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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