TIDMJDG
RNS Number : 2168A
Judges Scientific PLC
22 September 2022
Judges Scientific plc
("Judges Scientific", "the Company", or "the Group")
Interim results for the six months ended 30 June 2022
Recovery continuing, large order book and largest acquisition
completed
16% increase to interim dividend
Judges Scientific, the group focused on acquiring and developing
companies in the scientific instrument sector, announces its
unaudited interim results for the six months ended 30 June
2022.
Key financials
Period ended 30 June H1 2022 H1 2021 Change
Revenue GBP46.4m GBP43.0m 8.0%
----------- ----------- -------
Adjusted* pre-tax profit GBP9.6m GBP8.5m 13.4%
----------- ----------- -------
Adjusted* basic earnings per
share 124.6p 111.0p 12.3%
----------- ----------- -------
Cash generated from operations GBP8.2m GBP8.0m 2.5%
----------- ----------- -------
Interim dividend per share 22.0p 19.0p 15.8%
----------- ----------- -------
Statutory pre-tax profit GBP3.9m GBP6.7m (42.3)%
----------- ----------- -------
Statutory basic earnings per
share 44.4p 88.4p (49.8)%
----------- ----------- -------
As at: 30 Jun 2022 31 Dec 2021
----------- -----------
Adjusted* net debt (excl. IFRS GBP1.4m net
16) GBP54.9m cash
----------- -----------
Cash balances GBP36.4m GBP18.4m
----------- -----------
Statutory net debt (excl. IFRS GBP1.4m net
16) GBP22.8m cash
----------- -----------
Statutory net debt (incl. IFRS
16) GBP27.2m GBP2.9m
----------- -----------
Other financial highlights
-- Organic** revenue increased 7% against H1 2021.
-- Organic** order intake up 4% compared with H1 2021.
-- Organic** order book at 21.3 weeks (H1 2021: 17.6 weeks).
Strategic highlights
-- Completed acquisition of Geotek on 23 May 2022 for a
consideration of up to GBP80 million. Largest acquisition to date
and expected to significantly enhance full year earnings.
-- New GBP100 million four-year bank facility providing
additional capacity to support the Group's buy and build
strategy.
-- Organic business continues to recover from the impact of
Covid-19 but the rate of recovery has been affected by increasing
supply chain issues during the period.
Outlook
-- The external environment is still challenging, with
variations between local markets and between the various scientific
disciplines we serve.
-- Resurgence of inflation, mitigated by Sterling weakness.
-- Organic orders remain positive and to the end of August are
3% up compared to the same period in 2021.
-- Organic order book at the end of August was 21 weeks.
-- Strong second half anticipated from Geotek and the Board now
expects that the full earn-out will be payable.
-- The Board now expects that the Group will be significantly
ahead of 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 includes
acquisition-related cash payables which had yet to be settled at
the balance sheet date and excludes IFRS 16 debt.
** Organic denotes Group performance excluding the businesses
which were not part of the Group on 1 January 2021.
Alex Hambro, Chairman of Judges Scientific, commented:
"During the period the Group generated record Organic order
intake, revenues and profits in spite of increasing supply chain
challenges, whilst still continuing to recover from the challenges
created by Covid-19. At the end of May, the Group completed its
largest acquisition to date, Geotek. A fter four months of
ownership, the Board expects a strong contribution from Geotek for
the second half of the financial year resulting in Adjusted
Earnings per Share for the full year being significantly ahead of
current market expectations.
The resilience of the Group's business model alongside the hard
work by all our colleagues have once again been evident throughout
the period and are reflected in the results."
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.
Investor Presentation
Judges Scientific is hosting a webinar, available to all
existing and potential shareholders, covering the interim results
for the six months to 30 June 2022, on Friday 30 September at 13:00
UK time. Investors can register for the webinar here:
https://bit.ly/JDG_H122_webinar
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 Tel: +44 (0) 20 7408 4090
& Joint Broker)
Stephane Auton
Iain Sexton
Liberum (Joint Broker) Tel: +44 (0) 20 3100 2222
Edward Mansfield
William Hall
Alma PR (Financial Public Relations) Tel: +44 (0) 20 3405 0205
Sam Modlin Judges@almapr.co.uk
Justine James
Joe Pederzolli
Chairman's statement
The Group's businesses continued their recovery from the
pandemic during the first half of 2022 and generated record Organic
order intake, Organic revenues, Adjusted profits and Adjusted
earnings per share. Travel restrictions were gradually eased in
most regions, with the exception of China which saw the return of
severe lockdowns. The easing enabled us progressively to resume
visits to our customers, proceed with installations and attend
conferences and trade shows. Nevertheless, this performance was
still delivered as supply chain issues deteriorated during the
period, probably aggravated by the Chinese lockdowns and the war in
Ukraine. "Business as usual" in comparison to pre-pandemic has not
returned yet.
The Group's ability to deliver this record performance would not
have been possible without our colleagues, all of whom have yet
again worked very hard in a challenging environment. I would like
to thank them for their continued dedication and commitment.
On 23 May 2022, the Group completed its largest ever acquisition
with the purchase of Geotek Holding Limited and Geotek Coring
Limited (together 'Geotek') for a consideration of up to GBP80
million; references to "Organic" information in this update exclude
any contribution from Geotek. Geotek's impact on the Group's full
year results is expected to be significant but, in view of the
timing of the transaction, the impact on the first half is
modest.
Order intake
Order intake across the Group benefited from the gradual return
of international travel but was dampened by the resurgence of
Covid-19 in China.
Organic order intake was up 4% after a 25% gain in H1 2021; this
shows 8% progress compared to H1 2019 although this cannot be
considered a full recovery to the pre-Covid growth trajectory. The
Group saw growth in North America, up 15% (after 41% growth in H1
2021) and the Rest of the World, up 13% (after 8% improvement in H1
2021). The Rest of Europe was flat (after 34% growth in H1 last
year) reflecting erratic performances across the region. China/Hong
Kong, which continued to be affected by strict lockdowns over the
period, receded 5% (after 2% growth in H1 2021). The UK, which had
progressed 26% in H1 2021, was down 9%. Order intake still varied
considerably from business to business, although less so than in H1
2021.
