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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 10,950.00 | 10,850.00 | 11,050.00 | 10,950.00 | 10,850.00 | 10,850.00 | 36,268 | 12:02:22 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Lab Analytical Instruments | 113.21M | 12.44M | 1.8823 | 58.17 | 723.55M |
From Apr 2021 to Apr 2024
TIDMJDG
RNS Number : 8214M
Judges Scientific PLC
24 September 2021
Judges Scientific plc
("Judges Scientific", "the Company", or "the Group")
Interim results for the six months ended 30 June 2021
Performance recovering, order book restored to pre-pandemic levels, and strong cash generation.
15% increase to interim dividend.
Judges Scientific, the group focused on acquiring and developing companies in the scientific instrument sector, announces its Interim Results for the six months ended 30 June 2021.
Key financials
Hot Features
Premium
Period ended 30 June H1 2021 H1 2020 Change
Revenue GBP43.0m GBP37.4m 14.7%
----------- ----------- ------
Adjusted* pre-tax profit GBP8.5m GBP6.4m 31.5%
----------- ----------- ------
Adjusted* basic earnings per
share 111.0p 84.2p 31.8%
----------- ----------- ------
Cash generated from operations GBP8.0m GBP5.1m 56.5%
----------- ----------- ------
Interim dividend per share 19.0p 16.5p 15.2%
----------- ----------- ------
Statutory pre-tax profit GBP6.7m GBP4.3m 55.4%
----------- ----------- ------
Statutory basic earnings per
share 88.4p 57.8p 52.9%
----------- ----------- ------
As at: 30 Jun 2021 31 Dec 2020
----------- -----------
Adjusted* net debt (excl. IFRS
16) GBP1.7m GBP5.7m
----------- -----------
Cash balances GBP17.6m GBP15.5m
----------- -----------
Statutory net debt (excl. IFRS
16) GBP1.7m GBP5.7m
----------- -----------
Other financials
-- Organic** revenue increased 5% against H1 2020.
-- Organic** order intake up 25% compared with H1 2020; and 3% up compared with record H1 2019.
-- Organic** order book at 16.1 weeks (H1 2020: 10.8 weeks); total order book at 17.6 weeks. -- New GBP60m five-year bank facility to provide greater acquisition financing capability.
Outlook
-- Business recovering from the initial impact of Covid-19.
-- Environment still challenging, with marked differences between local markets and between the various scientific disciplines we serve.
-- Organic orders remain positive and to the end of August are 23% up compared to the same period in 2020.
-- Organic order book at the end of August was 18.8 weeks and total order book 20.1 weeks.
-- The Board is confident that the Group will exceed existing market expectations for the current year.
* Adjusted earnings figures are stated before adjusting items relating to hedging of risks materialising after the end of the period, amortisation of acquired intangible assets, share based payments and acquisition-related costs. Adjusted net debt notionally includes acquisition-related payments which had yet to be settled at the balance sheet date and excludes IFRS 16 debt.
** Organic designates group performance excluding the businesses which were not part of the group on 1 January 2020.
Alex Hambro, Chairman of Judges Scientific, commented:
"Pleasingly, the Group's performance has started to recover from the initial impact of the pandemic. Whilst there are further obstacles to overcome, the Group's resilience and adaptability and the contribution of the recent acquisitions have enabled the first half performance to reach the record established in 2019."
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
For further information please contact:
Judges Scientific plc Tel: +44 (0) 20 3829 6970 David Cicurel, CEO Brad Ormsby, Group FD Shore Capital (Nominated Adviser & Joint Broker) Stephane Auton Tel: +44 (0) 20 7408 4090 Edward Mansfield Iain Sexton Liberum (Joint Broker) Tel: +44 (0) 20 3100 2222 Bidhi Bhoma Euan Brown W illiam Hall Alma PR (Financial Public Relations) Tel: +44 (0) 20 3405 0205 Sam Modlin Justine James Joe Pederzolli
Chairman's statement
The first half of 2021 marked a significant improvement in the Group's performance after the global difficulties caused by Covid-19 in 2020. Although daily life has returned to some normality in those countries with the benefit of a full vaccination programme, the pandemic is still ongoing across the world; our markets are, of course, global and are still affected by the ups-and-downs of the pandemic in various regions. Our markets and customers have managed to adapt to this new environment to a degree, but it is not "business as usual" yet. Our performance should be evaluated in this new context: reaching the adjusted EPS of H1 2019 (108.7p) demonstrates a significant recovery but we would have preferred to have already been able to add the two missing years of organic growth and the full contribution from our recent acquisitions to that result.
Order intake
Travel restrictions, university closures and the cancellation of scientific conferences have continued to thwart our commercial activities but order intake has strongly rebounded and Organic** order intake for the 6 months to 30 June was up 25% compared to the same period last year which was itself down 17% on H1 2019; this leaves us 3% ahead of our record H1 2019 intake but well below pre-Covid growth levels.
