Half Yearly Report

RNS Number : 0609T
Judges Scientific PLC
22 September 2010
 



22 September 2010

Judges Scientific plc

("Judges Scientific", the "Company" or the "Group")

 

Interim results for the six months ended 30 June 2010

 

JUDGES SCIENTIFIC REPORTS RECORD HALF-YEAR RESULTS

 

 

Highlights*:

§ Record adjusted basic earnings per share of 22.5p, up 45% on the 15.5p recorded in first half 2009

§ Interim dividend of 2.5p (first half 2009: 1.3p).  Nine times covered by adjusted earnings

§ Record sales of £7.6 million, up 69% on first half 2009

§ Record adjusted pre-tax profit of £1,465,000, up 73% on first half 2009

§ Acquisition of Sircal Instruments (UK) Limited in March 2010

§ Adjusted net debt of £1.2 million at 30 June 2010 (up only £0.2 million in the six months, despite £1 million acquisition of Sircal).  Cash balances at 30 June 2010 of £2.7 million

*      Adjusted earnings figures are stated after adding back charges relating to derivative financial instruments, amortisation of intangible assets and acquisition costs expensed - see Note 1 to the Interim Report and Accounts.  Adjusted net debt figures notionally include acquisition-related debts which are not yet settled.

 

Alex Hambro, Chairman of Judges Scientific, commented:

"I am very pleased to report another record set of interim results.  The group's operations have achieved robust performances during the financial and economic turmoil of the last two years, benefiting from their inherent resilience and from the competitive levels of Sterling against other currencies.  Our recent acquisitions have contributed positively to group results.  Quorum has performed strongly since joining the group and Sircal has traded in line with expectations since its acquisition.

 

However, the global recovery currently under way appears tentative and many of the developed Western economies will increasingly feel the effects of government austerity.  In light of this, your Directors find it encouraging to face such challenges with the visibility of a comfortable order book, a solid balance sheet and a diverse customer base that encompasses both developed and emerging economies. The second half of the year has started well and your Board anticipates that the out-turn for the full year will be significantly in excess of current market expectations."

 

For further information, please contact:

David Cicurel - CEO, Judges Scientific:                                              Tel: 01342 323 600

Pascal Keane - Shore Capital & Corporate:                                       Tel: 020 7408 4090

Melvyn Marckus - Cardew Group:                                                     Tel: 020 7930 0777

 

 

Chairman's Statement

 

I am very pleased to report another record set of interim results.  Sales for the six months ended 30 June 2010 reached £7.6 million compared with £4.5 million in the first half of 2009, an increase of 69%.  Organic growth in respect of businesses owned throughout the first half periods of both 2009 and 2010 accounted for 7% of this increase in sales, a particularly pleasing outcome given that performance during 2009 had, at that time, appeared exceptionally strong.  The balance of the increase resulted from the acquisitions of Quorum Technologies Limited in June 2009 and Sircal Instruments (UK) Limited in March 2010.

 

Profit before tax in the first half of the year, adjusted as explained in the paragraph below, rose by 73% to £1,465,000 (2009: £848,000).  Approximately 18% of this increase in profits is attributable to organic growth.  Basic earnings per share, similarly adjusted, increased to 22.5p (2009: 15.5p).  Adjusted diluted earnings per share amounted to 20.9p (2009: 15.5p); under IAS 33, significant dilution arose in respect of outstanding share options and warrants due to a material, and welcome, increase in the company's share price.  This strong trading performance resulted in an advance from 38% to 42% in the annual return on total invested capital ("ROTIC").

 

The profit adjustments referred to above have been made in order to eliminate the impact of charges introduced under IFRS which have little to do with the group's trading performance.  These charges comprise one cash item of £77,000, being the costs incurred in respect of the acquisition of Sircal (which would previously have been capitalised) and two non-cash items, namely the increase in the fair value of the Convertible Redeemable shares resulting from the rise in the company's Ordinary share price during the period (£575,000;  2009 - nil) and the amortisation of intangible assets (£148,000;  2009 - £150,000).  After factoring in these IFRS-related adjustments, profit before tax is reduced to £665,000 (2009: £698,000) and earnings per share to 4.3p basic and 4.1p diluted (2009: both 12.8p).

