this acquisition,
full disclosures have not been provided, including fair value of acquired
assets and liabilities.
All acquisitions were made in line with Group strategy, which includes
acquiring independent trading companies or complementary companies for
existing subsidiaries.
10. Changes in net debt
Changes in net debt for the six months ended 30 June 2024 were as follows:
1 January Cashflow Non-cash 30 June
2024 £m items 2024
£m £m £m
Cash at bank and in hand 13.7 (6.8) - 6.9
Bank debt (58.4) 3.1 - (55.3)
IFRS 16 right-of-use lease liabilities (6.9) 0.9 (0.5) (6.5)
Statutory net debt (51.6) (2.8) (0.5) (54.9)
Less: IFRS 16 right-of-use lease liabilities 6.9 (0.9) 0.5 6.5
Add: Accrued acquisition consideration payable in cash (note 9) (0.5) 0.2 (3.6) (3.9)
Adjusted net debt (45.2) (3.5) (3.6) (52.3)
Non-cash items primarily represent foreign exchange differences on foreign
currency bank balances.
The movement in borrowings over the period was as follows:
2024 2023
£m £m
At 1 January 58.4 55.6
Net proceeds from drawdown of loans - 10.5
Repayment of loans (3.1) (3.1)
Interest payable 1.7 1.4
Interest paid (1.7) (1.4)
At 30 June 55.3 63.0
2024 2023
£m £m
Current 6.3 6.2
Non-current 49.0 56.8
Total borrowings at 30 June 55.3 63.0
As at 30 June 2024 the Term Loan was £11.0m (31 December 2023: £14.1m)
and the RCF was £44.3m drawn (31 December 2023: £44.3m drawn),
with £10.7m undrawn, alongside the uncommitted £20m accordion.
Amendment and Extension to Facilities (post balance sheet event)
On 1 July 2024, the Group entered into an amendment and extension of the
Group's existing multi-bank facility ("Facility"). The changes to the Group's
Facility are as follows:
· £40m extension of the aggregate to £140m consisting of
a £90m revolving credit facility ("RCF") alongside a £50m uncommitted
accordion facility, which can be drawn with the agreement of the Banks. This
replaces the previous £100m facility which consisted of a £25m term loan
("Term Loan"), a committed £55m RCF and a £20m uncommitted accordion.
· The Facility has been extended by two years giving a four year term
running to 1 July 2028 ("Borrowing Term").
There were no changes to the existing covenants which remain as:
· Gearing no greater than 3 times Adjusted EBITDA*; and
· Interest Cover no less than 3 times.
*Adjusted EBITDA (earnings before interest, tax, depreciation and
amortisation) excludes adjusting items relating to amortisation of acquired
intangible assets, acquisition-related costs, share based payments and hedging
of risks materialising after the end of the year.
11. Defined benefit scheme
In March 2024, the Trustees of the scheme entered into a buy-in policy with an
insurance company. This policy secures payment of all future pensions due to
the scheme's members in relation to their pensions.
12. Dividends
During the period, the Company paid £nil dividends (period to 30 June 2023:
£nil).
The Company paid a final dividend of 68p per share totalling £4.5m to
shareholders on 5 July 2024 relating to the financial year ended 31 December
2023.
The Company will pay an interim dividend for 2024 of 29.7p per share (2023:
interim dividend of 27p per share) on 8 November 2024 to shareholders on the
register on 11 October 2024. The shares will go ex-dividend on 10 October
2024.
13. Restatement of 2023 half year figures
Within the 2023 report and accounts, the 31 December 2022 balance sheet was
restated to adjust the initial goodwill and equity component of the contingent
consideration payable arising from the Geotek acquisition in May 2022. The
contingent consideration balance should have been £2.2m higher at the
acquisition date with a corresponding increase in goodwill, as the equity
share component of the contingent consideration should have been measured by
reference to the fair value of the Judges share price. This amendment had no
overall impact on net assets and no overall impact on the statement of
comprehensive income for the year ended 31 December 2022.
This accounting alignment also had to be applied to the comparative 2023 half
year results. Originally, within the statement of comprehensive income, a
£6.2m charge was recorded within adjusting items (which encompassed £0.7m
for unwinding of the discount on the fair value of deferred consideration and
£5.5m for the premium on the ordinary shares issued to the vendors upon
achievement of the earn-out). The amended accounting instead required a £4.0m
charge to recognised the fair value movement on the equity component of the
contingent consideration instead of the aforementioned £6.2m charge.
Therefore a credit of £2.2m has been recorded to the statement of
comprehensive income with a corresponding increase to goodwill which restated
the prior period figures. This aligns both the fair value movement on
contingent consideration (within adjusting items) and goodwill relating to the
Geotek acquisition in the 2023 half year results with the 2023 report and
accounts.
The net effect on the statement of comprehensive income for the six month
period to 30 June 2023 is an increase of £2.2m to statutory profit and a
corresponding £2.2m increase to equity. There is no effect on the Adjusted
profit for the six-month period to 30 June 2023.
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BVLLFZKLBBBXRecent news on Judges Scientific
See all newsREG - Judges ScientificPLC - Notice of AGM
AnnouncementREG - Judges ScientificPLC - Board Change and formation of Executive Committee
AnnouncementREG - Judges ScientificPLC - Director/PDMR Shareholding
AnnouncementREG - Judges ScientificPLC - Director/PDMR Shareholding
AnnouncementREG - Judges ScientificPLC - Confirmation of Full Year Results
Announcement