Judges Scientific plc
Interim Report 30 June 2024
Highlights
£60.8m
Revenue (£m)
-0.7%
H1 | H2 | |
20 | 37.4 | 42.4 |
21 | 43.0 | 48.3 |
22 | 46.4 | 66.8 |
23 | 61.3 | 74.8 |
24 | 60.8 | - |
123.7p
Adjusted* basic earnings per share (p)
-19.0%
H1 | H2 | |
20 | 84.2 | 93.0 |
21 | 111.0 | 127.0 |
22 | 124.6 | 239.2 |
23 | 152.8 | 221.8 |
24 | 123.7 | - |
29.7p
Interim dividend (p)
10%
Interim dividend | Final dividend | |
20 | 16.5 | 38.5 |
21 | 19.0 | 47.0 |
22 | 22.0 | 59.0 |
23 | 27.0 | 68.0 |
24 | 29.7 | - |
Key financials
- Revenue decreased 0.7% to £60.8m (H1 2023: £61.3m);
- Adjusted* pre-tax profit of £10.8m (H1 2023: £12.8m);
- Statutory pre-tax profit of £5.8m (H1 2023: £3.0m***);
- Adjusted* basic earnings per share of 123.7p (H1 2023: 152.8p);
- Statutory basic earnings per share of 63.3p (H1 2023: 15.6p***);
- Interim dividend of 29.7p (H1 2023: 27.0p), an increase of 10%;
- Cash generated from operations of £7.8m (H1 2023: £11.5m).
- Adjusted* net debt of £52.3m as at 30 June 2024 (31 December 2023: £45.2m);
- Statutory net debt of £54.9m as at 30 June 2024 (31 December 2023: £51.6m);
- Cash balances of £6.9m as at 30 June 2024 (31 December 2023: £13.7m).
Other financials
- Subdued trading across the Group set against a backdrop of difficult market conditions and record prior year comparatives;
- Organic** revenue decreased 3% against H1 2023;
- Organic** order intake down 4% compared with H1 2023;
- Organic** order book at 17.2 weeks (H1 2023: 22.4 weeks).
Strategic highlights
- Completion of two small acquisitions: Luciol and Rockwash for a combined consideration of £4m plus maximum earn-out of up to £4.2m plus excess cash.;
Post period highlights
- Completion of Magsputter acquisition for £12.3m plus excess cash;
Judges Scientific plc Interim Report 2024 | 1 |
- Extension and increase of our banking facility to £140m including £50m accordion;
- New Geotek coring contract for an early 2025 expedition;
- Strengthening of Judges Executive team following the recruitment of Dr Ian Wilcock as Group Commercial Director.
Outlook
- Stronger second half expected for the Group.
- Some recovery in order intake in first few months of H2, including 2025 coring contract.
- No change to existing guidance for the full year, but continued challenging market conditions and short-term vulnerability to the timing of orders and revenue.
- Adjusted earnings figures exclude adjusting items relating to amortisation of acquired intangible assets, acquisition-related costs, share-based payments and hedging of risks materialising after the end of the year. Adjusted net debt includes acquisition-related liabilities and excludes IFRS 16 liabilities.
- Organic denotes Group performance excluding the businesses which were not part of the Group on 1 January 2022.
- Restatement amends statutory comparative figures only. See note 13 for further details.
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Chairman's statement
Trading in the first half of 2024, as already announced, has been subdued against a backdrop of difficult market conditions and versus record prior year comparatives. The challenging environment has impacted trading across our Group, with a general softening of order intake and the deferral of some projects into the second half of the current year or until 2025.
Despite unfavourable trading conditions, the Group has continued to execute its strategy, and completed two small acquisitions in the first six months: PE Fiberoptics acquired Luciol Instruments SA and Geotek acquired Rockwash Geodata Limited. These deals were followed by the post-period acquisition of Magsputter Limited, and the appointment of Dr Ian Wilcock to the Board as Group Commercial Director, reinforcing the strength of Judges' executive team.
