Judges Scientific sees order intake drop

With universities closed, scientific conferences cancelled and industrial customers curtailing capital expenditure, organic order intake decreased by 17 per cent. North America was the hardest hit region, with orders dropping by almost a third versus a year earlier. The total order book contracted to 12.4 weeks of budgeted revenue versus 13.6 weeks at the start of the year.

When times are good, Judges is boosted by operational gearing, meaning profits increase at a faster rate than sales once fixed costs are covered. But this relationship also means profits can plummet when sales fall. The group estimates that the 12 per cent decline in organic sales should have translated to adjusted operating profit plunging by a third. But cost savings curbed the actual drop in profit to 22 per cent, to £6.7m.  

The Heath acquisition pushed net debt (excluding lease liabilities) up from £0.3m at the December year-end to £3.9m. Meanwhile, cash generated from operations was down two-fifths year-on-year to £5.1m as payments were delayed and Judges stockpiled components to guard against supply chain issues.

House broker Liberum anticipates full year adjusted operating profit of £12.6m – down from £17.4m in 2019 – rising to £15.2m in 2021.