Progress was strongest in geographies which were affected most in 2020 with North America up 41%, the Rest of Europe up 34%, the UK up 26%, China/Hong Kong up 2% and the Rest of the World up 8%. The most notable absolute increases were the US (up GBP2.5 million), the UK (up GBP1.4 million), France (up GBP1.2m), Germany (up GBP1.1 million), the Czech Republic (up GBP0.7 million) and Japan (up GBP0.6 million); the worst absolute decline was Brazil (down GBP0.3 million).
Order intake still varied considerably from business to business, between various scientific disciplines, and with bookings from large corporate customers being the slowest to revive.
Revenues
Group revenues for the period increased to GBP43.0 million (H1 2020: GBP37.4 million). This included a 5% increase in Organic revenues plus the contribution of the businesses acquired in 2020. Organic revenue expanded less than Organic order intake as the Organic order book was refilled to a robust level. Whilst there is a gap before a recovery in orders translates into sales growth, another factor has been the divergence between the Group's businesses slowest to rebound and those working hard to satisfy a large order book; a further feature has been a change in the way China produces tax exemption certificates on academic imports, deferring sales, profits and cash-flow throughout the period.
Organic sales were strong in the UK (up 39%) and the rest of Europe (up 27%) but were weak in China/Hong Kong (down 33%) and North America (down 16%).
Profits
Adjusted operating profit improved 31% to GBP8.8 million (H1 2020: GBP6.7 million) and adjusted pre-tax profit progressed 32% to GBP8.5 million (H1 2020: GBP6.4 million).
The main driver of improved profitability has been the increase in Organic revenue reflecting the operational gearing within the Group: the EBITA contribution of the Organic businesses progressed 14% versus H1 2020. In addition, the non-Organic businesses added a GBP0.7m EBITA contribution. Natural savings related to Covid-19 (travel and scientific conferences) continued to benefit our costs but our use of the UK Government's Coronavirus Job Retention Scheme was reduced by 75% versus H1 2020. It should be noted that order book fluctuations have a significant impact on profitability; H1 profits were flattered in 2020 by the compression of the order book and were dampened in 2021 by its rebuilding.
A further impact on our results for the six-month period to 30 June 2021 is that, in accordance with IAS 38, we were required to capitalise GBP0.4 million of our total R&D expense relating to development of new or significantly improved products. This has had the effect of artificially improving our result for this half year by 5 pence of EPS. Once these products are completed, their development costs will be amortised through the income statement over the next three years. We are likely to have a materially similar run rate of capitalisation over the second half of this year and also in the coming years, so whilst there will be a performance-enhancing effect on the results this year, the effect on the bottom line will diminish over the next two to three years.
Return on Total Invested Capital ("ROTIC") recovered to 25.0% for the trailing 12 months ended 30 June 2021 (31 December 2020: 23.5%; 30 June 2020: 26.6%). The ROTIC calculation excludes any effect of the aforementioned capitalisation of development costs.
Adjusted basic earnings per share grew 32% to 111.0p (H1 2020: 84.2p) and adjusted diluted earnings per share progressed similarly to 109.5p from 82.5p.
Your Directors continue to publish adjusted figures alongside the statutory results, prepared consistently with past reports, in order to communicate to shareholders what is, in the Directors' opinion, the true operating performance of the Group. The total adjustments of GBP1.7 million (H1 2020: GBP2.1 million) consist primarily of a GBP1.4 million charge for amortisation of acquired intangible assets arising through acquisition. The adjusting items reduce profit before tax from GBP8.5 million to GBP6.7 million (H1 2020: GBP4.3 million) and earnings per share to 88.4p basic and 87.1p diluted (H1 2020: 57.8p basic and 56.6p diluted).
Cashflow and net debt
The Group once again saw strong cash conversion: cash generated from operations grew to GBP8.0 million (H1 2020: GBP5.1 million) representing 91% of adjusted operating profit (H1 2020: 76%). Cash generation was still affected by increased working capital requirements from stockpiling of components to counteract potential supply channel difficulties and by payment delays due to our inability to travel and perform installations; the aforementioned issue of Chinese tax certificates has also impacted H1 cash-flow.
The interim balance sheet includes cash balances of GBP17.6 million and adjusted net debt of GBP1.7 million, from GBP5.7 million at the beginning of 2021.
On 26 May 2021 the Group entered into new banking facilities ("Facility") with Lloyds Banking Group plc (the "Bank") for an aggregate GBP60.0 million, which replaced its previous GBP35.0 million banking arrangements. The new Facility will provide the Group, in support of its buy and build strategy, with greater acquisition financing capacity, both in terms of higher frequency and/or larger deals.
The Facility consists of a GBP19.0 million term loan ("Term Loan"), a committed GBP35.0 million revolving credit facility plus a GBP6.0 million accordion facility, which can be drawn at the discretion of the Bank. The Facility has a five year term with covenants and interest consistent with the previous bank facilities. The accordion facility increases by the amount paid off the Term Loan, keeping the overall Facility at GBP60.0 million throughout the five year period (see note 10 for further details).
