- EPS forecasts cut again
- Shares fall as much as 18%
- Long-term outlook positive
London-based scientific instrument specialist Judges (JDG:AIM) lowered its earnings guidance for a second time this year after what it called a ‘disappointing trading performance’ heading into the end of 2024.
The shares initially fell as much as £19 or 18.5% to £83.52, making them the worst performers in the AIM 100 index, before recovering to trade £14.58 or 14% lower at £87.91 by mid-morning.
LOWERING EXPECTATIONS
The group said in September trading in the first six months of the year had been ‘subdued’ due to tough market conditions compared with its record performance in 2023.
First-half organic revenue was down 3% and organic order intake was down 4%, but at the time the firm reiterated its full-year earnings guidance on the basis it was expecting a better second half, partly borne out by its order intake in July and August, although it cautioned on the timing of revenue recognition due to some projects being deferred.
This week, the company said the second half would show progress compared to the first half, but meeting its full-year targets, which had already been revised down in July, was no longer likely as certain orders were no longer due to fall into this financial year.
Organic order intake for the year to the end of October was up 4.2%, but excluding the Geotek coring contract for 2025 were down 1.6% which showed the general level of orders across the group had still not recovered to its traditional level.
As a result, the board lowered its full-year adjusted EPS (earnings per share) forecast to between 270p and 300p from a range of roughly 345p to 365p previously but said it was confident the long-term growth drivers of the business remained solid.
EXPERT VIEW
Analyst Sanjay Vidyarthi at Panmure Liberum described the firm’s 270p lower EPS estimate as a ‘worst-case’ scenario and lowered his forecast to 280p noting there was still a degree of uncertainty over the timing or orders and revenue for the remainder of the year.
‘We take some consolation that year-to-date organic order intake is on an improving trajectory, albeit still in negative territory excluding the coring contract’, commented Vidyarthi, before adding 2024 had been ‘an uncharacteristically disappointing year for Judges, but the fundamentals remain solid’.
