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(JDG) Judges Scientific share chat

Discussion in 'General Share Chat (JDG)' started by Groucho, Sep 25, 2018.

  1. Groucho

    Groucho Member

    Press release

    18 September 2018

    Judges Scientific plc

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

    Interim results for the six months ended 30 June 2018 and Trading Update

    Key financials

    · Revenues up 13% to a record £37.0 million (H1 2017: £32.7 million) including 5.7% Organic growth;

    · Adjusted* pre-tax profit up 50% to £6.6 million (H1 2017: £4.4 million);

    o Statutory pre-tax profit of £4.2 million (H1 2017: £2.1 million);

    · Adjusted* basic earnings per share up 52% to 83.4p (H1 2017: 54.8p);

    o Statutory basic earnings per share of 53.3p (H1 2017: 23.9p);

    · Interim dividend of 12.0p (H1 2017: 10.0p), an increase of 20%; covered 7 times by adjusted earnings;

    · Organic order intake up 2.3% compared with H1 2017;

    · Organic order book at 15.0 weeks (H1 2017: 15.4 weeks);

    · Cash generated from operations of £6.3 million (H1 2017: £4.4 million);

    · Adjusted* net debt of £2.2 million as at 30 June 2018 (31 December 2017: £8.0 million);

    o Statutory net debt of £2.4 million as at 30 June 2018 (31 December 2017: £7.6 million);

    · Cash balances of £14.4 million as at 30 June 2018 (31 December 2017: £10.7 million);

    · Bank debt refinanced with new facilities of £35 million;

    · Post period end buy-back by PFO of one half of the shares held by its minority holders for a cash consideration of £1.5 million, increasing the Group's share in PFO from 51% to 67.5%.

    Trading update

    · Adjusted profit before tax and Earnings per Share anticipated to be ahead of FY 2018 expectations.

    * Adjusted earnings figures are stated before adjusting items relating to hedging of risks materialising after the end of the period, amortisation of acquired intangible assets, share based payments and acquisition-related costs. Adjusted net 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:

    "During the period, the Company achieved new records in terms of revenues, adjusted profit before tax, adjusted earnings per share and dividends. This strong momentum has been maintained since the end of the period and as such, the Board anticipates that full year adjusted profit before tax and EPS will be ahead of current market expectations.

    During the period we welcomed Charles Holroyd to the Board with Glynn Reece transitioning to become the Group's Company Secretary. The Group continues to pursue its disciplined strategy and benefits from a broad range of revenue streams, diversified by geography and market, partially insulating it against wider external volatility."
  2. Groucho

    Groucho Member

  3. Groucho

    Groucho Member

    17 January 2019

    Judges Scientific plc (the "Group" or "Judges")

    Trading Statement and Notice of Final Results

    The Board of Judges Scientific plc, a group involved in the buy and build of scientific instrument businesses, updates shareholders and the market on the Group's trading performance for the financial year ended 31 December 2018.

    The trading climate was favourable throughout the year and the momentum in demand accelerated in the second half, resulting in 6.2% growth in organic* order intake for the year as a whole. This leaves the Group at the year-end with a total order book equivalent to 14.2 weeks of budgeted sales (31 December 2017: 14.9 weeks).

    The healthy commercial activity and the excellent exchange rates helped further drive sales, profits and cash generation; as a result, the Board anticipates that EPS for the full year ended 31 December 2018 will be slightly ahead of current market expectations as increased following the November 2018 trading update.

    Notice of Results

    Judges expects to announce its full year results for the year ended 31 December 2018 on 19 March 2019.

    *Organic includes those businesses owned by the Group prior to 1 January 2017
  4. Groucho

    Groucho Member

    19 March 2019

    Judges Scientific plc

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


    Record revenue, order intake and cash generation underpinning 25% increase in dividend

    Judges Scientific, a group involved in the buy and build of scientific instrument businesses, is pleased to announce its Final Results for the year ended 31 December 2018.


