Don't be alarmed by the modest pre-tax profit from scientific instrument maker Judges Scientific (JDG). This was distorted by several exceptional items including acquisition costs and a fair value adjustment in the group's convertible shares. In fact, for the eighth consecutive year underlying profits rose to a record level - up 21 per cent to £3.1m - and shareholders were rewarded with another hefty hike in the dividend.
Moreover, trading in the second half will be boosted by June's acquisition of precision instruments maker Scientifica in a £13m deal. Along with £2.4m invested in a new factory, this explains the rise in net debt from £4.3m to £15m - although without those investments net debt would have been eliminated. Turnover benefited from a full six-month contribution from previous acquisitions - Global Digital Systems and KE Developments - but the group still delivered 5 per cent organic growth.
After a strong first quarter, order intake weakened in the second quarter, but the order book was still up from a year earlier, representing over 10 weeks of revenue. Factoring in the recent acquisitions, order intake would have risen by 13 per cent in the period.
Broker WH Ireland has upgraded its full-year forecasts by 3 per cent and now expects full-year pre-tax profits of £6.6m, EPS of 82.3p and a dividend of 19.8p (from £5.6m, 73.5p and 15p in 2012).
| JUDGES SCIENTIFIC (JDG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,805p | MARKET VALUE: | £97.5m | |
| TOUCH: | 1,790-1,820p | 12-MONTH HIGH: | 1,835p | LOW: 464p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 238p* | NET DEBT: | 114% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 13.5 | -1.12 | -36.4 | 5.00 |
| 2013 | 15.4 | 0.78 | 7.0 | 6.60 |
| % change | +14 | - | - | +32 |
Ex-div: 9 Oct Payment: 8 Nov *Includes intangible assets of £24.8m, or 460p a share | ||||
