JUDGES SCIENTIFIC PLC (JDG) Q2 2026 Earnings Call Transcript

Good afternoon and welcome to the Judges Scientific Investor presentation. Today we are joined by CEO Tim Prestidge, CFO Brad Ormsley and Group Commercial Director Ian Wilcock. Questions are encouraged throughout this webinar and can be submitted via the Q&A box which is on the panel on the right hand side of your screen. I will now hand over to Tim to begin the presentation.

Thank you very much, Vivian. Thank you everyone for joining us. So today we're going to take you through interim results for the six-month period ending 30th of June 2026. Actually, this is one of two announcements that's come out today. And so before I start on the interim results, the first thing I'm going to do is just mention the other announcement, which is regarding our CFO, Brad Ormsby. Brad's been with the group for just over 11 years now, and he's made the decision to retire from the group, and I just wanted to mention a bit about his contribution to the group, and the experience that he's brought. So Brad has made a huge impact on the group since joining, and he really lives and breathes the judges' culture and is amongst its greatest ambassadors. Really grateful for the impact that he's had and how he's developed financial acumen within the group and particularly as well for how he's worked so hard to develop such strong relationships both with our colleagues within the group but also with the investor community outside the group. He's given us 12 months notice and so he's going to absolutely be around to help in identifying his successor and in the transition process so i'd like to thank brad very warmly on behalf of the group for the work that he's done for us and for staying around and look forward to continuing to work with him over the next 12 months brad will say a little bit more during his presentation We're talking about our interim results now, so we can move to the next slide, and the first thing I'll do is say a little bit about what Judges Scientific is, who we are, and our strategy. So Judges Scientific, we are a buy-and-build group in scientific insurance markets. If I start in the top left-hand corner, there's three pillars of our shareholder value, three on which our model is based. Long-term drivers. What are the long-term drivers? We talk here about long-term secular trends in research and scientific techniques, so the ongoing need for measurement and assessment of variables associated with scientific techniques and instruments associated with scientific processes, and that those things in turn find increasing application in commercial and industrial opportunities. We see those as very long-term secular drivers. The other aspect is a large deal pool. So there are many businesses in the world. If we think about a typical opportunity for us, maybe it's a company which is founded by someone that used to be in a research lab, that used to be in a university, they've identified an opportunity, they've built a successful business, it's key for us obviously that it's a successful business, maybe they've come to a conclusion over 15 or 20 years or so that it's time for them to find a different home for that business. We think there are many, many thousands of opportunities, many thousands of deals like that that are available in the UK and elsewhere in the world. Also, it's fundamental to us that the businesses that we acquire have low capital use, so we're not looking for businesses that require a huge amount of investment and ongoing investment in capital equipment, in manufacturing equipment, we're talking about businesses that are set And the key benefit of that is high cash conversion, in other words, they convert the majority of their profit into cash. We need that because we recycle that cash both to pay off debt and to invest in more businesses. It's that compounding that generates shareholder value. Moving down to the bottom left, characterising us is an extensive and diversified global customer base. So the sorts of businesses that we acquire, if they are successful, they've got successful by becoming diversified in that customer base. If they're UK-based, for example, the UK doesn't own enough of a global market in scientific instruments to in and of itself make a successful company or a successful customer base. So companies that are successful have clearly developed an ability to export and serve customers around the world. And that's a fundamental aspect of what we're able to acquire. We don't buy turnarounds, we don't buy start-ups, we buy successful businesses, and the inbuilt of that is that they're already diversified. The sorts of customer base will include universities, industrial customers, and other types of research with clients. And we did there some examples, some typical examples across the group of the types of companies, sorry, the types of customers that our businesses have. If I move to the top right, what is our growth strategy? Well, I mentioned earlier, the companies that we acquire generate cash. Low capital use, high cash conversion. They generate cash. We then recycle that cash. We turn that cash into investments in new acquisitions, which includes paying down the debt for those acquisitions. We turn that cash into investments in organic growth. for investments into the existing portfolio and we turn that cash into a progressive dividend policy to benefit our shareholders. Again those are the mechanisms through which we generate shareholder value. And the execution of our strategy over the last 20 years has been up to the end of the last financial year. 25 acquisitions, total dividend distributions of nearly 10 times the admission price back in 2005. 