    · Revenues up 9% to a record £77.9 million (2017: £71.4 million), including 5.5% Organic* growth;

    · Adjusted** operating profit up 35% to £14.7 million (2017: £10.9 million);

    o Statutory operating profit of £10.7 million (2017: £5.7 million);

    · Adjusted** basic earnings per share up 39% to 183.4p (2017: 131.9p);

    o Statutory basic earnings per share of 137.5p (2017: 65.6p);

    · Final dividend of 28p, totalling 40p for the year, an increase of 25%; covered 4.6 times by adjusted earnings;

    · Organic* order intake up 6.2% compared with 2017;

    · Order book at 14.4 weeks (1 January 2018: 14.9 weeks);

    · New 5-year acquisition facilities for aggregate £35 million;

    · Cash generated from operations of £15.7 million (2017: £10.9 million);

    · Adjusted** net cash of £0.9 million as at 31 December 2018 (31 December 2017: £8.0 million net debt);

    o Statutory net cash of £0.7 million at 31 December 2018 (31 December 2017: £7.6 million net debt);

    · Cash balances of £15.7 million as at 31 December 2018 (31 December 2017: £10.7 million).

    * Organic describes the performance of the Group including businesses acquired prior to 1 January 2017.

    ** Adjusted earnings figures exclude adjusting items relating to amortisation of intangible assets, acquisition-related costs, share based payments and hedging of risks materialising after the end of the year. Adjusted net debt includes acquisition-related liabilities and excludes subordinated debt owed by subsidiaries to minority shareholders.

    Alex Hambro, Chairman of Judges Scientific, commented:

    "2018 saw the Group achieve new records for order intake, sales, adjusted profits, cash generation and earnings per share; this was driven by strong demand for our products, continued operational improvements and very favourable foreign exchange rates. 2019 has started well and, with a robust balance sheet and a strong order book, Judges is well positioned to face an uncertain macro and political climate."

    Judges ScientificPLC - Final Results https://www.voxmarkets.co.uk/rns/announcement/421773b9-bd1d-4f0c-bd67-6c58037772db


    I am delighted to report that in the financial year ended 31 December 2018, the Group achieved new records in order intake, revenues, cash generation, adjusted pre-tax profit and adjusted earnings per share. In the absence of an acquisition the Group has achieved a net cash position at the year-end providing a robust position for future corporate development when opportunities arise. Pleasingly the performance has been achieved this year through organic growth and efforts to achieve operational excellence, highlighting the inherent commercial strength of the businesses within the Group. The long-term growth drivers in the scientific instruments industry remain robust and, whilst volatility in short term demand remains a feature within our sector, the climate - and exchange rates - were in our favour as evidenced by the consistently strong demand for our products observed over more than the last two and a half years.

    Delivering returns to our shareholders remains the core objective of the Group and as such the Board is pleased to be recommending a final dividend of 28p, making a total of 40p in respect of 2018, a 25% increase on the prior year (2017: 32p). As a result of this payment, the Company will have returned to its original shareholders in cumulative dividends more than twice the Company's original subscription price.


    The Group's strategy continues to be based on creating shareholder returns through highly selective and carefully structured acquisitions, underpinned by diversified, solid and consistent earnings and cash-flows arising from our existing businesses.

    The Group's policy is to acquire small/medium-sized scientific instrument companies, paying a disciplined multiple of earnings and to finance any acquisition, ideally, through existing cash resources and/or bank borrowings. We are highly selective in acquiring businesses with sustainable profits and cash-flows in order to obtain immediate and enduring earnings enhancement for our shareholders. It is paramount that acquisitions are completed only when the Directors are satisfied that the target business has sound underlying strength. On the back of the growth of our Group it has been able to promptly reduce the acquisition debt, generating the resources to reinvest in further acquisitions, subject always to our prudent approach on gearing.

