Final Results

RNS Number : 6494P

Judges Capital PLC

30 March 2009

 



30 March 2009

Judges Capital Plc 

 ('Judges Capital,' the 'Company' or the 'Group')

Preliminary Statement:

Results for the year ended 31 December 2008

JUDGES CAPITAL REPORTS RECORD

RESULTS FOR 2008

Highlights

• Record revenues of £7.1 million (2007: £6.2 million)

• Record adjusted profit of £1.2 million (2007: £836,000) stated before tax, abortive acquisition costs, amortisation of intangible assets and gains on divestments

• Record adjusted earnings per share of 21.1p (2007: 15.0p restated)

• Record year-end order book

• Proposed final dividend of 2.4p, making 3.6p for the year (2007: 3.3p)

• All trading subsidiaries making positive contribution to adjusted group profit and are cash generative

• Cash balances in excess of £1.6 million; net debt reduced to £1 million

• Favourable start to current year's trading, although economic climate dictates cautious outlook at this stage

Alex Hambro, Chairman of Judges Capital, commented:

'After a successful year in 2008, the group is again in a strong position, starting the year with a solid order book. The resulting visibility on revenue and the benign currency environment give your Board confidence in respect of the first half of 2009. However, your Board is conscious of the fact that the inherent strength of our businesses does not necessarily provide immunity against the worldwide recession and accordingly we view prospects for the second half of the year with caution at this stage.'

Chairman's Statement

I have great pleasure in reporting your company's results for 2008. Revenue advanced from £6.2 million in 2007 to £7.1 million and generated profit of £1.2 million before tax, abortive acquisition costs, a gain on the disposal of an investment and amortisation of intangible assets. This compares with £836,000 in 2007 on an equivalent basis. Earnings per share, similarly adjusted, rose from 15.0p (restated in respect of the calculation of dilution) to 21.1p.

Pre tax profit after abortive acquisition costs, investment gains and amortisation amounted to £869,000 (2007: £858,000). This equates to earnings per share of 14.7p (2007: 15.5p, restated).

Corporate activity

All group subsidiaries were owned throughout the financial year to 31 December 2008 and since the beginning of the comparative year, 2007.

During the financial year, the company raised £479,000 net of expenses through the placement of 476,800 new Ordinary shares at a price of 110p per share.

Regrettably, a significant acquisition project was thwarted at a late stage by the global financial upheavals during the second half of the year and consequently £310,000 of costs incurred in relation to the proposed acquisition process had to be written off.

In March 2008, the company purchased a freehold factory adjacent to FTT, into which its subsidiary, Aitchee Engineering, was relocated.

Trading

Despite the widespread economic malaise, our businesses enjoyed a successful year. The healthy order backlog at 1 January 2008 kick-started a robust performance in the first half. As the second half unfolded, commercial activity accelerated, which again resulted in a record order book at the year-end, standing at twice the level reached at the end of 2007. Your Board believes that the significant part of our revenue that is ultimately financed by government expenditure in a widely diversified range of countries has, up to now, been afforded some protection against the impact of the global economic slow-down.

After years of trading against the background of a relatively strong Sterling currency, our export driven business was enhanced by the strength of the Euro from the early part of 2008 and of the US Dollar after September 2008.

  Financial position

Our financial position remains strong, with cash balances reaching £1.6 million at the year-end (2007: £0.9 million) and net debt reducing from £2.0 million to £1.0 million. This has been achieved in large part by our robust trading performance and by a reduction in working capital. As last year, a significant proportion of our debt is denominated in foreign currency to hedge against the impact of exchange fluctuations on export activity.

Dividends

Your Board is pleased to recommend a final dividend of 2.4p per share (2007: 2.2p per share) which, subject to approval at the forthcoming Annual General Meeting on 22 May 2009, would make a total distribution of 3.6p per share for the year (2007: 3.3p per share). The level of cover by adjusted earnings per share has risen from 4 times to 6 times, notwithstanding the proposed 9 per cent increase.

The proposed dividend will be payable on 3 July 2009 to shareholders on the register on 5 June 2009 and the shares will go ex-dividend on 3 June 2009.

Current trading and prospects

The group is again in a strong position, starting the year with a solid order book. The resulting visibility on revenue and the benign currency environment give your Board confidence in respect of the first half of 2009. However, your Board is conscious of the fact that the inherent strength of our businesses does not necessarily provide immunity against the worldwide recession and accordingly we view prospects for the second half of the year with caution at this stage.

The directors are adopting a prudent approach to acquisitions, focusing on those of a size that is manageable in the present financial climate. Nevertheless, we intend to capitalise on the company's strong financial position to expand the group's activities where attractive opportunities arise to acquire niche companies in the instrumentation sector. The company has worked hard at embedding and managing new subsidiaries, as evidenced by the 33% return currently achieved on total invested capital. Although this target will become increasingly challenging as the economic climate worsens, it remains one which the directors consider should be kept in their sights when assessing prospective acquisition opportunities. 