Revenues
Organic revenues were driven by the large order book available
at the start of the year/throughout the period and by the modest H1
growth in intake, hindered by increasing supply chain difficulties
and, to a lesser extent, by Covid-related absenteeism and
recruitment challenges.
Group revenues for the period increased to GBP46.4 million (H1
2021: GBP43.0 million) including a 7% increase in Organic revenues.
Revenues from China/Hong Kong were very strong (up 30%) in spite of
the lockdowns; North America showed 21% growth and the Rest of the
World 15%. The UK was down 21% and the rest of Europe was stable.
The largest absolute changes were the US (up GBP1.9 million), the
UK (down GBP1.5 million), China Hong Kong (up GBP1.4 million) and
the Czech Republic (up GBP1.2 million). The best revenue
performances were achieved in the areas which were weak in H1 2021
and vice versa, illustrating the erratic impact of Covid-19 and the
ability, in our sector, to catch up over time.
The Organic order book remained robust, partially due to the
operating difficulties, and reached a mid-year record of 21.3 weeks
(17.6 weeks at 30 June 2021 and 23 weeks at 1 January 2022).
Profits
Adjusted operating profit improved 15% to GBP10.1 million (H1
2021: GBP8.8 million) and adjusted pre-tax profit progressed 13% to
GBP9.6 million (H1 2021: GBP8.5 million).
The main driver of improved profitability was the increase in
Organic revenue reflecting the operational gearing within the
Group: the EBITA contribution of the Organic businesses progressed
14% versus H1 2021 in spite of a gradual increase in travel
spending.
Organic Return on Total Invested Capital ("ROTIC") recovered to
29.6% for the trailing 12 months ended 30 June 2022 (30 June 2021:
25.0%). However, once Geotek is included, a sharp reduction of
ROTIC must be expected.
Adjusted basic earnings per share grew 12% to 124.6p (H1 2020:
111.0p) and Adjusted diluted earnings per share progressed
similarly to 123.0p from 109.5p.
The 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 GBP5.7 million (H1 2021: GBP1.7 million) consist
primarily of a GBP2.3 million charge for amortisation of acquired
intangible assets arising through acquisition and GBP2.9 million of
Geotek acquisition related costs. These adjusting items reduce
profit before tax from GBP9.6 million to GBP3.9 million (H1 2021:
GBP6.7 million) and earnings per share to 44.4p basic and 43.8p
diluted (H1 2021: 88.4p basic and 87.1p diluted).
Corporate activity
On 23 May 2022, the Group completed the largest acquisition in
its history. Geotek was acquired for GBP45 million plus an earn-out
capped at GBP35 million plus excess cash at completion. The
earn-out is based on the EBIT generated by Geotek in the calendar
year 2022 and is payable to the extent such EBIT exceeds GBP6.4
million at the rate of 7 times such excess, until EBIT reaches
GBP11.4 million, payable 50% in cash and 50% in new Judges shares.
Geotek is a world leader in instruments conducting non-destructive
testing on geological cores and in providing related services.
Geotek's contribution to these interim results is modest but the
acquisition is expected to be strongly earnings enhancing in the
full year and the Board now expects that the full earn-out will be
payable, around March 2023.
The acquisition was financed by a new GBP100 million club
facility granted by Lloyds Banking Group plc, Bank of Ireland and
Santander UK plc which replaced the previous GBP60 million facility
which was solely with Lloyds. The new facility which is
co-terminous with the previous facility and has a term of four
years until 25 May 2026, consists of a GBP25 million straight-line
amortising term loan, a GBP55 million committed revolving credit
facility, repayable in a bullet at the end of the term, and a GBP20
million uncommitted accordion. Further details are included in Note
10.
On 27 June 2022, the Group purchased the remaining 12% of the
outstanding shares in Bordeaux Acquisition Limited for a
consideration of GBP2.1 million including excess cash, bringing its
shareholding to 100%. GBP2 million of the consideration was settled
in new Judges shares based on the prevailing share price at the
date of the transaction and the balance paid in cash. Bordeaux owns
100% of Deben UK Limited and Oxford Cryosystems Limited and holds
significant net cash balances. This transaction is expected to be
earnings enhancing in the second half.
Cashflow and net debt
The Group once again saw good cash conversion: cash generated
from operations grew to GBP8.2 million (H1 2021: GBP8.0 million)
representing 81% of adjusted operating profit (H1 2021: 91%). Cash
generation was still affected by increased working capital
requirements from stockpiling of components to counteract supply
channel difficulties and by continued payment delays arising from
our inability to travel and perform installations in certain
regions, particularly China.
The interim balance sheet includes cash balances of GBP36.4
million and adjusted net debt of GBP54.9 million (inclusive of the
cash element of the expected Geotek earn-out), from GBP1.4 million
net cash at the beginning of 2022. The overwhelming majority of
investment expenditure in H1 was related to the Geotek acquisition
but the Group also spent GBP4.6 million on new industrial
properties and related improvements for our businesses. Ownership
of factories improves our flexibility in organising them in
accordance with our needs and may prove favourable in an
inflationary climate.
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 22p (2021: 19p), which will be paid on Friday 4
November 2022 to shareholders on the register on Friday 7 October
2022. The shares will go ex-dividend on Thursday 6 October 2022.
The interim dividend is covered 5.7 times by adjusted earnings
(2021: 5.5 times).
Outlook
As the world emerges from the Covid-19 engendered pandemic, and
subsequently deals with the challenging external environment, our
ecosystem is still unstable. Localised lockdowns remain, as well as
continuing supply chain and recruitment challenges. The invasion of
Ukraine has not only exacerbated some of these issues but also
stimulates tensions in other regions of the world. Our scientific
communities are global and cosmopolitan, and we thrive in a world
at peace where commerce is conducted freely.