    The underlying market for scientific instruments remains robust and the sector's long-term growth drivers provide comfort that the Group will continue to deliver durable returns for shareholders despite, as we have observed since 2014, the potential for some short-term variability in performance. Long-term market drivers are rooted in the global expansion of higher education and the need for improved measurement to support the relentless worldwide search for optimisation across science and industry.

    Our team

    This was the first year of activity for our new Chief Operating Officer, Mark Lavelle. His contribution has been very positive and we are confident that his impact on the quality of our operations will provide a strong and growing enhancement to organic profitability.

    Your Board was strengthened by the addition of Charles Holroyd as an independent Non-Executive Director. His general business acumen and knowledge of our sector will be of great benefit to the Group. Glynn Reece has left the Board but we are pleased that he will continue his long and successful association with Judges as Company Secretary.

    Of course, the good performance achieved in 2018 is primarily the result of the great competence and hard work of all our colleagues at every level. The Board and, I am sure, our shareholders are grateful for their efforts that have created such a positive performance.

    Alex Hambro


    18 March 2019




    Group revenues for the financial year ended 31 December 2018 progressed from £71.4 million to £77.9 million, an increase of 9%. This reflects Organic growth of 5.5% and the full year contribution of Oxford Cryosystems which was acquired in July 2017. For the year as a whole and excluding the business acquired since 1 January 2017 (this is the meaning of "Organic" in this Report and Accounts), revenues grew strongly across most of the mature economies with UK turnover increasing by 18%, the Rest of Europe up 22% and North America up 11%. China/Hong Kong was down 8% following the strong 39% growth the previous year; the Rest of the World was down by 17%. Customers outside the UK tend to appraise the value of what they purchase in currencies other than Sterling and the weakness in Sterling throughout most of the year assisted the strength of our exports. Country by country, the most impressive swings were in the USA (up £1.9 million) and in the UK (up £1.5 million) followed by the Czech Republic, Germany and Taiwan. The Group is a strong exporter and well diversified across the globe, with 27% of the Group's revenues earned in North America, 30% in the Rest of Europe, 10% in China/Hong Kong and 20% in the Rest of the World.


    Profit before tax and adjusting items progressed 37% to £14.3 million (2017: £10.4 million). Organic operating contribution was up 30% driven by improved demand throughout the Group, by good progress at the business which had suffered operating issues and by the very favourable exchange rates prevailing since the Brexit vote. The operating subsidiaries combined produced a Return on Total Invested Capital of 27.6% (2017: 20.6%).

    The Group has continued to invest in the improvement of its existing products and the development of new products. Investment in research and development amounted to £4.6 million in 2018 (2017: £3.5 million), equivalent to 5.9% of Group revenue.

    Earnings per share were enhanced largely by the positive Organic trading performance but also by a full years ownership of Oxford Cryosystems and the impact of our increased shareholdings in Bordeaux Acquisition (from 51% to 75.5% in July 2017) and in PE.fiberoptics (from 51% to 67.5% in August 2018). Basic earnings per share before adjusting items advanced by 39% from 131.9p to 183.4p; fully diluted earnings per share before adjusting items also improved 39% to 180.6p (2017: 130.3p).

    Order intake

    The positive momentum benefitting the Group since June 2016 continued throughout 2018; this strength was observed across most Group companies and progress was made across all major export zones with the UK up 22%, Europe ahead by 14%, North America up by 14% and China/Hong Kong up 1% although the rest of the World was down 15%. This resulted in a 6% increase in Organic order intake compared to 2017. The robust demand enabled the improved sales and left the Group with a healthy order book at 31 December 2018 representing 14.4 weeks of budgeted sales (2017: 14.9 weeks).


    The strong trading performance produced abundant cashflow with cash generated from operations of £15.7 million (2017: £10.9 million). At 31 December 2018 the Group was in a net cash position with adjusted net cash excluding subordinated debt owed to non-controlling shareholders (and for 2017, including sums still due in respect of an acquisition) amounting to £0.9 million (2017: £8.0 million net debt). Statutory net cash was £0.7 million (2017: statutory net debt of £7.6 million).


