Interim Results

Judges Capital PLC 26 September 2006 Judges Capital plc Interim report and accounts 2006 Highlights Maiden interim dividend of 1p Sales £2,406,000 (first half 2005: £265,000) Pre-tax profits £122,000 (first half 2005: £12,000) Earnings per share 0.9p (first half 2005: 0.08p) and 2.8p before goodwill amortisation Strong balance sheet available for further acquisitions Encouraging start to second half trading activity following solid first quarter and subdued second quarter Board confident of satisfactory results for full year Alex Hambro, Chairman of Judges Capital, commented: 'Your Board is encouraged by the healthy order intake experienced by all three businesses since the onset of second half trading and is confident that the results for the full year will be satisfactory. 'Against this background, your Board is delighted that the Company's progress, a little more than a year after adopting its new strategy, will enable the distribution of an interim dividend of 1p. Our balance sheet leaves the Company in a strong position to pursue further acquisitions in line with our strategy.' For further information please contact: David Cicurel, Chief Executive, Judges Capital: Tel: 01342 323 600 Alex Borrelli, Shore Capital & Corporate: Tel: 020 7408 4090 Mike Sawbridge, Shore Capital & Corporate Tel: 0151 600 3722 Melvyn Marckus, Cardew Group: Tel: 020 7930 0777 Chairman's Statement I have much pleasure in announcing your Company's results for the six months ended 30 June 2006. Profit before tax increased to £122,000 compared to £12,000 for the corresponding period of 2005 on sales of £2,406,000 (2005: £265,000), while operating profit before goodwill amortisation reached £273,000. Fully diluted earnings per share amounted to 0.9p (2005: 0.08p), and before goodwill amortisation totalled 2.8p. As a result your Company will, for the first time, pay a dividend. The period under review includes a full six-month contribution from our recent acquisitions Fire Testing Technology ('FTT') and PE.fiberoptics ('PFO') and a four-month contribution from UHV Design ('UHV'). The figures continue to be reported under UK GAAP and the Company is in the process of reviewing the implications of reporting under IFRS, to be implemented on publication of the 2007 full year results. UHV, which designs and manufactures instruments that manipulate objects in ultra high vacuum chambers, was acquired on 21 February 2006. The £836,000 purchase price comprised £650,000 in cash, the issue of 98,522 new ordinary shares and an earn-out arrangement of up to a maximum £86,000 of which the first instalment of £43,000 was earned and paid in cash during the period under review. In addition £205,000 was paid in cash to reflect excess working capital at completion. The cash element was financed by an extension of the Company's senior loan. The unaudited accounts of UHV for the 11 months prior to completion of the acquisition show an operating profit of £321,000 on sales of £900,000. FTT and PFO enjoyed solid first quarter trading followed by a quieter second quarter; subsequent to which both companies have experienced a strong order intake. UHV has performed well following the acquisition and has achieved excellent order levels, sales and profits. During the period, our shares in Dickinson Legg were sold at a small loss compared to their written-down value, a divestment that leaves Poole Investments PLC (book value £200,000) as the Company's only material portfolio investment. Subsequent to the period under review, FTT purchased the business and assets of Aitchee Engineering, one of its key suppliers, for £220,000 cash plus a maximum earn-out of £10,000. Our balance sheet, with £1.2 million cash balances and net debt of £2.1 million, leaves the Company in a strong position to pursue further acquisitions in line with our strategy. Although the subdued trading activity in the second quarter is likely to result in earnings slightly below our earlier expectations for the full year, your Board is encouraged by the healthy order intake experienced by all three businesses since the onset of second half trading and is confident that the results for the full year will be satisfactory. Against this background your Board is delighted that the Company's progress in the period to 30 June 2006, a little more than a year after adopting its new strategy, will enable the distribution of an interim dividend of 1p, which will be paid on Friday 3 November to shareholders on the register on Friday 6 October. The shares will go ex-dividend on