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JDG Judges Scientific Plc

10,200.00
-100.00 (-0.97%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Judges Scientific Plc LSE:JDG London Ordinary Share GB0032398678 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -100.00 -0.97% 10,200.00 10,100.00 10,350.00 10,400.00 10,150.00 10,400.00 14,935 16:35:11
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Lab Analytical Instruments 113.21M 12.44M 1.8823 54.32 675.64M

Judges Scientific PLC Interim Results (2571K)

20/09/2016 7:01am

UK Regulatory


Judges Scientific (LSE:JDG)
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TIDMJDG

RNS Number : 2571K

Judges Scientific PLC

20 September 2016

 
 Press release   20 September 2016 
 

Judges Scientific plc

("Judges Scientific", the "Company", or the "Group")

Interim results for the six months ended 30 June 2016

Key financials

-- Revenues up 9.3% to a record GBP27.3 million (H1 2015: GBP24.9 million) including 7.0% organic growth;

-- CoolLED, Dia-Stron and Fire Instrumentation and Research Equipment ("FIRE") acquired during the period for a total consideration of GBP6.6m;

-- Interim dividend of 9.0p (H1 2015: 8.1p), an increase of 11.1%; covered 3.7 times by adjusted earnings;

   --       Organic order intake down 1.6% compared with H1 2015; 
   --       Organic order book at 10.7 weeks (H1 2015: 11.7 weeks); 
   --       Adjusted* pre-tax profit down 11.4% to GBP3.0 million (H1 2015: GBP3.3 million); 
   --       Adjusted* basic earnings per share down 19.2% to 33.2p (H1 2015: 41.1p); 
   --       Cash generated from operations of GBP2.4 million (H1 2015: GBP2.3 million); 

-- Adjusted* net debt of GBP10.3 million as at 30 June 2016 (30 June 2015: GBP7.5 million and 31 December 2015: GBP4.0 million);

-- Cash balances of GBP6.0 million as at 30 June 2016 (30 June 2015: GBP8.2 million and 31 December 2015: GBP8.5 million).

* Adjusted earnings figures are stated before adjusting items relating to hedging of risks materialising after the end of the period, amortisation of intangible assets, share based payments and acquisition-related costs. Adjusted net debt notionally includes acquisition-related payments which had yet to be settled at the balance sheet date and excludes subordinated debt owed by subsidiaries to minority shareholders.

Alex Hambro, Chairman of Judges Scientific, commented:

"This has been a period of contrast, with success in the pursuit of earnings-enhancing acquisitions and frustration in respect of short-term trading performance. At this stage, the Board therefore believes that the full year results will be significantly below market expectations."

For further information please contact:

 
Judges Scientific plc                          +44 (0) 20 3829 6970 
 David Cicurel, CEO / Brad Ormsby, Group FD     www.judges.uk.com 
Shore Capital (Nomad and Broker) 
 Stephane Auton / Edward Mansfield              +44 (0) 20 7408 4090 
Media enquiries: 
 Abchurch (Financial Public Relations) 
Rebecca Clube / Julian Bosdet / Tim Thompson   Tel: +44 (0) 20 7398 7714 
                                                www.abchurch-group.com 
 

Chairman's Statement

I am pleased to be able to report, for the eleventh consecutive year, record revenues and dividends. This has been a period of contrast, with success in the pursuit of earnings-enhancing acquisitions and frustration in respect of short-term trading performance. The patchy climate, which has characterised our sector in the last five years and affected its participants at various times to various degrees, has continued to prevail and dampened our performance in the first half of 2016. This resulted in slower order intake and reduced adjusted pre-tax profits and earnings per share for the period.

Acquisitions

During the period under review, the Group completed three acquisitions:

-- CoolLED Limited, which makes LED based illumination systems for fluorescence microscopy, was acquired on 17 February 2016 for GBP3.6 million including the payment of a GBP0.1 million earn-out;

-- The business and assets of FIRE were purchased by the Group's subsidiary Fire Testing Technology Limited ("FTT") on 28 March 2016; and

-- Dia-Stron Limited, which makes systems to test the mechanical properties of fibres (predominantly human hair), was acquired on 31 March 2016 for GBP2.7 million.

The results for the six-month period ended 30 June 2016 include the maiden contribution of these three businesses as well as a full six-month contribution from Armfield Limited (acquired 22 January 2015). All references to "Organic" data in this statement exclude Armfield, CoolLED and Dia-Stron ("the Acquired Companies"), as they were not owned by the Group as at 1 January 2015, but include the figures relating to FIRE which are neither material nor distinguishable from FTT's.

Trading performance

Group revenues for the six months ended 30 June 2016 progressed 9.3% to GBP27.3 million (H1 2015: GBP24.9 million), as a result of 7.0% Organic growth and of the inclusion of the revenue generated by the Acquired Companies. Organic sales progressed best in North America, but were weak in the UK (down 13%) and in China / Hong Kong (down 10%). The post-acquisition revenues of CoolLED and Dia-Stron were satisfactory, but Armfield's revenue was down following slow order intake during the first five months of 2016. Group revenue was also significantly held back by production issues in one of the constituents of the Group's Vacuum division.

