Judges Scientific’s (JDG) business model is predicated on a ‘buy-and-build’ acquisitions strategy in the scientific instruments field. But 2019 saw the group make just one purchase – Moorfield Nanotechnology for £2.3m in December. Sales growth was overwhelmingly organic, with revenue from North America and ‘China and Hong Kong’ up 17 per cent and 23 per cent, respectively.
Organic order intake rose 3.3 per cent, but the group noted more patchy demand and slower momentum – “periods of buoyancy alternated with spells of quiet”. Despite double-digit sales growth in North America, new orders there declined by 3 per cent.
Judges has cautioned that the coronavirus pandemic will impede scientific conventions and its ability to travel to customers, producing a knock-on effect on order intake, sales and installations. Orders have already slowed over the first 10 weeks of 2020 compared with last year. It believes the hit to earnings will be limited should the outbreak only last another two months, but the impact would be “progressively growing and more significant” thereafter.
House broker Liberum assumes a month of sales will be lost (equivalent to £7m in revenue) and has trimmed its 2020 profit forecasts by a quarter. It now forecasts adjusted pre-tax profit of £13.2m and EPS of 169p in 2020, rising to £15.3m and 196p in 2021.
| JUDGES SCIENTIFIC (JDG) | ||||
| ORD PRICE: | 3,240p | MARKET VALUE: | £202m | |
| TOUCH: | 3,230-3,250p | 12-MONTH HIGH: | 6,060p | LOW: 2,563p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 448p* | NET DEBT: | 17%** | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 56.2 | 1.3 | 12.8 | 25.0 |
| 2016 | 57.3 | 0.4 | 1.30 | 27.5 |
| 2017 | 71.4 | 5.1 | 65.6 | 32.0 |
| 2018 | 77.9 | 10.2 | 138 | 40.0 |
| 2019 | 82.5 | 13.6 | 183 | 50.0^ |
| % change | +6 | +34 | +33 | +25 |
| Ex-div: | 4 Jun | |||
| Payment: | 3 Jul | |||
| *Includes intangible assets of £19.7m, or 317p a share, **Includes lease liabilities of £4.4m, ^Excludes 200p per share special dividend paid on 10 Dec 2019 | ||||