The need to pay the bill for Covid-19 is starting to be
recognised and inflation and higher interest rates no longer appear
so transient. Our Group needs to adapt to this new climate. We have
recently increased our indebtedness, but we have fixed the interest
rates to protect the Group from the consequences of any
inflationary spiral. The market leadership of most of our
businesses, their continuous search for innovation and the weakness
of Sterling will alleviate the inflationary pressures we will
unavoidably encounter.
Whilst the near-term trading environment does remain volatile,
our sizeable order book allied with the enduring long-term drivers
of our business allow us to remain confident in the Group's
resilience and adaptability.
At the end of August the Organic order intake was 3% above the
comparable period in 2021 and the Organic order book stood at a
robust 21 weeks. The Group's Organic businesses overall are
performing in line with management's expectations and, after four
months of ownership, the Board expects a strong contribution from
Geotek for the second half of the financial year resulting in
Adjusted Earnings per Share for the full year being significantly
ahead of current market expectations.
The Hon. Alexander Hambro
Chairman
22 September 2022
Condensed consolidated interim statement of comprehensive
income
Year to
Adjusting 30 June Adjusting 30 June 31 Dec
Adjusted items 2022 Adjusted items 2021 2021
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Revenue 3 46,374 - 46,374 42,955 - 42,955 91,289
Operating costs 3,4 (36,277) (5,212) (41,489) (34,147) (1,698) (35,845) (75,670)
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Operating profit/(loss) 10,097 (5,212) 4,885 8,808 (1,698) 7,110 15,619
Interest income 1 - 1 1 - 1 2
Interest expense 4 (509) (489) (998) (350) (27) (377) (761)
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Profit/(loss) before
tax 9,589 (5,701) 3,888 8,459 (1,725) 6,734 14,860
Taxation (charge)/credit (1,509) 592 (917) (1,318) 258 (1,060) (1,956)
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Profit/(loss) for
the period 8,080 (5,109) 2,971 7,141 (1,467) 5,674 12,904
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Attributable to:
Owners of the parent 7,883 (5,074) 2,809 7,001 (1,431) 5,570 12,682
Non-controlling
interests 197 (35) 162 140 (36) 104 222
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Profit/(loss) for
the period 8,080 (5,109) 2,971 7,141 (1,467) 5,674 12,904
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Other comprehensive
income
Items that will
not be reclassified
subsequently to
profit or loss
Retirement benefits
actuarial gain 1,374 1,196 1,445
Deferred tax on
retirement benefits
actuarial gain (344) (258) (206)
Items that may be
reclassified subsequently
to profit or loss
Exchange gain/(loss)
on translation of
foreign subsidiaries 211 (21) 22
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Other comprehensive
income for the period,
net of tax 1,241 917 1,261
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Total comprehensive
income for the period 4,212 6,591 14,165
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Attributable to:
Owners of the parent 4,050 6,487 13,943
Non-controlling
interests 162 104 222
--------------------------- ---- -------- --------- --------- -------- --------- --------- --------
Pence Pence Pence Pence Pence
------------------- ----- ----- ------ ----- -----
Earnings per share
- adjusted
Basic 5124.6 111.0 238.1
Diluted 5123.0 109.5 234.9
------------------- ----- ----- ------ ----- -----
Earnings per share
- total
Basic 5 44.4 88.4 201.0
Diluted 5 43.8 87.1 198.2
------------------- ----- ----- ------ ----- -----
Condensed consolidated interim balance sheet
30 June 30 June 31 December
2022 2021 2021
Note GBP000 GBP000 GBP000
---------------------------------- ---- --------- -------- -----------
ASSETS
Non-current assets
Goodwill 6 50,452 18,713 18,713
Other intangible assets 7 49,655 5,963 5,056
Property, plant and equipment 15,315 6,702 8,254
Right-of-use leased assets 4,299 4,646 4,186
Deferred tax assets 4,131 1,899 3,081
---------------------------------- ---- --------- -------- -----------
123,852 37,923 39,290
---------------------------------- ---- --------- -------- -----------
Current assets
Inventories 21,936 13,175 14,133
Trade and other receivables 20,116 16,312 17,146
Cash and cash equivalents 36,386 17,612 18,408
---------------------------------- ---- --------- -------- -----------
78,438 47,099 49,687
---------------------------------- ---- --------- -------- -----------
Total assets 202,290 85,022 88,977
---------------------------------- ---- --------- -------- -----------
LIABILITIES
Current liabilities
Trade and other payables (28,439) (16,774) (19,373)
Payables relating to acquisitions 9 (48,204) - -
Borrowings 11 (6,679) (4,657) (4,657)
Right-of-use lease liabilities (1,037) (938) (887)
Current tax liabilities (2,016) (2,216) (1,726)
---------------------------------- ---- --------- -------- -----------
(86,375) (24,585) (26,643)
---------------------------------- ---- --------- -------- -----------
Non-current liabilities
Borrowings 11 (52,518) (14,679) (12,351)
Right-of-use lease liabilities (3,395) (3,836) (3,420)
Deferred tax liabilities (12,399) (1,767) (1,845)
Retirement benefit obligations 12 35 (1,962) (1,324)
---------------------------------- ---- --------- -------- -----------
(68,277) (22,244) (18,940)
---------------------------------- ---- --------- -------- -----------
Total liabilities (154,652) (46,829) (45,583)
---------------------------------- ---- --------- -------- -----------
Net assets 47,638 38,193 43,394
---------------------------------- ---- --------- -------- -----------
EQUITY
Share capital 8 318 316 316
Share premium 18,954 16,562 16,667
Other reserves 2,210 1,903 1,999
Retained earnings 26,112 18,912 23,794
---------------------------------- ---- --------- -------- -----------
Equity attributable to owners
of the parent 47,594 37,693 42,776
Non-controlling interests 44 500 618
---------------------------------- ---- --------- -------- -----------
Total equity 47,638 38,193 43,394
---------------------------------- ---- --------- -------- -----------
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 2022 316 16,667 1,999 23,794 42,776 618 43,394
--------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Change in non -- controlling
interest - - - (1,366) (1,366) (736) (2,102)
Issue of share capital 2 2,287 - - 2,289 - 2,289
Purchase of own shares for
