23rd Mar 2007 07:01
Judges Capital PLC23 March 2007 Judges Capital plc Preliminary Results for the year ended 31 December 2006 Highlights • Record sales of £5.2 million (2005: £2.2 million) • Record adjusted fully diluted earnings per share of 8.2p (2005: 4.8p) • Proposed final dividend of 2p, making 3p for the year (2005: nil) • Two successful acquisitions during the year: UHV Design and Aitchee Engineering • All trading subsidiaries profitable and cash generative Alex Hambro, Chairman of Judges Capital, commented: "We are delighted with theoutcome of our first full year's trading operations as a scientific instrumentsgroup. We have now established a solid base from which to build the company,both organically and through further acquisitions within the instrumentationsector." Chairman's Statement I have much pleasure in reporting your company's results for 2006, its firstfull year as a scientific instruments group. Sales reached £5.2 million (2005:£2.2 million) while profit before tax but after goodwill amortisation amountedto £350,000 (2005: £163,000). This resulted in an increase in earnings per shareto 3.9p (2005: 1.6p). Before goodwill amortisation, pre-tax profit rose from£267,000 to £510,000 and earnings per share from 5.3p to 9.4p; similarly, on afully diluted basis, earnings per share rose from 4.8p to 8.2p. Your board isdelighted to propose a final dividend of 2p, making a total distribution of 3pfor the year. Constitution of the Group Judges Capital is the holding company for a group of companies that specialisein the design and production of scientific instruments. Operations are all basedin the UK but the group is a world player in certain niche markets, with exportscurrently representing 86% of total turnover. The results include a full year's contribution from Fire Testing Technology ("FTT"), the world's leading manufacturer of instruments designed to test thereaction of various materials to fire and heat, and from PE Fiberoptics ("PFO"),our 51% owned subsidiary, which specialises in the production of instrumentsthat test the properties of fibre optic and fibre optic networks. During the year two additional businesses were purchased. The acquisition of UHVDesign ("UHV") was completed in February 2006 and 10 months of trading areincluded in these accounts. At the beginning of September 2006, FTT bought thetrade of Aitchee Engineering ("Aitchee"), the contribution in this instancebeing four months. UHV designs and manufactures instruments capable of manipulating objects inultra high vacuum chambers. The £836,000 purchase price comprised £650,000 incash, 98,522 Ordinary shares in Judges and an £86,000 earn-out; in addition a£205,000 cash payment was made to reflect excess working capital at completion.The cash element of the purchase price was financed by an extension of thecompany's senior term loan. The business of Aitchee, which manufactures engineering parts and is one ofFTT's principal sub-contractors, was acquired by FTT for a maximum considerationof £230,000. FTT is the company's largest customer. Trading After a strong start to 2006, both FTT and PFO experienced a slow-down in orderstowards the summer. This trading pattern proved relatively short-lived and thesecond half of the year ended favourably on the back of a solid recovery in theorder book. UHV experienced strong growth throughout the year and Aitcheeperformed well during the four months following its purchase. All operations have shown flexibility and resilience and have producedsignificant profits and cash-flows. Financial Performance In addition to the strong profits performance referred to above, net cash inflowfrom operating activities (before interest and tax) nearly doubled from £345,000in 2005 to £614,000 in 2006. Net debt rose from £1.2 million to £2.2 million asa result of acquisitions. During the year the company continued to realise the investment portfolio builtup through its former business activity and divested its holding in DickinsonLegg plc. The book value of the remaining investments has been reduced to£220,000, almost entirely attributable to the company's holding in PooleInvestments Plc. Dividend After paying a maiden interim dividend of 1p, your board is delighted to proposea final dividend of 2p payable, subject to approval at the forthcoming AnnualGeneral Meeting, on Friday 6 July 2007 to