19% CAGRA of total revenue, 7% CAGRA of organic revenue, 23% CAGRA of token EBIT, 8% CAGRA of organic EBIT, who together bring a broad set of skills from the different experiences that they've had. So on the call today, myself, Brad Olesby, who I mentioned earlier, also Ian Wilcox, our Group Commercial Director. Over the last couple of years we've added him to the team, Rick Armitage as Group Acquisitions Executive and John Dunn as Portfolio Chief Executive. Together we bring varied experiences from companies like Halmer, Oxfam Instruments, Danahoe and Renishaw. An overview of our performance in HLON and the key messages and key takeaways, ways, after which I'll hand over to Brad to take us through some more detailed financials. So the headline here, challenging market conditions that weigh on our H1 performance, but our fundamentals remain intact. So we certainly don't hide behind the fact that we have an exceptionally weak H1 performance. Our revenue was down 21% compared to prior year. That be 13% on a like-for-like basis if we exclude the Geotech coring expedition that happened in the first half of last year, which was something that we knew wouldn't really occur this year, and Brad will talk in more detail about that. But adjusted earnings per share down 72%. And we need to be clear here, we are a portfolio of high margin businesses. So as we'll talk about, for sure. We took some action on costs, but we've never intended to be able to offset the entire decline in margin through costs. As high-margin businesses, when there is a decline in revenue, there is a high flow through, and that's why the adjusted earnings per share is down so much. We highlight the external headwinds that affected us during the half. So coming into the half, we mentioned already that there was no coring expedition for Geotek, which we knew about. Also, orders and renew were materially affected by continued uncertainties in US research funding. So we knew this was an aspect which was going to affect us. It started around about the beginning of the second quarter in 2025. It continued through the balance of last year, and it's still affecting us now. So in the first half of this year, we had two full quarters of that impact, versus only one quarter of the first half of last year. We also continued to see postponement of offshore wind investments. Those started to impact us in the second half of 2025 and continued through the first half of this year. We had initially expected that those might improve a little. Some of the major suppliers, some of the major businesses in that industry, for example, Fubro, had been highlighting in some of their announcements that they had expected to see a little bit of improvement from Q2 onwards, but in fact that didn't occur that didn't happen so we didn't see that improvement as well something that we hadn't really foreseen coming in to the half were delays resulting from China's tax exemption processes now we should be clear this isn't something which is specific to judges this relates to any business including domestic Chinese businesses supplying research or scientific instrumentation into customers in China or to customers in China, where those customers might benefit from government funding as part of the purchase. Normally there would be processes in place where those customers can be exempt from what is essentially a VAT, about 15% or so. Because of the new five-year plan in China, several of those processes have been postponed. And the way that we saw that was orders that were placed, with customers then asking for those shipments to be postponed until the tax issues were sorted out, and then latterly orders not being placed for future business until those issues were resolved. Against the backdrop of these challenges, we highlight ongoing focus on controlling the control walls. So we continue to take action to reduce costs of underperforming businesses. We took almost £2 million of costs out of underperforming businesses, principally related to people costs. At the same time, we also invested in talent and innovation in other businesses to support recovery and growth opportunities. It's an important point that we want to make about us we're not the type of group that would indiscriminately cut costs purely on the basis of attempting to achieve a short-term outcome, a short-term EBIT number or earnings per share. Both things futurise. We took action to control costs to underperforming businesses while simultaneously investing elsewhere to support recovery and growth. Related to that was addressing onto performance. We highlighted in previous presentations that there were some businesses where there were product-specific issues or challenges, and we're pleased to report that there's been solid progress for those businesses. Software that needed to be developed has been launched, there's been operational improvements, there's been product rationalisation, there's been cost reductions, and there was a genuine order intake momentum around those businesses. So while we're a little behind the plan that we expected to be at the age of a half, we're confident that by the end of the year, there will be demonstrable progress for those businesses. Trading growth. So, despite revenue down 21%, eight of our businesses grew. Now, as Brad will later show you a bridge, that growth was nowhere near enough to offset the decline that we saw elsewhere. But nonetheless, eight businesses grew in the half, supported by internal growth initiatives, new product development market development investments in talent as well as positive market dynamics in industries like semiconductor vacuum development and some other industrial research markets so of note all three of those examples i gave were industrial markets strategy remains unchanged disciplined acquisition process our structured and decentralized organic growth growth drivers that Ian will talk about later the importance of local definition and execution of market learning growth strategies each of our businesses responsible for defining their own strategy and continued investment for long-term returns we ended the heart with a solid outlook and as we'll talk about increasing momentum on order intake 90% cash conversion despite significantly develop profitability, and we're recommending a 10% increase in the interim dividend. I'm going to hand over to Brad for the detailed performance review.