Company
reward scheme - - - (85) (85) - (85)
Deferred tax on share-based
payments - - - (404) (404) - (404)
Share-based payments - - - 334 334 - 334
--------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Transactions with owners 2 2,287 - (1,521) 768 (736) 32
--------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Profit for the period - - - 2,809 2,809 162 2,971
Retirement benefit actuarial gain - - - 1,030 1,030 - 1,030
Foreign exchange differences - - 211 - 211 - 211
--------------------------------- -------- -------- --------- --------- ------------- ------------ -------
Total comprehensive income for
the
period - - 211 3,839 4,050 162 4,212
--------------------------------- -------- -------- --------- --------- ------------- ------------ -------
At 30 June 2022 318 18,954 2,210 26,112 47,594 44 47,638
--------------------------------- -------- -------- --------- --------- ------------- ------------ -------
At 1 January 2021 315 16,429 1,977 13,469 32,190 858 33,048
------------------------------------------ --- ------ ----- ------- ------- ----- -------
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
------------------------------------------ --- ------ ----- ------- ------- ----- -------
At 1 January 2021 315 16,429 1,977 13,469 32,190 858 33,048
------------------------------------------ --- ------ ----- ------- ------- ----- -------
Dividends - - - (3,630) (3,630) - (3,630)
Change in non -- controlling interest - - - (1,371) (1,371) (462) (1,833)
Issue of share capital 1 238 - - 239 - 239
Purchase of own shares for Company reward
scheme - - - (53) (53) - (53)
Deferred tax on share-based payments - - - 823 823 - 823
Share-based payments - - - 635 635 - 635
------------------------------------------ --- ------ ----- ------- ------- ----- -------
Transactions with owners 1 238 - (3,596) (3,357) (462) (3,819)
------------------------------------------ --- ------ ----- ------- ------- ----- -------
Profit for the year - - - 12,682 12,682 222 12,904
Retirement benefit actuarial gain - - - 1,239 1,239 - 1,239
Foreign exchange differences - - 22 - 22 - 22
------------------------------------------ --- ------ ----- ------- ------- ----- -------
Total comprehensive income for the year - - 22 13,921 13,943 222 14,165
------------------------------------------ --- ------ ----- ------- ------- ----- -------
At 31 December 2021 316 16,667 1,999 23,794 42,776 618 43,394
------------------------------------------ --- ------ ----- ------- ------- ----- -------
Condensed consolidated interim cashflow statement
Six months Six months Year
to to to
30 June 30 June 31 December
2022 2021 2021
GBP000 GBP000 GBP000
-------------------------------------------------------------- ---------- ---------- ------------
Cashflows from operating activities
Profit after tax 2,971 5,674 12,904
Adjustments for:
Financial instruments measured at fair value: hedging
contracts (441) (34) (190)
Share-based payments 334 306 635
Depreciation of property, plant and equipment 537 512 1,039
Depreciation of right-of-use leased assets 523 510 1,066
Amortisation of acquired intangible assets 2,337 1,355 2,638
Amortisation of internally generated intangible assets 42 - 11
Profit on disposal of property, plant and equipment (22) (29) (37)
Interest income (1) (1) (2)
Interest expense 415 245 516
Interest payable on right-of-use lease liabilities 94 105 197
Unwinding of discount on fair value of deferred consideration 474 - -
Retirement benefit obligation net interest cost 15 27 48
Contributions to defined benefit plans - (164) (574)
Tax recognised in the Consolidated Statement of Comprehensive
Income 917 1,060 1,956
Increase in inventories (3,714) (590) (1,548)
Decrease/(increase) in trade and other receivables 163 (1,972) (2,806)
Increase in trade and other payables 3,544 983 3,726
-------------------------------------------------------------- ---------- ---------- ------------
Cash generated from operations 8,188 7,987 19,579
Tax paid (707) (565) (2,180)
-------------------------------------------------------------- ---------- ---------- ------------
Net cash from operating activities 7,481 7,422 17,399
-------------------------------------------------------------- ---------- ---------- ------------
Cashflows from investing activities
-------------------------------------------------------------- ---------- ---------- ------------
Paid on acquisition of subsidiaries (45,000) - -
Gross cash inherited on acquisition 19,606 - -
-------------------------------------------------------------- ---------- ---------- ------------
Acquisition of subsidiaries, net of cash acquired (25,394) - -
Purchase of property, plant and equipment (5,086) (544) (2,652)
Capitalised development costs (528) (409) (796)
Proceeds on disposal of property, plant and equipment 38 36 74
Interest received 1 1 2
-------------------------------------------------------------- ---------- ---------- ------------
Net cash used in investing activities (30,969) (916) (3,372)
-------------------------------------------------------------- ---------- ---------- ------------
Cashflows from financing activities
Proceeds from issue of share capital 289 134 239
Purchase of own shares for Company reward scheme (85) (53) (53)
Finance costs paid (415) (245) (516)
Repayments of borrowings* (2,941) (1,879) (4,207)
Repayments of right-of-use lease liabilities (601) (520) (1,164)
Proceeds from bank loans* 45,130 - -
Equity dividends paid - - (3,630)
Paid on acquisition of non-controlling interest in
subsidiary (102) (1,833) (1,833)
-------------------------------------------------------------- ---------- ---------- ------------
Net cash from/(used in) financing activities 41,275 (4,396) (11,164)
-------------------------------------------------------------- ---------- ---------- ------------
Net change in cash and cash equivalents 17,787 2,110 2,863
Cash and cash equivalents at the start of the period 18,408 15,523 15,523
Exchange movements 191 (21) 22
-------------------------------------------------------------- ---------- ---------- ------------
Cash and cash equivalents at the end of the period 36,386 17,612 18,408
-------------------------------------------------------------- ---------- ---------- ------------
* On 23 May 2022, GBP15.2 million of outstanding loans were
repaid and GBP60.3 million was simultaneously reborrowed as the
Group renewed its banking facilities (see Notes 10 and 11). On 25
May 2021, GBP19.0 million of outstanding loans were repaid and
simultaneously reborrowed as the Group renewed its banking
facilities.