 

Our recent acquisitions have contributed positively to group results.  Quorum has performed strongly since joining the group and the company's profitability proved well in excess of the level required to justify the payment of the earn-out in full.  Sircal, which produces rare gas purifiers largely used for the analysis of metal samples, was acquired on 18 March 2010 for £1 million.  Most of Sircal's sales are overseas and the company is more sensitive to the world economic cycle than other constituents of the group.  The company has been fully integrated into the group's East Grinstead operation and has traded in line with expectations since its acquisition.

 

Order intake across the group was strong in the period under review, with the order book at 30 June 2010 representing 13 weeks of sales.  This was a slight improvement on the prior year, despite 2009 having started with the benefit of an abnormally high order book.

Cash generation during the period was strong and the Board is particularly pleased that adjusted net debt of £1.2 million at 30 June 2010 has remained broadly stable compared to the amount outstanding at the start of the period, this despite the £1 million Sircal acquisition.  Cash balances remained healthy at £2.7 million.

 

The group's operations have achieved robust performances during the financial and economic turmoil of the last two years, benefiting from their inherent resilience and from the competitive levels of Sterling against other currencies.  The bias in the group's customer base towards the public sector and academia, with only a modest exposure to cyclical industries, has also proved a positive factor.  However, the global recovery currently under way appears tentative and many of the developed Western economies will increasingly feel the effects of government austerity.  In light of this, your Directors find it encouraging to face such challenges with the visibility of a comfortable order book, a solid balance sheet and a diverse customer base that encompasses both developed and emerging economies.  The second half of the year has started well and your Board anticipates that the out-turn for the full year will be significantly in excess of current market expectations.

 

The performance of the company fully supports your Board's objective of pursuing a well-covered and progressive dividend policy.  An interim dividend of 2.5p (2009: 1.3p) will be paid on Friday 5 November 2010 to shareholders on the register on Friday 8 October 2010.  The shares will go ex-dividend on Wednesday 6 October 2010.

 

 

The Hon. Alexander Hambro

Chairman

21 September 2010



 

 

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

 

Unaudited




6 months to 30 June 2010

6 months to 30 June 2009

Year to 31 December 2009


Note

£000

£000

£000

£000

£000



Continuing activities

Acquisitions

Total



Revenue


7,429

211

7,640

4,517

11,295

Operating costs excluding adjusting items


(5,936)

(174)

(6,110)

(3,629)

(9,613)

Adjusted operating profit


1,493

37

1,530

888

1,682

Adjusting items







Charge relating to derivative financial instruments (Convertible Redeemable shares)

4.4

(575)

-

(575)

-

-

Amortisation of intangible assets

6

(134)

(14)

(148)

(150)

(415)

Acquisition-related transaction costs

10

-

(77)

(77)

-

-

Unadjusted operating profit/(loss)


784

(54)

730

738

1,267

Finance costs




(69)

(42)

(110)

Finance income




4

2

3

Profit before tax




665

698

1,160

Taxation




(381)

(198)

(325)

Profit and total comprehensive income for the period




284

500

835

Attributable to:







Equity holders of the parent company




174

517

832

Non-controlling interest




110

(17)

3





284

500

835








Earnings per share




Pence

Pence

Pence

Basic

7



4.3

12.8

20.6

Diluted

7



4.1

12.8

20.1

 

There are no items of other comprehensive income for the three periods in question.

 

The accompanying notes form an integral part of these consolidated financial statements.