    Your Board is recommending a final dividend of 28p per share subject to approval at the forthcoming Annual General Meeting on 22 May 2019, which will make a total distribution of 40p per share in respect of 2018 (2017: 32p per share). Despite the proposed 25% increase, the total dividend per share is more than four and a half times covered by adjusted earnings per share (2017: four times).

    The proposed final dividend, if approved by shareholders, will be payable on 5 July 2019 to shareholders on the register on 7 June 2019 and the shares will go ex-dividend on 6 June 2019.

    The Company's shareholders are reminded that a Dividend Reinvestment Plan (DRIP) is in place to enable shareholders to automatically reinvest their dividends into additional Judges shares should they so wish.

    Trading environment

    The long-term fundamentals supporting demand for scientific instruments remain positive. Market demand is being driven primarily by increased worldwide investment in higher education and a growing trend towards optimisation across science and industry; optimisation requires measurement.

    Despite these positive long-term trends, the markets across which Judges and its peers operate are characterised by a degree of shorter-term variability, influenced mostly by government spending, currency fluctuations and the business climate in major trading blocs, particularly the USA and China. In smaller territories, year-on-year comparisons are not necessarily illustrative of performance, partly due to the high value of some individual orders and the long gestation period often occurring before purchasing intentions crystallise into orders and sales. Alongside these external variables, the uncertainty in research funding in the UK resulting from Brexit may have a continuing influence on commercial activity in some of our businesses.

    As a large percentage of the Group's sales are overseas, exchange rates have a significant influence on the Group's business: Judges' manufacturing costs are largely denominated in Sterling and most of its revenue originates from countries where the standard of value is the Euro (one quarter of total revenue) or the US Dollar (two thirds of total revenue). The currency movements in the run-up to the Brexit vote and since have had a positive influence (mitigated to an extent by hedging) on our margins and our competitiveness. Exchange rates during 2018 have been nearly the most favourable we have seen since 2009.


    As a buy and build group, the acquisition of new businesses is a fundamental feature of Group strategy. Executing this effectively is required to ensure that long-term value is generated for shareholders.

    The industry in which we operate consists of a multitude of small global niches as highlighted by the diverse nature of the new entrants to our Group. The UK is recognised in this arena as a centre of excellence for product innovation and manufacturing with world-leading businesses. Our Group has built a reputation over the past decade as an experienced and well-financed buyer and a supportive home for businesses in our sector whose owners wish to sell. We are trusted to act decisively and to complete deals under the initial terms agreed. For the businesses we acquire, the Group offers advice and support wherever necessary, participates in succession planning and implements robust financial controls. We trust subsidiary management teams with the day-to-day running of their businesses. This has been a successful operating model for the Group, as management teams are given responsibility for their own destinies, as well as an environment in which they can thrive.

    In 2018 no acquisition was completed. This is a reflection of the disciplined attitude of your Board and the erratic nature of deal origination given that most of our acquisitions arise from the seller's intention to retire.

    Thirteen years after Judges backed the management buy-out of PE.fiberoptics ("PFO"), one of its original founders retired. PFO offered to buy-back half of its own shares using part of its surplus cash. All shareholders except Judges took advantage of the offer and, as a result, the Group's percentage holding in PFO increased from 51% to 67.5%.

    Current trading and prospects

    Judges has started 2019 with a strong financial position and a solid order book; order intake in the first ten weeks of the new year was ahead of the corresponding prior year period.

    Our business will continue to be influenced by public spending around the world and trade tensions (including Brexit) could impact our performance. More significantly, following a resolution on Brexit, which will be addressed at some point, Sterling's fate ought to be driven again by economic rather than political factors; we are well hedged for the current year but a stronger Sterling would not be positive in the medium term. Our well diversified Group has shown its resilience and the underlying strength of our business justifies some optimism for the current year.

    David Cicurel

    Chief Executive

    18 March 2019
  5. Groucho

    Groucho Member

  6. Groucho

    Groucho Member


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