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 recent acquisition of Geotek has been included in the
Material Sciences segment.
The financial information set out in this Interim Report for the
six months ended 30 June 2022 and the comparative figures for the
six months ended 30 June 2021 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 2021, 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 2021
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 2021 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 22 September
2022.
Going concern
The consolidated financial statements have been prepared on a
going concern basis. The Group ended the first half of 2022 with
adjusted net debt of GBP54.9 million compared to adjusted net cash
of GBP1.4 million at 31 December 2021. The Group refinanced its
borrowing facilities in May 2022 for a four-year term providing the
Group with certainty over long-term liquidity; as part of the
financing, the Group increased borrowings by GBP45.1 million, in
order to finance the acquisition of Geotek, and there are
additional cash liabilities in respect of the acquisition of
GBP32.1 million (see notes 9 to 11). Aside from the increase in
borrowing and amounts payable in respect of the acquisition, the
Group's cash position improved in the period as a result of
consistent cash generation arising from strong performance of the
Group's principal operating companies, supported by growth in
Organic order intake and a large forward order book. The
improvement in cash is after outlays for paying our fair share of
tax (GBP0.7 million) and ongoing investment into capital
expenditure (GBP5.1 million).
The Directors have considered the ongoing impact of the events
in Ukraine and the Covid-19 pandemic. The Group remains in a strong
financial position, with high cash balances, high cash generation
and a solid future order book enabling it to face the challenge of
the continued uncertain global economic environment. The Directors
have planned for reasonably foreseeable worsening scenarios
including a repetition of the same level of reduction in orders in
2022 as happened in 2020 (at the start of Covid-19) which would not
cause any significant challenges to the Group's continued
existence.
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 2021, 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 Head
For the period ended 30 Sciences Vacuum office Total
June 2022 Note GBP000 GBP000 GBP000 GBP000
-------------------------- ---- --------- -------- ------- --------
Revenue 21,862 24,512 - 46,374
Operating costs (17,206) (17,545) (1,526) (36,277)
-------------------------- ---- --------- -------- ------- --------
Adjusted operating profit 4,656 6,967 (1,526) 10,097
Adjusting items 4 (5,212)
-------------------------- ---- --------- -------- ------- --------
Operating profit 4,885
Net interest expense (997)
-------------------------- ---- --------- -------- ------- --------
Profit before tax 3,888
Income tax charge (917)
-------------------------- ---- --------- -------- ------- --------
Profit for the period 2,971
-------------------------- ---- --------- -------- ------- --------
Materials Head
For the period ended 30 Sciences Vacuum office 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
-------------------------- ---- --------- -------- ------- --------
Materials Head
For the year ended 31 December Sciences Vacuum office Total
2021 Note GBP000 GBP000 GBP000 GBP000
------------------------------- ---- --------- -------- ------- --------
Revenue 40,716 50,573 - 91,289
Operating costs (33,251) (35,531) (3,730) (72,512)
------------------------------- ---- --------- -------- ------- --------
Adjusted operating profit 7,465 15,042 (3,730) 18,777
Adjusting items 4 (3,158)
------------------------------- ---- --------- -------- ------- --------
Operating profit 15,619
Net interest expense (759)
------------------------------- ---- --------- -------- ------- --------
Profit before tax 14,860
Income tax charge (2,061)
------------------------------- ---- --------- -------- ------- --------
Profit for the year 12,799
------------------------------- ---- --------- -------- ------- --------
Head office items relate to the Group's head office costs.
Segment assets and liabilities
Materials Head
Sciences Vacuum office Total
At 30 June 2022 GBP000 GBP000 GBP000 GBP000
------------------------------------------------ --------- -------- --------- ---------
Assets 62,459 37,786 102,045 202,290
Liabilities (22,105) (12,951) (119,596) (154,652)
------------------------------------------------ --------- -------- --------- ---------
Net assets 40,354 24,835 (17,551) 47,638
------------------------------------------------ --------- -------- --------- ---------
Capital expenditure 130 4,946 10 5,086
Depreciation of property, plant and equipment 213 293 31 537
Depreciation of right-of-use leased assets 289 205 29 523
Amortisation of acquired intangible assets 1,666 671 - 2,337
Amortisation of internally generated intangible
assets 13 29 - 42
------------------------------------------------ --------- -------- --------- ---------
Materials Head
Sciences Vacuum office 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
---------------------------------------------- --------- -------- -------- --------
Capital expenditure 198 343 3 544
Depreciation of property, plant and equipment 177 309 26 512
Depreciation of right-of-use leased assets 261 219 30 510
Amortisation of acquired intangible assets 530 825 - 1,355
---------------------------------------------- --------- -------- -------- --------
Materials Head
Sciences Vacuum office Total
At 31 December 2021 GBP000 GBP000 GBP000 GBP000
------------------------------------------------ --------- -------- -------- --------
Assets 27,087 35,671 26,219 88,977
Liabilities (13,423) (11,873) (20,287) (45,583)
------------------------------------------------ --------- -------- -------- --------
Net assets 13,664 23,798 5,932 43,394
------------------------------------------------ --------- -------- -------- --------
Capital expenditure 384 2,253 15 2,652
Depreciation of property, plant and equipment 362 624 53 1,039
Depreciation of right-of-use leased assets 536 474 56 1,066
Amortisation of acquired intangible assets 1,070 1,568 - 2,638
Amortisation of internally generated intangible
assets 4 7 - 11
------------------------------------------------ --------- -------- -------- --------
Head office 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
2022 2021 2021
Geographic analysis GBP000 GBP000 GBP000
-------------------- ---------- ---------- ------------
UK (domicile) 5,914 7,743 14,776
Rest of Europe 14,515 14,354 29,488
North America 10,219 8,382 20,034