Thanks, Tim, and I think firstly, thank you very much for your kind of comments. I'll probably let me address this first. You'll be aware that I've made the decision to step down from serving as judges CFO. I just want to say a couple of quick things on that. It's absolutely a very personal decision for me, and no reflection whatsoever on the great management team that's at Judges, and one who I firmly believe are the right people in place in order to deliver an excellent long-term future for Judges. I've been truly honoured to be able to serve my colleagues and our shareholders over the past more than a decade, and I know when I leave, I'm going to misjudge it terribly because it is truly a wonderful company. Once my success has been found, I will do my very best to ensure they have a really good and proper handover, and then I'll take a break and see what comes next. To results in the next, on 21%, and as Tim touched on before, like-for-like revenues down 13% when you exclude the 2025 Geotech coring expedition that we knew wasn't going to repeat in the first half of this year. A 21% revenue drop for a business like ours with higher operational leverage results in a two-thirds drop in adjusted operating profits. Put simply, marginal gains in revenue positively add to profitability. And unfortunately, in this case, the decline in revenue really, really has profits. Endings per share was also significantly affected with adjusted basic endings per share of only 39 pence. Moving on to order intake, an order intake declined by similar amounts to the like-for-like drop in revenue, with order intake 12% down in H1. However, since the end of H1, and I'll talk about this in somewhat more detail in the order intake slide, we're now in a position where a like-for-like order intake year-to-date is now almost a parity. The effect, or the reason for the 12% drop in order intake as Tim touched on earlier There was a, firstly, a full six months of the continuing uncertainties in the US. We only had one quarter in the first half last year. And it adds to that the delays in the implementation of the China tax exemptions and good reason for why we were down. And as Tim touched on, and I think it's an important point to make, the environment's difficult, but at the same time, we've managed to, in the last few months really seen some improvement so if you go back to the beginning of the year and I'll talk about this later you'll see how things have changed I think it's a very very important one because it's now a better place where we have good momentum in our order in say for a number of months now moving from P&L on to cash generation and the group has a strong track record of turning our profit into cash since I was before about a high cash conversion, and whilst we only generated 4.3 million cash from operations, it was at a cash conversion of 90% in line with historic expectations. We continue to focus on working capital, and whilst it did increase in the period, impacting on our adjusted net debt, which increased by 3 million, and I'll come and talk about this later we remain the strong balance sheet and plenty of headroom on our customers and consequently we've also provided for a 10% increase in the injury dividend to 36 pence per share and that's in line with our policy of providing shareholders with progressively increasing dividend returns. Before I move on I've mentioned about the outlook for the rest of the year. Now, we said in July, when we gave our trading updates, that there were two key things we needed to deliver in order to be able to achieve the numbers in the market. The first one is that we needed to achieve a good level of order intake in line with our expectations for Q3, and as you'll see, and I'll talk through on the order intake slide, that we have done almost all the way through to Q3, quite happy with the order intake which then leaves us with an improved order book and improved order outlook and pretty much the orders we need in order to be able to deliver the full year result so quite quite simply it's a case of execution now and that will mean say it's absolutely straightforward and it's certainly not without risk but it is within our gift so moving on to the next slide i've just touched on a couple things on the performance side I did mention beforehand in the summary slide that the group has high operational leverage and you know the unfortunate consequences in this first half is that we suffer greatly from declining revenue on our profits and as Tim touched on we're not a business and I think he used these words so I'll repeat them not a business that would indiscriminately cut costs in order to achieve a short-term profit target. However, importantly, that doesn't mean to say we do not take action where action is appropriate, and we've reduced the cost base of those businesses that are underperforming by 2 million in this first half. But at the same time, we've continued to invest for future growth and innovation. And it's a really, really important point because it takes us on to comments on tax, for our effective rate of tax we expect for this year to be 18% and that is a consequence of the continued investment in innovation and the side product from wanting to be able to continue to improve our products for our customers and such as our customers is that we are also able to tap into the UK's patent box scheme which is enabling us to reduce our tax rate. A nice side benefit which we expect to continue to benefit as the years pass from our intention to continue to invest in innovation. Lastly, for those that are not as familiar with our P&L, we do have adjusting items that take the statutory results. The largest of these is the 4 million non-cash amortisation of these tangible assets which we are required to recognise when we acquire businesses. So moving to the next slide, on order of intake, which really is our bellwether. So first thing, most important for me, thought you through the graph that's on the right-hand side of the slide. There are three key lines on here, the red line, a black line, and a green line. The red line is our internal sales budget, which we set once a year and do not change. It's part of our budgeting process. Don't change unless we have a major acquisition, it's our target. The black line with our trading 12 months of orders, and really what we're looking for from the black line, because that's the historic last year, is for the black line to ideally be touching the red line come the end of the year, such that we'd have had sufficient orders for which to satisfy our internal sales budget, and then the green line, which is the last four months of orders annualised. It's a shorter term measure, unsurprisingly, a much more jagged line, but an important line nonetheless because if that line is tracking the red line then we know that we'll also have good operational capacity so what's happened in the period and by the way before we go on to that the end of the graph is pretty much up to date so we're going to start from the beginning of the year and just remind everyone at the year end announcement in early april that we noted that Q1 order intake was down 18% in the first quarter, not a great start to the year, we have to be honest about that. You can see that from the declining black line throughout the first quarter. Into the start of the second quarter, order intake started to improve, and you can see the black line beginning to improve, as with the green line as well. By the time we got to the end of June, some improvement, but still 12% down. However, that improvement continued as we went into the second half, and for the last two and a half months has again continued to improve. You can see it through both black and green lines. Actually, the green line, which if you follow to the end of the graph, has been at, around or a bit above the budget level for at least a month. Because this measure is the last four months annualised, what that really means is we've have five months of order intake at and around our budget, which means that we've got momentum coming back, and you can then see that in the blast line as it's working its way up on hopes inextricably towards the red line for our budget. So overall, this is momentum returning for us. We wouldn't have said anything for two months' worth of decent order intake, and hence we didn't say anything in July. But after five months, I think that's a reasonable period to feel like we've made some improvements and we can see it, and consequently how that's giving us greater confidence. Now clearly we've been effective, as you can see from the geography, the effects of China, the effects of the continuing uncertainty in the US academic research funding arena, and its knock-on effects around the world. but we've managed to do this despite no real improvement in those environments. So I'm pleased with our team's dogging determination to be able to bring in extra orders and help improve things. And that gives us a good degree of confidence looking forward. It means that we can have enough orders with which to satisfy this year's consensus performance, but as I said before, still have to execute and there is definitely still risk because we have a lot of high-value orders and things can go wrong. However, we're in a good position this year because we've got the orders to be able to deliver.