As a consequence, organic EBITA contribution declined by 3.4% in the first half of 2016 and adjusted pre-tax profit reduced by 11.4% to GBP3.0 million (H1 2015: GBP3.3 million). Adjusted basic earnings per share decreased 19.2% to 33.2p (H1 2015: 41.1p); the decline is sharper than that of pre-tax profit due to the good performance in H1 2016 of the Group's two part-owned businesses. Adjusted diluted earnings per share contracted from 40.3p to 32.7p. Return on total invested capital ("ROTIC") progressed modestly to 20.8% (based on 12 months to June 2016) from 18.7% a year before.

Consistent with past reports, the Group's figures have been adjusted to present, in the Directors' opinion, the true operating performance of the Group. The total adjustments of GBP3.6 million (H1 2015: GBP4.8 million) include a GBP2.9 million charge for amortisation of acquired intangible assets (H1 2015: GBP4.3 million) primarily arising from recent acquisitions. The adjusting items reduce profit before tax from GBP3.0 million to a loss of GBP0.7 million (H1 2015: loss of GBP1.5 million) and earnings per share to a negative 16.3p for both basic and diluted (H1 2015: negative 24.7p basic and diluted).

Cashflow and net debt

Cash flow during the first half of 2016 was robust, with cash from operations of GBP2.4 million (H1 2015: GBP2.3 million) representing 75% of adjusted EBIT. The interim balance sheet includes cash balances of GBP6.0 million and adjusted net debt of GBP10.3 million, reflecting the acquisitions during the period and the impact of settling the second interim dividend of GBP1.0 million; this will reduce the outflow in the second half by the same amount.

Order intake

Across the sector demand has been generally soft and for the third consecutive year, order intake was weak in the first quarter. This year order intake did not start to pick up until June and as a result the organic order book at 30 June 2016 had reduced to 10.7 weeks (30 June 2015: 11.7 weeks). The Group's total order book stood at 10.6 weeks at 30 June 2016.

Dividend

In accordance with the Company's dividend policy, the Board is declaring an interim dividend of 9.0p (2015: 8.1p), which will be paid on Friday 4 November 2016 to shareholders on the register on Friday 7 October 2016. The shares will go ex-dividend on Thursday 6 October 2016. The interim dividend is covered 3.7 times by adjusted earnings.

Outlook

The Group's business environment remains uneven. The long term effect of Brexit is difficult to gauge but, in the short term, the Group benefits from the most favourable global exchange rates since 2009. Although exports represent a vast majority of the Group's sales, the UK is not an insignificant market and it may remain adverse until the Brexit negotiations are concluded. China has been an important source of growth and its continued appetite for education and research investment remains an important factor in the Group's development. The Group remains convinced of the long term growth of the sector, however the Board believes that medium term growth is dampened by its dependence on public funds. As a result the Group is currently more vulnerable to short-term performance fluctuations. Positively, this has not affected the pursuit of our business model as seen through our continued completion of value enhancing acquisitions.

Order intake in the third quarter continued the more positive trend observed in June and organic order intake since the beginning of the year is now ahead of the comparative period in the prior year. A satisfactory outcome for the year still depends on this improvement being sustained and on a continued revival of Armfield's market and on the resolution of the aforementioned production issues. At this stage, the Board therefore believes that the full year results will be significantly below market expectations.

The Hon. Alexander Hambro

Chairman

20 September 2016

Condensed consolidated interim statement of comprehensive income

 
                                                           Six months  Six months          Year 
                                                                   to          to            to 
                                                Adjusting     30 June     30 June   31 December 
                                      Adjusted      items        2016        2015          2015 
                                Note    GBP000     GBP000      GBP000      GBP000        GBP000 
------------------------------  ----  --------  ---------  ----------  ----------  ------------ 
Revenue                          3      27,258          -      27,258      24,933        56,203 
Operating costs                       (24,031)          -    (24,031)    (21,359)      (46,953) 
------------------------------  ----  --------  ---------  ----------  ----------  ------------ 
Adjusted operating profit        3       3,227          -       3,227       3,574         9,250 
Adjusting items                  4           -    (3,598)     (3,598)     (4,814)       (7,443) 
------------------------------  ----  --------  ---------  ----------  ----------  ------------ 
Operating profit/(loss)                  3,227    (3,598)       (371)     (1,240)         1,807 
Interest income                              8          -           8          12            28 
Interest expense                 4       (275)       (27)       (302)       (275)         (583) 
------------------------------  ----  --------  ---------  ----------  ----------  ------------ 
Profit/(loss) before tax                 2,960    (3,625)       (665)     (1,503)         1,252 
Taxation (charge)/credit                 (585)        575        (10)         128         (138) 
------------------------------  ----  --------  ---------  ----------  ----------  ------------ 
Profit/(loss) for the period             2,375    (3,050)       (675)     (1,375)         1,114 
------------------------------  ----  --------  ---------  ----------  ----------  ------------ 
Attributable to: 
Owners of the parent                     2,024    (3,028)     (1,004)     (1,490)           775 
Non-controlling interests                  351       (22)         329         115           339 
------------------------------  ----  --------  ---------  ----------  ----------  ------------ 
 
Other comprehensive income 
Items that will not be reclassified subsequently 
 to profit or loss 
Retirement benefits actuarial 
 (losses)/gains                                                 (700)         162           113 
Items that may be reclassified subsequently 
 to profit or loss 
Exchange differences on translation of foreign 
 subsidiaries                                                      42        (16)            13 
---------------------------------------------------------  ----------  ----------  ------------ 
Other comprehensive (expense)/income for 
 the period, net of tax                                         (658)         146           126 
---------------------------------------------------------  ----------  ----------  ------------ 
Total comprehensive (expense)/income for 
 the period                                                   (1,333)     (1,229)         1,240 
---------------------------------------------------------  ----------  ----------  ------------ 
Attributable to: 
Owners of the parent                                          (1,662)     (1,344)           901 
Non-controlling interests                                         329         115           339 
------------------------------  ----  --------  ---------  ----------  ----------  ------------ 
 