China/Hong Kong 6,155 4,720 11,103
Rest of the World 9,571 7,756 15,888
-------------------- ---------- ---------- ------------
Revenue 46,374 42,955 91,289
-------------------- ---------- ---------- ------------
4. Adjusting items
Six months Six months Year
to to to
30 June 30 June 31 December
2022 2021 2021
GBP000 GBP000 GBP000
-------------------------------------------------------------- ---------- ---------- ------------
Amortisation of acquired intangible assets 2,337 1,355 2,638
Financial instruments measured at fair value: hedging
contracts (441) (34) (190)
Share-based payments 334 306 635
Employment taxes arising from share-based payments 60 39 90
Acquisition costs 2,922 32 (15)
-------------------------------------------------------------- ---------- ---------- ------------
Total adjusting items within operating profit 5,212 1,698 3,158
Unwinding of discount on fair value of deferred consideration 474 - -
Retirement benefits obligation net interest cost 15 27 48
-------------------------------------------------------------- ---------- ---------- ------------
Total adjusting items 5,701 1,725 3,206
Taxation (592) (258) (797)
-------------------------------------------------------------- ---------- ---------- ------------
Total adjusting items net of tax 5,109 1,467 2,409
-------------------------------------------------------------- ---------- ---------- ------------
Attributable to:
Owners of the parent 5,074 1,431 2,345
Non-controlling interests 35 36 64
-------------------------------------------------------------- ---------- ---------- ------------
5,109 1,467 2,409
-------------------------------------------------------------- ---------- ---------- ------------
5. Earnings per share
Six months Six months Year
to to to
30 June 30 June 31 December
2022 2021 2021
Note GBP000 GBP000 GBP000
----------------------------------- ---- ---------- ---------- ------------
Profit for the period attributable
to owners of the parent
Adjusted profit 7,883 7,001 15,027
Adjusting items 4 (5,074) (1,431) (2,345)
----------------------------------- ---- ---------- ---------- ------------
Profit for the period 2,809 5,570 12,682
----------------------------------- ---- ---------- ---------- ------------
Pence Pence Pence
------------------------------ ----- ----- -----
Earnings per share - adjusted
Basic 124.6 111.0 238.1
Diluted 123.0 109.5 234.9
Earnings per share - total
Basic 44.4 88.4 201.0
Diluted 43.8 87.1 198.2
Number Number Number
----------------------------------- --------- --------- ---------
Issued Ordinary shares at start
of the period 76,318,415 6,299,163 6,299,163
Movement in Ordinary shares during
the period 7 36,002 12,676 19,252
----------------------------------- --------- --------- ---------
Issued Ordinary shares at end
of the period 76,354,417 6,311,839 6,318,415
----------------------------------- --------- --------- ---------
Weighted average number of shares
in issue 6,325,433 6,306,177 6,310,608
Dilutive effect of share options 85,251 90,467 87,786
----------------------------------- --------- --------- ---------
Weighted average shares in issue
on a diluted basis 6,410,684 6,396,644 6,398,394
----------------------------------- --------- --------- ---------
Adjusted basic earnings per share is calculated on the adjusted
profit, which excludes 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 share
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. Goodwill
The following tables show the additions to goodwill:
Total
GBP000
-------------------------------- -------
Carrying amount at
1 January 2022 18,713
Acquisitions (see note 9) 31,739
--------------------------------- -------
Carrying amount at 30 June 2022 50,452
--------------------------------- -------
Total
GBP000
----------------------------- -------
Carrying amount at 1 January
and 30 June 2021 18,713
------------------------------ -------
Total
GBP000
--------------------------------- -------
Carrying amount at 1 January and
31 December 2021 18,713
---------------------------------- -------
7. Other intangible assets
The following tables show the additions to, and amortisation of,
intangible assets:
Acquired
Internally Acquired brand
generated Acquired sales and Acquired
development distribution Acquired order domain customer
costs agreements technology backlog names relationships Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------- ----- ------------ ------------- ----------- -------- -------- -------------- -------
Carrying amount at
1 January 2022 785 92 2,006 - 918 1,255 5,056
Acquisitions (see note
9) - - 22,750 5,400 1,800 16,500 46,450
Additions 528 - - - - - 528
Amortisation (42) (50) (796) (300) (286) (905) (2,379)
------------------------------ ------------ ------------- ----------- -------- -------- -------------- -------
Carrying amount at 30
June 2022 1,271 42 23,960 5,100 2,432 16,850 49,655
------------------------------ ------------ ------------- ----------- -------- -------- -------------- -------
Acquired
Internally Acquired brand
generated 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
Internally Acquired brand
generated 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 796 - - - - - 796
Amortisation (11) (100) (964) (33) (648) (893) (2,649)
------------------------------- ------------ ------------- ----------- -------- -------- -------------- -------
Carrying amount at 31 December
2021 785 92 2,006 - 918 1,255 5,056
------------------------------- ------------ ------------- ----------- -------- -------- -------------- -------
8. Share capital
Movements in the Group's Ordinary shares in issue are summarised
as follows:
2022 2021
Ordinary shares of 5p each GBP000 GBP000
---------------------------------------------------------------- ------- -------
Allotted, called up and fully paid - Ordinary shares of
5p each
1 January: 6,318,415 shares (2021: 6,299,163 shares) 316 315
Exercise of share options: 3,876 shares (2021: 12,676 shares) - 1
Issue of shares as settlement of acquisition costs: 2,929
shares (2021: nil shares) - -
Issue of shares as consideration for shareholding in subsidiary
company: 29,197 shares (2021: nil shares) 2 -
---------------------------------------------------------------- ------- -------
30 June: 6,354,417 shares (2021: 6,311,839 shares) 318 316
---------------------------------------------------------------- ------- -------
Allotments of Ordinary shares in the first six months of 2022
were made to satisfy the exercise of 3,876 share options in
aggregate on 5 occasions during the period when the share price was
within the range of 7500p to 8360p (2021: exercise of 12,676 share
options when the share price was within the range of 5800p to
6408p).