Moving on to the next slide.

And this slide is our profit bridge, which reconciles between the 2025 first half and 26th first half profit contributions to the businesses before central costs. Here are the two green blocks at either end of the graph. Reconciling between these, you can see the green block of organic growth, where eight of our businesses grew during the period, good performance from Ian will add a bit of colour to things that we did in order to be able to achieve this over that period, but as Tim touched on before, I can say the red line greatly overshadows the green line. A large chunk of that is the consequence of no colouring expedition at Geotech during the period, but also decline at 13 of our companies, some of which I have to say is the consequence of delayed order intake and it's then subsequent delivery for customers. I just want to say, I've also left very deliberately the acquisitions column in to enable us to remind shareholders that this important part of our strategy is absolutely not on port. Moving on to the next slide, please. Budgeting cash flows, cash conversion continues to be at historic levels, which I'm pleased We continue to focus on working capital, although with the weaker H-ROM results and the need as a consequence to plan well for the significant delivery in the second half, working capital has increased. The year end will give us a clearer picture of progress here. Gearing has inevitably increased as a consequence of the weaker performance and that really is a mechanical effect on this measurement. You will also see this morning that we have announced a two-year extension to our banking facilities such that they now mature on the 1st of July of 2030 instead of 2028. One of the three banks that we have, Lloyds and Santander and HSBC, for their continued need support which is not unappreciated by any means. Lastly, for anyone that has followed the fact that we do have a small defined benefit pension scheme that we have had on our balance sheet for the best part of 11 years, August this year saw the groups no longer having responsibility for this defined benefit pension scheme as was fully bought out such that now all members, future pension payments have all been secured and the group no longer has responsibility. So moving on to the next slide, we turn on total investor capital at Rotik. This is a quick reminder for everyone, in its purest form it's a function of the multiples we pay for the businesses we acquire. You can see on the far left-hand side of the graph when we acquired FTT, our first acquisition, we paid close to five times, start around 20% and growing erotic thereafter requires improved financial performance and or buying businesses at lower multiples and when you pay higher multiples you can see the cliff edge effect when we acquired gps and scientifica which were then very large acquisitions for the group in 2012 and 2013 the cliff edge effect of doing that and likewise when we paid seven times was acquired in Geotech in 2022. Smaller acquisitions, in fact minimally, on ROTIC now. What happened in the year? Well, the declining performance unfortunately means that ROTIC has declined to around 13% and it's clear we had much work to do to return this figure to historic levels and work we will do. So moving on to the next slide, my penultimate one, diversification, simply put, diversification works for us. Just a couple of things to note, one, our focus added to life science semi-con areas and also into industry, particularly as a consequence of the continued uncertainty around the academic funding, not only in the US, but across the world, and so good that we're working on that. Here, again, we'll touch on a little bit of this in a short while. Then onto my last slide, which hopefully won't be my last slide, on financial history and some key statistics about the long-term success of our group. Whilst we're going through a prolonged continuing challenging period for performance, the group has provided shareholders with a long track record of growth, and we've all returned to growth. and those key measures Tim touched on at the beginning of CAGRs, a revenue growth and a private growth will return to their rightful levels. Dividends have grown by at least 10% per annum over the history of the group and we've increased this interim dividend by 10% to £36 per share. And lastly, the group's continued focus on cash generation serves to enable the group to weather challenging market conditions like we've been going through enable us to make the acquisitions we want to be able to make when we want to make them and when we're able to make them quickly reduce acquisition debt and continue to fund those progressively increasing dividend returns for shareholders and I'll pass back the

Next slide. We use this slide to position or describe our growth strategy around buy and build capital allocation and the priorities that we have for that capital allocation. So just going back to what I mentioned in the very first slide, the businesses that we acquire are asset-light. They generate cash. Our businesses generate cash, we collect that cash, and we recycle that cash in this priority. So, the first priority for us is to recycle that cash as investments in further acquisitions, including reducing the debt or paying down the debt resulting from those acquisitions. The second priority for us is investments in organically, investments in the portfolio of businesses that we have already to enable them to take full advantage of the growth and market opportunity they have. The third priority is then a progressive dividend policy, and I'll talk more about that on a later slide. So if we move to the next slide, I'll talk a little bit more about our acquisition strategy. And I think the key point in the heading there is around the strict discipline. The strict discipline that we have is fundamental to our acquisition strategy. If we think about the attributes of the target businesses, we described earlier how the deal pool we still see, or the opportunity pool is large, but strong exporters in global niche markets for scientific instruments and techniques related to the use of scientific instruments. A strong indicator for us of what indicates success, strong cultural alignment as businesses have developed innovation, entrepreneurialness, openness within their culture, and also frugality. They're run with a real frugal mindset that helps obviously with the asset-light or cash conversion aspect. We absolutely look for businesses with robust margins. That demonstrates to us differentiation in the niche that they serve and pricing power, both of which are fundamental to our life. And we look for businesses that generate sustainable EBIT and cash flows at a high return on service. Again, all of which reinforces the strength that they have in their marketplace. All of these aspects taken together really form what we would think of as the hurdle, the high barrier or high hurdle that we have, that potential acquisitions had to be able to cross in order for us to be able to think about acquiring them. I think a key way of thinking about this is we always acquire a business in the context of keeping it forever. We don't acquire a business in the context of selling it after three minutes' time. So if we're to acquire a business, absolutely it has to pass the test for us. Do we want to keep this business forever? The deal parameters, we typically pay four to six times for a business, we have paid three times, we have paid seven times for our largest acquisition, Geotech, and that's generally around the size. We pay a multiple of EBIT, we don't pay a multiple of EBITDA. We see depreciation and monetisation as a cost of running the business. We've demonstrated flexibility in the deal structures that we've used over the years, and our deals are funded with cash in debt. We buy high quality businesses, importantly we find businesses that are for sale. That might sound like tongue-in-cheek, but we are talking about businesses that the owners have decided that they want to sell the business for whatever reason. It's not that we are attempting to persuade owners who don't want to sell the business to sell to us. Deals typically have long intubation periods and we acknowledge crystallization is evasive. There have been periods where we've gone two years without securing a deal. In fact, we've been in one of those periods now. That happened again a few years ago. Equally well, there's been years where we've had three deals that were completed. The most important statement here is we aim to do deals. Absolutely, it's fundamental to who we are what we do, but not any specific dealer. So that high barrier, that high hurdle, means that we mustn't feel compelled to do a deal. We have a reputation as an honourable acquirer. We are mindful that for most of the people who buy from, they will go through this process just once in their life, whereas it's something we do much more regularly. So the importance of building, having built a reputation, maintaining our reputation, being open in the process that we follow is absolutely key and critical to who we are in our code. Generate cash, reduce debt, repeat. That's the fundamentals of this model. We make no acquisitions in half of this year, but these are healthy pipeline of opportunities and we absolutely remain confident, both in the depth and vitality of the potential deal pool, and in our continued ability to attract and acquire businesses of the disciplined, either multiple, but the original CPEF. So we do not interpret the lack of an acquisition in the first half as either a lull in activity or that our acquisition strategy is ceasing to work in some way. We have absolute faith in the strategies that we follow. I'd highlight as well that, compared to maybe 9-12 months ago, we do feel that there are some stronger opportunities out there. We certainly see examples of businesses that might have started a sale process and then exited that process. In other words, they stopped it themselves, having restarted that process.