 
                                  Pence   Pence  Pence 
------------------------------   ------  ------  ----- 
Earnings per share - adjusted 
Basic                           5  33.2    41.1  109.2 
Diluted                         5  32.7    40.3  107.3 
------------------------------   ------  ------  ----- 
Earnings per share - total 
Basic                           5(16.5)  (24.7)   12.8 
Diluted                         5(16.5)  (24.7)   12.6 
------------------------------   ------  ------  ----- 
 

Condensed consolidated interim balance sheet

 
                                              30 June   30 June  31 December 
                                                 2016      2015         2015 
                                       Note    GBP000    GBP000       GBP000 
-------------------------------------  ----  --------  --------  ----------- 
ASSETS 
Non-current assets 
Goodwill                                       12,860    10,927       10,927 
Other intangible assets                 6      10,675    11,491        9,088 
Property, plant and equipment                   5,335     4,704        4,787 
Deferred tax assets                               625       369          351 
-------------------------------------  ----  --------  --------  ----------- 
                                               29,495    27,491       25,153 
-------------------------------------  ----  --------  --------  ----------- 
Current assets 
Inventories                                     9,275     8,751        7,922 
Trade and other receivables                    10,091     8,650       11,040 
Cash and cash equivalents                       5,963     8,242        8,530 
-------------------------------------  ----  --------  --------  ----------- 
                                               25,329    25,643       27,492 
-------------------------------------  ----  --------  --------  ----------- 
Total assets                                   54,824    53,134       52,645 
-------------------------------------  ----  --------  --------  ----------- 
LIABILITIES 
Current liabilities 
Trade and other payables                     (10,059)   (8,584)     (10,807) 
Trade and other payables relating to 
 acquisitions                                   (905)     (103)         (85) 
Borrowings                                    (2,813)   (3,527)      (3,361) 
Current tax liabilities                       (1,672)   (1,341)      (1,436) 
-------------------------------------  ----  --------  --------  ----------- 
                                             (15,449)  (13,555)     (15,689) 
-------------------------------------  ----  --------  --------  ----------- 
Non-current liabilities 
Borrowings                                   (13,033)  (12,689)      (9,556) 
Deferred tax liabilities                      (2,188)   (2,413)      (1,922) 
Retirement benefit obligations                (2,296)   (1,535)      (1,394) 
-------------------------------------  ----  --------  --------  ----------- 
                                             (17,517)  (16,637)     (12,872) 
-------------------------------------  ----  --------  --------  ----------- 
Total liabilities                            (32,966)  (30,192)     (28,561) 
-------------------------------------  ----  --------  --------  ----------- 
Net assets                                     21,858    22,942       24,084 
-------------------------------------  ----  --------  --------  ----------- 
EQUITY 
Share capital                           7         305       304          305 
Share premium                                  14,450    14,380       14,441 
Other reserves                                  2,046     1,974        2,004 
Retained earnings                               3,975     5,657        6,532 
-------------------------------------  ----  --------  --------  ----------- 
Equity attributable to owners of the 
 parent                                        20,776    22,315       23,282 
Non-controlling interests                       1,082       627          802 
-------------------------------------  ----  --------  --------  ----------- 
Total equity                                   21,858    22,942       24,084 
-------------------------------------  ----  --------  --------  ----------- 
 

Condensed consolidated interim statement of changes in equity

 
                                                                            Total 
                                                                     attributable          Non- 
                             Share     Share      Other   Retained      to owners   controlling    Total 
                           capital   premium   reserves   earnings      of parent     interests   equity 
                            GBP000    GBP000     GBP000     GBP000         GBP000        GBP000   GBP000 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 At 1 January 2016             305    14,441      2,004      6,532         23,282           802   24,084 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 Dividends                       -         -          -      (970)          (970)          (49)  (1,019) 
 Share-based payments            -         -          -        117            117             -      117 
 Issue of share capital          -         9          -          -              9             -        9 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 Transactions with 
  owners                         -         9          -      (853)          (844)          (49)    (893) 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 (Loss)/profit for 
  the period                     -         -          -    (1,004)        (1,004)           329    (675) 
 Retirement benefit 
  actuarial losses               -         -          -      (700)          (700)             -    (700) 
 Foreign exchange 
  differences                    -         -         42          -             42             -       42 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 Total comprehensive 
  (expense)/income 
  for the period                 -         -         42    (1,704)        (1,662)           329  (1,333) 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 At 30 June 2016               305    14,450      2,046      3,975         20,776         1,082   21,858 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 
 