The existing lending facilities via Bordeaux Acquisition Limited remain unchanged.
Corporate activity
On 16 February 2021, the Group purchased 12.5% of the outstanding shares in Bordeaux Acquisition Limited for a cash consideration of GBP1.8 million, bringing its shareholding to 88%. Bordeaux owns 100% of Deben UK Limited and Oxford Cryosystems Limited and holds significant net cash.
Dividend
In accordance with the Company's policy of increasing dividends by no less than 10% per annum, the Board is declaring an interim dividend of 19p (2020: 16.5p), which will be paid on Friday 5 November 2021 to shareholders on the register on Friday 8 October 2021. The shares will go ex-dividend on Thursday 7 October 2021. The interim dividend is covered 5.5 times by adjusted earnings (2020: 5 times).
Outlook
As the Group emerges from the worst of the pandemic, it is still faced by many challenges; whilst traveling restrictions and university closures are progressively alleviated, capital expenditure freezes are still affecting some of our operations and supply chain issues, which were benign in 2020, are now generating much unproductive management effort. Nevertheless, the Company is consolidating its recovery: Organic order intake remains positive and for the eight months to the end of August was 23% up on 2020, when the total order book stood at 20.1 weeks. Our financial position is robust and the Board has confidence that the performance for the year as a whole will be ahead of consensus expectations.
The Hon. Alexander Hambro
Chairman
23 September 2021
Condensed consolidated interim statement of comprehensive income
Year
to
Adjusting 30 June Adjusting 30 June 31 Dec
Adjusted items 2021 Adjusted items 2020 2020
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Revenue 3 42,955 - 42,955 37,449 - 37,449 79,865
Operating costs 3,4 (34,147) (1,698) (35,845) (30,746) (2,080) (32,826) (69,699)
--------------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Operating profit/(loss) 8,808 (1,698) 7,110 6,703 (2,080) 4,623 10,166
Interest income 1 - 1 13 - 13 14
Interest expense 4 (350) (27) (377) (281) (22) (303) (707)
--------------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Profit/(loss) before tax 8,459 (1,725) 6,734 6,435 (2,102) 4,333 9,473
Taxation (charge)/credit (1,318) 258 (1,060) (940) 363 (577) (825)
--------------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Profit/(loss) for the period 7,141 (1,467) 5,674 5,495 (1,739) 3,756 8,648
--------------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Attributable to:
Owners of the parent 7,001 (1,431) 5,570 5,268 (1,654) 3,614 8,220
Non-controlling interests 140 (36) 104 227 (85) 142 428
--------------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Profit/(loss) for the period 7,141 (1,467) 5,674 5,495 (1,739) 3,756 8,648
--------------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss
Retirement benefits actuarial
gain/(loss) 938 (740) (1,092)
Items that may be reclassified
subsequently to profit or loss
Exchange (loss)/gain on translation
of foreign subsidiaries (21) 144 (82)
--------------------------------------- -------- --------- --------- -------- --------- --------- --------
Other comprehensive income/(expense)
for the period, net of tax 917 (596) (1,174)
--------------------------------------- -------- --------- --------- -------- --------- --------- --------
Total comprehensive income
for the period 6,591 3,160 7,474
--------------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Attributable to:
Owners of the parent 6,487 3,018 7,046
Non-controlling interests 104 142 428
--------------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Pence Pence Pence
------------------------------ ----- ----- -----
Earnings per share - adjusted
Basic 5111.0 84.2 177.2
Diluted 5109.5 82.5 173.9
------------------------------ ----- ----- -----
Earnings per share - total
Basic 5 88.4 57.8 131.1
Diluted 5 87.1 56.6 128.7
------------------------------ ----- ----- -----
Condensed consolidated interim balance sheet
30 June 30 June 31 December
2021 2020 2020
Note GBP000 GBP000 GBP000
-------------------------------------------------- ------ -------- -------- -----------
ASSETS
Non-current assets
Goodwill 18,713 18,196 18,713
Other intangible assets 6 5,963 7,098 6,909
Property, plant and equipment 6,702 6,583 6,678
Right-of-use leased assets 4,646 4,295 5,125
Deferred tax assets 1,899 2,131 2,153
-------------------------------------------------- ------ -------- -------- -----------
37,923 38,303 39,578
-------------------------------------------------- ------ -------- -------- -----------
Current assets
Inventories 13,175 14,040 12,585
Trade and other receivables 16,312 12,666 14,340
Cash and cash equivalents 17,612 19,422 15,523
-------------------------------------------------- ------ -------- -------- -----------
47,099 46,128 42,448
-------------------------------------------------- ------ -------- -------- -----------
Total assets 85,022 84,431 82,026
-------------------------------------------------- ------ -------- -------- -----------
LIABILITIES
Current liabilities
Trade and other payables (16,774) (15,069) (15,828)
Trade and other payables relating to acquisitions - (2,769) -
Borrowings (4,657) (3,047) (3,857)
Right-of-use lease liabilities (938) (854) (947)
Current tax liabilities (2,216) (2,512) (1,539)
-------------------------------------------------- ------ -------- -------- -----------
(24,585) (24,251) (22,171)
-------------------------------------------------- ------ -------- -------- -----------
Non-current liabilities
Borrowings (14,679) (20,244) (17,358)
Right-of-use lease liabilities (3,836) (3,468) (4,209)
Deferred tax liabilities (1,767) (1,819) (1,945)