Order intake
Organic order intake was down 4% against the first half of 2023. This was a strong comparative prior period as orders had climbed 14%, supported by the emergence of China from repeated lockdowns.
Organic intake was subdued in most of our trading regions, particularly in China/Hong Kong, which decreased by 65%, bringing it back to two thirds of its 2022 level; North America was down 7%. The UK fared better, ahead by 8%, with Europe up by 2%; the Rest of the World increased by 31%. The best absolute performances were Singapore (its progress equalled a third of the China/Hong Kong decline), Germany, Angola, Brazil, Australia, Canada and the Czech Republic. The weakest absolute performances were recorded in China/Hong Kong, the US, Pakistan, Poland, Malaysia and Japan.
The Organic order book was maintained at 17.2 weeks from its year-end position (31 December 2023: 17.0 weeks; 30 June 2023:
22.4 weeks). This reflects the resolution of the supply chain issues. The second half of 2023 saw the final catch up of deliveries, and the stability in the first half suggests that progress in sales must now be driven by improved order intake rather than order book compression.
Revenues
Total Group revenues were down 1% at £60.8m (H1 2023: £61.3m) and included contributions from the recently acquired Henniker, Bossa Nova and Luciol.
As order intake became the main driver of revenues again, during the first half some businesses made excellent progress with intake, some businesses maintained revenues despite a lack of order intake, while others suffered reduced sales due to weak demand. Of those businesses seeing weakened demand, most hold significant trading relations with China. Another feature of the period has been the postponement of some projects to the second half of 2024 or into 2025.
Organic revenues declined 3% to £58.8m (H1 2023: £60.6m). The only region to progress was the Rest of Europe, up by 3%. The UK was marginally down by 1%, North America declined by 4%, the Rest of the World by 7% and China/Hong Kong by 9%. The best absolute performance was seen in the Czech Republic, Belgium, India and Malaysia, while the worst absolute performances were in Brazil, Sweden, Australia and China/Hong Kong.
As previously announced, Geotek's performance was weaker than H1 2023, which had included some residual income from its 2022 coring expedition. The positive extension of existing, and entry into new, digitalisation contracts occurred too late to impact the H1 results meaningfully.
Profits
Profitability was affected by the reduced revenues amplified by the high fixed cost base of the Group's operations. Adjusted operating profit receded 13% to £12.3m (H1 2023: £14.2m) and Adjusted pre-tax profit 16% to £10.8m (H1 2023: £12.8m). The EBITA contribution of the Organic businesses declined 14% versus H1 2023.
Return on Total Invested Capital ("ROTIC") reduced to 20.7% against 22.8% for the trailing 12 months ended 30 June 2023. Adjusted basic earnings per share decreased by 19% to 123.7p (H1 2023: 152.8p) and Adjusted diluted earnings per share reduced similarly to 121.6p from 150.3p. Adjusted Earnings per share were still affected for half of the period by the increase in UK corporation tax rates to 25%.
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 pre-tax adjustments of £5.0m (H1 2023: £9.8m restated) consists primarily of a £4.2m charge for amortisation (H1 2023: £6.1m) of acquired intangible assets arising through acquisition. These adjusting items reduce profit before tax from £10.8m to £5.8m (H1 2023: £12.8 to £3.0m restated) and result in earnings per share of 63.3p basic and 62.3p diluted (H1 2023: 15.6p per share basic and 15.3p per share diluted).
Corporate activity
On 1 February 2024, the Group acquired 100% of the share capital of Luciol Instruments SA ("Luciol"), a company specialising in instruments to test fibreoptics, based in Mies, Vd, Switzerland. The initial consideration was CHF 2.0m paid in cash on completion plus excess cash. A cash earn-out capped at CHF 0.5m will be paid if and to the extent that Luciol exceeds an average EBIT of CHF 0.5m in the four years ending on 31 December 2024 or 2025 at a multiple of four times the excess.
On 27 June 2024, the Group acquired 100% of the share capital of Rockwash Geodata Ltd ("Rockwash"), a Llandudno based company specialising in rock cuttings and chippings digitalisation, for an initial cash consideration of £2.25m plus excess cash plus an earnout capped at £3.75m. The earnout will be paid if and to the extent that Rockwash exceeds an EBIT of £0.375m in 2024 or 2025 at a multiple of six times the excess.