                                                                              Total 
                                                                       attributable          Non- 
                               Share     Share      Other   Retained      to owners   controlling    Total 
                             capital   premium   reserves   earnings      of parent     interests   equity 
                              GBP000    GBP000     GBP000     GBP000         GBP000        GBP000   GBP000 
 ----------------------  -----------  --------  ---------  ---------  -------------  ------------  ------- 
 At 1 January 2015               300    14,294      1,374      6,910         22,878           512   23,390 
 ---------------------------  ------  --------  ---------  ---------  -------------  ------------  ------- 
 Share-based payments              -         -          -         75             75             -       75 
 Issue of share capital            4        86        616          -            706             -      706 
 ---------------------------  ------  --------  ---------  ---------  -------------  ------------  ------- 
 Transactions with 
  owners                           4        86        616         75            781             -      781 
 ---------------------------  ------  --------  ---------  ---------  -------------  ------------  ------- 
 (Loss)/profit for 
  the period                       -         -          -    (1,490)        (1,490)           115  (1,375) 
 Retirement benefit 
  actuarial gains                  -         -          -        162            162             -      162 
 Foreign exchange 
  differences                      -         -       (16)          -           (16)             -     (16) 
 ---------------------------  ------  --------  ---------  ---------  -------------  ------------  ------- 
 Total comprehensive 
  (expense)/income 
  for the period                   -         -       (16)    (1,328)        (1,344)           115  (1,229) 
 ---------------------------  ------  --------  ---------  ---------  -------------  ------------  ------- 
 At 30 June 2015                 304    14,380      1,974      5,657         22,315           627   22,942 
 ---------------------------  ------  --------  ---------  ---------  -------------  ------------  ------- 
 
 
 
                                                                            Total 
                                                                     attributable          Non- 
                             Share     Share      Other   Retained      to owners   controlling    Total 
                           capital   premium   reserves   earnings      of parent     interests   equity 
                            GBP000    GBP000     GBP000     GBP000         GBP000        GBP000   GBP000 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 At 1 January 2015             300    14,294      1,374      6,910         22,878           512   23,390 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 Dividends                       -         -          -    (1,385)        (1,385)          (49)  (1,434) 
 Share based payments            -         -          -        119            119             -      119 
 Issue of share capital          5       147        617          -            769             -      769 
 Transactions with 
  owners                         5       147        617    (1,266)          (497)          (49)    (546) 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 Profit for the year             -         -          -        775            775           339    1,114 
 Retirement benefit 
  actuarial gains                -         -          -        113            113             -      113 
 Foreign exchange 
  differences                    -         -         13          -             13             -       13 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 Total comprehensive 
  income for the year            -         -         13        888            901           339    1,240 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 At 31 December 2015           305    14,441      2,004      6,532         23,282           802   24,084 
 -----------------------  --------  --------  ---------  ---------  -------------  ------------  ------- 
 
 

The movement in Other reserves of GBP617,000 arises from the issue of 36,738 shares as part of the consideration for the acquisition of Armfield Ltd.

Condensed consolidated interim cash flow statement

 
                                                Six months  Six months 
                                                        to          to       Year to 
                                                   30 June     30 June   31 December 
                                                      2016        2015          2015 
                                                    GBP000      GBP000        GBP000 
 ---------------------------------------------  ----------  ----------  ------------ 
 Cash flows from operating activities 
 (Loss)/profit after tax                             (675)     (1,375)         1,114 
 Adjustments for: 
 Financial instruments measured at fair 
  value: 
  Hedging contracts                                     48       (172)            10 
 Contingent consideration measured 
  at fair value                                          -          25            25 
 Share-based payments                                  117          75           119 
 Depreciation                                          281         223           482 
 Amortisation of intangible assets                   2,871       4,333         6,736 
 Loss on disposal of property, plant 
  and equipment                                         11          16            30 
 Foreign exchange gains on foreign 
  currency loans                                       134        (40)          (15) 
 Interest income                                       (8)        (12)          (28) 
 Interest expense                                      275         246           523 
 Retirement benefit obligation net 
  interest cost                                         27          29            60 
 Contributions to defined benefit plans                  -           -         (198) 
 Tax recognised in income statement                     10       (128)           138 
 (Increase)/decrease in inventories                  (823)       (212)           617 
 Decrease/(increase) in trade and other 
  receivables                                        1,623       (187)       (2,759) 
 (Decrease)/increase in trade and other 
  payables                                         (1,480)       (570)         1,638 
 ---------------------------------------------  ----------  ----------  ------------ 
 Cash generated from operations                      2,411       2,251         8,492 
 Finance costs paid                                  (275)       (251)         (528) 
 Tax paid                                            (512)       (723)       (1,387) 
 ---------------------------------------------  ----------  ----------  ------------ 
 Net cash from operating activities                  1,624       1,277         6,577 
 ---------------------------------------------  ----------  ----------  ------------ 
 Cash flows from investing activities 
 ---------------------------------------------  ----------  ----------  ------------ 
 Paid on acquisition of new subsidiaries           (7,248)    (11,421)      (11,421) 
 Gross cash inherited on acquisition                 2,036       3,904         3,904 
 ---------------------------------------------  ----------  ----------  ------------ 
 Acquisition of subsidiaries, net of 
  cash acquired                                    (5,212)     (7,517)       (7,517) 
 Paid on the acquisition of trade and 
  assets                                             (243)        (15)          (33) 
 Purchase of property, plant and equipment           (571)       (182)         (530) 
 Interest received                                       8          12            28 
 ---------------------------------------------  ----------  ----------  ------------ 
 Net cash used in investing activities             (6,018)     (7,702)       (8,052) 
 ---------------------------------------------  ----------  ----------  ------------ 
 Cash flows from financing activities 
 Proceeds from issue of share capital                    9          88           150 
 Repayments of borrowings                          (2,693)     (1,313)       (4,626) 
 Proceeds from bank loans                            5,500       4,755         4,755 
 Equity dividends paid                               (970)           -       (1,385) 
 Dividends paid - non controlling interest 
  in subsidiary                                       (49)           -          (49) 
 Net cash from/(used in) financing activities        1,797       3,530       (1,155) 
 ---------------------------------------------  ----------  ----------  ------------ 
 Net change in cash and cash equivalents           (2,597)     (2,895)       (2,630) 
 Cash and cash equivalents at start 
  of period                                          8,530      11,148        11,148 
 Exchange movements                                     30        (11)            12 
 ---------------------------------------------  ----------  ----------  ------------ 
 Cash and cash equivalents at end of 
  period                                             5,963       8,242         8,530 
 ---------------------------------------------  ----------  ----------  ------------ 
 

