With the help of acquisitions, Judges Scientific (JDG) has just reported record interim results for the seventh successive year. Unfortunately, as our table below indicates, they don't show up there. This is because regular acquisitions mean regular acquisition costs and regular amortisation of goodwill. Also, under an accounting rule, a rising share price increases the liability to pay off convertible redeemable shares.
However, if all those items, totalling £3.72m, are excluded, adjusted pre-tax profits increased by 47 per cent to £2.6m, which was roughly split between organic growth and acquisitions. There are few signs as yet that orders for the company's scientific instruments are slowing down - not even in Euroland or China. The company exports directly more than 80 per cent of its output and the current order book is "comfortably consistent" with management's expectations and better than in January this year.
Following these results, broker WH Ireland significantly upgraded full-year expectations. Instead of a forecast increase in adjusted pre-tax profits from £3.95m last year to £4.8m on revenues up from £20.8m to £25.7m, the broker now expects profits of £5.57m on turnover of £28.5m. On the same basis, adjusted EPS is expected to rise from 61p in 2011 to 69.9p and the full-year dividend is forecast at 16.5p, up from 10p last year.
JUDGES SCIENTIFIC (JDG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 830p | MARKET VALUE: | £43.5m | |
| TOUCH: | 820-840p | 12-MONTH HIGH: | 832.5p | LOW: 395p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | na | |
| NET ASSET VALUE: | 165p* | NET DEBT: | 53% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 9.7 | 0.23 | 2.7 | 3.3 |
| 2012 | 13.5 | -1.12 | -36.4 | 5.0 |
| % change | +39 | - | - | +52 |
Ex-div: 3 Oct Payment: 2 Nov *Includes intangible assets of £14.3m, or 272p a share | ||||