Wednesday 4 October and the dividend will be paid on Friday 3rd November to shareholders on the register on Friday 6 October. The Hon. Alexander Robert Hambro Chairman 26 September 2006 Consolidated profit and loss account for the six months ended 30 June 2006 Six months ended Six months Year ended ended 30 June 2006 30 June 2005 31 Dec 2005 (unaudited) (unaudited) (audited) £000 £000 £000 £000 £000 Continuing Acquisitions Total activities Turnover 1,946 460 2,406 265 2,212 ______________________________________________________________________________ Operating costs (1,802) (331) (2,133) (322) (1,982) Goodwill amortisation (41) (13) (54) (16) (104) ______________________________________________________________________________ Total operating costs (1,843) (344) (2,187) (338) (2,086) _________ _________ _________ _________ _________ Operating profit/ (loss) 103 116 219 (73) 126 ========= ========= Profit/(loss) on disposal of investments (6) 226 90 Provision against investments - (150) - Investment income - 24 62 Net interest (payable)/ receivable (91) 9 (53) _________ _________ _________ Profit on ordinary activities before taxation 122 12 163 Tax on profit on ordinary activities (62) (10) (101) _________ _________ _________ Profit on ordinary activities after taxation 60 2 62 Minority interests (29) - (15) _________ _________ _________ Profit for the financial period retained 31 2 47 ========= ========= ========= Earnings per share: Basic 0.9p 0.08p 1.6p ========= ========= ========= Diluted 0.9p 0.08p 1.7p Consolidated Balance Sheet at 30 June 2006 30 June 2006 30 June 2005 31 December 2005 Notes (unaudited) (unaudited) (audited) (restated) £000 £000 £000 Fixed assets Intangible assets 4,331 3,946 3,638 Tangible assets 232 60 114 _______ _______ _______ 4,006 4,006 3,752 _______ _______ _______ Current assets Stocks 541 210 413 Debtors 737 922 692 Investments 219 428 428 Cash in hand and at bank 1,230 1,702 1,149 _______ _______ _______ 2,727 3,262 2,682 Creditors: amounts falling due within one year (1,214) (2,075) (1,044) _______ _______ _______ Net current assets 1,513 1,187 1,638 _______ _______ _______ Total assets less current liabilities 6,076 5,193 5,390 Creditors: amounts falling due after more than one year (3,048) (2,393) (2,529) Provisions for liabilities (31) (23) (23) Minority interests (44) - (16) _______ _______ _______ Total net assets 2,953 2,777 2,822 ======= ======= ======= Capital and reserves Called up share capital 2 178 173 173 Share premium 2,501 2,501 2,501 Merger reserve 3 475 380 380 Profit and loss account (201) (277) (232) _______ _______ _______ Shareholders' funds 2,953 2,777 2,822 ======= ======= ======= Consolidated Cashflow statement for the six months ended 30 June 2006 Note Six months ended Six months ended Year ended 30 June 2006 30 June 2005 31 Dec 2005 (unaudited) (unaudited) (audited) £000 £000 £000 Net cash inflow/ (outflow) from operating activities 4 425 (114) 345 Return on investments and servicing of finance ____________________________________________________________________ Interest paid (93) (1) (107) Interest received 19 23 54 ____________________________________________________________________ (74) 22 (53) Capital expenditure (11) - (11) Tax paid (220) - - Acquisitions and disposals ____________________________________________________________________ Investments in subsidiaries (1,093) (2,715) (4,060) Net cash inherited on investments in subsidiaries 179 580 580 ____________________________________________________________________ (914) (2,135) (3,480) __________ __________ __________ Net cash outflow before management of liquid resources and financing (794) (2,227) (3,199) Management of liquid resources Sale of investments 203 780 1,364 __________ __________ __________ Net cash outflow before financing (591) (1,447) (1,835) __________ __________ __________ Financing Issue of ordinary share capital 100 956 956 Expenses paid in connection with share issues - (102) (102) Loans drawn down 700 1,880 2,449 Loan repayments (128) - (164) Receipts/(payments) for CFDs - 119 (451) __________ __________ __________ Net cash inflow from financing 672 2,853 2,688 __________ __________ __________ Increase in cash in 5/6 the period 81 1,406 853 ========== ========== ========== Notes to the interim accounts 1. Basis of accounts The financial information for the six months to 30 June 2006 is unaudited and has been prepared using accounting policies and presentation consistent with those applied in the preparation of the statutory accounts of the Group. These figures