Retirement benefit obligations 11 (1,962) (3,088) (3,295)
-------------------------------------------------- ------ -------- -------- -----------
(22,244) (28,619) (26,807)
-------------------------------------------------- ------ -------- -------- -----------
Total liabilities (46,829) (52,870) (48,978)
-------------------------------------------------- ------ -------- -------- -----------
Net assets 38,193 31,561 33,048
-------------------------------------------------- ------ -------- -------- -----------
EQUITY
Share capital 7 316 314 315
Share premium 16,562 16,068 16,429
Other reserves 1,903 2,203 1,977
Retained earnings 18,912 12,404 13,469
-------------------------------------------------- ------ -------- -------- -----------
Equity attributable to owners of the parent 37,693 30,989 32,190
Non-controlling interests 500 572 858
-------------------------------------------------- ------ -------- -------- -----------
Total equity 38,193 31,561 33,048
-------------------------------------------------- ------ -------- -------- -----------
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 2021 315 16,429 1,977 13,469 32,190 858 33,048
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Adjustment arising from change in
non-controlling interest - - - (1,371) (1,371) (462) (1,833)
Issue of share capital 1 133 - - 134 - 134
Purchase of own shares for Company
reward scheme - - (53) - (53) - (53)
Share-based payments - - - 306 306 - 306
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Transactions with owners 1 133 (53) (1,065) (984) (462) (1,446)
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Profit for the period - - - 5,570 5,570 104 5,674
Retirement benefit actuarial gain - - - 938 938 - 938
Foreign exchange differences - - (21) - (21) - (21)
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Total comprehensive income for the
period - - (21) 6,508 6,487 104 6,591
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
At 30 June 2021 316 16,562 1,903 18,912 37,693 500 38,193
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
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 2020 311 15,453 2,059 10,048 27,871 821 28,692
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Adjustment arising from change in
non-controlling interest - - - (680) (680) (391) (1,071)
Issue of share capital 3 615 - - 618 - 618
Share-based payments - - - 162 162 - 162
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Transactions with owners 3 615 - (518) 100 (391) (291)
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Profit for the period - - - 3,614 3,614 142 3,756
Retirement benefit actuarial loss - - - (740) (740) - (740)
Foreign exchange differences - - 144 - 144 - 144
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Total comprehensive income for the
period - - 144 2,874 3,018 142 3,160
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
At 30 June 2020 314 16,068 2,203 12,404 30,989 572 31,561
----------------------------------- -------- -------- --------- --------- ------------- ------------ -------
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 2020 311 15,453 2,059 10,048 27,871 821 28,692
------------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Dividends - - - (3,231) (3,231) - (3,231)
Adjustment arising from change in
non-controlling interest - - - (680) (680) (391) (1,071)
Issue of share capital 4 976 - - 980 - 980
Deferred tax on share based payments - - - (113) (113) - (113)
------------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Share-based payments - - - 317 317 - 317 ------------------------------------- -------- -------- --------- --------- ------------- ------------ ------- Transactions with owners 4 976 - (3,707) (2,727) (391) (3,118) ------------------------------------- -------- -------- --------- --------- ------------- ------------ ------- Profit for the period - - - 8,220 8,220 428 8,648 Retirement benefit actuarial loss - - - (1,092) (1,092) - (1,092) Foreign exchange differences - - (82) - (82) - (82) ------------------------------------- -------- -------- --------- --------- ------------- ------------ ------- Total comprehensive income for the period - - (82) 7,128 7,046 428 7,474 ------------------------------------- -------- -------- --------- --------- ------------- ------------ ------- At 31 December 2020 315 16,429 1,977 13,469 32,190 858 33,048 ------------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Condensed consolidated interim cashflow statement
Six months Six months
to to Year to
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
---------------------------------------------- ---------- ---------- ------------
Cashflows from operating activities
Profit after tax 5,674 3,756 8,648
Adjustments for:
Financial instruments measured at fair
value: hedging contracts (34) 146 72
Share-based payments 306 162 317
Depreciation of property, plant and equipment 512 431 926
Depreciation of right-of-use leased assets 510 436 935
Amortisation of intangible assets 1,355 1,360 3,179
Profit on disposal of property, plant
and equipment (29) (3) (4)
Interest income (1) (13) (14)
Interest expense 245 196 464
Interest payable on right-of-use lease
liabilities 105 85 190
Retirement benefit obligation net interest
cost 27 22 53
Contributions to defined benefit plans (164) - (236)
Tax recognised in the Consolidated Statement
of Comprehensive Income 1,060 577 825
(Increase)/decrease in inventories (590) (716) 1,099
Increase in trade and other receivables (1,972) (39) (1,232)
Increase/(decrease) in trade and other
payables 983 (1,296) (598)
---------------------------------------------- ---------- ---------- ------------
Cash generated from operations 7,987 5,104 14,624
Tax paid (565) (749) (2,377)