We're seeing some examples like that. and and absolutely we are seeing good positive flow of opportunities we're going to move on and talk about investments in organic growth on the next slide and at this point i'm going to hand over to you thanks thanks sim and hello everyone um yeah i've been well trained by my colleagues we're going to look at organic growth for a few slides um so next slide please um So, many of you will be familiar with the fundamentals of our model, but it is worth repeating, and particularly for those who are not familiar, some fundamental points on this slide as to how we work. The key word in the title is decentralized. So, we are deliberately an asset-like group. We have a small head office as reasonable, so that as much as possible in terms of resources are in the businesses close to customers driving innovation and now that model only works I think 19 separate individual P&Ls that model only works the left-hand side points those fundamental points are so the first one I'll focus on for a second is a strong leadership teams and obviously we can't be in the businesses when other businesses all the time so we rely on having exceptionally good entrepreneurial growth-minded MDs. We've had a lot of time in talent development and making sure we've got strong leadership teams. I'm pleased to report that we've had a very stable period with only one change in MD in the period, which is a retirement. And I think we reported last time we had up to seven. So we've reached a really good period of stability. There were some other changes in the leadership teams locally, but at MD level there was only one change. So strong leadership teams, and if we get one thing right, it is having that entrepreneurial growth mind in leadership teams locally. The second point is, again, this model only works if it is within a framework of robust governance and financial controls. Now I don't want to give the impression we over-encumbered incumbent businesses with processes and structures, quite the opposite. We want to minimise that. We want to use the agility, the small nimbleness of our businesses to our advantage. But of course, we do need to have processes in place, obviously financial ones, but we focus a lot on things like export control, cybersecurity, and increasingly things like AI, responsible use of AI to provide that framework for them to work in. And the third point is we also recognise that where we have capability gaps, we can bring in additional help, we can bring in external resource, for example, we've done some software outsourcing, I'll talk about in a second, or where we think we need to invest in a capability. So, for example, AI is a growing area, which we all know, and we're putting, I think, 23 people through an AI apprenticeships as a new initiative, specifically focused on adoption of AI for SME manufacturing businesses, which is a really exciting initiative. So we get all that right on the left, which then talks to having the autonomy and accountability. For the group work in isolation, we move to the right-hand side. We have incredible amounts of talent and experience across the group, so we aim to leverage that as much as we can by creating communities of like-minded roles. So for example, we have a very strong sales community, operations community, finance community and so on and these communities share best practice as much as they can and the whilst one of those in the exec may well sponsor them they're generally run by one of the MDs so these are these are ground up grassroots communities rather than the top down imposed sort of thing and they're really really successful huge many examples of sharing a best practice We promote excellence, I mean, partly through these communities, but also through sharing case studies. We have a learning management system, which we're increasingly using. We do also use it actually for some of the compliance training on the left, but we're using it increasingly to improve our capabilities and promote excellence. And then finally, on the bottom right is we encourage ambition, really, really strong growth ambitions. I'll talk a little bit about that, particularly in regards to our strategy development process. We get all that right on that slide, then that gives us that long-term focus, that long-term growth. So, we alluded last time, in fact, we lifted the lid last time on some detail around some of the challenges – sorry, some details around some of the opportunities we're seeing. And one of the very exciting things in what has obviously been a relatively difficult period in academic markets, particularly in the US, is the application of some of these scientific techniques and equipment that we make into industrial areas. Now we've picked up two here. THT is our calorimetry business focusing on understanding heat flows and particularly is applied to a number of our industrial processes and particularly in batteries. and we're seeing a really good recovery in that more battery market and that's both in EVs but also in energy storage in general. We have new leadership there and interesting applications of AI in that business as well so there's some really good growth prospects there and the second one I would draw attention to is UHV which is one of our longest-standing businesses in the group actually experts in moving things in also high vacuum now that's historically been a typically a big science thing often synchrotrons uh international facilities and very very academic but increasingly finding opportunities in industrial application particularly semi-con where the move to um more ultra clean environments is becoming more and more important so really two interesting examples of a growing sense that of application of our scientific techniques into industry next slide please so we alluded last time to some of our businesses who's had some product related issues Tim touched on this at the beginning pleased to report some very good progress on these so firstly in fine testing technology it's our longest-standing business in the group for over 20 years ran into some particular competitive issues particularly around software, required additional investment, particular focus on cost-based and capabilities. We brought in quite a lot of external expertise there, and that's resulted in some really exciting new product launches. Very pleased to report some significant older growth when on the way to recovery. These are multi-year projects, and big, big projects as well. We're really pleased to report some good progress there. And the second one we drew attention to last time was Armfield, a business which focuses on educational equipment and food technology area. Again, product related issues slightly different, more to do with the extent of the product So we did a lot around product rationalisation, focus on margin improvements, cost reductions and operations improvements. So a multi-strand set of activities there. Good progress to report as well, order intake is up, and new products being launched as So great, great, great, great progress on those two. And a final slide for me. So got a very robust strategy process, which we'd like to have just come to the end. We tend to do it in the summer, we run obviously a budgeting process in the autumn, but we We deliberately separate budgeting from strategies because they are fundamentally different disciplines. Now, when we're developing strategies, we ask the businesses to really think big. What do they need to do to double the EBIT in a three to five-year period? What are those big rocks? What are those big key strategic initiatives they need to do? They need to be investing in now. Where do they see the market opportunities to do that? Honestly, it's my favorite time of the year because I really think it brings out the creativity and entrepreneurial nature of some of our businesses. And they put that together into a strategy, into a three-year plan, which is then presented. And we're just at the end of that process. That then flows into the budget, which is more of a short-term commitment. And I think, you know, I can't over-obsess how important that strategy process is. It helps us identify the investments we need to be doing now to deliver the growth in the longer term. Okay, I think that's all from me. your hand back to Tim.