9. Acquisitions
Acquisition of Geotek Holding Limited and Geotek Coring
Limited
On 23 May 2022, Judges Scientific acquired 100% of the entire
issued share capital of Geotek Holding Limited and Geotek Coring
Limited (together "Geotek" or the "Acquisition"), a world leading
developer and manufacturer of instruments used to measure and log
various characteristics of geological cores and a supplier of
related services.
The purchase price of Geotek consists of:
-- The initial consideration, paid in cash at completion, of GBP45 million.
-- Contingent consideration of up to a maximum GBP35 million
("Earn-out") to be satisfied half in cash and half in new Judges
ordinary shares to be issued at a price of GBP76.80 per new
ordinary share, Judges' prevailing share price at the time of
signing heads of terms with Geotek's vendors.
-- The Earn-out starts to become payable on achievement of a
minimum adjusted EBIT of GBP6.4 million for the calendar year 2022
increasing pro rata on a 7:1 ratio until it reaches a cap when an
adjusted EBIT of GBP11.4 million is achieved.
-- An additional payment for excess cash (surplus working
capital) at completion over and above the ongoing requirements of
the business and will be covered by the cash inherited at
completion.
The summary provisional fair value of the cost of this
acquisition includes the components stated below:
Consideration GBP000
------------------------------------------------------------------ -------
Initial cash consideration 45,000
Earn-out 31,706
------------------------------------------------------------------ -------
76,706
------------------------------------------------------------------ -------
Gross cash inherited on acquisition 19,606
Cash retained in the business (3,582)
------------------------------------------------------------------ -------
Payment in respect of surplus working capital 16,024
------------------------------------------------------------------ -------
Total consideration 92,730
------------------------------------------------------------------ -------
Acquisition-related transaction costs charged to the Consolidated
Statement of Comprehensive Income 2,922
------------------------------------------------------------------ -------
The maximum Earn-out is expected to be paid, however as the
amount is likely to fall due around March 2023, it has been
discounted to GBP31.7 million. The payment in respect of surplus
working capital is a provisional figure and will be agreed and
settled in October 2022.
The estimated total fair value of the future liabilities
relating to the Geotek acquisition as at 23 May and 30 June 2022
consists of the following:
23 May Non-cash 30 June
2022 item 2022
GBP000 GBP000 GBP000
------------------------------------------------------- ------- -------- -------
Payable in respect of surplus working capital 16,024 - 16,024
50% of earn-out to be satisfied in cash 15,853 237 16,090
------------------------------------------------------- ------- -------- -------
Total payable in cash 31,877 237 32,114
------------------------------------------------------- ------- -------- -------
50% of earn-out to be satisfied in new ordinary shares 15,853 237 16,090
------------------------------------------------------- ------- -------- -------
Total payables relating to acquisitions 47,730 474 48,204
------------------------------------------------------- ------- -------- -------
The non-cash item is the unwinding of the discount on the
Earn-out consideration.
The summary provisional fair values recognised for the assets
and liabilities acquired are as follows:
Accounting Fair
policy value Fair
Book value alignments adjustments value
GBP000 GBP000 GBP000 GBP000
---------------------------------------- ---------- ----------- ------------ --------
Intangible assets - - 46,450 46,450
Property, plant and equipment 2,546 - - 2,546
Right-of-use leased assets - 652 - 652
Deferred tax assets 1,094 480 308 1,882
Current tax recoverable 375 - - 375
Inventories 5,111 - (1,022) 4,089
Trade and other receivables 3,161 112 (140) 3,133
Cash and cash equivalents 19,606 - - 19,606
---------------------------------------- ---------- ----------- ------------ --------
Total assets 31,893 1,244 45,596 78,733
---------------------------------------- ---------- ----------- ------------ --------
Deferred tax liabilities (85) - (10,912) (10,997)
Trade payables (3,335) (2,639) (70) (6,044)
Right-of-use lease liabilities - (652) - (652)
Current tax liability (49) - - (49)
---------------------------------------- ---------- ----------- ------------ --------
Total liabilities (3,469) (3,291) (10,982) (17,742)
---------------------------------------- ---------- ----------- ------------ --------
Net identifiable assets and liabilities 28,424 (2,047) 34,614 60,991
---------------------------------------- ---------- ----------- ------------ --------
Total consideration 92,730
---------------------------------------- ---------- ----------- ------------ --------
Goodwill recognised 31,739
---------------------------------------- ---------- ----------- ------------ --------
The intangible assets recognised reflect recognition of acquired
customer relationships, the value of the acquired future committed
order book, acquired technology together with brand names. A
significant amount of the value of the acquired business is
attributable to its workforce and sales knowhow and contributes to
the goodwill recognised upon acquisition. This goodwill has been
allocated to the Materials Sciences segment.
The majority of 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. Additional fair value
adjustments include stock, doubtful debt, and warranty provisions
together with the related deferred tax. Adjustments to recognition
of revenue for certain contracts, and recognition of right-of-use
assets and liabilities were made to align with Group accounting
policies.
Increased shareholding in Bordeaux Acquisition Limited
On 27 June 2022, Judges acquired 12.0% of the shares in Bordeaux
Acquisition Limited ("Bordeaux") for a consideration of GBP2.1
million, increasing its shareholding from 88% to 100%. GBP2 million
of the consideration was settled via the issue of 29,197 new Judges
ordinary shares issued at a price of GBP68.50 per share, equal to
the mid-market price at close of business on Friday 24 June 2022,
with the balance paid in cash.