---------------------------------------------- ---------- ---------- ------------
Net cash from operating activities 7,422 4,355 12,247
---------------------------------------------- ---------- ---------- ------------
Cashflows from investing activities
---------------------------------------------- ---------- ---------- ------------
Paid on acquisition of subsidiaries - (5,274) (8,857)
Payment of deferred consideration - (1,896) (3,922)
Gross cash inherited on acquisition - 969 1,363
---------------------------------------------- ---------- ---------- ------------
Acquisition of subsidiaries, net of cash
acquired - (6,201) (11,416)
Purchase of property, plant and equipment (544) (675) (1,268)
Capitalised development costs (409) - -
Proceeds from the sale of property, plant
and equipment 36 3 14
Interest received 1 13 14
---------------------------------------------- ---------- ---------- ------------
Net cash used in investing activities (916) (6,860) (12,656)
---------------------------------------------- ---------- ---------- ------------
Cashflows from financing activities
Proceeds from issue of share capital 134 618 980
Purchase of own shares for Company reward
scheme (53) - -
Finance costs paid (245) (200) (468)
Repayments of borrowings* (1,879) (1,429) (7,857)
Repayment of subordinated loan notes - - (190)
Repayments of right-of-use lease liabilities (520) (527) (1,108)
Proceeds from bank loans* - 10,274 14,816
Equity dividends paid - - (3,231)
Paid on acquisition of non-controlling
interest in subsidiary (1,833) (1,071) (1,071)
---------------------------------------------- ---------- ---------- ------------
Net cash (used in)/from financing activities (4,396) 7,665 1,871
---------------------------------------------- ---------- ---------- ------------
Net change in cash and cash equivalents 2,110 5,160 1,462
Cash and cash equivalents at the start
of the period 15,523 14,123 14,123
Exchange movements (21) 139 (62)
---------------------------------------------- ---------- ---------- ------------
Cash and cash equivalents at the end of
the period 17,612 19,422 15,523
---------------------------------------------- ---------- ---------- ------------
* On 25 May 2021, GBP19.0 million of outstanding loans were repaid and simultaneously reborrowed as the Group renewed its banking facilities (see note 10). On 29 June 2020, GBP5.0 million was borrowed as a working capital buffer, and was subsequently repaid in December 2020.
Notes to the interim report
1. General information and basis of preparation
The Judges Scientific plc Group's principal activities comprise the design, manufacture and sale of scientific instruments. The subsidiaries are grouped into two segments: Materials Sciences and Vacuum.
The financial information set out in this Interim Report for the six months ended 30 June 2021 and the comparative figures for the six months ended 30 June 2020 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 2020, which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 (IFRS).
The financial information for the year ended 31 December 2020 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 2020 have been filed with the Registrar of Companies. The Auditor's Report in respect of those financial statements was unqualified and did not contain statements under section 498 of the Companies Act 2006.
Judges Scientific plc is the Group's ultimate parent company. The Company is a public limited company incorporated and domiciled in the United Kingdom. Its registered office and principal place of business is 52c Borough High Street, London SE1 1XN and the Company's shares are quoted on the Alternative Investment Market. The Interim Report is presented in Sterling, which is the functional currency of the parent company. The Interim Report has been approved for issue by the Board of Directors on 23 September 2021.
Going concern
The consolidated financial statements have been prepared on a going concern basis. The Group ended the first half of 2021 with total net debt of GBP1.8 million (equal to 5% of equity) compared to adjusted net debt of GBP5.7 million at 31 December 2020. This reduction in net debt arose through profitable and cash generative trading of the Group's principal operating companies throughout the first half of 2021, driven by the 25% growth in Organic order intake, partially offset by GBP1.9 million allocated to increase the Group's shareholding in one of its majority-owned businesses (see Note 9). Further outlays were also made, paying instalments towards our fair share of tax (GBP0.6 million) and ongoing investment into capital expenditure (GBP0.5 million).
The Directors have considered the ongoing impact of the COVID-19 pandemic, and a summary of the implications is included in the Chairman's Statement. The Group is in a robust financial position, with high cash balances, low gearing and a strong future order book enabling it to face the challenge of the continued uncertain global economic environment due to COVID-19. The Directors have also performed reasonably possible stress testing on forecast cashflows, considering potential scenarios from the pandemic and, as a result, consider that the Group is appropriately placed to manage its business risks.
The Directors therefore have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. They therefore continue to adopt the going concern basis in preparing the Interim Report.
2. Significant accounting policies
The Interim Report has been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 December 2020, except for the taxation policy where, for the purposes of the interim results, the tax charge on adjusted business performance is calculated by reference to the estimated effective rate for the full year.