Cashflow and net debt
Group cash flow was disappointing as a legacy of the recent supply issues.
Cash generated from operations amounted to £7.8m (H1 2023: £11.5m) representing 63% of Adjusted operating profit (H1 2023: 81%). Cash conversion is an essential element of our business model and restoring it to the pre-Covid levels is a priority.
The interim balance sheet includes cash balances of £6.9m; the increased flexibility of our debt facility reduces the requirement to hold large cash balances. Adjusted net debt grew to £52.3m from the beginning of 2024 (31 December 2023: £45.2m); £7m related to acquisitions and £3m on capex.
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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 29.7p (2023: 27p), which will be paid on Friday 8 November 2024 to shareholders on the register on Friday 11 October 2024. The shares will go ex-dividend on Thursday 10 October 2024. The interim dividend is covered 4.2 times by Adjusted earnings (2023: 5.7 times).
Post balance sheet events
Post period-end, the Group has made further strategic progress, highlighting the resilience of the Group's business model. On 1 July 2024, the Group amended and extended its multi-bank facility, which now amounts to £140m (including a £50m accordion), compared with £100m (including a £20m accordion). The facility was extended by two years and now expires on 1 July 2028, adding increased capability to the Group's deal-making capacity.
On 15 August 2024, the Group acquired 100% of the shares of Magsputter Limited, the holding company of Teer Coatings Limited,
-
company manufacturing top-of-the-range physical vapour deposition instruments and providing specialised coating services. The consideration was £12.3m (excluding excess cash), equal to six times adjusted EBIT for the year ended 31 January 2024 of £1.74m, plus the independent valuation of the property. The Board expects the Acquisition to be immediately earnings enhancing. On 28 August 2024, Geotek signed a binding contract for its next coring expedition; this expedition will take place in the first half of 2025 and the revenue arising from this contract will be of a similar magnitude to recent coring contracts.
On 2 September 2024, we were pleased to welcome Dr Ian Wilcock to the Board as Group Commercial Director, further reinforcing the executive team. Ian is experienced in successfully leading divisions in large scientific groups and will join Mark Lavelle and Dr Tim Prestidge in the pursuit of excellence at our businesses.
Outlook
The World is still in a very nervous place, a trend that is not ideal for the scientific community which thrives on free exchange and a cosmopolitan atmosphere. Our sector is also sensitive to efforts to control sovereign debt and the potential impact on research spending. More positively, exchange rates have remained favourable to our export driven business.
Your Board expects the second half to show significant improvement, with several agreements signed too late to impact the first half but contributing to the second. With the signature of a 2025 coring contract, our order intake is now 3% ahead of YTD 2023. The Board is not revising its current guidance for the full year performance, but remains mindful of the challenging market conditions and current short-term vulnerability to the timing of orders and revenue.
In spite of the trading disappointment in the first half, the Group has again demonstrated its resilience and its financial strength with the completion of three acquisitions since the start of the year and a 10% increase to the interim dividend, thus continuing to build on our model of delivering long-term shareholder value.