Notes to the interim report

1. General information and basis of preparation

Judges Scientific plc is the ultimate parent company of the Group, whose principal activities comprise the design, manufacture and sale of scientific instruments. The subsidiaries are grouped into two segments: Materials Sciences and Vacuum. The results of the Group's recent acquisitions of Dia-Stron Limited ("Dia-Stron") and the trade and assets of Fire Instrumentation and Research Equipment ("FIRE") are included in the Materials Sciences segment and CoolLED Limited ("CoolLED") is included in the Vacuum segment.

The financial information set out in this interim report for the six months ended 30 June 2016 and the comparative figures for the six months ended 30 June 2015 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 2015, which have been prepared in accordance with IFRS as adopted by the European Union.

The financial information for the year ended 31 December 2015 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 2015 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. Its 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 19 September 2016.

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 2015, except for the taxation policy where, for the purposes of the interims, the tax charge on adjusted business performance is calculated by reference to the estimated effective rate for the full year.

3. Segmental analysis

 
                                  Materials            Unallocated 
For the period ended 30            Sciences    Vacuum        items     Total 
 June 2016                  Note     GBP000    GBP000       GBP000    GBP000 
--------------------------  ----  ---------  --------  -----------  -------- 
Revenue                              12,555    14,703            -    27,258 
Operating costs                    (10,634)  (12,693)        (704)  (24,031) 
--------------------------  ----  ---------  --------  -----------  -------- 
Adjusted operating profit             1,921     2,010        (704)     3,227 
Adjusting items              4                                       (3,625) 
--------------------------  ----  ---------  --------  -----------  -------- 
Operating loss                                                         (398) 
Net interest expense                                                   (267) 
--------------------------  ----  ---------  --------  -----------  -------- 
Loss before tax                                                        (665) 
Income tax charge                                                       (10) 
--------------------------  ----  ---------  --------  -----------  -------- 
Loss for the period                                                    (675) 
--------------------------  ----  ---------  --------  -----------  -------- 
 
 
                                     Materials            Unallocated 
For the period ended 30 June          Sciences    Vacuum        items     Total 
 2015                          Note     GBP000    GBP000       GBP000    GBP000 
-----------------------------  ----  ---------  --------  -----------  -------- 
Revenue                                 11,652    13,281            -    24,933 
Operating costs                       (10,027)  (10,931)        (401)  (21,359) 
-----------------------------  ----  ---------  --------  -----------  -------- 
Adjusted operating profit                1,625     2,350        (401)     3,574 
Adjusting items                 4                                       (4,843) 
-----------------------------  ----  ---------  --------  -----------  -------- 
Operating loss                                                          (1,269) 
Net interest expense                                                      (234) 
-----------------------------  ----  ---------  --------  -----------  -------- 
Loss before tax                                                         (1,503) 
Income tax credit                                                           128 
-----------------------------  ----  ---------  --------  -----------  -------- 
Loss for the period                                                     (1,375) 
-----------------------------  ----  ---------  --------  -----------  -------- 
 

3. Segmental analysis (continued)

 
                                       Materials            Unallocated 
For the year ended 31 December          Sciences    Vacuum        items     Total 
 2015                            Note     GBP000    GBP000       GBP000    GBP000 
-------------------------------  ----  ---------  --------  -----------  -------- 
Revenue                                   28,347    27,856            -    56,203 
Operating costs                         (22,894)  (22,957)      (1,102)  (46,953) 
-------------------------------  ----  ---------  --------  -----------  -------- 
Adjusted operating profit                  5,453     4,899      (1,102)     9,250 
Adjusting items                   4                                       (7,503) 
-------------------------------  ----  ---------  --------  -----------  -------- 
Operating profit                                                            1,747 
Net interest expense                                                        (495) 
-------------------------------  ----  ---------  --------  -----------  -------- 
Profit before tax                                                           1,252 
Income tax charge                                                           (138) 
-------------------------------  ----  ---------  --------  -----------  -------- 
Profit for the year                                                         1,114 
-------------------------------  ----  ---------  --------  -----------  -------- 
 

Unallocated items relate to the Group's head office costs.