Thank you, thanks. So that's the last point I wanted to touch on in our growth strategy, a progressive dividend policy. Just a reminder that businesses generate cash, we recycle that cash. Investments in acquisitions, including paying down debt, investments in organic growth, and then a progressive dividend policy. That policy is to increase our total dividend, the total annual dividend, by a minimum 10% annually, subject always to appropriate cover, and subject to no constraint on the group's capacity to continue to invest in its priorities 1 and 2, so investments in acquisitions and investments in organic growth. So the board has increased the interim dividend by 10%, and the cover for that, the dividend of cover is 1.1, and we recognise completely that viewed in isolation that level of cover is not sustainable. But it's important to understand that that's driven by the particularly low result in the first half of the year. We do expect, as the result comes through for the second half, that mechanistically that number will improve. So the increase in the interim dividend is a statement of confidence from the group that The group will weather the current headwings, the current macro headwings, and the confidence in the future potential of the group. And importantly, the group is not constrained in its capacity for investments in acquisitions and investments in organic growth. We'll move on to the final couple of slides, the outlook and investment case. So next round, please. So I just want to summarise what I said and what my colleagues have said in terms of the outlook for the balance of 2026, but also some points about 2027 as well. So positively, we are seeing real momentum in order intake. So as Brad mentioned, 18% down at the end of the first quarter, largely because of that The impact of the comparative quarter of the previous year was not impacted by US federal funding science challenges, whereas this year it was. So 18% down at the end of the first quarter, 12% down by the end of the half at the end of last week, just 1% down at the end of the year to date. So it feels like momentum building there. Also, positively, early signs that China's tax exemption processes are being resolved. So, we're having customers who have ordered equipment, but ask us to delay sending them until these things are resolved, and are starting to ask for those things to be supplied. The timing of these things, the improvements in order intake and the tax exemption process being resolved inevitably leads to a significant H2 weighting, indeed Q4 weighting in terms of revenue. And that has some execution risks, execution challenges for us. We are a collection of businesses that produce high-value capital equipment. So a single instrument or two instruments missing or shifting a month could have an impact there. So, for example, if there's an instrument that's being shipped, and there's specific terms, or maybe it's delayed during shipment, we are mindful, those are risks that exist. But the risks that we have are predominantly within our control. So we now have good usability with the improved order intake on the revenue that we used to deliver through the balance of the year. So the risks are predominantly within our control, but there are still risks in terms of execution through that final period of the year we are confident about delivering demonstrable progress of those businesses that have underperformed the particular examples that i gave at the end gate earlier so we're guiding trading in line with fi26 market expectations we hire out some resilient markets in particular those related to uh industrial so we're talking about um the exposure that we have to semiconductor improvements in battery development and battery technologies so similar industrial research markets but absolutely highlighting continued headlines in scientific research so we see challenges remaining through the balance of this year with uncertainties from the US of course we have and the midterm elections coming up soon the US a budget for scientific research, where there were proposed cuts that were rejected by Congress, but those funding never really flowed properly through the balance of 2026, and we don't expect to see a recovery there. And we're also now very mindful that the US administration is talking about similar cuts to the 2027 budget. So we do expect continued headwinds in the scientific research market generally we understand the next year tech coring expedition is not now expected earlier than 2028 so previously we explained we'd anticipated that there might be a contract signed later this year for delivery at some point next year the good news is that a particular customer has had their funding approved um but we now understand that they're going to reverse the order of some of their projects, and so the quarry expedition is unlikely to happen before 2038, and the business model for the group remains intact. That brings us on to the investment case for the group, so next slide please. So I reiterate, long-term drivers, the large deal pool, and that low capital use, businesses that generate cash that we recycle in the buy and build capital allocation strategy that we discussed, altogether continues to generate shareholder value. We have a robust business model that we pursue with discipline. Earnings enhancing acquisitions, we're diversified by geography and by application, We note increasing diversification, particularly in industrial and commercial opportunities. And dividend growth greater than 10% for the last 19 years, actually at a CAGR of 21%. Okay, thank you. That's the last slide. We're going to now move to Q&A.