 

 

CONDENSED CONSOLIDATED INTERIM BALANCE SHEET

 

Unaudited


30 June

2010

30 June

2009

31 December

2009


Note

£000

£000

£000






ASSETS





Non-current assets





Property, plant and equipment


946

938

921

Goodwill


5,290

4,497

4,497

Other intangible assets

6

525

859

594








6,761

6,294

6,012






Current assets





Inventories


1,645

1,546

1,241

Trade and other receivables


2,878

2,165

1,803

Cash and cash equivalents


2,680

2,513

2,540








7,203

6,224

5,584






Total assets


13,964

12,518

11,596






LIABILITIES





Current liabilities





Trade and other payables


(2,559)

(1,875)

(1,897)

Derivative financial instruments

4.4

(575)

-

-

Trade and other payables relating to acquisitions


(300)

(588)

(300)

Current portion of long-term borrowings


(600)

(814)

(650)

Current tax payable


(1,081)

(819)

(638)








(5,115)

(4,096)

(3,485)






Non-current liabilities





Long term payables relating to acquisitions


-

(300)

-

Long-term borrowings


(2,958)

(2,697)

(2,590)

Deferred tax liabilities


(170)

(281)

(188)








(3,128)

(3,278)

(2,778)






Total liabilities


(8,243)

(7,374)

(6,263)






Net assets


5,721

5,144

5,333

 



 

 

CONDENSED CONSOLIDATED INTERIM BALANCE SHEET

(continued)

 

Unaudited


30 June 2010

30 June 2009

31 December 2009


Note

£000

£000

£000






EQUITY





Share capital


208

202

202

Share premium


3,086

2,956

2,959

Merger reserve


475

475

475

Retained earnings


1,706

1,366

1,532






Equity attributable to equity holders of the parent company


5,475

4,999

5,168






Non-controlling interest


246

145

165






Total equity


5,721

5,144

5,333

 



 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

 

 

Unaudited


Share capital

Share premium

Merger reserve

Retained earnings

Total *

Non-

controlling

interest

Total equity


Note

£000

£000

£000

£000

£000

£000

£000

Balance at

1 January 2010


202

2,959

475

1,532

5,168

165

5,333

Dividends


-

-

-

-

-

(29)

(29)

Issue of share capital


6

127

-

-

133

-

133

Transactions with owners


6

127

-

-

133

(29)

104

Profit for the period


-

-

-

174

174

110

284

Total comprehensive income for the period


-

-

-

174

174

110

284

Balance at

30 June 2010


208

3,086

475

1,706

5,475

246

5,721

 

 

Unaudited


Share capital

Share premium

Merger reserve

Retained earnings

Total *

Non-

controlling

interest

Total equity


Note

£000

£000

£000

£000

£000

£000

£000

Balance at

1 January 2009


202

2,956

475

849

4,482

162

4,644

Profit for the period


-

-

-

517

517

(17)

500

Total comprehensive income for the period


-

-

-

517

517

(17)

500

Balance at

30 June 2009


202

2,956

475

1,366

4,999

145

5,144

 

 



Share capital

Share premium

Merger reserve

Retained earnings

Total *

Non-

controlling

interest

Total equity


Note

£000

£000

£000

£000

£000

£000

£000

Balance at

1 January 2009


202

2,956

475

849

4,482

162

4,644

Dividends

11

-

-

-

(149)

(149)

-

(149)

Issue of share capital


-

3

-

-

3

-

3

Transactions with owners


-

3

-

(149)

(146)

-

(146)

Profit for the period


-

-

-

832

832

3

835

Total comprehensive income for the period


-

-

-

832

832

3

835

Balance at

31 December 2009


202

2,959

475

1,532

5,168

165

5,333

 

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

 

 

CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT

 

Unaudited


6 months to

30 June

2010

6 months to

30 June

2009

Year to

31 December

2009


Note

£000

£000

£000

Cash flows from operating activities





Profit after tax


284

500

835

Adjustments for:





Charge relating to derivative financial instruments

4.4

575

-

-

Depreciation


79

52

107

Amortisation of intangible assets


148

150

415

(Profit)/loss on disposal of property, plant and equipment


(2)

