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Judges buoyed by export activity

The 'buy and build' specialist has turned in an encouraging trading performance in 2017
March 20, 2018

Actuarial losses on pension benefits, translation differences on foreign subsidiaries, and hefty amortisation charges couldn’t obscure the strong trading recovery for Judges Scientific (JDG) through 2017, with sales growth from existing enterprises up 17.7 per cent, and order intake from those businesses 16 per cent to the good.

IC TIP: Hold at 2250p

Judges essentially acquires and adds value to small and medium-sized scientific instrument businesses, with the emphasis on creating shareholder returns through identifying the right type of enterprise at the right price multiple. Last year, the group forked out £5.1m to bring Oxford Cryosystems within the fold, a company that specialises in cooling technology for x-ray crystallography. Another £1.3m was spent on increasing its stake in the vehicle for the purchase – Bordeaux Acquisition Limited – to 75.5 per cent. Despite these commitments, net debt contracted from the end of 2016, aided by a steep rise in operating cash flow and a cash conversion rate of 100 per cent.   

WH Ireland has cranked up its Dec 2018 year-end forecasts on these numbers, leading to pre-tax profits of £10.8m and adjusted EPS of 136p, against £10.4m and 132p in 2017.

JUDGES SCIENTIFIC (JDG)  
ORD PRICE:2,250pMARKET VALUE:£137m
TOUCH:2,200-2,300p12-MONTH HIGH:2,420pLOW: 1,453p
DIVIDEND YIELD:1.4%PE RATIO:34
NET ASSET VALUE:387p*NET DEBT:31%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201336.01.223.420.0
201440.62.435.722.0
201556.21.312.825.0
201657.30.41.327.5
201771.45.165.632.0
% change+25+1128+4946+16
Ex-div:7 Jun   
Payment:6 Jul   
*Includes intangible assets of £23.7m, or 388p a share