3. Segmental analysis
Materials Unallocated
For the period ended 30 Sciences Vacuum items Total
June 2021 Note GBP000 GBP000 GBP000 GBP000
-------------------------- ---- --------- -------- ----------- --------
Revenue 19,019 23,936 - 42,955
Operating costs (15,926) (16,908) (1,313) (34,147)
-------------------------- ---- --------- -------- ----------- --------
Adjusted operating profit 3,093 7,028 (1,313) 8,808
Adjusting items 4 (1,698)
-------------------------- ---- --------- -------- ----------- --------
Operating profit 7,110
Net interest expense (376)
-------------------------- ---- --------- -------- ----------- --------
Profit before tax 6,734
Income tax charge (1,060)
-------------------------- ---- --------- -------- ----------- --------
Profit for the period 5,674
-------------------------- ---- --------- -------- ----------- --------
3. Segmental analysis (continued)
Materials Unallocated
For the period ended 30 June Sciences Vacuum items Total
2020 Note GBP000 GBP000 GBP000 GBP000
----------------------------- ---- --------- -------- ----------- --------
Revenue 14,675 22,774 - 37,449
Operating costs (12,274) (17,110) (1,362) (30,746)
----------------------------- ---- --------- -------- ----------- --------
Adjusted operating profit 2,401 5,664 (1,362) 6,703
Adjusting items 4 (2,080)
----------------------------- ---- --------- -------- ----------- --------
Operating profit 4,623
Net interest expense (290)
----------------------------- ---- --------- -------- ----------- --------
Profit before tax 4,333
Income tax charge (577)
----------------------------- ---- --------- -------- ----------- --------
Profit for the period 3,756
----------------------------- ---- --------- -------- ----------- --------
Materials Unallocated
For the year ended 31 December Sciences Vacuum items Total
2020 Note GBP000 GBP000 GBP000 GBP000
------------------------------- ---- --------- -------- ----------- --------
Revenue 33,210 46,655 - 79,865
Operating costs (28,341) (34,564) (2,603) (65,508)
------------------------------- ---- --------- -------- ----------- --------
Adjusted operating profit 4,869 12,091 (2,603) 14,357
Adjusting items 4 (4,191)
------------------------------- ---- --------- -------- ----------- --------
Operating profit 10,166
Net interest expense (693)
------------------------------- ---- --------- -------- ----------- --------
Profit before tax 9,473
Income tax charge (825)
------------------------------- ---- --------- -------- ----------- --------
Profit for the year 8,648
------------------------------- ---- --------- -------- ----------- --------
Unallocated items relate to the Group's head office costs.
Segment assets and liabilities
Materials Unallocated
Sciences Vacuum items Total
At 30 June 2021 GBP000 GBP000 GBP000 GBP000
------------------------------------------ --------- -------- ----------- --------
Assets 25,374 34,492 25,156 85,022
Liabilities (12,390) (11,724) (22,715) (46,829)
------------------------------------------ --------- -------- ----------- --------
Net assets 12,984 22,768 2,441 38,193
------------------------------------------ --------- -------- ----------- --------
Purchase of property, plant and equipment 198 343 3 544
Capitalised development costs 77 332 - 409
Depreciation of property, plant and
equipment 177 309 26 512
Depreciation of right-of-use leased
assets 261 219 30 510
Amortisation 530 825 - 1,355
------------------------------------------ --------- -------- ----------- --------
Materials Unallocated
Sciences Vacuum items Total
At 30 June 2020 GBP000 GBP000 GBP000 GBP000
------------------------------------------ --------- -------- ----------- --------
Assets 24,155 30,222 30,054 84,431
Liabilities (10,970) (11,216) (30,684) (52,870)
------------------------------------------ --------- -------- ----------- --------
Net assets 13,185 19,006 (630) 31,561
------------------------------------------ --------- -------- ----------- --------
Purchase of property, plant and equipment 121 544 10 675
Depreciation of property, plant and
equipment 113 295 23 431
Depreciation of right-of-use leased
assets 203 205 28 436
Amortisation 392 968 - 1,360
------------------------------------------ --------- -------- ----------- --------
3. Segmental analysis (continued)
Materials Unallocated
Sciences Vacuum items Total
At 31 December 2020 GBP000 GBP000 GBP000 GBP000
------------------------------------------ --------- -------- ----------- --------
Assets 23,566 31,713 26,747 82,026
Liabilities (11,468) (11,702) (25,808) (48,978)
------------------------------------------ --------- -------- ----------- --------
Net assets 12,098 20,011 939 33,048
------------------------------------------ --------- -------- ----------- --------
Purchase of property, plant and equipment 355 902 11 1,268
Depreciation of property, plant and
equipment 285 591 50 926
Depreciation of right-of-use leased
assets 465 413 57 935
Amortisation 1,345 1,834 - 3,179
------------------------------------------ --------- -------- ----------- --------
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
2021 2020 2020
Geographic analysis GBP000 GBP000 GBP000
-------------------- ---------- ---------- ------------
UK (domicile) 7,743 5,153 10,167
Rest of Europe 14,354 10,847 24,784
North America 8,382 9,241 17,289
China/Hong Kong 4,720 5,286 13,721
Rest of the World 7,756 6,922 13,904
-------------------- ---------- ---------- ------------
Revenue 42,955 37,449 79,865
-------------------- ---------- ---------- ------------
4. Adjusting items
Six months Six months
to to Year to
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
---------------------------------------------- ---------- ---------- ------------
Amortisation of intangible assets 1,355 1,360 3,179
Financial instruments measured at fair value:
hedging contracts (34) 146 72