-

3

Foreign exchange gains


-

(138)

(92)

Finance income


(4)

(2)

(4)

Finance costs


69

42

110

Tax expense recognised in income statement


381

198

325

(Increase)/decrease in inventories


(360)

(197)

144

(Increase)/decrease in trade and other receivables


(1,014)

(105)

257

Increase/(decrease) in trade and other payables


655

(117)

(95)






Cash generated from operations


811

383

2,005

Finance costs paid


(45)

(31)

(107)

Tax paid


(92)

-

(401)






Net cash from operating activities


674

352

1,497






Cash flows from investing activities





Paid on acquisition of new subsidiaries

10

(1,316)

(1,325)

(1,914)

Gross cash inherited on acquisition

10

481

889

889

Acquisition of subsidiaries, net of cash acquired

10

(835)

(436)

(1,025)

Purchase of property, plant and equipment


(113)

(47)

(125)

Proceeds from disposal of property, plant and equipment


11

-

1

Finance income received


4

2

4






Net cash used in investing activities


(933)

(481)

(1,145)






Cash flows from financing activities





Issue of share capital


133

-

3

Repayments of borrowings


(205)

(422)

(730)

Proceeds from bank loans


1,000

1,443

1,443

Repayment of loan notes


(500)

-

-

Dividends paid - equity shareholders

11

-

-

(149)

Dividends paid - non controlling interests in subsidiary


(29)

-

-






Net cash from financing activities


399

1,021

567






Net increase in cash and cash equivalents


140

892

919

Cash and cash equivalents at beginning of period


2,540

1,621

1,621

Cash and cash equivalents at end of period


2,680

2,513

2,540

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

 

1.         Adjustments to condensed consolidated interim income statement

 

 

Unaudited

6 months to

30 June 2010

6 months to

30 June 2009

Year to 31 December 2009


£000

£000

£000





Unadjusted profit and total comprehensive income for the period after tax

284

500

835

Add-back:  unadjusted taxation

381

198

325

Unadjusted profit before tax

665

698

1,160

Adjustments (before tax):




Add-back: charge relating to derivative financial instruments (Convertible Redeemable shares)

575

-

-

amortisation of intangible assets

148

150

415

acquisition-related transaction costs expensed under IFRS 3 (revised 2008)

77

-

-


800

150

415

Adjusted profit before tax

1,465

848

1,575

Adjusted taxation

(434)

(240)

(441)

Adjusted profit and total comprehensive income for the period after tax

1,031

608

1,134





Attributable to:

£000

£000

£000

Equity holders of the parent company

921

625

1,131

Non controlling interest

110

(17)

3





Adjusted earnings per share:

Pence

pence

pence

Basic

22.5

15.5

28.0

Diluted

20.9

15.5

27.3

 

2.         Nature of operations

 

Judges Scientific plc is the ultimate parent company of the group, whose principal activities comprise the design, manufacture and sale of scientific instruments.

 

·      Fire Testing Technology Limited is the world's major producer of instruments designed to measure the reaction of materials to fire; the activity is supported through the in-house production of engineering parts by its subsidiary company, Aitchee Engineering Limited.  Its other trading subsidiary, Sircal Instruments (UK) Limited, designs, manufactures and sells rare gas purifiers for use in metals analysis.

·      PE.fiberoptics Limited is a significant provider to the telecoms industry of equipment to test the properties of fibre optic and fibre optic networks.

·      UHV Design Limited designs, manufactures and sells instruments to create motion, heating and cooling within ultra high vacuum chambers.

·      Quorum Technologies Limited designs, manufactures and sells instruments that prepare samples for examination in electron microscopes.

 

 

3.         General information and basis of preparation

 

The financial information set out in these condensed consolidated interim financial statements for the six months ended 30 June 2010 and the comparative figures for the six months ended 30 June 2009 are unaudited.  They have been prepared taking into account the requirements of IAS 34 Interim Financial Reporting and the AIM Rules.  They do 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 2009, which have been prepared in accordance with IFRS as adopted by the European Union.

