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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 |
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
(END) Dow Jones Newswires
September 20, 2016 02:01 ET (06:01 GMT)
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