Share-based payments 306 162 317
Employment taxes arising from share-based
payments 39 28 64
Acquisition costs 32 384 559
---------------------------------------------- ---------- ---------- ------------
Total adjusting items within operating profit 1,698 2,080 4,191
Retirement benefits obligation net interest
cost 27 22 53
---------------------------------------------- ---------- ---------- ------------
Total adjusting items 1,725 2,102 4,244
Taxation (258) (363) (1,204)
---------------------------------------------- ---------- ---------- ------------
Total adjusting items net of tax 1,467 1,739 3,040
---------------------------------------------- ---------- ---------- ------------
Attributable to:
Owners of the parent 1,431 1,654 2,888
Non-controlling interests 36 85 152
---------------------------------------------- ---------- ---------- ------------
1,467 1,739 3,040
---------------------------------------------- ---------- ---------- ------------
5. Earnings per share
Six months Six months
to to Year to
30 June 30 June 31 December
2021 2020 2020
Note GBP000 GBP000 GBP000
--------------------------------------------- ---- ---------- ---------- ------------
Profit for the period attributable to owners
of the parent
Adjusted profit 7,001 5,268 11,108
Adjusting items 4 (1,431) (1,654) (2,888)
--------------------------------------------- ---- ---------- ---------- ------------
Profit for the period 5,570 3,614 8,220
--------------------------------------------- ---- ---------- ---------- ------------
Pence Pence Pence
------------------------------ ----- ----- -----
Earnings per share - adjusted
Basic 111.0 84.2 177.2
Diluted 109.5 82.5 173.9
------------------------------- ----- ----- -----
Earnings per share - total
Basic 88.4 57.8 131.1
Diluted 87.1 56.6 128.7
------------------------------- ----- ----- -----
Number Number Number
------------------------------------- --------- --------- ---------
Issued Ordinary shares at start of
the period 76,299,163 6,226,291 6,226,291
Movement in Ordinary shares during
the period 7 12,676 48,650 72,872
------------------------------------- --------- --------- ---------
Issued Ordinary shares at end of the
period 76,311,839 6,274,941 6,299,163
------------------------------------- --------- --------- ---------
Weighted average number of shares in
issue 6,306,177 6,254,512 6,269,437
Dilutive effect of share options 90,467 128,861 117,551
------------------------------------- --------- --------- ---------
Weighted average shares in issue on
a diluted basis 6,396,644 6,383,373 6,386,988
------------------------------------- --------- --------- ---------
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:
Acquired
Acquired brand
Acquired sales and Acquired
Development distribution Acquired order domain customer
costs agreements technology backlog names relationships Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------- ----------- ------------- ----------- -------- -------- -------------- -------
Carrying amount at
1 January 2021 - 192 2,970 33 1,566 2,148 6,909
Additions 409 - - - - - 409
Amortisation - (50) (519) (33) (348) (405) (1,355)
------------------- ----------- ------------- ----------- -------- -------- -------------- -------
Carrying amount at
30 June 2021 409 142 2,451 - 1,218 1,743 5,963
------------------- ----------- ------------- ----------- -------- -------- -------------- -------
Acquired
Acquired brand
Acquired sales and Acquired
Development distribution Acquired order domain customer
costs agreements technology backlog names relationships Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------- ----------- ------------- ----------- -------- -------- -------------- -------
Carrying amount at
1 January 2020 - 400 1,927 119 1,508 504 4,458
Acquisitions - - 1,400 400 750 1,450 4,000
Amortisation - (143) (474) (219) (372) (152) (1,360)
------------------- ----------- ------------- ----------- -------- -------- -------------- -------
Carrying amount at
30 June 2020 - 257 2,853 300 1,886 1,802 7,098
------------------- ----------- ------------- ----------- -------- -------- -------------- -------
Acquired
Acquired brand
Acquired sales and Acquired
Development distribution Acquired order domain customer
costs agreements technology backlog names relationships Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------- ----------- ------------- ----------- -------- -------- -------------- -------
Carrying amount at
1 January 2020 - 400 1,927 119 1,508 504 4,458
Acquisitions - - 2,100 500 830 2,200 5,630
Amortisation - (208) (1,057) (586) (772) (556) (3,179)
------------------- ----------- ------------- ----------- -------- -------- -------------- -------
Carrying amount at
31 December 2020 - 192 2,970 33 1,566 2,148 6,909
------------------- ----------- ------------- ----------- -------- -------- -------------- -------
7. Share capital
Movements in the Group's Ordinary shares in issue are summarised as follows:
30 June 30 June
2021 2020
Ordinary shares of 5p each GBP000 GBP000
------------------------------------------------------- ------- -------
Allotted, called up and fully paid - Ordinary shares
of 5p each
1 January: 6,299,163 shares (2020: 6,226,291 shares) 315 311
Exercise of share options: 12,676 shares (2020: 48,650
shares) 1 3
------------------------------------------------------- ------- -------
30 June: 6,311,839 shares (2020: 6,274,941 shares) 316 314
------------------------------------------------------- ------- -------
Allotments of Ordinary shares in the first six months of 2021 were made to satisfy the exercise of 12,676 share options in aggregate on 16 occasions during the period when the share price was within the range of 5800p to 6408p (2020: exercise of 48,650 share options when the share price was within the range of 4300p to 5680p).