The Hon. Alexander Hambro
Chairman
19 September 2024
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Condensed consolidated interim statement of comprehensive income
Year to | ||||||||
Adjusting | 30 June | 31 | ||||||
Adjusting | 30 June | items | 2023 | December | ||||
Adjusted | items | 2024 | Adjusted | restated | restated | 2023 | ||
Note | £m | £m | £m | £m | £m | £m | £m | |
Revenue | 3 | 60.8 | - | 60.8 | 61.3 | - | 61.3 | 136.1 |
Operating costs | 3,4 | (48.5) | (5.1) | (53.6) | (47.1) | (6.9) | (54.0) | (114.5) |
Operating profit/(loss) | 12.3 | (5.1) | 7.2 | 14.2 | (6.9) | 7.3 | 21.6 | |
Interest income | 0.2 | - | 0.2 | 0.1 | - | 0.1 | 0.4 | |
Interest expense | 4 | (1.7) | 0.1 | (1.6) | (1.5) | (2.9) | (4.4) | (8.6) |
Profit/(loss) before tax | 10.8 | (5.0) | 5.8 | 12.8 | (9.8) | 3.0 | 13.4 | |
Taxation (charge)/credit | (2.5) | 1.0 | (1.5) | (2.8) | 1.0 | (1.8) | (3.5) | |
Profit/(loss) for the period | 8.3 | (4.0) | 4.3 | 10.0 | (8.8) | 1.2 | 9.9 | |
Attributable to: | ||||||||
Owners of the parent | 8.2 | (4.0) | 4.2 | 9.8 | (8.8) | 1.0 | 9.5 | |
Non-controlling interests | 0.1 | - | 0.1 | 0.2 | - | 0.2 | 0.4 | |
Profit/(loss) for the period | 8.3 | (4.0) | 4.3 | 10.0 | (8.8) | 1.2 | 9.9 | |
Other comprehensive income | ||||||||
Items that will not be reclassified | ||||||||
subsequently to profit or loss | ||||||||
Retirement benefits actuarial (loss)/gain | (1.4) | 0.2 | 0.1 | |||||
Deferred tax on retirement benefits | ||||||||
actuarial (loss)/gain | 0.3 | - | - | |||||
Items that may be reclassified | ||||||||
subsequently to profit or loss | ||||||||
Exchange (loss)/gain on translation of | ||||||||
foreign subsidiaries | - | (0.1) | (0.1) | |||||
Other comprehensive (loss)/income for | ||||||||
the period, net of tax | (1.1) | 0.1 | - | |||||
Total comprehensive income for the | ||||||||
period | 3.2 | 1.3 | 9.9 | |||||
Attributable to: | ||||||||
Owners of the parent | 3.1 | 1.1 | 9.5 | |||||
Non-controlling interests | 0.1 | 0.2 | 0.4 | |||||
Pence | ||||||||
Pence | Pence | Pence | restated | Pence | ||||
Earnings per share - adjusted | ||||||||
Basic | 5 | 123.7 | 152.8 | 374.6 | ||||
Diluted | 5 | 121.6 | 150.3 | 368.5 | ||||
Earnings per share - total | ||||||||
Basic | 5 | 63.3 | 15.6 | 145.8 | ||||
Diluted | 5 | 62.3 | 15.3 | 143.5 |
The statement of comprehensive income for the period to 30 June 2023 was restated for adjustment to the measurement of the fair value of the contingent consideration recognised in the Geotek acquisition to align with an amendment recorded in the 2023 Annual Report and Accounts. See note 13 for further details.
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Condensed consolidated interim balance sheet
30 June | ||||
30 June | 2023 31 December | |||
2024 | restated | 2023 | ||
Note | £m | £m | £m | |
ASSETS | ||||
Non-current assets | ||||
Goodwill | 6 | 57.7 | 54.8 | 54.8 |
Other intangible assets | 7 | 35.3 | 41.0 | 35.6 |
Property, plant and equipment | 22.2 | 16.7 | 19.8 | |
Right-of-use leased assets | 6.1 | 6.5 | 6.6 | |
Retirement benefit surplus | 11 | - | 1.5 | 1.4 |
121.3 | 120.5 | 118.2 | ||
Current assets | ||||
Inventories | 27.9 | 28.4 | 26.5 | |
Trade and other receivables | 27.5 | 25.7 | 25.1 | |
Cash and cash equivalents | 6.9 | 14.6 | 13.7 | |
62.3 | 68.7 | 65.3 | ||
Total assets | 183.6 | 189.2 | 183.5 | |
LIABILITIES | ||||
Current liabilities | ||||
Trade and other payables | (21.0) | (26.5) | (24.6) | |
