Interim Results

Judges Capital PLC 15 September 2005 Judges Capital plc ('Judges Capital' or the 'Company') Interim results for the six months ended 30 June 2005 Highlights: • Judges Capital announces first results as a trading company • Encouraging order book at Fire Testing Technology (FTT) acquired in May 2005 • Balance sheet includes cash and short-term debtors of £1.85 million; and in excess of £1.5 million in cash and securities available to finance equity element of future acquisitions • Acquisition of 51% interest in PE fiberoptics in September 2005, specialists in design and manufacture of instruments to test fibre optic cables • Interim pre-tax profits £12,000 (£28,000 before goodwill amortisation) (2004: loss of £2,000) • Earnings per Ordinary share: 0.08p (2004: loss 0.1p) • Directors view the outlook with confidence Alexander Hambro, Chairman of Judges Capital, commented: 'The order book at FTT is encouraging and your Board is delighted that the Company's new direction as a trading group has been founded on a company of the calibre of FTT. Your Directors therefore view the outlook with confidence. 'As stated at the time of our purchase of FTT your Board has identified the UK based instrumentation sector, which encompasses almost 2,000 active companies, as an area that offers significant potential for growth. Against this background, your Board is continuing to explore further acquisition opportunities in this field.' For further information please contact: David Cicurel, Chief Executive, Judges Capital: Tel: 07771 893 080 Alex Borrelli, Shore Capital & Corporate: Tel: 020 7408 4090 Melvyn Marckus, Cardew Group: Tel: 0207 930 0777 Chairman's Statement This is the first set of accounts since your Company's change of direction from an investment company to a trading group involved in the manufacture of test and measurement instruments. This is also our first six-month period showing consolidated profits. On 24 May 2005 your Company completed the purchase of Fire Testing Technology Limited ('FTT'). As the world leader in its market, FTT is an attractive business which has doubled its turnover in the space of five years and currently generates an operating margin in excess of 25%. The purchase consideration was £3.7 million comprised of cash (£2.3 million), shares (£0.4 million), subordinated notes (£0.5 million) and earn-out (£0.5 million). This equates to approximately 4.5 times FTT's operating profits for the year ended 31 May 2005. In addition we will be paying an excess working capital adjustment of approximately £0.8 million, which is more than covered by the cash accumulated in FTT. The cash element and the earn-out have been financed through a £956,000 share placing and a £2.43 million bank loan facility. Pre-tax profit for the six months to 30 June 2005 amounted to £12,000 (£28,000 before goodwill amortisation). The results benefited from a £45,000 five-week operating contribution from FTT before goodwill amortisation, while investment activity largely covered corporate overheads during the period. The Company, which has been winding down its share portfolio, realised a £226,000 gain on its investment in Interior Services Group and has made a provision of £150,000 against its interest in SP Holdings. The only significant holdings that remain are in Poole Investments and Dickinson Legg. The balance sheet includes cash and short-term debtors of £1.85 million. After allowing for the aforementioned excess working capital payment, this leaves in excess of £1 million in cash and £1.5 million in cash and securities available to finance the equity element of future acquisitions. As stated at the time of our purchase of FTT your Board has identified the UK based instrumentation sector, which encompasses almost 2,000 active companies, as an area that offers significant potential for growth. Against this background, your Board is continuing to explore further acquisition opportunities in this field. Since the end of the period we have acquired a 51% equity interest in PE fiberoptics Limited ('PEF'), a newly formed company that will specialise in the design and manufacture of instruments to test fibre optic cables; the balance of the equity being held by senior managers and a US multinational corporation. The business was purchased from a subsidiary of that corporation which had been closed down following a sharp contraction in revenues post the exuberance of the internet bubble. Our maximum investment is £300,000, including a £250,000 secured working capital facility. The order book at FTT is encouraging and your Board is delighted that the Company's new direction as a trading group has been founded on a company of the calibre of FTT. Your Directors therefore view the outlook with confidence. I would like to take this opportunity to express, on behalf of the Board, our thanks to shareholders and employees for their continued support and to extend a warm welcome to all our new colleagues at FTT and PEF. The Hon. Alexander Robert Hambro Chairman 14 September 2005 Judges Capital plc Interim report and accounts Consolidated profit and loss account for the six months ended 30 June 2005 Six months ended Six months ended Year ended 30 June 2005 30 June 2004 31 December 2004 (unaudited) (unaudited) (audited) £000 £000 £000 £000 £000 Continuing Acqui-sitions Total operations Turnover - 265 265 - - Direct costs - (175) (175) - - Gross profit - 90 90 - - Administrative expenses (102) (61) (163) (84) (176) Operating (loss)/profit (102) 29 (73) (84) (176) Profit on disposal of 226 44 58 investments Provision against (150) - (100) investments Investment income - 24 62 Profit/(loss) on ordinary 3 (16) (156) activities before interest and taxation Net interest receivable 9 14 2 Profit/(loss) on ordinary 12 (2) (154) activities before taxation Tax on profit/(loss) on (10) - - ordinary activities Profit/(loss) on ordinary 2 (2) (154) activities after taxation Earnings/(loss) per 0.08p (0.1p) (7.3p) ordinary share Judges Capital plc Interim report and accounts Consolidated