 

The financial information for the year ended 31 December 2009 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 2009 have been filed with the Registrar of Companies.  The auditor's report on those financial statements was unqualified and did not contain statements under section 498 of the Companies Act 2006.

 

The condensed consolidated interim financial statements are presented in Sterling, which is also the functional currency of the parent company.

 

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 Unit 19, Charlwoods Road, East Grinstead, West Sussex RH19 2HL.  Its shares are listed on the Alternative Investment Market.

 

The condensed consolidated interim financial statements have been approved for issue by the Board of Directors on 21 September 2010.

 

 

4.         Significant accounting policies

 

The condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 December 2009, except for the taxation policy where, for the purposes of the interims, the tax charge on underlying business performance is calculated by reference to the estimated effective rate for the full year and except for the adoption of the following standards as of 1 January 2010:

·      IFRS 3 Business Combinations (Revised 2008)

·      IAS 27 Consolidated and Separate Financial Statements (Revised 2008)

·      Improvements to IFRSs 2009

 

The accounting policies have been applied consistently throughout the group for the purposes of preparation of these condensed consolidated interim financial statements.

 

 

4.1        Adoption of IFRS 3 Business Combinations (Revised 2008)

 

The revised standard (IFRS 3R) introduced changes to the accounting requirements for business combinations.  It has been applied prospectively to business combinations for which the acquisition date is on or after 1 January 2010.  It retains the major features of the purchase method of accounting, now referred to as the acquisition method. The most significant change in IFRS 3R that had an impact on the group's condensed consolidated interim financial statements in 2010 is that acquisition-related transaction costs of the combination are now recorded as an expense in the income statement. Previously, these costs would have been capitalised as part of the cost of the acquisition.

 

For the six months ended 30 June 2010, acquisition-related transaction costs amounting to £77,000 arising on the acquisition of Sircal Instruments (UK) Limited (see note 10), which would previously have been capitalised, were expensed as required by IFRS 3R;  current tax expense decreased by £12,000 and basic and diluted earnings per share for the current period decreased by 1.6p and 1.5p respectively.

 

Business combinations for which the acquisition date is before 1 January 2010 have not been restated.

 

 

4.2        Adoption of IAS 27 Consolidated and Separate Financial Statements (Revised 2008)

 

The adoption of IAS 27R did not have an impact on the current period financial statements.

 

 

4.3        Adoption of Improvements to IFRSs 2009 (issued in April 2009)

 

These amendments did not have an impact on the current period financial statements.

 

 

4.4        Derivative financial instruments

 

Under the terms of IAS 39 Financial Instruments - Recognition and Measurement, the Convertible Redeemable shares in the company are deemed to represent embedded derivative financial instruments.  As such, it is a requirement that they be fair-valued at each accounting date, with changes in fair-value being recognised through the Income Statement.  The recent increase in the market price of the company's Ordinary shares has correspondingly increased the fair value of the Convertible Redeemable shares, resulting in a £575,000 charge in the six months ended 30 June 2010 relating to the derivative financial instruments.

 

As this charge represents a non-cash accounting adjustment that does not affect the underlying trading performance of the group, the directors have concluded that it should be eliminated for the purposes of presenting adjusted profits and adjusted earnings per share figures.

 

 

5.         Significant events and transactions

 

Trading activity during the six-month period ended 30 June 2010 remained robust and benefited from a healthy opening order book, strong order intake and favourable exchange rates. Order intake during the half-year was much stronger than in the comparable period of 2009, enabling the June 2010 order book to exceed the level reached in June 2009.

 

Sircal, acquired on 18 March 2010, has since been relocated and integrated within Fire Testing Technology and is trading in line with expectations.

 

The half-year results include a six-month contribution from Quorum (acquired in June 2009) and a three-month contribution from Sircal.