Payables relating to acquisitions | 9 | (1.2) | (1.6) | (0.5) |
Borrowings | 10 | (6.3) | (6.2) | (6.2) |
Right-of-use lease liabilities | (1.2) | (1.2) | (1.2) | |
Current tax liabilities | (1.9) | (3.3) | (2.5) | |
(31.6) | (38.8) | (35.0) | ||
Non-current liabilities | ||||
Payables relating to acquisitions | 9 | (2.7) | - | - |
Borrowings | 10 | (49.0) | (56.8) | (52.2) |
Right-of-use lease liabilities | (5.3) | (5.5) | (5.7) | |
Deferred tax liabilities | (7.6) | (8.6) | (8.0) | |
(64.6) | (70.9) | (65.9) | ||
Total liabilities | (96.2) | (109.7) | (100.9) | |
Net assets | 87.4 | 79.5 | 82.6 | |
EQUITY | ||||
Share capital | 8 | 0.3 | 0.3 | 0.3 |
Share premium | 19.1 | 17.6 | 17.7 | |
Other reserves | 26.9 | 26.9 | 26.9 | |
Retained earnings | 41.0 | 34.3 | 37.5 | |
Equity attributable to owners of the parent | 87.3 | 79.1 | 82.4 | |
Non-controlling interests | 0.1 | 0.4 | 0.2 | |
Total equity | 87.4 | 79.5 | 82.6 |
The 30 June 2023 balance sheet has been restated to adjust the initial goodwill and equity component of contingent consideration payable which was recognised in the Geotek acquisition to align with an amendment recorded in the 2023 Annual Report and Accounts. See note 13 for further details.
Judges Scientific plc Interim Report 2024 | 6 |
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 | ||||
£m | £m | £m | £m | £m | £m | £m | ||||
At 1 January 2024 | 0.3 | 17.7 | 26.9 | 37.5 | 82.4 | 0.2 | 82.6 | |||
Dividends | - | - | - | - | - | (0.2) | (0.2) | |||
Issue of share capital | - | 1.4 | - | - | 1.4 | - | 1.4 | |||
Purchase of own shares for Company reward | - | - | - | (0.1) | (0.1) | - | (0.1) | |||
scheme | ||||||||||
Tax on Company reward scheme shares awarded | - | - | - | (0.1) | (0.1) | - | (0.1) | |||
Share-based payments | - | - | - | 0.6 | 0.6 | - | 0.6 | |||
Transactions with owners | - | 1.4 | - | 0.4 | 1.8 | (0.2) | 1.6 | |||
Profit for the period | - | - | - | 4.2 | 4.2 | 0.1 | 4.3 | |||
Retirement benefit actuarial loss | - | - | - | (1.1) | (1.1) | - | (1.1) | |||
Foreign exchange differences | - | - | - | - | - | - | - | |||
Total comprehensive income for the period | - | - | - | 3.1 | 3.1 | 0.1 | 3.2 | |||
At 30 June 2024 | 0.3 | 19.1 | 26.9 | 41.0 | 87.3 | 0.1 | 87.4 | |||
At 1 January 2023 | 0.3 | 17.2 | 4.1 | 32.7 | 54.3 | 0.2 | 54.5 | |||
Issue of share capital | - | 0.4 | 22.9 | - | 23.3 | - | 23.3 | |||
Purchase of own shares for Company reward | ||||||||||
scheme | - | - | - | (0.1) | (0.1) | - | (0.1) | |||
Tax on Company reward scheme shares awarded | - | - | - | (0.1) | (0.1) | - | (0.1) | |||
Share-based payments | - | - | - | 0.6 | 0.6 | - | 0.6 | |||
Transactions with owners | - | 0.4 | 22.9 | 0.4 | 23.7 | - | 23.7 | |||
Profit for the period restated | - | - | - | 1.0 | 1.0 | 0.2 | 1.2 | |||
Retirement benefit actuarial gain | - | - | - | 0.2 | 0.2 | - | 0.2 | |||
Foreign exchange differences | - | - | (0.1) | - | (0.1) | - | (0.1) | |||
Total comprehensive income for the period | - | - | (0.1) | 1.2 | 1.1 | 0.2 | 1.3 | |||
At 30 June 2023 | 0.3 | 17.6 | 26.9 | 34.3 | 79.1 | 0.4 | 79.5 | |||
At 1 January 2023 | 0.3 | 17.2 | 4.1 | 32.7 | 54.3 | 0.2 | 54.5 | |||
Dividends | - | - | - | (5.7) | (5.7) | (0.4) | (6.1) | |||
Issue of share capital | - | 0.5 | 22.9 | - | 23.4 | - | 23.4 | |||
Purchase of own shares for Company reward | ||||||||||
scheme | - | - | - | (0.1) | (0.1) | - | (0.1) | |||
