Final Results

Judges Capital PLC 28 March 2008 28 March 2008 Judges Capital plc ('Judges Capital' or the 'Company') Preliminary Results for the year ended 31 December 2007 JUDGES CAPITAL REPORTS RECORD RESULTS FOR 2007 Highlights • Record sales of £6.2 million (2006: £5.2 million) • Record profit of £836,000 (2006: £516,000) before tax, gains on divestments and amortisation • Record adjusted fully diluted earnings per share of 12.9p (2006: 8.6p) • Record order book • Proposed final dividend of 2.2p, making 3.3p for the year (2006: 3p) • All trading subsidiaries profitable and cash generative • Cash balances in excess of £900,000; net debt reduced to £2 million • Favourable start to current year's trading Alex Hambro, Chairman of Judges Capital, commented: 'Benefiting from a strong order book, the Group experienced a favourable start to 2008. Your Directors are optimistic about the prospects for 2008, always bearing in mind the uncertain macro-economic climate currently pertaining in global markets and the high proportion of the Group's turnover which is derived from overseas.' Chairman's Statement I am delighted to report that your Company achieved record results for 2007. Revenue advanced from £5.2 million in 2006 to £6.2 million and generated profit of £836,000 before tax, gains on the disposal of securities and amortisation, compared with £516,000 in the previous year. Earnings per share, similarly adjusted, rose from 8.6p to 12.9p (fully diluted) and from 9.9p to 15.0p (basic). After gains and amortisation, pre tax profit totalled £858,000 (2006: £281,000). This equates to fully diluted earnings per share of 13.3p (2006: 4.8p) and basic earnings per share of 15.5p (2006: 5.4p). IFRS With effect from 1 January 2007, the Company is required to present its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). The financial information in this preliminary announcement has been prepared in accordance with accounting policies which are based on IFRS and comparatives have been restated accordingly. Constitution of the Group All Group subsidiaries were owned throughout the financial year to 31 December 2007. The accounts for the previous year included a 10-month contribution from UHV Design and a four-month contribution from Aitchee. Trading All our operations traded strongly during the year and achieved increases in sales and EBIT. Activity proved particularly buoyant towards the end of the year, a momentum that enabled the Group to enter 2008 with an order book almost double the level in hand at the onset of 2007. Despite the relative strength of sterling, the robust performance of the Group in terms of sales, margins and orders is testament to our acquired companies' solid niche positioning in their respective world markets. Financial Performance Favourable trading contributed to a satisfactory increase in our year-end cash balances which stood at £910,000 (2006: £824,000) and to the reduction in net debt from £2.4 million to £2.0 million. A significant proportion of our debt is denominated in foreign currency to alleviate the impact of exchange fluctuations on export activity. During the year our last significant investment in securities was sold: an offer for Poole Investments became unconditional in August 2007, a development which resulted in cash proceeds of £342,000 and a pre-tax gain of £142,000. Dividends Your Board is pleased to recommend a final dividend of 2.2p (2006: 2p) which, subject to approval at the forthcoming Annual General Meeting on 22 May 2008, would make a total distribution of 3.3p for the year (2006: 3p). The level of cover by adjusted basic earnings per share has risen from 3 times to 4 times, notwithstanding the proposed 10 per cent increase. The proposed dividend will be payable on Friday 4 July 2008 to shareholders on the register on 6 June 2008 and the shares will go ex-dividend on 4 June 2008. Current trading and prospects Benefiting from a strong order book, the Group experienced a favourable start to 2008 and, in the opinion of your Directors, enjoys good visibility for the first half of the year. Your Directors are optimistic about the prospects for 2008, always bearing in mind the uncertain macro-economic climate currently pertaining in global markets and the high proportion of the Group's turnover which is derived from overseas. Since the year-end, the Company has contracted to purchase a freehold