Judges Scientific earnings fall in challenging first half

19th Sep 2024 07:19

(Sharecast News) - Judges Scientific, a specialist in acquiring and developing scientific instrument companies, reported a decline in first-half profits on Thursday amid subdued trading conditions and challenging market environments, while it bolstered its shareholder return with a 10% increase in its interim dividend.

The AIM-traded company said revenue for the six months ended 30 June decreased 1% to £60.8m, while adjusted pre-tax profit fell 16% to £10.8m.

Adjusted basic earnings per share also declined, down 19% to 123.7p, and cash generated from operations saw a significant drop of 32%, amounting to £7.8m.

Despite the declines, the company raised its interim dividend to 29.7p per share.

The group's adjusted net debt increased to £52.3m, from £45.2m at the end of 2023, with cash balances dropping to £6.9m from £13.7m over the same period.

Judges said the rise in debt was partly due to strategic acquisitions and investments aimed at strengthening the group's portfolio.

During the first half, the company completed two small acquisitions - Luciol and Rockwash - for a combined £4m, with potential earn-outs of up to £4.2m.

Post-period, the firm acquired Magsputter for £12.3m, expanding its reach in the scientific instrument sector.

The group also secured an extension and increase of its banking facility to £140m, including a £50m accordion option, providing additional financial flexibility for future growth initiatives.

Judges Scientific also continued to bolster its leadership team, appointing Dr Ian Wilcock as group commercial director to drive commercial strategy and integration across its portfolio companies.

Additionally, it announced a new Geotek coring contract set for an early 2025 expedition, which was expected to support revenue growth in the coming years.

Looking ahead, Judges anticipated a stronger performance in the second half of the year, buoyed by a modest recovery in order intake and the recent acquisitions.

The group's organic revenue decreased 3% in the first half, and the organic order book stood at 17.2 weeks, down from 22.4 weeks in the prior year.

However, the board said early signs of recovery in order intake, including a 2025 coring contract, offered some optimism.

Despite ongoing market challenges and sensitivity to order timing, the company maintained its full-year guidance, expecting continued pressure from difficult market conditions but remaining confident in its long-term growth strategy.

"As announced already, several of our group businesses have experienced a challenging first half, driven by difficult market conditions and the deferral of some projects into the second half, or 2025," said chairman Alex Hambro.

"In spite of the trading disappointment, the group has again demonstrated its resilience and its financial strength.

"With the completion of three acquisitions since the start of the year, the further strengthening of our management team, and a 10% increase to the interim dividend, we continue to build on our model of delivering long-term shareholder value."

At 0918 BST, shares in Judges Scientific were down 1.94% at 10,100p.

Reporting by Josh White for Sharecast.com.