shareholders on the record on 8 June2007. The shares will go ex-dividend on 6 June 2007. The total distribution forthe year is 3p, which is more than three times covered by undiluted adjustedearnings per share. Current trading and prospects The group started 2007 with an improved order book and trading activity has beensatisfactory. Results for the current financial year will benefit from a full 12months' contribution from UHV and Aitchee. The company is actively looking for new acquisitions in the scientificinstruments sector. Our recent acquisitions have doubled the average number of employees within theJudges group and I would like to take this opportunity to thank them all fortheir dedication and hard work which was integral to our achievements during2006. I would also like to thank our shareholders, both long-standing and morerecent, for their invaluable support. Alex HambroChairmanDate: 22 March 2007 CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 DECEMBER 2006 2006 2005 Continuing activities Acquisitions Total £ £ £ £ Turnover 3,900,477 1,294,848 5,195,325 2,211,521 Operating costs (3,546,856) (936,996) (4,483,852) (1,981,776)Goodwill amortisation (105,741) (54,215) (159,956) (103,750) Total operating costs (3,652,597) (991,211) (4,643,808) (2,085,526) Operating profit 247,880 303,637 551,517 125,995 (Loss)/profit on disposal of investments (6,145) 89,842Net interest payable (195,377) (52,632) Profit on ordinary activities before taxation 349,995 163,205 Tax on profit on ordinary activities (173,265) (100,777) Profit on ordinary activities after taxatio 176,730 62,428 Minority interests (36,440) (15,499) Profit for the year 140,290 46,929 Earnings per shareBasic 3.9p 1.6pDiluted 3.6p 1.7p There are no recognised gains and losses other than the results for the year setout above. BALANCE SHEETSAS AT 31 DECEMBER 2006 2006 2005 Group Company Group Company £ £ £ £Fixed assetsIntangible assets 4,430,826 - 3,638,059 -Tangible assets 295,468 - 114,336 -Investments in subsidiaries - 5,620,080 - 4,579,564 4,726,294 5,620,080 3,752,395 4,579,564 Current assetsStocks 402,941 - 413,130 -Debtors 1,249,039 384,878 692,350 145,242Investments 219,155 219,155 427,911 427,911Cash in hand and at bank 824,156 218,514 1,148,619 742,337 2,695,291 822,547 2,682,010 1,315,490 Creditors: amounts falling due within one year (1,463,239) (513,838) (1,044,264) (305,776) Net current assets 1,232,052 308,709 1,637,746 1,009,714 Total assets less current liabilities 5,958,346 5,928,789 5,390,141 5,589,278 Creditors: amounts falling due (2,835,940) (2,799,775) (2,528,959) (2,528,959)after more than one year Provisions for liabilities (43,676) - (23,557) - Minority interests (51,992) - (15,548) - Total net assets 3,026,738 3,129,014 2,822,077 3,060,319 Capital and reservesCalled up share capital 178,044 178,044 173,118 173,118Share premium 2,501,430 2,501,430 2,501,430 2,501,430Merger reserve 475,074 - 380,000 -Profit and loss account (127,810) 449,540 (232,471) 385,771 Shareholders' funds 3,026,738 3,129,014 2,822,077 3,060,319 CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2006 Notes 2006 2005 £ £ £ £ Net cash inflow from operating activities 3a 613,983 345,217 Returns on investments and servicingof financeInterest received 32,041 54,462Interest paid (227,418) (107,094) (195,377) (52,632) Taxation paid (294,693) - Capital expenditurePurchases of fixed assets (31,336) (11,704)Proceeds from sale of fixed assets 15,655 - - (15,681) (11,704)Acquisitions and disposalsInvestments in subsidiaries (1,215,090) (4,059,564)Net cash from purchase of subsidiaryundertaking 178,867 579,949 (1,036,223) (3,479,615) Net cash outflow before management ofliquid resources and financing (927,991) (3,198,734) Management of liquid resourcesSales of investments 202,611 1,364,006 Equity dividend paid (35,629) - Net cash outflow before financing (761,009) (1,834,728) FinancingIssue of Ordinary shares - 956,000Expenses paid in connection with share issues - (102,264)Bank loans drawn down 700,000 2,448,959Loan repayments (263,454) (164,000)Repayments of Contracts for Differences - (451,421) Net cash inflow from financing 436,546 2,687,274 (Decrease)/increase in cash in the year 3c (324,463) 852,546 NOTES TO THE PRELIMINARY ANNOUNCEMENTFOR THE YEAR ENDED 31 DECEMBER 2006 1. Basis of preparation The financial information in this preliminary