property that adjoins the FTT factory for £490,000. This will enable Aitchee to be relocated into larger, more suitable premises and will serve to enhance the ongoing cooperation between Aitchee and FTT. Your Board is progressing with the 'whitewash' resolution referred to in last January's trading statement, in order to enable the Company to purchase its own shares without an obligation being incurred by certain shareholders to make an offer for the entire share capital. Such a proposal to shareholders forms part of the Board's efforts to improve the liquidity of the Company's shares. Consolidation has been the hallmark of 2007 and, in the wake of an excellent trading performance reflected in record sales and profits, your Board is conscious of the benefits to be derived from a significant expansion in the scale of the Group. To this end your Directors are working hard to convert an encouraging pipeline of prospective deals into tangible and value enhancing transactions. I would like to take this opportunity to convey the Board's thanks and appreciation to all our employees for their invaluable contributions to a first class trading result. Alex Hambro Chairman Enquiries: David Cicurel, CEO, Judges Capital: Tel: 01342 323 600 Pascal Keane, Shore Capital: Tel: 020 7408 4090 Melvyn Marckus, Cardew Group: Tel: 07775 896 491 JUDGES CAPITAL plc CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 2007 2006 Notes £ £ Revenue 6,191,965 5,195,325 Operating costs (5,267,084) (4,712,635) __________ __________ Operating profit 924,881 482,690 Profit/(loss) on disposal of available-for-sale investments 142,217 (6,145) Interest receivable 32,987 32,041 Interest payable (241,772) (227,418) __________ __________ Profit before tax 858,313 281,168 Taxation (231,496) (84,653) __________ __________ Profit for the year 626,817 196,515 __________ __________ Attributable to: Equity holders of the parent company 552,468 190,105 Minority interest 74,349 6,410 __________ __________ Earnings per share - total and continuing Basic 2 15.5p 5.4p Diluted 2 13.3p 4.8p __________ __________ JUDGES CAPITAL plc CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2007 2007 2006 Note £ £ ASSETS Non-current assets Property, plant and equipment 274,626 295,468 Goodwill 4,383,347 4,389,963 Other intangible assets 75,909 195,924 Available-for-sale investments 20,000 210,950 _________ _________ 4,753,882 5,092,305 _________ _________ Current assets Inventories 553,311 402,941 Trade and other receivables 1,543,011 1,249,039 Cash and cash equivalents 910,366 824,156 _________ _________ 3,006,688 2,476,136 _________ _________ Total assets 7,760,570 7,568,441 _________ _________ LIABILITIES Current liabilities Trade and other payables (877,226) (779,708) Current portion of long-term borrowings 3 (527,008) (421,813) Current tax payable (299,771) (261,718) _________ _________ (1,704,005) (1,463,239) _________ _________ Non-current liabilities Long-term borrowings 3 (2,335,751) (2,835,940) Deferred tax liabilities (35,934) (89,505) _________ _________ (2,371,685) (2,925,445) _________ _________ Total liabilities (4,075,690) (4,388,684) _________ _________ Net assets 3,684,880 3,179,757 _________ _________ EQUITY Share capital 178,044 178,044 Share premium account 2,501,430 2,501,430 Merger reserve 475,074 475,074 Retained earnings 408,452 (33,629) Revaluation reserve 450 (5,743) _________ _________ Equity attributable to equity holders of the parent company 3,563,450 3,115,176 Minority interest 121,430 64,581 _________ _________ Total equity 3,684,880 3,179,757 _________ _________ JUDGES CAPITAL plc CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2007 Share Share Merger Retained Revaluation Minority Total capital premium reserve earnings reserve Total** interest equity £ £ £ £ £ £ £ £ 1 January 2006 173,118 2,501,430 380,000 (188,109) (58,510) 2,807,929 58,171 2,866,100 Changes in equity for 2006 ____________________________________________________________________________________________ Gains/(losses) on | | revaluation of | | available-for-sale | | investments | - - - - 19,950 19,950 - 19,950 | | | Tax on revaluation | | gains/(losses) | | taken directly to | | equity | - - - - (5,985) (5,985) - (5,985)| | | Transferred to | | profit or loss on | | disposal of | | available-for-sale | | investments | - - - - 38,802 38,802 - 38,802 | |___________________________________________________________________________________________| Net income recognised directly in equity - - - - 52,767 52,767 - 52,767 Profit for the year - - - 190,105 - 190,105 6,410 196,515 ____________________________________________________________________________________________ Total recognised income and expense for the period - - - 190,105 52,767 242,872 6,410 249,282 Dividends - - - (35,625) - (35,625) - (35,625) Issue of share capital 4,926 - 95,074 - - 100,000 - 100,000 ____________________________________________________________________________________________ Balance at 31 December 2006 178,044 2,501,430 475,074 (33,629) (5,743) 3,115,176 64,581 3,179,757 ____________________________________________________________________________________________ Changes in equity for 2007 ___________________________________________________________________________________________ Transferred to | | profit or loss on | | disposal of | | available-for-sale | | investments | - - - - 6,193 6,193 - 6,193 | |___________________________________________________________________________________________| Net income recognised directly in equity - - - - 6,193 6,193 - 6,193 Profit for the year - - - 552,468 - 552,468 74,349 626,817 Total recognised income and expense for the year - - - 552,468 6,193 558,661 74,349 633,010 Dividends - - - (110,387) - (110,387) (17,500) (127,887) _____________________________________________________________________________________________ Balance at 31 December 2007 178,044 2,501,430 475,074 408,452 450 3,563,450 121,430 3,684,880 _____________________________________________________________________________________________ ** - Total represents amounts attributable to equity holders of the parent company. JUDGES CAPITAL plc CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 2007 2006 £ £ Cash flows from operating activities Profit after tax 626,817 196,515 Adjustments for: Depreciation 70,289 53,644 Amortisation of intangible assets 120,015 228,783 Profit on disposal of property, plant and equipment (611) (2,078) (Profit)/loss on disposal of available-for-sale investments (142,217) 6,145 Foreign exchange losses/(gains) on foreign currency loans 27,443 (7,335) Interest receivable (32,987) (32,041) Interest payable 241,772 227,418 Tax expense recognised in income statement 231,496 84,653 (Increase)/decrease in inventories (150,370) 104,775 Increase in trade and other receivables (293,972) (364,429) Increase in trade and other payables 161,518 117,929 ________ ________ Cash generated from operations 859,193 613,979 Interest paid (242,399) (227,418) Tax paid (249,651) (294,693) ________ ________ Net cash from operating activities 367,143 91,868 ________ ________ Cash flows from investing activities Acquisition of subsidiaries, net of cash acquired (57,384) (1,036,223) Purchase of property, plant and equipment (57,032) (31,336) Proceeds from disposal of equipment 8,196 15,655 Proceeds from disposal of available-for-sale investments 342,000 202,611 Interest received 32,987 32,041 ________ ________ Net cash generated/(used) in investing activities 268,767 (817,252) ________ ________ Cash flows from financing activities Proceeds from drawdown of long-term borrowings - 700,000 Repayments of borrowings (including hire purchase contracts) (421,813) (263,454) Dividends paid (127,887) (35,625) ________ ________ Net cash (used in)/from financing activities (549,700) 400,921 ________ ________ Net increase/(decrease) in cash and cash equivalents 86,210 (324,463) Cash and cash equivalents at beginning of period 824,156 1,148,619 ________ ________ Cash and cash equivalents at end of period 910,366 824,156 ________ ________ JUDGES CAPITAL plc NOTES TO THE PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 1. Basis of preparation With effect from 1 January 2007, the Company is required to present its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Accordingly, the financial information in this preliminary announcement has been prepared in accordance with accounting policies which are based on the IFRS in issue and in effect at 31 December 2007. Comparatives have been restated in compliance with the principles of IFRS. 2. Earnings per share Year to 31 December 2007 Earnings attributable Weighted to equity average holders of the number of Earnings parent company shares per share £ No. pence Profit after tax for calculation of basic