Judges Scientific (JDG) H1 2024 earnings summary

Executive summary

• H1 2024 saw subdued trading and a 1% revenue decline, with organic revenue down 3% and order intake particularly weak in China, leading to a downward revision of market expectations in July.

• Three acquisitions were completed or announced: Luciole, Rockwash, and Teer Coatings/Magsputter, supporting the long-term buy-and-build strategy and expected to be earnings enhancing.

• Interim dividend increased by 10% to 29.7p per share, reflecting confidence in long-term fundamentals and financial resilience.

• The management team was strengthened with the appointment of a new Group Commercial Director.

• Order book remained solid, with order intake improving post-period and a major 2025 coring contract secured.

Financial highlights

• Total revenue decreased 1% year-over-year to £60.8m, with organic revenue down 3% and acquisitions partially offsetting declines.

• Adjusted operating profit fell 13% to £12.3m, adjusted pre-tax profit dropped 16% to £10.8m, and adjusted EPS declined 19% to 123.7p.

• Cash conversion was 63%, below the target of 90%, with cash from operations at £7.8m and working capital elevated at 24% of annual revenue.

• Adjusted net debt increased to £52.3m from £45.2m at year-end, mainly due to acquisitions and capex.

• Operating margin reduced to 20.2% (H1 2023: 23.2%) due to operating leverage.

Outlook and guidance

• Management expects improved H2 performance, with order intake now 3–3.4% ahead of the prior year and a major coring contract secured.

• No change to full-year guidance, but short-term vulnerability remains due to timing of orders and revenues.

• Positive long-term fundamentals and robust business model, with a continued focus on shareholder value.