Segment assets and liabilities

 
                      Materials           Unallocated 
                       Sciences   Vacuum        items     Total 
At 30 June 2016          GBP000   GBP000       GBP000    GBP000 
--------------------  ---------  -------  -----------  -------- 
Assets                   13,531   16,257       25,036    54,824 
Liabilities             (6,043)  (6,872)     (20,051)  (32,966) 
--------------------  ---------  -------  -----------  -------- 
Net assets                7,488    9,385        4,985    21,858 
--------------------  ---------  -------  -----------  -------- 
Capital expenditure         217      350            4       571 
Depreciation                104      136           41       281 
Amortisation              1,376    1,495            -     2,871 
--------------------  ---------  -------  -----------  -------- 
 
 
                      Materials           Unallocated 
                       Sciences   Vacuum        items     Total 
At 30 June 2015          GBP000   GBP000       GBP000    GBP000 
--------------------  ---------  -------  -----------  -------- 
Assets                   14,877   13,223       25,034    53,134 
Liabilities             (5,576)  (6,048)     (18,568)  (30,192) 
--------------------  ---------  -------  -----------  -------- 
Net assets                9,301    7,175        6,466    22,942 
--------------------  ---------  -------  -----------  -------- 
Capital expenditure          42      115           25       182 
Depreciation                 75      120           28       223 
Amortisation              3,090    1,243            -     4,333 
--------------------  ---------  -------  -----------  -------- 
 
 
                      Materials           Unallocated 
                       Sciences   Vacuum        items     Total 
At 31 December 2015      GBP000   GBP000       GBP000    GBP000 
--------------------  ---------  -------  -----------  -------- 
Assets                   14,370   14,070       24,205    52,645 
Liabilities             (6,562)  (7,026)     (14,973)  (28,561) 
--------------------  ---------  -------  -----------  -------- 
Net assets                7,808    7,044        9,232    24,084 
--------------------  ---------  -------  -----------  -------- 
Capital expenditure         117      202          211       530 
Depreciation                185      233           64       482 
Amortisation              4,246    2,490            -     6,736 
--------------------  ---------  -------  -----------  -------- 
 

Unallocated items are borrowings, intangible assets and goodwill arising on acquisition, deferred tax, defined benefit obligations and parent company net assets.

 
                       Six months  Six months 
                               to          to       Year to 
                          30 June     30 June   31 December 
                             2016        2015          2015 
Geographic analysis        GBP000      GBP000        GBP000 
---------------------  ----------  ----------  ------------ 
UK (domicile)               4,263       4,679         9,303 
Rest of Europe              6,459       6,036        13,822 
United States/Canada        7,427       4,833        12,526 
Rest of the world           9,109       9,385        20,552 
---------------------  ----------  ----------  ------------ 
Revenue                    27,258      24,933        56,203 
---------------------  ----------  ----------  ------------ 
 

4. Adjusting items

 
                                              Six months  Six months 
                                                      to          to       Year to 
                                                 30 June     30 June   31 December 
                                                    2016        2015          2015 
                                                  GBP000      GBP000        GBP000 
--------------------------------------------  ----------  ----------  ------------ 
Amortisation of intangible assets                  2,871       4,333         6,736 
Contingent consideration measured at 
 fair value                                            -          25            25 
Financial instruments measured at fair 
 value: 
 Hedging contracts                                    48       (172)            10 
Share-based payments                                 117          75           119 
Acquisition costs                                    562         553           553 
--------------------------------------------  ----------  ----------  ------------ 
Total adjusting items within operating 
 profit                                            3,598       4,814         7,443 
Retirement benefits obligation net interest 
 cost                                                 27          29            60 
--------------------------------------------  ----------  ----------  ------------ 
Total adjusting items                              3,625       4,843         7,503 
Taxation                                           (575)       (845)       (1,615) 
--------------------------------------------  ----------  ----------  ------------ 
Total adjusting items net of tax                   3,050       3,998         5,888 
--------------------------------------------  ----------  ----------  ------------ 
Attributable to: 
Owners of the parent                               3,028       3,967         5,839 
Non-controlling interests                             22          31            49 
--------------------------------------------  ----------  ----------  ------------ 
                                                   3,050       3,998         5,888 
--------------------------------------------  ----------  ----------  ------------ 
 

5. Earnings per share

 
                                                  Six months  Six months 
                                                          to          to       Year to 
                                                     30 June     30 June   31 December 
                                                        2016        2015          2015 
                                            Note      GBP000      GBP000        GBP000 
------------------------------------------  ----  ----------  ----------  ------------ 
Profit/(loss) for the period attributable 
 to owners of the parent 
Adjusted profit                                        2,024       2,477         6,614 
Adjusting items                              4       (3,028)     (3,967)       (5,839) 
------------------------------------------  ----  ----------  ----------  ------------ 
(Loss)/profit for the period                         (1,004)     (1,490)           775 
------------------------------------------  ----  ----------  ----------  ------------ 
 
                                                       Pence       Pence         Pence 
------------------------------------------  ----  ----------  ----------  ------------ 
Earnings per share - adjusted 
Basic                                                   33.2        41.1         109.2 
Diluted                                                 32.7        40.3         107.3 
------------------------------------------  ----  ----------  ----------  ------------ 
Earnings per share - total 
Basic                                                 (16.5)      (24.7)          12.8 
Diluted                                               (16.5)      (24.7)          12.6 
------------------------------------------  ----  ----------  ----------  ------------ 
 
                                                      Number      Number        Number 
------------------------------------------  ----  ----------  ----------  ------------ 
Issued Ordinary shares at start of 
 the period                                  7     6,098,549   5,996,211     5,996,211 
Movement in Ordinary shares during 
 the period                                  7         3,500      72,238       102,338 
------------------------------------------  ----  ----------  ----------  ------------ 
Issued Ordinary shares at end of 
 the period                                  7     6,102,049   6,068,449     6,098,549 
------------------------------------------  ----  ----------  ----------  ------------ 
Weighted average number of shares 
 in issue                                          6,100,557   6,024,498     6,054,699 
Dilutive effect of share options                      83,414     121,213       109,140 
Weighted average shares in issue 
 on a diluted basis                                6,183,971   6,145,711     6,163,839 
------------------------------------------  ----  ----------  ----------  ------------ 
 

