Judges Scientific Regulatory News (JDG)

Judges Scientific plc

("Judges Scientific", "Judges", the "Company" or the "Group")

PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013

Highlights:

· Fully diluted earnings per share, excluding exceptional items, up 31% to 96.4p (2012: 73.5p)

· Record basic earnings per share, excluding exceptional items, of 100.5p (2012: 81.3p); corresponding figures including exceptional items: 23.4p (2012: 4.2p loss)

· Proposed final dividend increased by 34% to 13.4p (2012: 10.0p), making a total distribution for the year of 20.0p (2012: 15.0p)

· 30% increase in pre-tax profit to a record £7.3 million (2012: £5.6 million) before exceptional items and non-controlling interests

· Record revenues of £36.0 million (2012: £28.0 million), including a 4.3% increase on a like-for-like basis

· Cash in hand of £10.1 million as at 31 December 2013; adjusted net debt of £5.7 million (2012: £1.8 million)

· Completion of the acquisition of Scientifica Limited, the Group's largest transaction to date

· A substantially oversubscribed £8.1 million share placing at 1625p in October 2013.

Alex Hambro, Chairman of Judges Scientific, commented:

"The year 2013 was both exciting and rewarding, witnessing the completion of our largest acquisition to date and a substantially oversubscribed share placing. A resilient operating performance, with a sizeable initial contribution from Scientifica, enabled the Group to generate earnings per share in a single year that exceeded our 2003 IPO price of 95p per share."

Chairman's Statement

I am pleased to be able to report, for the eighth consecutive year, record levels of sales, adjusted pre-tax profits, adjusted earnings per share and dividends. Your Company enjoyed a successful year, which saw further corporate activity and a satisfactory trading performance achieved in a challenging economic environment.

Group revenues for the financial year ended 31 December 2013 advanced 28% from £28.0 million to £36.0 million. This reflects organic growth of 4.3% plus a full year's contribution from Global Digital Systems Limited ("GDS" - ten months in 2012) and a maiden six-month contribution from Scientifica Limited ("Scientifica").

Profit before tax, exceptional items and minorities increased by 30% to a record £7.3 million (2012: £5.6 million), with the operating contribution of the businesses owned as at 1 January 2012 growing by 13.8%. Basic earnings per share, before exceptional items, rose by 23.6% from 81.3p to 100.5p. This increase was achieved despite the dilution created by the 2012 and 2013 share placings and the conversion in 2012 of almost all of the Convertible Redeemable shares. Only 4.2% of the original Convertible Redeemable shares now remain outstanding. Fully diluted earnings per share, before exceptional items, progressed 31.2% to 96.4p (2012: 73.5p).

Exceptional items include the amortisation of intangible assets, acquisition expenses, tax relief arising from the issue of shares to employees and other non-trading items as set out in the Income Statement. The accounting "loss" attributable to the few remaining Convertible Redeemable shares was reduced to £340,000 (2012: £1.6 million); this adjustment is expected to appear for the last time in 2014. Profit, including exceptional items but before tax and minorities, amounted to £1.2 million (2012: £321,000). Including exceptional items, basic earnings per share amounted to 23.4p (2012: 4.2p loss) while fully diluted earnings per share totalled 22.5p (2012: 4.2p loss).

Corporate activity

On 26 June 2013, Judges acquired the entire share capital of Scientifica, a leading specialist in the design and manufacture of systems used in neuroscience research. The consideration amounted to £12.0 million in cash and an earn-out capped at £500,000 in cash and 42,372 Ordinary shares in Judges. The earn-out is based on Scientifica's financial performance in respect of the 12 month period to 31 March 2014. The acquisition was financed by an extension of the facilities provided by Lloyds Bank Corporate Markets and from existing cash resources.

In October 2013, the Company restored its ability to complete further acquisitions by raising new equity of £8.125 million before expenses. This was achieved through a placing of 500,000 new Ordinary shares priced at 1625p, which was substantially over-subscribed. In the main, the new Ordinary shares were placed with existing and several new institutional holders.

Trading in 2013

In common with many companies operating within our sector, the year under review proved distinctly challenging. Despite a promising start, the Company experienced weak order intake, particularly during the second quarter of the year. A gradual improvement as the year progressed culminated in an excellent fourth quarter. I am pleased to report that this leaves the Group with a comfortable year-end order book of ten and a half weeks of budgeted sales.

Supported by a healthy order book at the beginning of 2013 and thanks in part to the diversity of the markets that we serve, the Group produced 4.3% organic growth in revenues. This encompassed a modest reduction in North America, but a solid advance in Europe. The respective revenues of GDS and Scientifica, both of which have increased strongly post acquisition, are not included in the figures for organic growth, these companies having been acquired after January 2012.

As highlighted in previous annual reports, the inevitable consequence of a large acquisition at a multiple of six times EBIT is to reduce the Company's Return On Total Invested Capital; this was again the case with Scientifica which served to reduce ROTIC from 40.3% in 2012 to 30.2% in 2013.