Thank you. We have had a number of questions pre-submitted and submitted live. Just as a reminder, if you would like to ask a question, please type them into the Q&A box so it's reached on the right-hand side of your screen. So our first question is on long-term capital allocation. Once the balance sheet has deleveraged further, has the board considered adding opportunistic share buybacks alongside the 10% dividend progression, particularly during the quieter M&A periods? This significantly enhances dividend sustainability and avoids the structural risk of getting boxed into an unsustainably high absolute payout base from one-off larger dividend hikes, while allowing judges' scientific to elegantly circumvent cash drag and remain in line with historical dividend policy. Dividend policy, sorry.

I'm very happy to take that one. I think there's two points to the question here. One is your point in some respects suggests that we shouldn't do more than 10% increases to our dividend over the longer term, and perhaps apply that to share buybacks, and yes, to answer the first part of the question, absolutely, we've looked at and thought about share buybacks, and see them as a viable use of capital allocation, but not necessarily at the moment. I follow the logic of a sustained and consistent dividend increase, rather than a variable dividend increase. It's something that we continue to talk about, and given the last couple of years' performance where we haven't been at historic highs, we've retained a 10% increase and haven't sought for the last few years to increase anything higher than 10%. As regards the current situation, the groups in relation to share buybacks, I'll probably add this in now, that I don't feel personally, and I think the board's in agreement with this, that the use of increasing debt in order to achieve share buybacks outside of everything else we're doing is necessarily an excellent use of our capital allocation at the moment. I certainly would feel that, I've always said when we do acquisitions, you never want your latest acquisition to be your last one, but you accidentally over-leverage the group and can't recover from that. The same thing I would argue would be the same. It would be said for shared buybacks would increase our leverage and we do need to de-leverage with improve performance, first and foremost.

I think we acknowledge that since the share price has come off the highs of a couple of years ago, in conversations that we've had with investors, share buybacks has been an increasingly common point that's been raised. But as we mentioned in the interim statement, it's not what we felt to be the most effective way of allowing value of returning cash to investors. So we wanted to take the opportunity in this enhancement, in the presentation, to research that first and foremost in our capital allocation priority, we're a dividend stock. That doesn't mean that at some point in the future, we might also consider on the basis a return of cash to investors. There's been examples in the past with special divisions as well. So it's something that we may again come to look at. But the conclusion of claims it was that, at least in recent history, it was not the most effective way of us returning cash to investments.

Our next question is on margin resilience. You noted a £2 million reduction in the cost space of underperforming businesses during H1. How much of this represents permanent structural overhead reduction versus temporary variable cost containment? and did any of these measures require cutting back on active R&D or engineering capacity?

So I think if I do a general overview there, and Ian perhaps you want to comment on some of that as well, that the majority of that cost is absolutely, in targeting underperforming businesses, the majority of that cost related to head cam costs. There were some difficult decisions to make, and that is part of, I think, what was a kind of examples of businesses in the group where investments had been made previously.

Yeah, I was just going to add, Tim, that in fact the two examples that we gave, FDT and Armfield, both launched new products and or dated products, as well as did the cost reduction. So it was done in a way which protected the innovation, because the innovation, particularly around the products, which were the two issues, the main issues in those businesses, had been maybe lacking, and we need to address that. So it was done in a way which protected that core innovation development, allowed us to launch new products, while still overall reducing the envelope of costs.

Thank you. And next we have, you reaffirmed the current four-year market expectations. Could you please explain the key assumptions behind this guidance, particularly regarding second half revenue, operating margins, and Q3 order intakes?

I guess that's the key thing.

We said that we needed to get the appropriate level of Q3 order intake. I think we've been quite clear in showing shareholders in the order intake slide that that certainly happens for us throughout the period. It's very much another week or so left in Q3, but we're up to date, more than happy with that. So it's in line with our expectations. It gives us, together with the part here, order book, and what we've delivered so far in Q3, yes, a higher volume to deliver in Q4, but not something that we haven't delivered before as a group. And if you look from an earnings perspective, what we've got to do to meet market expectations is basically deliver it at 160 pence in the second half. Now, we've done that before. We certainly last year, in not-so-brilliant-year, did 140 pence. What is slightly different this year versus last year is the effect of some of the adjustments to our cost base means that we will have a lower cost base in H2 this year compared to last year. Plus, as I mentioned earlier, the side benefits from our innovation and the effect on our effective tax rate on adjusted earnings, which will be a lower tax rate than last year, and that will add some additional benefit also to our earnings, such that it is not a giant leap that we've never done before, but as we've said beforehand, it will be very much Q4 weighted just as a consequence of the fact that orders need to come in in Q3. We're building, continuing to build, but clearly it's not a balanced year, H1 versus H2, so there's more to deliver in H2 than H1. Overall, it's not like we're asking our businesses to do something they've never done before and I think that's the important point and with a pretty reasonable order book and they can see that even at this stage and we are not yet at the end of Q3. So I said it before it's not without risk Tim's mentioned it I mentioned it things can go wrong this is not a bulletproof guarantee from us that things can't go wrong but as I said it's within our gift and our businesses all have the opportunity and responsibility to make sure that they've planned properly, they've done everything they can to reduce the risk of it going wrong, and we're not in a position thankfully that we're desperately waiting for a load of orders to come in in November that we hopefully can get out in December.