Tax on Company reward scheme shares awarded | - | - | - | (0.1) | (0.1) | - | (0.1) | |||
Deferred tax on share-based payments | - | - | - | (0.1) | (0.1) | - | (0.1) | |||
Share-based payments | - | - | - | 1.2 | 1.2 | - | 1.2 | |||
Transactions with owners | - | 0.5 | 22.9 | (4.8) | 18.6 | (0.4) | 18.2 | |||
Profit for the year | - | - | - | 9.5 | 9.5 | 0.4 | 9.9 | |||
Retirement benefit actuarial gain | - | - | - | 0.1 | 0.1 | - | 0.1 | |||
Foreign exchange differences | - | - | (0.1) | - | (0.1) | - | (0.1) | |||
Total comprehensive income for the period | - | - | (0.1) | 9.6 | 9.5 | 0.4 | 9.9 | |||
At 31 December 2023 | 0.3 | 17.7 | 26.9 | 37.5 | 82.4 | 0.2 | 82.6 |
The statement of comprehensive income for the period to 30 June 2023 was restated for adjustment to the measurement of the fair value of the contingent consideration recognised in the Geotek acquisition to align with an amendment recorded in the 2023 Annual Report and Accounts. See note 13 for further details.
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Condensed consolidated interim cashflow statement
Six months | |||||
Six months | to 30 June | Year to | |||
to 30 June | 202331 December | ||||
2024 | restated | 2023 | |||
£m | £m | £m | |||
Cashflows from operating activities | |||||
Profit after tax | 4.3 | 1.2 | 9.9 | ||
Adjustments for: | |||||
Financial instruments measured at fair value: interest rate swaps | (0.1) | (1.1) | 1.2 | ||
Share-based payments | 0.6 | 0.6 | 1.2 | ||
Depreciation of property, plant and equipment | 1.0 | 0.8 | 1.9 | ||
Depreciation of right-of-use leased assets | 0.7 | 0.6 | 1.3 | ||
Amortisation of acquired intangible assets | 4.2 | 6.1 | 11.8 | ||
Amortisation of internally generated intangible assets | 0.3 | 0.1 | 0.4 | ||
Interest income | (0.2) | (0.1) | (0.3) | ||
Interest expense | 1.5 | 1.4 | 3.0 | ||
Interest payable on right-of-use lease liabilities | 0.2 | 0.1 | 0.4 | ||
Fair value movement on contingent consideration | - | 4.0 | 4.0 | ||
Retirement benefit obligation net interest cost | - | - | (0.1) | ||
Tax recognised in the Consolidated Statement of Comprehensive Income | 1.5 | 1.8 | 3.5 | ||
Increase in inventories | (1.0) | (5.9) | (5.1) | ||
(Increase)/decrease in trade and other receivables | (1.2) | 1.4 | (0.3) | ||
(Decrease)/increase in trade and other payables | (4.0) | 0.5 | (1.5) | ||
Cash generated from operations | 7.8 | 11.5 | 31.3 | ||
Tax paid | (3.2) | (1.7) | (4.8) | ||
Net cash from operating activities | 4.6 | 9.8 | 26.5 | ||
Cashflows from investing activities | |||||
Paid on acquisition of subsidiaries | (4.0) | (3.2) | (3.1) | ||
Paid in respect of surplus working capital | (0.7) | - | (1.2) | ||
Paid in respect of earn out | (0.2) | (17.5) | (17.5) | ||
Gross cash inherited on acquisition | 1.4 | 1.5 | 1.5 | ||
Acquisition of subsidiaries, net of cash acquired | (3.5) | (19.2) | (20.3) | ||
Purchase of property, plant and equipment | (3.0) | (1.6) | (4.7) | ||
Capitalised development costs | (0.6) | (0.6) | (1.2) | ||
Interest received | 0.2 | 0.1 | 0.3 | ||
Net cash used in investing activities | (6.9) | (21.3) | (25.9) | ||
Cashflows from financing activities | |||||
Proceeds from issue of share capital | 1.4 | 0.1 | 0.5 | ||
Purchase of own shares for Company reward scheme | (0.1) | (0.1) | (0.1) | ||
Tax on shares awarded under Company reward scheme | (0.1) | (0.1) | (0.1) | ||
Finance costs paid | (1.5) | (1.4) | (3.0) | ||
Repayments of borrowings | (3.1) | (3.1) | (9.2) | ||