 

 

6.         Additions and amortisation of intangible assets

 

The following tables show the significant additions to and amortisation of intangible assets:

 


Carrying amount at

1 January 2010

Additions

Amortisation

Carrying

amount at

30 June 2010


£000

£000

£000

£000






Non-competition agreements

5

-

2

3

Distribution agreements

324

-

66

258

Research and development

160

-

18

142

Sales order backlog

-

7

7

-

Brand names

40

72

47

65

Domain names

65

-

8

57






Total

594

79

148

525

 


Carrying

amount at

1 January 2009

Additions

Amortisation

Carrying

amount at

30 June 2009


£000

£000

£000

£000






Customer relationships

14

-

10

4

Non-competition agreements

9

-

2

7

Distribution agreements

-

398

8

390

Research and development

-

180

2

178

Sales order backlog

-

244

122

122

Brand names

-

91

5

86

Domain names

-

73

1

72






Total

23

986

150

859

 


Carrying

amount at

1 January 2009

Additions

Amortisation

Carrying

amount at

31 December

2009


£000

£000

£000

£000






Customer relationships

14

-

14

-

Non-competition agreements

9

-

4

5

Distribution agreements

-

398

74

324

Research and development

-

180

20

160

Sales order backlog

-

244

244

-

Brand names

-

91

51

40

Domain names

-

73

8

65






Total

23

986

415

594

 

 

7.         Earnings per share

 

Basic earnings per share is calculated on the earnings attributable to Ordinary shareholders divided by the weighted average number of shares in issue during the period.

 

Diluted earnings per share is calculated on the basic earnings per share, adjusted to allow for the issue of shares on the assumed conversion of all dilutive options and 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.

 

Reconciliations of the earnings and the weighted average number of shares used in the calculations are set out below:

 

6 months to 30 June 2010

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 unadjusted basic and diluted earnings per share

174



Add-back:




charge relating to derivative financial instruments

575



amortisation of intangible assets, net of tax

107



acquisition-related transaction costs, net of tax

65



Adjusted basic and diluted profit

921







Number of shares for calculation of basic earnings per share


4,085,691


Dilutive effect of potential shares (unadjusted)


112,585


Number of shares for calculation of unadjusted diluted earnings per share


4,198,276


Dilutive effect of potential derivative financial instruments


207,895


Number of shares for calculation of adjusted diluted earnings per share


4,406,171






Basic earnings per share



4.3

Diluted earnings per share



4.1

Adjusted basic earnings per share



22.5

Adjusted diluted earnings per share



20.9

 

 

7.         Earnings per share (continued)

 

6 months to 30 June 2009

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 and diluted earnings per share

517



Add-back amortisation of intangible assets, net of tax

108



Adjusted basic and diluted profit

625







Number of shares for calculation of basic earnings per share


4,037,678


Dilutive effect of potential shares


-


Number of shares for calculation of diluted earnings per share


4,037,678






Basic earnings per share



12.8

Diluted earnings per share



12.8

Adjusted basic earnings per share



15.5

Adjusted diluted earnings per share



15.5

 

 

Year to 31 December 2009

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 and diluted earnings per share

832



Add-back: amortisation of intangible assets, net of tax

299



Adjusted basic and diluted profit

1,131







Number of shares for calculation of basic earnings per share


4,038,434


Dilutive effect of potential shares


108,212


Number of shares for calculation of diluted earnings per share


4,146,646






Basic earnings per share



20.6

Diluted earnings per share



20.1

Adjusted basic earnings per share



28.0

Adjusted diluted earnings per share



27.3

 

 

8.         Share issue

 

 

During the first six months of 2010, 133,564 shares were issued at £1 per share on the exercise of unquoted warrants to subscribe for Ordinary shares in the company, granted in May 2005 in connection with the acquisition of Fire Testing Technology Limited.  The market price of the shares at the time of exercise was 180p.