have been prepared in accordance with applicable United Kingdom Accounting Standards, up to and including FRS 28, and under the historical cost convention. The principal accounting policies remain unchanged from those adopted in the financial statements for the year to 31 December 2005. In line with the presentation adopted in the December 2005 accounts and in accordance with FRS 25, the preference shares totalling £12,500 have been reclassified as financial liabilities and included in other creditors. In addition, the shares issued in connection with the acquisition of Fire Testing Technology Limited (400,000 shares at a fair value of £1 per 5p share) were accounted for in accordance with the principles of merger relief under section 131 of the Companies Act 1985. The prior year figures to 30 June 2005 have accordingly been restated to reflect this. This financial information, together with the comparative information, does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the year ended 31 December 2005 has been extracted from the statutory accounts to that date which have been reported on by the company's auditors and delivered to the Registrar of Companies. The auditors' report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 2. Equity share capital At 30 June At 30 June At 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) (restated) £000 £000 £000 Authorised: 10,000,000 Ordinary shares of 5p each 500 500 500 ========== ========== ========== Allotted, called up and fully paid: Number of Ordinary shares of 5p each 3,560,878 3,462,356 3,462,356 £000 £000 £000 Nominal value 178 173 173 ========== ========== ========== On 6 March 2006 the company issued 98,522 Ordinary shares of 5p each at a fair value of £1.015 per share in respect of the acquisition of UHV Design Limited. 3. Merger reserve At 30 June At 30 June At 31 2006 2005 December 2005 (unaudited) (unaudited) (audited) (restated) £000 £000 £000 Balance 475 380 380 ========== ========== ========== The company has taken advantage of the relief available under section 131 of the Companies Act 1985 and recorded the shares issues in connection with the acquisition of UHV Design Limited (98,522 shares at a fair value of £1.015 per 5p share) at nominal value. 4. Reconciliation of operating profit/(loss) to net cash inflow/(outflow) from operating activities At 30 June At 30 June At 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £000 £000 £000 Operating profit/(loss) 219 (73) 126 Depreciation 21 3 10 Amortisation of goodwill 54 16 104 (Increase)/decrease in stocks (38) 33 (61) Decrease/(increase) in debtors 147 (225) (43) Increase/(decrease) in creditors within one year 16 132 209 Translation differences on foreign currency loans 6 - - __________ __________ __________ Net cash inflow/(outflow) from operating activities 425 (114) 345 ========== ========== ========== 5. Analysis of net funds 31 Dec Acqui- Cashflow Investments 30 June 2005 sitions realised 2006 £000 £000 £000 £000 £000 Cash in hand and at bank 1,149 - 81 - 1,230 Liquid resources (current asset investments) 428 - - (209) 219 Debt due < one year (256) (50) (24) - (330) Debt due > one year (2,529) (650) 132 - (3,047) _____________________________________________________________________ Net debt (1,208) (700) 189 (209) (1,928) ===================================================================== 6. Reconciliation of net cashflow to movement in net funds £000 Increase in cash in the period 81 Current asset investments realised (209) Change in debt in the period (592) _______ Movement in net funds in the period (720) Opening net debt (1,208) _______ Closing net debt (1,928) ======= 7. Acquisition of UHV Design Limited Book value of Fair value Total assets and adjustments liabilities at the date of acquisition £000 £000 £000 Fixed assets 128 - 128 Current assets 461 - 461 Current liabilities (192) - (192) Long term liabilities (8) - (8) ______________________________________________ Total net assets at date of acquisition 389 - 389 Consideration paid including acquisition costs 1,141 - 1,141 ______________________________________________ Goodwill arising on acquisition 752 - 752 ============================================== The goodwill is being amortised over a period of 20 years, on a straight line basis. 8. Distribution of document Copies of the interim financial statements will be sent to shareholders and the AIM team shortly. This information is provided by RNS The company news service from the London Stock Exchange

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