8. Changes in net debt
Changes in net debt for the six months ended 30 June 2021 were as follows:
1 January Non-cash 30 June
2021 Cashflow items 2021
GBP000 GBP000 GBP000 GBP000
------------------------- --------- -------- -------- --------
Cash at bank and in hand 15,523 2,110 (21) 17,612
Bank debt (21,215) 1,879 - (19,336)
------------------------- --------- -------- -------- --------
Total net debt (5,692) 3,989 (21) (1,724)
------------------------- --------- -------- -------- --------
Non-cash items primarily represent foreign exchange differences on foreign currency bank balances.
The movement in borrowings over the period was as follows:
2021 2020
GBP000 GBP000
-------------------------------------------------- ------- -------
At 1 January 21,215 14,260
Proceeds from drawdown of loans - 10,274
Repayment of loans (1,879) (1,429)
Interest payable 245 196
Interest paid (245) (200)
-------------------------------------------------- ------- -------
At 30 June 19,336 23,101
-------------------------------------------------- ------- -------
Subordinated debt to non-controlling shareholders - 190
-------------------------------------------------- ------- -------
Total borrowings at 30 June 19,336 23,291
-------------------------------------------------- ------- -------
On 25 May 2021, GBP19.0 million of outstanding loans were repaid and simultaneously reborrowed as the Group renewed its banking facilities (see note 10).
2021 2020
GBP000 GBP000
---------------------------- ------- -------
Current 4,657 3,047
Non-current 14,679 20,244
---------------------------- ------- -------
Total borrowings at 30 June 19,336 23,291
---------------------------- ------- -------
9. Acquisitions
Increased shareholding in Bordeaux Acquisition Limited
On 16 February 2021, Judges acquired 12.5% of the shares in Bordeaux Acquisition Limited for a cash consideration of GBP1.8 million, increasing its shareholding from 75.5% to 88%. The transaction was financed from Judges' existing cash resources.
10. Banking arrangements
On 25 May 2021, the Group entered into new banking facilities ("Facility") with Lloyds Banking Group plc (the "Bank") replacing its existing banking arrangements. The Facility was for an aggregate GBP60.0 million consisting of a GBP19.0 million term loan ("Term Loan"), a committed GBP35.0 million revolving credit facility ("RCF") plus a GBP6.0 million accordion facility, which can be drawn at the discretion of the Bank. The Facility replaced the previous facilities for which the Group had a total of GBP19.0 million outstanding. The Facility has a five year term ("Borrowing Term") with covenants and interest consistent with the previous bank facilities. The Term Loan shall amortise on a straight line basis over the Borrowing Term by quarterly instalments. The RCF is repayable in a bullet at the end of the Borrowing Term. The accordion facility increases by the amount paid off the Term Loan, keeping the overall Facility at GBP60.0 million throughout the Borrowing Term.
The existing lending facilities via Bordeaux Acquisition Limited ("Bordeaux"), the Group's 88% owned subsidiary, remain unchanged. Bordeaux was set up as a vehicle to acquire Deben UK Limited and was used in 2017 to acquire Crystallon, the parent of Oxford Cryosystems Limited.
11. Defined benefit scheme
The Group's defined benefit pension scheme net liability has decreased to GBP2.0 million, compared to GBP3.3 million at 31 December 2020, primarily due to an increase of 0.5% in the discount rate to 1.85% from 1.35% at 31 December 2020.
12. Dividends
During the period, the Company paid no dividends (period to 30 June 2020: GBPnil).
The Company paid a final dividend of 38.5p per share totalling GBP2.4 million to shareholders on 9 July 2021 relating to the financial year ended 31 December 2020 (35.0p per share totalling GBP2.2 million relating to the financial year ended 31 December 2019).
The Company will pay an interim dividend for 2021 of 19.0p per share (2020: interim dividend of 16.5p per share) on 5 November 2021 to shareholders on the register on 8 October 2021. The shares will go ex-dividend on 7 October 2021.
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END
IR QXLFLFKLFBBB
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September 24, 2021 01:59 ET (05:59 GMT)
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