 

Ordinary shares authorised and issued are summarised as follows:

 

 


6 months to June 2010

6 months to June 2009

Year to

31 December

2009


no.

no.

no.





Ordinary shares of 5p each




Authorised

10,000,000

10,000,000

10,000,000





Issued and fully paid




Beginning of the period

4,040,678

4,037,678

4,037,678

Exercise of share options

-

-

3,000

Exercise of warrants to subscribe

133,564

-

-

End of the period

4,174,242

4,037,678

4,040,678

 

 

9.         Changes in net debt in the 6 months ended 30 June 2010 were as follows:

 


1 January 2010

Cash flow

Non-cash items

30 June 2010


£000

£000

£000

£000

Cash at bank and in hand

2,540

140

-

2,680

Debt (bank and subordinated loan notes)

(3,240)

(295)

(23)

(3,558)

Net debt

(700)

(155)

(23)

(878)

Effect of earn-out payments relating to the acquisition of Quorum Technologies Limited that are yet to be settled (included within current liabilities)

(300)

-

-

(300)

Adjusted net debt

(1,000)

(155)

(23)

(1,178)

 

Non-cash items represent foreign exchange differences on bank loans and interest accruals.

 

 

10.        Acquisition of Sircal Instruments (UK) Limited

 

On 18 March 2010, the company's subsidiary, Fire Testing Technology Limited ("FTT") acquired the entire issued share capital of Sircal Instruments (UK) Limited ("Sircal"), a company based in the UK.  The total cost of acquisition, all of which was paid in cash, includes the components stated below.

 

Consideration

£000

Payment to vendors

1,000

Gross cash inherited on acquisition

481

Cash retained in the business

(165)

Payment to vendors in respect of surplus working capital

316

Total consideration transferred

1,316

Acquisition-related transaction costs charged in the Income Statement

77

 

The amounts recognised for each class of the acquiree's assets, liabilities and contingent liabilities at the acquisition date are as follows:

 


Pre acquisition carrying amount

Adjustment to fair value

Recognised at acquisition date


£000

£000

£000





Property, plant and equipment

1

-

1

Intangible assets

-

79

79

Inventories

44

-

44

Trade and other receivables

61

-

61

Cash and cash equivalents

481

-

481

Total assets

587

79

666

Deferred tax liabilities

-

(22)

(22)

Trade payables

(7)

-

(7)

Current tax liability

(114)

-

(114)

Total liabilities

(121)

(22)

(143)

Net identifiable assets and liabilities

466

57

523

Goodwill arising on acquisition

793

Total cost of acquisition

1,316

 

The goodwill that arose on the combination can be attributed to Sircal's profitability.

 

 

10.        Acquisition of Sircal Instruments (UK) Limited (continued)

 

Sircal made a contribution to group profit after tax of £27,000 in the 15 weeks from 18 March 2010 to the reporting date.  After amortisation of intangible assets, Sircal's contribution to the group results amounted to a profit of £17,000 after tax.

 

If Sircal had been acquired on 1 January 2010, based on pro-forma 2009 results revenue for the group for the period to 30 June 2010 would have increased by £166,000 and profit after tax would have increased by £38,000 after allowing for interest costs but before charging amortisation of intangible assets (an increase of £36,000 after charging additional amortisation of intangible assets of £2,000).

 

 

11.        Dividends

 

The company paid an interim dividend of 1.3p per share (£52,490) on 6 November 2009 and a final dividend of 3.7p per share (£154,447) on 2 July 2010, both relating to the financial year ended 31 December 2009.

 

The company will pay an interim dividend for 2010 of 2.5p per share on Friday 5 November 2010 to shareholders on the register on Friday 8 October 2010.  The shares will go ex-dividend on Wednesday 6 October 2010.

 

 

12.        Distribution of document

 

Copies of these condensed consolidated interim financial statements will be sent to shareholders and the AIM team and will be available on the company's website at www.judges.uk.com


This information is provided by RNS
The company news service from the London Stock Exchange
 
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