To reiterate, the bridge that we see is a lower cost base compared to the second half last year, some impacts on class and box, and then the impact of operating leverage on higher volumes, where we have good visibility now as a result of those positive order intake trends over the last few months.

It would be nice if it works in our favouring H2, somewhat in reverse with the way it worked in H1.

Our next question is, aside from recent disruption, what impact, if any, will the new Chinese these procurement processes have on the group in the medium term?

Those processes are replacing previous ones. We don't expect them to have a long-term impact on the group. We highlight that this is not something that was specific to judges. It was any company, be they outside China or domestic, that's supplying equipment, scientific equipment typically, where that ultimately would be funded by government money. The impact that we've seen is delays. We don't think we've seen orders being lost, orders having been received, delays in shipping those orders, and then beyond that, delays in orders being placed until these processes have resolved. But I don't think we anticipate any fundamental changes in the future as a result of those those newly defined processes. Ian, do you have any other thoughts?

No, I would agree. We would largely see its orders, particularly the bidding processes have been frozen by a lot of customers until it's resolved. So, you know, quite a lot of orders have moved to the right in China, but there's no indication that they'll drop off and we would anticipate some decent recovery next year, I think, in the Chinese market.

Thank you. Next we have, the delay in a new coring expedition seems longer than usual. If that is correct, what is the reason for this?

The reason in this particular case is related to that customer has their funding approved, but they've elected to reverse the order of a couple of different things that they wanted to do. And so, as we currently understand it, the coring expedition that we were to be involved in will follow another scientific or another expedition that they're doing about, you know, something slightly different. What we also highlight is that there are, Geotech continues to follow up some other opportunities. There are other opportunities out there, the field is very vibrant. There was a show or an event a few months ago in France, it was all about gas hydrate exploration and science, and the outcome of that is that we understand that there are still plenty of opportunities out there, it's just we don't currently see any of those being argued to say yes, there will definitely be a current expedition in 2027. But we're not highlighting at this stage any fundamental change in the market.

I think it's important to remind shareholders that these projects are incredibly expensive. You know, they're usually multiple tens of millions to actually put one of these projects on. So you've got to get a significant amount of funding to be able to do this. and it is research, so a lot of this is completely out of our control, unfortunately. Once a project is plundered and we know it's going to happen, given the pressure cooling that we do for gas hydrates, we are the only company that can do it. So that's very reassuring to us, but the timing unfortunately remains one which we don't have the control over.

Thank you. And this next one's for you, Tim. How did your experience as a CEO at Renishaw and Halmer prepare you for your current role as Executive Officer at Judges?

Great question, thank you. I guess however we go, in several different ways. I think we're all, aren't we, the sum, somewhat of our prior experiences and I think it's been good to be able to learn from some of those past experiences and think about how to import them and how to bring them and deploy them in this situation. So I think recognising some of the real strengths in the previous companies I've worked for around innovation and patenting in particular and bringing that before here as a means of how to use patents and patentability as a driver of innovation. That's absolutely something that has been something that I've learned in the past and look to deploy here and I think There are current markets and uncertainties leading to lower valuation multiples for potential

acquisition targets in the scientific industry.

The simple answer of that is no, that's not our experience. If I think about the experience that we're seeing now, these are

From minus 12% in H1 to minus 1% year to date, imply Q3 orders are roughly plus 20%.

You know, that may be one gap that I think is quite helpful. supply to the offshore.

What share of your North American revenue is directly tied to federally funded labs versus commercial customers? Are those labs telling you 2027 budgets are recovering or should we model North America at the current lower base?

Well I mean I can't give you a direct...

Revenue lost in China this half, how much do you think comes back versus is gone for good?

I would say that the vast majority of that is about delay and one example I can back in the last year that we were expecting to have at least in the first half this year and i say at least in the first half which is expected towards the end of the first quarter then pushed out into the second quarter and the consequence of this is now it is expected at some point in h2 it's not yet come in so we're the order intake inflection coming from is it universities

or industrial activity i'm happy to take that one it's a real mix actually and i think it is were highlighting that what we are seeing, we are an example for us in the US and what we're seeing across the country in working on that.

Thank you, Tim. We are now moving on to our final question. If you have any further questions, please email the team. It will respond to any questions that weren't covered today. The question is, you've explained why North America is down, but Europe is down even more. So why is that, and when do you expect Europe to recover?

I think the data that we showed, Europe was down 20% during the first half, North America was down 7%. What we did highlight was that how North America was down, there was a bigger impact than 7% related to the challenges with continued uncertainty and federal funding of science. But we did benefit from some of our businesses seeing quite region-specific recovery and water and scientific instrument OANs that we sell to and they supply into the US. And there was also a reasonably significant one-off non-recurring order that we saw industrial order that we saw last year.

Thank you, Tim. That's all the questions we have time for today, so I'll hand back over to you guys for any closing remarks.

Thank you very much. Thanks everyone for attending. I think the main closing remarks are just to reiterate. We acknowledge a very challenging set of results in the first half, but some positives in there in terms of continuing to control the controllables and solid progress of businesses that have been underperforming. We also highlight the momentum that's been building through the second half around order intake, as a result of which we maintain guidance for the end of the year and acknowledge that there remains. Where are the current political challenges?

Thank you to the management team for joining us today. That concludes the judges' scientific investor presentation. Please take a moment to complete a short survey following this event. The recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.