announcement has been prepared inaccordance with the accounting policies set out in the financial statements ofJudges Capital plc for the year ended 31 December 2005, which have remainedunchanged for the financial year ended 31 December 2006 apart from the adoptionof FRS 20 - Share based payments. This change in accounting policy had nomaterial effect on figures previously reported or on the results for the year. 2 Earnings per share 2006 2005 Basic Diluted Basic Diluted Earnings Basic: profit for the financial year 140,290 140,290 46,929 46,929 Notional taxed interest income accruing on dilution - 16,685 - 11,744 Diluted profit 140,290 156,975 46,929 58,673 Adjusted: Add back goodwill charge, net of £36,051 (2005: £4,557) relating to tax and minority interest in negative goodwill write back 196,007 196,007 108,307 108,307 Adjusted profit - basic / diluted 336,297 352,982 155,236 166,980 Number of shares Basic: weighted average in year 3,544,953 3,544,953 2,931,101 2,931,101 Adjusted: weighted average increase on dilution - 718,852 - 513,593 3,544,953 4,263,805 2,931,101 3,444,694 Earnings per share Basic / diluted 3.9 3.6 1.6 1.7 Adjusted - basic / diluted 9.4 8.2 5.3 4.8 3. Notes to the consolidated cash flow statement a Reconciliation of operating profit to net cash inflow from operating activities 2006 2005 £ £ Operating profit 551,517 125,995 Depreciation of fixed assets 53,644 10,767 Amortisation of goodwill 159,956 103,750 Profit on disposal of fixed assets (2,078) - Decrease/(increase) in stocks 104,775 (60,880) Exchange differences on foreign currency (7,335) - bank loans Increase in debtors (364,429) (43,247) Increase in creditors due within one year 117,933 208,832 Net cash inflow from operating activities 613,983 345,217 b Analysis of net debt 1 January Acquisitions Cash Other 31 December 2006 flow movements 2006 £ £ £ £ £ Net cash: Cash at bank and in 1,148,619 - (324,463) - 824,156 hand Liquid resources: Current asset 427,911 - - (208,756) 219,155 investments Debt due < one year (256,000) (100,000) (48,000) - (404,000) Debt due > one year (2,528,959) (600,000) 304,000 25,184 (2,799,775) Hire purchase - - 7,454 (61,432) (53,978) (2,784,959) (700,000) 263,454 (36,248) (3,257,753) Net debt (1,208,429) (700,000) (61,009) (245,004) (2,214,442) Other movements reflect disposals of current asset investments (£208,756), non-cash debt adjustments (£25,184) comprising foreign exchange differences and interest accrual changes, and the inception of hire purchase obligations. c Reconciliation of net cash flow to movement in net debt 2006 2005 £ £ (Decrease) / increase in cash in the year (324,463) 852,546 Cash flow from decrease in liquid resources (202,611) (1,364,006) (Loss) / profit on disposal of investments (6,145) 89,842 Amount repaid under Contracts for Differences - 451,421 New loans entered into, net of repayments (436,546) (2,284,959) Non-cash debt adjustments (2005: issue of loan notes) 25,184 (500,000) Inception of hire purchase obligation (56,550) - Hire purchase obligation acquired with subsidiary (4,882) - Movement in net debt in the year (1,006,013) (2,755,156) Opening net (debt) / funds (1,208,429) 1,546,727 Closing net debt (2,214,442) (1,208,429) 4. Preliminary Announcement The preliminary statement, which has been agreed with the auditors, was approvedby the board of directors on 22 March 2007. It is not the group's statutoryaccounts. Copies of the group's audited statutory accounts for the year ended31 December 2006 will be dispatched to shareholders and the AIM team shortly.Copies will also be available to the public at the company's Registered Officeat Unit 19, Charlwoods Road, East Grinstead RH19 2HL. The statutory accounts for the year ended 31 December 2006 and the year ended 31December 2005 received audit reports which were unqualified and did not containstatements under Section 237(2) or Section 237(3) of the Companies Act 1985.The statutory accounts for the year ended 31 December 2005 have been deliveredto the Registrar of Companies, but the 31 December 2006 accounts have not yetbeen filed. Ends For further information please contact: David Cicurel, CEO, Judges Capital: Tel: 01342 323 600 Alex Borrelli, Shore Capital & Corporate: Tel: 020 7408 4090 Melvyn Marckus, Cardew Group: Tel: 020 7930 0777 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Judges Scientific