The development of the Stonecross factory was completed in the summer of 2013 and the UHV Design and Quorum businesses were successfully re-located into the new facility in August. Your Board expects these businesses to derive significant benefits during the current financial year and beyond from operating in this purpose-built unit.

Financial position

Net debt as at 31 December 2013 stood at £5.5 million; excluding subordinated debt owed to minority shareholders but including cash amounts still payable in respect of acquisitions, this figure rises to £5.7 million (2012: £1.7 million). The Group's cash position during the year reflected £12.4 million of net debt taken on to purchase Scientifica, £1.8 million spent in 2013 to complete the Stonecross factory and the net proceeds from the share placing.

Year-end cash balances progressed from £5.4 million to £10.1 million.

Dividends

Your Board is pleased to recommend a final dividend of 13.4p per share (2012: 10p per share) which, subject to approval at the forthcoming Annual General Meeting on 28 May 2014, will make a total distribution of 20.0p per share in respect of 2013 (2012: 15.0p per share). Despite the proposed increase, the dividend total is still covered five times by adjusted earnings per share.

The proposed final dividend will be payable on 4 July 2014 to shareholders on the register on 6 June 2014 and the shares will go ex-dividend on 4 June 2014.

Personnel

The Judges Share Incentive Plan was launched in 2012 to enable all employees with a minimum of 12 months' service to purchase shares in a tax efficient manner. In the coming tax year, the Company will continue to match individual employees' investments with free shares, up to a maximum value of £600.

The addition of Scientifica brings our total number of Group employees to more than 260 at the end of 2013. Each company within the Group has, in its own way, demonstrated resilience and dedication to its particular plans and the enthusiasm and energy of our stakeholders is the primary reason why this year's results have been so gratifying. Our thanks go to them and all the executive management for their continued commitment to Judges' future trajectory.

Current trading and prospects

Commercial activity in the early weeks of 2014 was sedate but, following the buoyant final quarter of the previous year, the Group continues to enjoy a robust order book. As in the past we are conscious of the potential impact of Sterling strengthening and of the Chinese economy weakening. Our export driven business should benefit from the best climate in the developed world since 2008 and it is hoped that it will not be spoilt by the political tensions playing out on the world stage.

Alex Hambro

Chairman

For further information please contact:

Judges Scientific plc

David Cicurel, CEO

Tel: 01342 323 600

Shore Capital (Nominated Adviser & Broker)

Pascal Keane

Edward Mansfield

Tel: 020 7408 4090

Cardew Group (Financial Public Relations)

Melvyn Marckus

Tel: 0207 930 0777 or 07775 896 491

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2013

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2013

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2013

* - Total represents amounts attributable to equity holders of the parent company.

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

NOTES TO THE PRELIMINARY ANNOUNCEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

1. Earnings per share

NOTES TO THE PRELIMINARY ANNOUNCEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

1. Earnings per share (continued)

NOTES TO THE PRELIMINARY ANNOUNCEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

2. Segment analysis

Segmental revenue is presented on the basis of the destination of the goods where known, failing which on the geographical location of customers. Segment assets are based on the geographical location of assets.

NOTES TO THE PRELIMINARY ANNOUNCEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

3. Maturity of borrowings and net debt

In addition, hire purchase debts amounted to £51,000.

NOTES TO THE PRELIMINARY ANNOUNCEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

4. Acquisition of Scientifica Limited

On 26 June 2013 the Company's wholly owned subsidiary, Judges Capital Limited, acquired the entire issued share capital of Scientifica Limited ("Scientifica"), a company based in the UK. The total cost of acquisition included the components stated below.

Additional contingent consideration will be payable on an incremental basis in the event that Scientifica generates higher operating profits in the twelve months period to 31 March 2014 than those calculated in the prior year in accordance with the sale and purchase agreement. The maximum value of additional contingent consideration will be achieved if operating profits of £2.167m are generated in this period and would bring the total consideration to £12.5 million in cash, 42,372 Ordinary shares in Judges Scientific plc and a payment of £1.4 million to reflect excess working capital at the time of the acquisition.

NOTES TO THE PRELIMINARY ANNOUNCEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

4. Acquisition of Scientifica Limited (continued)

The amounts recognised for each class of the acquiree's assets, liabilities and contingent liabilities at the acquisition date are as follows:

5. Preliminary Announcement

This preliminary announcement, which has been agreed with the auditors, was approved by the board of directors on 27 March 2014. It is not the group's statutory accounts. Copies of the group's audited statutory accounts for the year ended 31 December 2013 will be available at the company's website, www.judges.uk.com, promptly after the release of this preliminary announcement and a printed version will be dispatched to shareholders shortly. Copies will also be available to the public at the company's Registered Office at Unit 19, Charlwoods Road, East Grinstead, West Sussex RH19 2HL.

The audit reports for the years ended 31 December 2013 and 31 December 2012 did not contain statements under Sections 498(2) or 498(3) of the Companies Act 2006. The statutory accounts for the year ended 31 December 2012 have been delivered to the Registrar of Companies, but the 31 December 2013 accounts have not yet been filed.