Annual General Meeting

With the group now firmly established in its chosen field of activity, the directors intend to propose a resolution at the forthcoming Annual General Meeting to change the name of the company to one more closely reflecting its business, namely Judges Scientific plc. At the same meeting, it is intended to table new Articles of Association and to clarify the status of the Convertible Redeemable shares.

A 'whitewash' resolution was passed at the last General Meeting, enabling the company to purchase its own shares without an obligation being incurred by certain shareholders to make an offer for the entire share capital. Although no shares were purchased using this authority, the directors intend to seek a renewal of this 'whitewash' facility.

Personnel

My thanks must go out to all of the executives and employees of the group who have continued to drive their businesses forward with dedication and expertise despite the economic turbulence that affects all our export markets. Our solid performance bears testimony to their efforts.

Alex Hambro

Chairman

For further information please contact:

David Cicurel, CEO, Judges Capital:                        Tel: [phone]

Pascal Keane, Shore Capital:                                    Tel: [phone]

 
Melvyn Marckus, Cardew Group:                                Tel: [phone] 

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2008

		2008		2007
		£000		£000
Revenue		7,104		6,192
Abortive acquisition costs		(310)		-
Other operating costs		(5,806)		(5,267)
Operating profit		988		925
Profit on disposal of available-for-sale investments		21		142
Interest receivable		48		33
Interest payable		(188)		(242)
Profit before tax		869		858
Taxation		(230)		(231)
Profit for the year		639		627
Attributable to:
Equity holders of the parent company		567		553
Minority interest		72		74
Earnings per share - total and continuing
Basic		14.7p		15.5p
Diluted (restated - see Note 1)		14.7p		15.5p

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2008

		2008		2007
		£000		£000
ASSETS
Non-current assets
Property, plant and equipment		861`		275`
Goodwill		4,383`		4,383`
Other intangible assets		23`		76`
Available-for-sale investments		-`		20`
		5,267`		4,754`
Current assets
Inventories		672`		554`
Trade and other receivables		1,364`		1,543`
Cash and cash equivalents		1,621`		910`
		3,657`		3,007`
Total assets		8,924`		7,761`
LIABILITIES
Current liabilities
Trade and other payables		(1,337)		(877)
Current portion of long-term borrowings		(625)		(527)
Current tax payable		(292)		(300)
		(2,254)		(1,704)
Non-current liabilities
Long-term borrowings		(1,992)		(2,336)
Deferred tax liabilities		(34)		(36)
		(2,026)		(2,372)
Total liabilities		(4,280)		(4,076)
Net assets		4,644`		3,685`

 

EQUITY
Share capital		202`		178`
Share premium account		2,956`		2,501`
Merger reserve		475`		475`
Retained earnings		849`		409`
Revaluation reserve		-`		1`
Equity attributable to equity holders of the parent company		4,482`		3,564`
Minority interest		162`		121`
Total equity		4,644`		3,685`

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2008

	Share capital	Share premium	Merger reserve	Retained earnings	Revalua-tion reserve	Total**	Minority interest	Total equity
	£000	£000	£000	£000	£000	£000	£000	£000
Balance at 1 January 2007	178`	2,501`	475`	(34)	(5)	3,115`	65`	3,180`
Changes in equity for 2007
Transferred to profit or loss on disposal of available-for-sale investments	-`	-`	-`	-`	6`	6`	-`	6`
Net income recognised directly in equity	-`	-`	-`	-`	6`	6`	-`	6`
Profit for the year	-`	-`	-`	553`	-`	553`	74`	627`
Total recognised income and expense for the year	-`	-`	-`	553`	6`	559`	74`	633`
Dividends	-`	-`	-`	(110)	-`	(110)	(18)	(128)
Balance at 31 December 2007	178`	2,501`	475`	409`	1`	3,564`	121`	3,685`
Changes in equity for 2008
Transferred to profit or loss on disposal of available-for-sale investments	-`	-`	-`	-`	(1)	(1)	-`	(1)
Net income recognised directly in equity	-`	-`	-`	-`	(1)	(1)	-`	(1)
Profit for the year	-`	-`	-`	567`	-`	567`	72`	639`
Total recognised income and expense for the year	-`	-`	-`	567`	(1)	566`	72`	638`
Dividends	-`	-`	-`	(127)	-`	(127)	(31)	(158)
Issue of share capital	24`	455`	-`	-`	-`	479`	-`	479`
Balance at 31 December 2008	202`	2,956`	475`	849`	-`	4,482`	162`	4,644`

