Final Results

Judges Capital PLC 21 March 2006 PRELIMINARY ANNOUNCEMENT JUDGES CAPITAL plc PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2005 Highlights â€¢ Maiden pre-tax profit of Â£163,000 on turnover of Â£2.2 million â€¢ Two successful acquisitions -- Fire Testing Technology ('FTT') and PE.fiberoptics ('PFO') -- in the financial year to 31 December 2005 â€¢ Acquisition of UHV Design ('UHV') completed post the year end â€¢ All these businesses are profitable and cash generative Alex Hambro, Chairman, commented 'The Board is confident that the Company's new strategy will result in increased shareholder value over time. We are delighted with the acquisitions completed during the past nine months and we are actively looking for new opportunities to achieve further consolidation within the instrumentation sector.' CHAIRMAN'S STATEMENT I am pleased to report that in 2005 your Company achieved its maiden pre-tax profit for a full year amounting to Â£163,000 (2004: loss Â£153,000) on turnover of Â£2.2 million (2004: nil). A New Direction In 2005 your Company adopted a new strategy focused on the development of a scientific instrumentation group. Our previous activity, effectively operating as a catalyst in relation to public to private transactions, proved incompatible with the revival of interest in quoted 'small cap' shares. During the year, your Company purchased Fire Testing Technology ('FTT') and supported a management buy-out of PE.fiberoptics ('PFO'). Subsequent to the year-end, Judges has completed the acquisition of UHV Design ('UHV'). FTT FTT, acquired on 24 May 2005, is a world leader in the manufacture of instruments designed to measure the reaction of a variety of materials to fire. FTT's business is largely driven by the need to comply with regulation and more than 95% of its sales are overseas. The purchase price amounted to Â£3.7 million, including 400,000 Ordinary shares and Â£500,000 in vendor subordinated loan notes, plus an Â£803,000 adjustment for excess working capital on completion. The cash consideration was financed by a Â£2.4 million senior term loan from HBoS and a Â£956,000 placing of Ordinary shares at 100p per share. In the year ended 31 May 2005, FTT generated sales of Â£3.3 million and an operating profit of Â£700,000. PFO On 2 September 2005 your Company supported the management buy-out by PFO of the fibre optic testing instruments division of PerkinElmer. The subscription price for our 51% shareholding was a nominal Â£51 plus a Â£40,800 subordinated loan and a Â£250,000 senior working capital facility, of which Â£75,000 was drawn down on completion. PFO makes instruments designed to check the performance of fibre optic used in telecommunications. The acquired business suffered in the aftermath of the telecom boom and its future success will be influenced by a resumption of normal spending within the sector. PFO has made an encouraging start and proved profitable and cash generative during its first four months' trading. The majority of the senior facility was repaid at the year-end with the remainder repaid shortly thereafter. UHV The acquisition of UHV was completed on 21 February 2006. UHV designs and manufactures instruments capable of manipulating objects in ultra high vacuum chambers. The Â£836,000 purchase price comprised Â£650,000 in cash, 98,522 Ordinary shares and an earn-out up to a maximum of Â£86,000; a further cash payment will become due, reflecting excess working capital at completion. The cash element was financed by an extension of our senior term loan. In the year ended 31 March 2005, UHV generated an unaudited operating profit of Â£295,000 from a Â£954,000 turnover. Investment Portfolio Our investment portfolio was drastically reduced during the year from a book value of Â£1.7 million to Â£428,000. The net contribution from disposals amounted to Â£90,000. At the year-end the book value of our portfolio included Â£228,000 of shares in companies that are either in the process of being liquidated or, in the case of Dickinson Legg, received a takeover offer (in March 2006) post our balance sheet date. The only on-going investment is Poole Investments (book value: Â£200,000). Financial Performance The Profit & Loss account therefore reflects seven months' trading at FTT, four months' trading at PFO and our residual investment activity. Basic earnings per share were 1.6p and 1.7p on a fully diluted basis (2004: loss per share of 7.3p). This encompasses the profits from our reducing investment activity and a full year of overheads, while our new trading activity only contributed for part of the year. Earnings per share, excluding goodwill amortisation, amounted to 5.3p and 4.8p on a fully diluted basis. Our year-end financial position was strong with Â£1.15 million of cash in hand (excluding the investment portfolio). Board Your Board was strengthened towards the end of the year by the recruitment of Ralph Cohen as a full-time Finance Director. Ralph Elman remains on the Board as a Non-Executive Director and the Board would like to take this opportunity to thank him for his contribution as a part-time Finance Director. Prospects Your Board is confident that the Company's new strategy will result in increased shareholder value over time. We are delighted with the acquisitions completed during the past nine months and we are actively looking for new opportunities to achieve further consolidation within the instrumentation sector. I would like to take this opportunity to thank both our longer standing and new shareholders for their continued support and also our group employees for their dedication and valued efforts throughout a year of organisational change. Alex Hambro Chairman Date: 21 March 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2005 2005 2004 Continuing activities Acquisitions Total Â£ Â£ Â£ Â£ Turnover - 2,211,521 2,211,521 - --------------------------------------------- -------------- Operating costs | (244,426) (1,737,350) (1,981,776) | | (175,535) | Goodwill amortisation | - (103,750) (103,750) | | - | -------------------------------------------- ------------- Total operating costs (244,426) (1,841,100) (2,085,526) (175,535) ________ __________ _________ ________ Operating (loss) / profit (244,426) 370,421 125,995 (175,535) ======== ========== Profit on disposal of investments 89,842 57,654 Provision against investments - (100,000) Investment income - 61,912 Net interest (payable) / receivable (52,632) 2,441 _______ ________ Profit / (loss) on ordinary activities before taxation 163,205 (153,528) Tax on profit / (loss) on ordinary activities (100,777) - ________ ________ Profit / (loss) on ordinary activities after taxation 62,428 (153,528) Minority interests (15,499) - _______ ________ Profit / (loss) for the financial year retained 46,929 (153,528) ======= ======== Earnings / (loss) per share Basic 1.6p (7.3)p Diluted 1.7p - ======= ======== There are no recognised gains and losses other than the results for the year set out above. CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2005 2005 2004 Group Group (restated) Â£ Â£ Fixed assets Intangible assets 3,638,059 - Tangible assets 114,336 - Investments - - _________ ________ 3,752,395 - _________ ________ Current assets Stocks 413,130 - Debtors 692,350 8,230 Investments 427,911 1,702,075 Cash in hand and at bank 1,148,619 296,073 _________ _________ 2,682,010 2,006,378 Creditors: amounts falling due within one year (1,044,264) (484,966) __________ _________ Net current assets 1,637,746 1,521,412 __________ _________ Total assets less current liabilities 5,390,141 1,521,412 Creditors: amounts falling due after more than one year (2,528,959) - Provisions for liabilities (23,557) - Minority interests (15,548) - _________ _________ Total net assets 2,822,077 1,521,412 ========= ========= Capital and reserves Called up share capital 173,118 105,318 Share premium 2,501,430 1,695,494 Merger reserve 380,000 - Profit and loss account (232,471) (279,400) _________ _________ Shareholders' funds 2,822,077 1,521,412 ========= ========= CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2005 2005 2004 Â£ Â£ Â£ Â£ Net cash inflow / (outflow) from operating activities 345,217 (195,365) Returns on investments and servicing of finance Interest received 54,462 25,279 Interest paid (107,094) (360) Dividends received - 58,462 _________ _______ (52,632) 83,381 Capital expenditure Purchases of fixed assets (11,704) - Acquisitions and disposals Investments in subsidiaries (4,059,564) - Net cash from purchase of subsidiary undertaking 579,949 - _________ (3,479,615) - ___________ _________ Net cash outflow before management of (3,198,734) (111,984) liquid resources and financing Management of liquid resources Purchases of investments - (650,790) Sales of investments 1,364,006 412,500 __________ __________ Net cash outflow before financing (1,834,728) (350,274) Financing Issue of Ordinary shares 956,000 - Expenses paid in connection with share issues (102,264) - Loans drawn down 2,448,959 - Loan repayments (164,000) - Payments for CFDs - (57,300) Repayments of CFDs (451,421) - ________ ________ Net cash inflow / (outflow) from financing 2,687,274 (57,300) _________ _________ Increase / (decrease) in cash in the year 852,546 (407,574) ========= ========= NOTES TO THE PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2005 1. Basis of preparation The financial information in this preliminary announcement has been prepared in accordance with the accounting policies set out in the financial statements of Judges Capital plc for the year ended 31 December 2004, which have remained unchanged for the financial year ended 31 December 2005 apart from the adoption of FRS 21 - Events After the Balance Sheet Date, and FRS 25 - Financial Instruments: Disclosure and Presentation. 2 Earnings / (loss) per share Options and warrants over Ordinary shares and rights of conversion of the Convertible Redeemable shares had no dilutive effect on earnings per share in 2004. 2005 2004 Undiluted Diluted Undiluted Earnings Basic: Profit / (loss) for the financial year 46,929 46,929 (153,528) ========= Adjusted: Add back goodwill charge, net of Â£4,557 minority interest in negative goodwill write back 108,307 108,307 Notional taxed interest income accruing on dilution - 11,744 _________ _________ Adjusted profit / (loss) 155,236 166,980 ========= ========= Number of shares Basic: weighted average in year 2,931,101 2,931,101 2,106,356 ========= Adjusted: weighted average increase on dilution - 513,593 _________ _________ 2,931,101 3,444,694 ========= ========= Earnings / (loss) per share Basic (no dilution effect in 2004) 1.6 1.7 (7.3) ========= ========= ========= Adjusted (no dilution effect in 2004) 5.3 4.8 ========= ========= ========= 3. Post balance sheet events On 21 February 2006, the company announced the acquisition of the entire issued share capital of UHV Design Limited for a maximum consideration of Â£836,000 (plus a working capital adjustment). This company designs and manufactures instruments used to manipulate objects in ultra high vacuum chambers. On 6 March 2006 the company issued 98,522 ordinary shares of 5p at a fair value of Â£1.015 in respect of the acquisition of UHV Design Limited. In addition, a formal takeover offer was received on 3 March 2006 by Dickinson Legg Group plc, a quoted company in which Judges Capital plc holds 3.01%, valuing the shares at 17.75p. 4. Preliminary Announcement The preliminary statement, which has been agreed with the auditors, was approved by the Board of Directors on 21 March 2006. It is not the Group's statutory accounts. Copies of the Group's audited statutory accounts for the year ended 31 December 2005 will be dispatched to shareholders and the AIM team shortly. Copies will also be available to the public at the Company's office at Unit 19, Charlwoods Road, East Grinstead RH19 2HL. The statutory accounts for the year ended 31 December 2005 and the year ended 31 December 2004 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 2004 have been delivered to the Registrar of Companies, but the 31 December 2005 accounts have not yet been filed. This information is provided by RNS The company news service from the London Stock Exchange

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