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                             Carrying 
                               amount                               amount 
                                   at                                   at 
                            1 January                              30 June 
                                 2016  Acquisition  Amortisation      2016 
                               GBP000       GBP000        GBP000    GBP000 
-------------------------  ----------  -----------  ------------  -------- 
Distribution agreements           750          272         (298)       724 
Research and development        2,903        1,841         (713)     4,031 
Customer relationships            858        1,077         (682)     1,253 
Brand and domain names          4,577        1,058         (968)     4,667 
Sales order backlog                 -          210         (210)         - 
-------------------------  ----------  -----------  ------------  -------- 
Total                           9,088        4,458       (2,871)    10,675 
-------------------------  ----------  -----------  ------------  -------- 
 
 
                             Carrying                             Carrying 
                               amount                               amount 
                                   at                                   at 
                            1 January                              30 June 
                                 2015  Acquisition  Amortisation      2015 
                               GBP000       GBP000        GBP000    GBP000 
-------------------------  ----------  -----------  ------------  -------- 
Distribution agreements           562          707         (250)     1,019 
Research and development        2,199        1,905         (584)     3,520 
Customer relationships          1,700          402         (658)     1,444 
Brand and domain names          4,201        2,201         (894)     5,508 
Sales order backlog                 -        1,947       (1,947)         - 
-------------------------  ----------  -----------  ------------  -------- 
Total                           8,662        7,162       (4,333)    11,491 
-------------------------  ----------  -----------  ------------  -------- 
 
 
                             Carrying                                 Carrying 
                               amount                                   amount 
                                   at                                       at 
                            1 January                              31 December 
                                 2015  Acquisition  Amortisation          2015 
                               GBP000       GBP000        GBP000        GBP000 
-------------------------  ----------  -----------  ------------  ------------ 
Distribution agreements           562          707         (519)           750 
Research and development        2,199        1,905       (1,201)         2,903 
Customer relationships          1,700          402       (1,244)           858 
Brand and domain names          4,201        2,201       (1,825)         4,577 
Sales order backlog                 -        1,947       (1,947)             - 
-------------------------  ----------  -----------  ------------  ------------ 
Total                           8,662        7,162       (6,736)         9,088 
-------------------------  ----------  -----------  ------------  ------------ 
 

7. Share capital

Movements in the Group's Ordinary shares in issue are summarised as follows:

 
                                                       Six months 
                                           Six months          to       Year to 
                                                   to     30 June   31 December 
                                         30 June 2016        2015          2015 
Ordinary shares of 5p each                     Number      Number        Number 
--------------------------------------  -------------  ----------  ------------ 
Issued and fully paid 
Start of the period                         6,098,549   5,996,211     5,996,211 
Shares issued as part of the Armfield 
 earn-out                                           -      36,738        36,738 
Exercise of share options                       3,500      35,500        65,600 
--------------------------------------  -------------  ----------  ------------ 
End of the period                           6,102,049   6,068,449     6,098,549 
--------------------------------------  -------------  ----------  ------------ 
 

During the first six months of 2016 the following allotments took place:

   --   3,500 Ordinary shares were issued to satisfy the exercise of share options as follows: 
   --    on 23 February 2016 when the mid-market share price was 1,517.5p; 
   --    on 1 April 2016 when the mid-market share price was 1,682.5p; and 
   --    on 3 May 2016 when the mid-market share price was 1,857.5p. 

8. Changes in net debt

Changes in net debt for the six months ended 30 June 2016 were as follows:

 
                                     1 January             Non-cash   30 June 
                                          2016  Cash flow     items      2016 
                                        GBP000     GBP000    GBP000    GBP000 
-----------------------------------  ---------  ---------  --------  -------- 
Cash at bank and in hand                 8,530    (2,596)        29     5,963 
Bank debt                             (12,390)    (2,807)     (134)  (15,331) 
-----------------------------------  ---------  ---------  --------  -------- 
Net senior debt                        (3,860)    (5,403)     (105)   (9,368) 
Effect of payments relating 
 to the acquisition of CoolLED 
 Limited not settled at 30 June 
 2016 (included within current 
 liabilities)                                -      (101)         -     (101) 
Effect of payments relating 
 to the acquisition of 
 Dia-Stron Limited not settled 
 at 30 June 2016 (included within 
 current liabilities)                        -      (742)         -     (742) 
Effect of payments relating 
 to the 2012 acquisition of the 
 trade and certain assets of 
 KE Developments Limited not 
 settled at 30 June 2016 (included 
 within current liabilities)              (85)         23         -      (62) 
-----------------------------------  ---------  ---------  --------  -------- 
Adjusted net debt                      (3,945)    (6,223)     (105)  (10,273) 
Subordinated loans                       (497)          -         -     (497) 
-----------------------------------  ---------  ---------  --------  -------- 
Total net debt                         (4,442)    (6,223)     (105)  (10,770) 
-----------------------------------  ---------  ---------  --------  -------- 
 

Non-cash items represent foreign exchange differences on bank loans.

9. Acquisitions

During the six months to 30 June 2016, the Group completed 3 separate acquisitions namely the purchase of CoolLED Limited, Dia-Stron Limited and the trade and assets of Fire Instrumentation and Research Equipment.