earnings per share 552,468 Notional taxed interest income accruing on dilution 22,230 _________ Profit after tax for calculation of diluted earnings per share 574,698 Add-back: amortisation of intangible assets, net of tax 82,492 Less: Profit on disposal of available-for-sale investments, net of tax (99,552) _________ Adjusted diluted profit before amortisation of intangible assets 557,638 _________ Number of shares for calculation of basic earnings per share 3,560,878 Dilutive effect of potential shares 769,944 _________ Number of shares for calculation of diluted earnings per share 4,330,822 _________ Basic earnings per share 15.5 Diluted earnings per share 13.3 Adjusted basic earnings per share 15.0 Adjusted diluted earnings per share 12.9 _________ Year to 31 December 2006 Earnings attributable Weighted to equity average holders of the number of Earnings parent company shares per share £ No. pence Profit after tax for calculation of basic earnings per share 190,105 Notional taxed interest income accruing on dilution 16,685 _________ Profit after tax for calculation of diluted earnings per share 206,790 Add-back: amortisation of intangible assets, net of tax 160,148 _________ Adjusted diluted profit before amortisation of intangible assets 366,938 _________ Number of shares for calculation of basic earnings per share 3,544,953 Dilutive effect of potential shares 718,852 _________ Number of shares for calculation of diluted earnings per share 4,263,805 _________ Basic earnings per share 5.4 Diluted earnings per share 4.8 Adjusted basic earnings per share 9.9 Adjusted diluted earnings per share 8.6 _________ 3. Borrowings and net debt 31 December 2007 Subordinated Hire Bank loan loan notes purchase Total £ £ £ __________________________________________________________ Repayable in less than 6 months | 254,000 - 9,350 263,350| Repayable in months 7 to 12 | 254,000 - 9,658 263,658| |__________________________________________________________| Current portion of long-term borrowings 508,000 - 19,008 527,008 __________________________________________________________ Repayable in years 1 to 2 | 608,000 - 17,157 625,157| Repayable in years 2 to 5 | 1,210,594 500,000 - 1,710,594| |__________________________________________________________| Long-term borrowings 1,818,594 500,000 17,157 2,335,751 __________________________________________________________ Total borrowings 2,326,594 500,000 36,165 2,862,759 ___________________________________________ Cash and cash equivalents (910,366) _________ Total net debt 1,952,393 _________ 31 December 2006 Subordinated Hire Bank loan loan notes purchase Total £ £ £ __________________________________________________________ Repayable in less than 6 months | 202,000 - 8,761 210,761| Repayable in months 7 to 12 | 202,000 - 9,051 211,051| |_________________________________________________________| Current portion of long-term 404,000 - 17,812 421,812 borrowings __________________________________________________________ Repayable in years 1 to 2 | 508,000 - 19,009 527,009| Repayable in years 2 to 5 |1,791,775 500,000 17,157 2,308,932| |_________________________________________________________| Long-term borrowings 2,299,775 500,000 36,166 2,835,941 __________________________________________________________ Total borrowings 2,703,775 500,000 53,978 3,257,753 ___________________________________________ Cash and cash equivalents (824,156) _________ Total net debt 2,433,597 _________ 4. Preliminary Announcement This preliminary announcement, which has been agreed with the auditors, was approved by the board of directors on 27 March 2008. It is not the group's statutory accounts. Copies of the group's audited statutory accounts for the year ended 31 December 2007 will be dispatched to shareholders and the AIM team 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 statutory accounts for the year ended 31 December 2007 and the year ended 31 December 2006 received audit reports which were unqualified and did not contain statements under Section 237(2) or Section 237(3) of the Companies Act 1985. The statutory accounts for the year ended 31 December 2006 have been delivered to the Registrar of Companies, but the 31 December 2007 accounts have not yet been filed. Ends This information is provided by RNS The company news service from the London Stock Exchange

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