10. Banking arrangements
On 23 May 2022, the Group entered into a new GBP100 million
multi-bank facility ("Facility") with Lloyds Banking Group plc,
Santander UK plc and Bank of Ireland (the "Banks") which replaced
its existing unilateral banking arrangements with Lloyds Bank,
which were for an aggregate amount of GBP60 million. The initial
consideration for the acquisition of Geotek was financed from this
Facility.
The Facility is for an aggregate GBP100 million consisting of a
GBP25 million term loan ("Term Loan"), a committed GBP55 million
revolving credit facility ("RCF") plus a GBP20 million uncommitted
accordion facility, which can be drawn with the agreement of the
Banks. The Facility replaced the Group's previous facilities of
which GBP15.2 million was outstanding at the time of the
acquisition of Geotek. The life of this new Facility is
co-terminous with the previous facility and therefore has a term of
4 years until 25 May 2026 ("Borrowing Term").
The Term Loan amortises 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 banking covenants have been adjusted from the previous
banking arrangements, namely:
-- Gearing no greater than 3.0 times Adjusted EBITDA (an
increase from 2.5 times in the previous arrangement);
-- Interest Cover no less than 3 times; and
-- Minimum EBITDA covenant within the previous facilities is no longer required.
Interest rates are consistent with the previous facilities, save
for an additional rate between 2.5 and 3.0 times gearing.
The existing lending facilities via Bordeaux were unchanged.
Subsequent to Judges' purchase of the remaining 12% of Bordeaux
(see note 9) on 27 June 2022, Bordeaux repaid in full its
outstanding loan of GBP0.4 million on 28 July 2022.
11. Changes in net (debt)/cash
Changes in net debt for the six months ended 30 June 2022 were
as follows:
1 January Non-cash 30 June
2022 Cashflow items 2022
GBP000 GBP000 GBP000 GBP000
-------------------------------------------------- --------- -------- -------- --------
Cash at bank and in hand 18,408 17,787 191 36,386
Bank debt (17,008) (42,189) - (59,197)
IFRS 16 Right-of-use lease liabilities (4,307) 601 (726) (4,432)
-------------------------------------------------- --------- -------- -------- --------
Statutory net debt (including IFRS 16) (2,907) (23,801) (535) (27,243)
Less: IFRS 16 Right-of-use lease liabilities 4,307 (601) 726 4,432
-------------------------------------------------- --------- -------- -------- --------
Statutory net cash/(debt) (excluding IFRS 16) 1,400 (24,402) 191 (22,811)
Accrued acquisition consideration payable in cash
(note 9) - (31,877) (237) (32,114)
-------------------------------------------------- --------- -------- -------- --------
Adjusted net cash/(debt) 1,400 (56,279) (46) (54,925)
-------------------------------------------------- --------- -------- -------- --------
Non-cash items primarily represent foreign exchange differences
on foreign currency bank balances and for IFRS 16, new and acquired
leases.
The movement in borrowings over the period was as follows:
2022 2021
GBP000 GBP000
------------------------------------- ------- -------
At 1 January 17,008 21,215
Net proceeds from drawdown of loans* 45,130 -
Repayment of loans (2,941) (1,879)
Interest payable 415 245
Interest paid (415) (245)
------------------------------------- ------- -------
At 30 June 59,197 19,336
------------------------------------- ------- -------
* On 23 May 2022, GBP15.2 million of outstanding loans were
repaid and GBP60.3 million was simultaneously reborrowed as the
Group renewed its banking facilities (see note 10).
2022 2021
GBP000 GBP000
---------------------------- ------- -------
Current 6,679 4,657
Non-current 52,518 14,679
---------------------------- ------- -------
Total borrowings at 30 June 59,197 19,336
---------------------------- ------- -------
12. Defined benefit scheme
The Group's defined benefit pension scheme is a net asset of
GBP0.0 million, compared to a net liability of GBP1.3 million at 31
December 2021, and GBP2.0m at 30 June 2021. The reduction in the
liability is primarily due to an increase of 1.9% in the discount
rate to 3.8% from 1.9% at 31 December 2021.
13. Dividends
During the period, the Company paid no dividends (period to 30
June 2021: GBPnil).
The Company paid a final dividend of 47.0p per share totalling
GBP3.0 million to shareholders on 8 July 2022 relating to the
financial year ended 31 December 2021.
The Company will pay an interim dividend for 2022 of 22.0p per
share (2021: interim dividend of 19.0p per share) on 4 November
2022 to shareholders on the register on 7 October 2022. The shares
will go ex-dividend on 6 October 2022.
14. Related party transaction
The acquisition of Geotek was originated by Charles Holroyd, a
non-executive director of Judges. As with all Judges Scientific
non-executive directors, and as disclosed in the Group's Annual
Report and Accounts, he is incentivised to originate acquisitions
on behalf of the Group. Accordingly, at the time of his appointment
to the Board of Judges Scientific in 2018, he entered into an
introduction agreement entitling him to the payment of a fee
amounting to 1% of the enterprise value of any business that he
introduced to the Group and was subsequently acquired by the Group
("Introduction Fee"). Based on the experience of the Group, the
level of the Introduction Fee is materially lower than the fees
charged by independent brokers.
Mr Holroyd was not involved in any part of the decision-making
process in relation to the Acquisition. The Introduction Fee in
relation to Geotek is payable at the same time and in the same
proportion as the payments of the Initial Consideration and the
Earn-out to the sellers; GBP450,000 at Completion and up to
GBP350,000 on settlement of the Earn-out in 2023. Mr Holroyd
elected to receive one half of his entire fee in new ordinary
shares, valued at GBP76.80 per ordinary share, the same level as
the share component of the Earn-out, and the other half in cash to
enable him to pay the relevant taxation.
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END
IR DFLFLLKLBBBK
(END) Dow Jones Newswires
September 22, 2022 02:01 ET (06:01 GMT)
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