balance sheet at 30 June 2005 30 June 2005 30 June 2004 31 December 2004 Notes (unaudited) (unaudited) (audited) £000 £000 £000 Fixed assets Tangible assets 60 - - Goodwill 8 3,946 - - 4,006 - - Current assets Stock and work in progress 210 - - Investments 1 428 1,584 1,702 Debtors 922 27 8 Cash at bank and in hand 1,702 616 296 3,262 2,227 2,006 Creditors: amounts falling due within one year (2,062) (541) (472) Net current assets 1,200 1,686 1,534 Total assets less current 5,206 1,686 1,534 liabilities Long term liabilities Subordinated loan note (500) - - Bank loan (1,893) - - (2,393) - - Provision for deferred tax (23) - - Total net assets 2,790 1,686 1,534 Capital and reserves Called up share capital 2 186 118 118 Share premium account 3 2,881 1,695 1,695 Retained loss (277) (127) (279) Shareholders' funds 2,790 1,686 1,534 Equity shareholders' funds 2,777 1,673 1,674 Non-equity shareholders' funds 13 13 13 2,790 1,686 1,534 Judges Capital plc Interim report and accounts Consolidated cashflow statement for the six months ended 30 June 2005 Note Six months ended Six months ended Year ended 30 June 2005 30 June 2004 31 December 2004 (unaudited) (unaudited) (audited) £000 £000 £000 Net cash outflow from operating activities 4 (114) (119) (195) Return on investments and servicing of finance Interest paid (1) - - Interest received 23 14 25 Dividends received - 24 58 Net cash inflow from returns on 22 38 83 investment and servicing of finance Acquisitions Purchase of subsidiary undertaking (2,715) - - Net cash from purchase of subsidiary 580 - - undertaking Net cash outflow from acquisitions (2,135) - - Management of liquid resources Purchase of investments - (945) (651) Sale of investments 780 412 413 Net cash inflow/(outflow) from 780 (533) (238) management of liquid resources Net cash outflow before financing (1,447) (614) (350) Financing Issue of ordinary share capital 956 - - Expenses paid in connection with share (102) - - issues Receipts/(payments) for CFD's 119 526 (57) Receipts from borrowing 1,880 - - Net cash inflow/(outflow) from 2,853 526 (57) financing Increase/(decrease) in cash in the 5/6 1,406 (88) (408) period Judges Capital plc Interim report and accounts Notes to the interim accounts 1. Investments Historical Period end value cost Stock market Directors' Total valuation valuation £000 £000 £000 £000 Unquoted investments 169 - 66 66 Quoted investments 509 369 - 369 Less: provision against investments (250) - - - 428 369 66 435 2. Share capital At 30 June 2005 At 30 June 2004 At 31 December 2004 (unaudited) (unaudited) (audited) £000 £000 £000 Authorised: 10,000,000 ordinary shares of 5p 500 500 500 each 5,000,000 convertible redeemable 50 50 50 shares of 1p each 550 550 550 Allotted and called up: 3,462,356 (2004: 2,106,356) 173 105 105 ordinary shares of 5p each, fully paid 5,000,000 convertible redeemable 13 13 13 shares of 1p quarter paid 186 118 118 On 24 May 2005, 956,000 ordinary 5p shares were issued by way of a placing for consideration of £956,000, and on the same date, 400,000 ordinary 5p shares were issued as part of the consideration in respect of the acquisition of shares in FTT. 3. Share premium account At 30 June 2005 At 30 June 2004 At 31 December 2004 (unaudited) (unaudited) (audited) £000 £000 £000 Balance 2,881 1,695 1,695 On 24 May 2005 1,356,000 ordinary shares were issued at a premium of 95p resulting in an increase in share premium of £1,185,935, after £102,265 of placing costs. 4. Reconciliation of operating loss to net cash outflow from operating activities At 30 June 2005 At 30 June 2004 At 31 December 2004 (unaudited) (unaudited) (audited) £000 £000 £000 Operating loss (73) (84) (176) Increase in debtors (225) (8) (4) Increase/(decrease) in (27) (15) creditors within one year 132 Decrease in stock 33 - - Amortisation of goodwill 16 - - Depreciation 3 - - Net cash outflow from (114) (119) (195) operating activities 5. Analysis of net funds 31 December 2004 Cashflow Debt 30 June 2005 £000 £000 £000 £000 Net cash: Cash at bank 296 1,406 - 1,702 Bank loan - - (1,893) (1,893) Net funds/(debt) 296 1,406 (1,893) (191) 6. Reconciliation of net cashflow to movement in net funds £000 Increase in cash in the period 1,406 Change in debt in the period (1,893) Movement in net funds in the period (487) Opening net funds 296 Closing net debt (191) 7. Basis of accounts The financial information for the six months to 30 June 2005 is unaudited and has been prepared on the basis of the Company's adopted accounting policies. This financial information, together with the comparative information, does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the year ended 31 December 2004 has been extracted from the statutory accounts to that date which have been reported on by the company's auditors and delivered to the Registrar of Companies. The auditors' report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 8. Acquisition of Fire Testing Technology Limited Book value of assets & Fair value Total liabilities at the date of adjustments acquisition £000 £000 £000 Fixed assets 335 (272) 63 Current Assets 1,512 - 1,512 Current Liabilities (453) - (453) Long Term Liabilities (23) - (23) Total net assets at date of 1,371 (272) 1,099 acquisition Consideration paid 5,061 - 5,061 including acquisition costs Goodwill arising on 3,690 272 3,962 acquisition Less: Amortisation in period (16) Net book value at 30 June 2005 3,946 The balance sheet of FTT included £271,684 within leasehold improvements on premises rented by that Company. The Directors assessed the fair value of these improvements as having no value in view of the fair market rental being paid by the Company. The calculation of the goodwill arising on acquisition of FTT is subject to the final agreement of certain variable elements of the consideration. The goodwill is being amortised over a period of 20 years, on a straight line basis. This information is provided by RNS The company news service from the London Stock Exchange

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