Repayments of right-of-use lease liabilities | (0.9) | (0.6) | (1.6) | ||
Proceeds from bank loans | - | 10.5 | 12.0 | ||
Equity dividends paid | - | - | (5.7) | ||
Dividends paid to non-controlling interest | (0.2) | - | (0.4) | ||
Net cash from financing activities | (4.5) | 5.3 | (7.6) | ||
Net change in cash and cash equivalents | (6.8) | (6.2) | (7.0) | ||
Cash and cash equivalents at the start of the period | 13.7 | 20.8 | 20.8 | ||
Exchange movements | - | - | (0.1) | ||
Cash and cash equivalents at the end of the period | 6.9 | 14.6 | 13.7 |
The Condensed consolidated interim cashflow statement for the period to 30 June 2023 was restated for adjustment to the measurement of the fair value of the contingent consideration recognised in the Geotek acquisition to align with an amendment recorded in the 2023 Annual Report and Accounts. See note 13 for further details.
Judges Scientific plc Interim Report 2024 | 8 |
Notes to the interim report
1. General information and basis of preparation
The Judges Scientific plc Group's principal activities comprise the design, manufacture and sale of scientific instruments. The subsidiaries are grouped into two segments: Materials Sciences and Vacuum.
The financial information set out in this Interim Report for the six months ended 30 June 2024 and the comparative figures for the six months ended 30 June 2023 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 2023, 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 2023 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 2023 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 18 September 2024.
Going concern
The consolidated financial statements have been prepared on a going concern basis. The Group ended the first half of 2024 with adjusted net debt of £52.3m compared to adjusted net debt of £45.1m at 31 December 2023, after paying £4.2m in cash in respect of the Luciol and Rockwash acquisitions (see note 9). The Group uses adjusted net debt rather than statutory net debt for this comparison, as this figure includes actual cash liabilities arising from acquisitions. The increase in net debt resulted from the aforementioned acquisitions and their corresponding expected earnout payments, payment of our fair share of tax (£1.5m) and ongoing investment into capital expenditure (including property refurbishment) for the businesses (£3.0m) partially offset by cash generation.
The Directors have considered the potential ongoing impact of the heightened political tensions globally and of continuing higher levels of interest rates and inflation. The Group is in a strong financial position with solid cash balances, low gearing and a robust 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 2024 as happened after the first outbreak of Covid-19 in 2020, 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 2023, 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 | ||||||
Sciences | Vacuum | Head office | Total | |||
For the period ended 30 June 2024 | Note | £m | £m | £m | £m | |
Revenue | 28.7 | 32.1 | - | 60.8 | ||
Operating costs | (23.8) | (23.2) | (1.5) | (48.5) | ||
Adjusted operating profit | 4.9 | 8.9 | (1.5) | 12.3 | ||
Adjusting items | 4 | (5.1) | ||||
Operating profit | 7.2 | |||||
Net interest expense | (1.4) | |||||
Profit before tax | 5.8 | |||||
Income tax charge | (1.5) | |||||
Profit for the period | 4.3 |
Judges Scientific plc Interim Report 2024 | 9 |