** - Total represents amounts attributable to equity holders of the parent company.

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2008

		2008`		2007`
		£000`		£000`
Cash flows from operating activities
Profit after tax		639`		627`
Adjustments for:
Depreciation		81`		70`
Amortisation of intangible assets		53`		120`
Profit on disposal of property, plant and equipment		-`		(1)
Profit on disposal of available-for-sale investments		(21)		(142)
Foreign exchange losses on foreign currency loans		280`		27`
Interest receivable		(48)		(33)
Interest payable		188`		242`
Tax expense recognised in income statement		230`		231`
Increase in inventories		(118)		(150)
Decrease/(increase) in trade and other receivables		179`		(294)
Increase in trade and other payables		460`		162`
Cash generated from operations		1,923`		859`
Interest paid		(188)		(242)
Tax paid		(238)		(250)
Net cash from operating activities		1,497`		367`
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired		-`		(57)
Purchase of property, plant and equipment		(668)		(57)
Proceeds from disposal of equipment		-`		8`
Proceeds from disposal of available-for-sale investments		40`		342`
Interest received		48`		33`
Net cash (used in)/generated from investing activities		(580)		269`
Cash flows from financing activities
Proceeds from issue of share capital		479`		-`
Repayments of borrowings (including hire purchase contracts)		(527)		(422)
Dividends paid		(158)		(128)
Net cash used in financing activities		(206)		(550)
Net increase in cash and cash equivalents		711`		86`
Cash and cash equivalents at beginning of period		910`		824`
Cash and cash equivalents at end of period		1,621`		910`

NOTES TO THE PRELIMINARY ANNOUNCEMENT

FOR THE YEAR ENDED 31 DECEMBER 2008

 

 

 

1.             Earnings per share

 

Year to 31 December 2008	Earnings attributable to equity holders of the parent company	Weighted average number of shares	Earnings per share
	£000`	No.	pence
Profit after tax for calculation of basic earnings per share	567`
Notional taxed interest income accruing on dilution	-`
Profit after tax for calculation of diluted earnings per share	567`
Add-back: amortisation of intangible assets, net of tax	38`
provision for abortive acquisition costs, net of tax	263`
Less: profit on disposal of available-for-sale investments, net of tax and tax adjustment in respect of prior year	(57)
Adjusted diluted profit	811`
Number of shares for calculation of basic earnings per share		3,849,565
Dilutive effect of potential shares		-
Number of shares for calculation of diluted earnings per share		3,849,565
Basic earnings per share			14.7
Diluted earnings per share			14.7
Adjusted basic earnings per share			21.1
Adjusted diluted earnings per share			21.1

 

 

 

 

 

Year to 31 December 2007	Earnings attributable to equity holders of the parent company	Weighted average number of shares	Earnings per share
	£000	no.	pence
Profit after tax for calculation of basic earnings per share	553`
Notional taxed interest income accruing on dilution	-`
Profit after tax for calculation of diluted earnings per share	553`
Add-back: amortisation of intangible assets, net of tax	82`
Less: profit on disposal of available-for-sale investments, net of tax	(100)
Adjusted diluted profit	535`
Number of shares for calculation of basic earnings per share		3,560,878
Dilutive effect of potential shares		-
Number of shares for calculation of diluted earnings per share		3,560,878
Basic earnings per share			15.5
Diluted earnings per share			15.5
Adjusted basic earnings per share			15.0
Adjusted diluted earnings per share			15.0

 

 

2.             Borrowings and net debt

 

	31 December 2008	Bank loan	Subordinated	Hire	Total
			loan notes	purchase
		£000	£000	£000	£000
	Repayable in less than 6 months	352	-	10	362
	Repayable in months 7 to 12	347	15	7	369
	Current portion of long-term borrowings	699	15	17	731
	Repayable in years 1 to 2	792	506	-	1,298
	Repayable in years 2 to 5	793	-	-	793
	Long-term borrowings	1,585	506	-	2,091
	Total borrowings	2,284	521	17	2,822
	Less: interest included above				205
	cash and cash equivalents				1,616
	Total net debt				1,001

 

	31 December 2007	Bank loan	Subordinated	Hire	Total
			loan notes	purchase
		£000	£000	£000	£000
	Repayable in less than 6 months	336	-	9	345
	Repayable in months 7 to 12	326	33	10	369
	Current portion of long-term borrowings	662	33	19	714
	Repayable in years 1 to 2	699	-	17	716
	Repayable in years 2 to 5	1,304	515	-	1,819
	Long-term borrowings	2,003	515	17	2,535
	Total borrowings	2,665	548	36	3,249
	Less: interest included above				386
	cash and cash equivalents				910
	Total net debt				1,953

 

3.      Preliminary Announcement

 

This preliminary announcement, which has been agreed with the auditors, was approved by the board of directors on 27 March 2009. It is not the group’s statutory accounts. Copies of the group’s audited statutory accounts for the year ended 31 December 2008 will be dispatched to shareholders shortly. Copies will also be available to the public at the company’s Registered Office at Unit 19, Charlwoods Road, East Grinstead, West Sussex RH19 2HL and at the company’s website, www.judges.uk.com.

 

The statutory accounts for the year ended 31 December 2008 and the year ended 31 December 2007 received audit reports which were unqualified and did not contain statements under Section 237(2) or Section 237(3) of the Companies Act 1985. The statutory accounts for the year ended 31 December 2007 have been delivered to the Registrar of Companies, but the 31 December 2008 accounts have not yet been filed.

 

 

 

 

Ends

 

END

 

 

FR UBUNRKWROUAR