On 18 February 2016, the Group acquired 100% of the issued share capital of CoolLED Limited, an instrument maker based in Andover, Hampshire. CoolLED designs, manufactures and markets illumination systems for fluorescence microscopy. CooLED was acquired for an initial cash consideration of GBP3.5 million, a payment to reflect excess working capital and an earn-out capped at GBP1.0 million calculated via achievement of adjusted operating profits of over GBP1.0 million in respect of the year to 30 June 2016, reducing by GBP4.50 for each GBP1 shortfall below GBP1.0 million. On 8 August 2016 GBP0.1 million was paid in full settlement of the earn-out.

On 29 March 2016, the Group acquired the trade and certain assets of FIRE, a fire testing equipment manufacturing and servicing business. The purchase consideration is not material in the context of the overall Judges group.

On 1 April 2016 the Group acquired 100% of the issued share capital of Dia-Stron Limited a company which designs and manufactures systems to test the mechanical properties of fibres and is based in Andover, Hampshire. Dia-Stron was acquired for a cash consideration of GBP2.75 million plus a payment to reflect excess working capital.

The summary provisional fair value of the costs of these acquisitions includes the components stated below:

 
 Consideration                                                           GBP000 
 ----------------------------------------------------------------------  ------ 
 Initial cash consideration                                               6,467 
 Deferred consideration to be paid in cash                                  101 
                                                                          6,568 
 ----------------------------------------------------------------------  ------ 
 Gross cash inherited on acquisition                                      2,036 
 Cash retained in the business                                            (293) 
 ----------------------------------------------------------------------  ------ 
 Payment in respect of surplus working capital                            1,743 
 ----------------------------------------------------------------------  ------ 
 Total consideration                                                      8,311 
 ----------------------------------------------------------------------  ------ 
 Acquisition-related transaction costs charged to the income statement      562 
 ----------------------------------------------------------------------  ------ 
 

The consideration and associated transaction costs for these transactions were financed from existing cash resources and GBP3.5 million was drawn down from the Group's existing GBP10 million acquisition loan facility.

9. Acquisitions (continued)

The summary provisional fair values recognised for the assets and liabilities acquired are as follows:

 
                                                        Fair value 
                                          Book value   adjustments  Fair value 
                                              GBP000        GBP000      GBP000 
----------------------------------------  ----------  ------------  ---------- 
Property, plant and equipment                    256             -         256 
Intangible assets                                  -         4,458       4,458 
Deferred tax assets                               94            18         112 
Inventories                                      734         (204)         530 
Trade and other receivables                      621             -         621 
Cash and cash equivalents                      2,036             -       2,036 
----------------------------------------  ----------  ------------  ---------- 
Total assets                                   3,741         4,272       8,013 
----------------------------------------  ----------  ------------  ---------- 
Deferred tax liabilities                           -         (854)       (854) 
Trade payables                                 (569)          (50)       (619) 
Current tax liability                          (162)             -       (162) 
Total liabilities                              (731)         (904)     (1,635) 
----------------------------------------  ----------  ------------  ---------- 
Net identifiable assets and liabilities        3,010         3,368       6,378 
----------------------------------------  ----------  ------------  ---------- 
Total consideration                                                      8,311 
----------------------------------------  ----------  ------------  ---------- 
Goodwill recognised                                                      1,933 
----------------------------------------  ----------  ------------  ---------- 
 

Management performed a detailed review of each of the acquiree's intangible assets. The intangible assets recognised reflect recognition of acquired customer relationships, the value of the acquired future committed order books, internally generated technology, trademarks, domain names and distributor relationships. A significant amount of the value of the acquired business is attributable to its workforce and sales knowhow. As no assets can be recognised in respect of these factors, they contribute to the goodwill recognised upon acquisition.

Other fair value adjustments reflect specific inventory provisions and accruals and related deferred tax assets. 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 and the fair value of the assets.

The acquisitions resulted in a profit after tax (before adjusting items) attributable to owners of the parent company of GBP327,000 in the period post-acquisition. After amortisation of intangible assets, the contribution to owners of the parent company's results amounted to a loss of GBP61,000 after tax.

If the acquisitions had been acquired on 1 January 2016, based on pro-forma results, revenue for the group for the period to 30 June 2016 would have increased by GBP792,000 and profit after tax (before adjusting items) attributable to owners of the parent company would have increased by GBP199,000 after allowing for interest costs but before charging amortisation of intangible assets (a reduction of GBP132,000 after charging additional amortisation of intangible assets of GBP331,000).

10. Defined Benefit Scheme

The Group's defined benefit pension scheme liability has increased to GBP2.3 million compared to GBP1.4 million at 31 December 2015. This increase in liability is mainly attributable to a significant reduction of 0.9% in the Discount rate to 3.00% from 3.90% at 31 December 2015.

11. Dividends

During the period, the Company paid a second interim dividend of 15.9p per share (GBP1.0 million) on 22 March 2016 relating to the financial year ended 31 December 2015 (2015: GBPnil).

The Company also paid a final dividend of 1.0p per share (GBP0.1 million) on 8 July 2016 relating to the financial year ended 31 December 2015.

The Company will pay an interim dividend for 2016 of 9.0p per share on 4 November 2016 to shareholders on the register on 7 October 2016. The shares will go ex-dividend on 6 October 2016.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR VKLFFQKFZBBQ

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