Judges Scientific Regulatory News (JDG)

21 Mar 2006 07:01

Judges Capital PLC21 March 2006 PRELIMINARY ANNOUNCEMENT JUDGES CAPITAL plc PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2005 Highlights • Maiden pre-tax profit of £163,000 on turnover of £2.2 million • Two successful acquisitions -- Fire Testing Technology ("FTT") and PE.fiberoptics ("PFO") -- in the financial year to 31 December 2005 • Acquisition of UHV Design ("UHV") completed post the year end • All these businesses are profitable and cash generative Alex Hambro, Chairman, commented "The Board is confident that the Company's newstrategy will result in increased shareholder value over time. We are delightedwith the acquisitions completed during the past nine months and we are activelylooking for new opportunities to achieve further consolidation within theinstrumentation sector." CHAIRMAN'S STATEMENT I am pleased to report that in 2005 your Company achieved its maiden pre-taxprofit for a full year amounting to £163,000 (2004: loss £153,000) on turnoverof £2.2 million (2004: nil). A New Direction In 2005 your Company adopted a new strategy focused on the development of ascientific instrumentation group. Our previous activity, effectively operatingas a catalyst in relation to public to private transactions, proved incompatiblewith the revival of interest in quoted 'small cap' shares. During the year, your Company purchased Fire Testing Technology ("FTT") andsupported a management buy-out of PE.fiberoptics ("PFO"). Subsequent to theyear-end, Judges has completed the acquisition of UHV Design ("UHV"). FTT FTT, acquired on 24 May 2005, is a world leader in the manufacture ofinstruments designed to measure the reaction of a variety of materials to fire.FTT's business is largely driven by the need to comply with regulation and morethan 95% of its sales are overseas. The purchase price amounted to £3.7 million,including 400,000 Ordinary shares and £500,000 in vendor subordinated loannotes, plus an £803,000 adjustment for excess working capital on completion. Thecash consideration was financed by a £2.4 million senior term loan from HBoS anda £956,000 placing of Ordinary shares at 100p per share. In the year ended 31May 2005, FTT generated sales of £3.3 million and an operating profit of£700,000. PFO On 2 September 2005 your Company supported the management buy-out by PFO of thefibre optic testing instruments division of PerkinElmer. The subscription pricefor our 51% shareholding was a nominal £51 plus a £40,800 subordinated loan anda £250,000 senior working capital facility, of which £75,000 was drawn down oncompletion. PFO makes instruments designed to check the performance of fibreoptic used in telecommunications. The acquired business suffered in theaftermath of the telecom boom and its future success will be influenced by aresumption of normal spending within the sector. PFO has made an encouragingstart and proved profitable and cash generative during its first four months'trading. The majority of the senior facility was repaid at the year-end with theremainder repaid shortly thereafter. UHV The acquisition of UHV was completed on 21 February 2006. UHV designs andmanufactures instruments capable of manipulating objects in ultra high vacuumchambers. The £836,000 purchase price comprised £650,000 in cash, 98,522Ordinary shares and an earn-out up to a maximum of £86,000; a further cashpayment will become due, reflecting excess working capital at completion. Thecash element was financed by an extension of our senior term loan. In the yearended 31 March 2005, UHV generated an unaudited operating profit of £295,000from a £954,000 turnover. Investment Portfolio Our investment portfolio was drastically reduced during the year from a bookvalue of £1.7 million to £428,000. The net contribution from disposals amountedto £90,000. At the year-end the book value of our portfolio included £228,000 ofshares in companies that are either in the process of being liquidated or, inthe case of Dickinson Legg, received a takeover offer (in March 2006) post ourbalance sheet date. The only on-going investment is Poole Investments (bookvalue: £200,000). Financial Performance The Profit & Loss account therefore reflects seven months' trading at FTT, fourmonths' trading at PFO and our residual investment activity. Basic earnings pershare were 1.6p and 1.7p on a fully diluted basis (2004: loss per share of7.3p). This encompasses the profits from our reducing investment activity and afull year of overheads, while our new trading activity only contributed for partof the year. Earnings per share, excluding goodwill amortisation, amounted to5.3p and 4.8p on a fully diluted basis. Our year-end financial position was strong with £1.15 million of cash in hand(excluding the investment portfolio). Board Your Board was strengthened towards the end of the year by the recruitment ofRalph Cohen as a full-time Finance Director. Ralph Elman remains on the Board asa Non-Executive Director and the Board would like to take this opportunity tothank him for his contribution as a part-time Finance Director. Prospects Your Board is confident that the Company's new strategy will result in increasedshareholder value over time. We are delighted with the acquisitions completedduring the past nine months and we are actively looking for new opportunities toachieve further consolidation within the instrumentation sector. I would like to take this opportunity to thank both our longer standing and newshareholders for their continued support and also our group employees for theirdedication and valued efforts throughout a year of organisational change. Alex HambroChairmanDate: 21 March 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 DECEMBER 2005 2005 2004 Continuing activities Acquisitions Total £ £ £ £ Turnover - 2,211,521 2,211,521 - --------------------------------------------- --------------Operating costs | (244,426) (1,737,350) (1,981,776) | | (175,535) |Goodwill amortisation | - (103,750) (103,750) | | - | -------------------------------------------- -------------Total operating costs (244,426) (1,841,100) (2,085,526) (175,535) ________ __________ _________ ________Operating (loss) / profit (244,426) 370,421 125,995 (175,535) ======== ==========Profit on disposal of investments 89,842 57,654Provision against investments - (100,000)Investment income - 61,912Net interest (payable) / receivable (52,632) 2,441 _______ ________Profit / (loss) on ordinary activities before taxation 163,205 (153,528) Tax on profit / (loss) on ordinary activities (100,777) - ________ ________Profit / (loss) on ordinary activities after taxation 62,428 (153,528) Minority interests (15,499) - _______ ________Profit / (loss) for the financial year retained 46,929 (153,528) ======= ======== Earnings / (loss) per shareBasic 1.6p (7.3)pDiluted 1.7p - ======= ======== There are no recognised gains and losses other than the results for the year setout above. CONSOLIDATED BALANCE SHEETAS AT 31 DECEMBER 2005 2005 2004 Group Group (restated) £ £Fixed assetsIntangible assets 3,638,059 -Tangible assets 114,336 -Investments - - _________ ________ 3,752,395 - _________ ________Current assetsStocks 413,130 -Debtors 692,350 8,230Investments 427,911 1,702,075Cash in hand and at bank 1,148,619 296,073 _________ _________ 2,682,010 2,006,378Creditors: amounts falling duewithin one year (1,044,264) (484,966) __________ _________Net current assets 1,637,746 1,521,412 __________ _________Total assets less current liabilities 5,390,141 1,521,412 Creditors: amounts falling due after more than one year (2,528,959) - Provisions for liabilities (23,557) - Minority interests (15,548) - _________ _________Total net assets 2,822,077 1,521,412 ========= =========Capital and reservesCalled up share capital 173,118 105,318Share premium 2,501,430 1,695,494Merger reserve 380,000 -Profit and loss account (232,471) (279,400) _________ _________Shareholders' funds 2,822,077 1,521,412 ========= ========= CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2005 2005 2004 £ £ £ £ Net cash inflow / (outflow) from operating activities 345,217 (195,365) Returns on investments and servicing of financeInterest received 54,462 25,279Interest paid (107,094) (360)Dividends received - 58,462 _________ _______ (52,632) 83,381Capital expenditurePurchases of fixed assets (11,704) - Acquisitions and disposalsInvestments in subsidiaries (4,059,564) -Net cash from purchase of subsidiary undertaking 579,949 - _________ (3,479,615) - ___________ _________Net cash outflow before management of (3,198,734) (111,984)liquid resources and financing Management of liquid resourcesPurchases of investments - (650,790)Sales of investments 1,364,006 412,500 __________ __________ Net cash outflow before financing (1,834,728) (350,274) FinancingIssue of Ordinary shares 956,000 -Expenses paid in connection with share issues (102,264) -Loans drawn down 2,448,959 -Loan repayments (164,000) -Payments for CFDs - (57,300)Repayments of CFDs (451,421) - ________ ________Net cash inflow / (outflow) from financing 2,687,274 (57,300) _________ _________ Increase / (decrease) in cash in the year 852,546 (407,574) ========= ========= NOTES TO THE PRELIMINARY ANNOUNCEMENTFOR THE YEAR ENDED 31 DECEMBER 2005 1. Basis of preparation The financial information in this preliminary announcement has been prepared inaccordance with the accounting policies set out in the financial statements ofJudges Capital plc for the year ended 31 December 2004, which have remainedunchanged for the financial year ended 31 December 2005 apart from the adoptionof FRS 21 - Events After the Balance Sheet Date, and FRS 25 - FinancialInstruments: Disclosure and Presentation. 2 Earnings / (loss) per share Options and warrants over Ordinary shares and rights of conversion of theConvertible Redeemable shares had no dilutive effect on earnings per share in2004. 2005 2004 Undiluted Diluted Undiluted Earnings Basic: Profit / (loss) for the financial year 46,929 46,929 (153,528) ========= Adjusted: Add back goodwill charge, net of £4,557 minority interest in negative goodwill write back 108,307 108,307 Notional taxed interest income accruing on dilution - 11,744 _________ _________ Adjusted profit / (loss) 155,236 166,980 ========= ========= Number of shares Basic: weighted average in year 2,931,101 2,931,101 2,106,356 ========= Adjusted: weighted average increase on dilution - 513,593 _________ _________ 2,931,101 3,444,694 ========= ========= Earnings / (loss) per share Basic (no dilution effect in 2004) 1.6 1.7 (7.3) ========= ========= ========= Adjusted (no dilution effect in 2004) 5.3 4.8 ========= ========= ========= 3. Post balance sheet events On 21 February 2006, the company announced the acquisition of the entire issuedshare capital of UHV Design Limited for a maximum consideration of £836,000(plus a working capital adjustment). This company designs and manufacturesinstruments used to manipulate objects in ultra high vacuum chambers. On 6March 2006 the company issued 98,522 ordinary shares of 5p at a fair value of£1.015 in respect of the acquisition of UHV Design Limited. In addition, a formal takeover offer was received on 3 March 2006 by DickinsonLegg Group plc, a quoted company in which Judges Capital plc holds 3.01%,valuing the shares at 17.75p. 4. Preliminary Announcement The preliminary statement, which has been agreed with the auditors, was approvedby the Board of Directors on 21 March 2006. It is not the Group's statutoryaccounts. Copies of the Group's audited statutory accounts for the year ended31 December 2005 will be dispatched to shareholders and the AIM team shortly.Copies will also be available to the public at the Company's office at Unit 19,Charlwoods Road, East Grinstead RH19 2HL. The statutory accounts for the year ended 31 December 2005 and the year ended 31December 2004 received audit reports which were unqualified and did not containstatements under Section 237(2) or Section 237(3) of the Companies Act 1985.The statutory accounts for the year ended 31 December 2004 have been deliveredto the Registrar of Companies, but the 31 December 2005 accounts have not yetbeen filed. This information is provided by RNS The company news service from the London Stock Exchange