Half Year 2026 Judges Scientific PLC Earnings Call

September 23, 2026

Speaker #1: Good afternoon, and welcome to the Judges Scientific Investor Presentation. Today, we are joined by CEO Tim Prestige, CFO Brad Ormsby, and Group Commercial Director Ian Wilcock.

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

Speaker #1: Questions are encouraged throughout this webinar and can be submitted via the Q&A box situated on the panel on the right-hand side of your screen.

Speaker #1: I will now hand over to Tim to begin the presentation.

Speaker #2: Thank you very much, Vivi, and thank you everyone for joining us. So today we're going to take you through interim results for the 6-month period ended 30 June, 2026.

Tim Prestidge: Thank you very much, Vivian. Thank you everyone for joining us. Today we are going to take you through our interim results for the six-month period ending 30 June 2026. Actually, this is one of two announcements that have come out today. Before I start on the interim results, the first thing I am going to do is just mention the other announcement, which is regarding our CFO, Brad Ormsby. Brad has been with the group for just over 11 years now, and he has made the decision to retire from the group. I just wanted to mention a bit about his contribution to the group and the experience that he has brought. Brad has had a huge impact on the group since joining.

Speaker #2: 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 eleven years now, and he's made the decision to retire from the group.

Speaker #2: And I just wanted to mention a bit about his contribution to the group and the experience that he's brought. So, Brad has had a huge impact on the group since joining.

Speaker #2: He really lives and breathes the Judges culture, and is amongst its greatest ambassadors. I'm really grateful for the impact that he's had, and for how he's developed financial acumen within the group—particularly as well for how he's worked so hard to develop such strong relationships both with our colleagues within the group, and also with the investor community outside the group.

Tim Prestidge: He really lives and breathes the Judges culture and is amongst its greatest ambassadors. Really grateful for the impact that he has had, and how he has developed our financial acumen within the group, and particularly as well for how he has 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 has given us 12 months' notice, and he is going to absolutely be around to help in identifying his successor and in the transition process. I would like to thank Brad very warmly on behalf of the group, for the work that he has done for us and for staying around. I look forward to continuing to work with him over the next 12 months. Brad will say a little bit more during his presentation. Okay, let us start talking about our interim results now.

Speaker #2: 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.

Speaker #2: 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 the for staying around and look forward to continuing to work with him over the next 12 months.

Speaker #2: Brad, I'll say a little bit more during his presentation. Okay, I'm going to start talking about our interim results, so we can move to the next slide.

Tim Prestidge: If we can move to the next slide. The first thing I will do is say a little bit about what Judges Scientific is, who we are, and our strategy. Judges Scientific, we are a buy and build group in scientific instruments markets. If I start in the top left hand corner, there are three pillars of our shareholder value, three pillars 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. The ongoing need for the measurement and assessment of variables associated with scientific techniques and instruments associated with scientific processes. 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. There are many businesses in the world.

Speaker #2: 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 instruments markets.

Speaker #2: If I start in the top left-hand corner, there are three pillars of our shareholder value—three pillars under which our model is based: long-term drivers.

Speaker #2: What are the long-term drivers? We talk here about long-term secular trends in research and scientific techniques. So the ongoing need for the measurement and assessment of variables associated with scientific techniques, and instruments associated with scientific processes.

Speaker #2: And those things in turn find increasing application in commercial and industrial opportunities. Okay, and we see those as very long-term secular drivers. The other aspect is a large deal pool.

Speaker #2: 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 or 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.

Tim Prestidge: If we think about a typical opportunity for us, maybe it is a company which is founded by someone that used to be in a research lab or used to be in a university. They have identified an opportunity. They have built a successful business. It is key for us, obviously, that it is a successful business. Maybe they have come to a conclusion over 15 or 20 years or so that it is time for them to move on and 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 fundamental to us that the businesses that we acquire have a low capital use. We are not looking for businesses that require a huge amount of investment and ongoing investment in capital equipment, in manufacturing equipment.

Speaker #2: Maybe they've come to a conclusion over 15 or 20 years or so that it's time for them to find to move on, find a different home for that business.

Speaker #2: 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.

Speaker #2: Also, fundamental to us are the deals; 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.

Speaker #2: We're talking about businesses that are asset-light, and the key benefit of that is high cash conversion. In other words, they convert the majority of their profit into cash.

Tim Prestidge: We are talking about businesses that are asset light, 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 is that compounding that generates shareholder value. Moving down to the bottom left. Characterizing us is an extensive and diversified global customer base. The sorts of businesses that we acquire, if they are successful, they have got successful by becoming diversified in their customer base. If they are UK based, for example, the UK does not own enough of a global market in scientific instruments to in and of itself make a successful company or a successful customer base.

Speaker #2: 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.

Speaker #2: So moving down to the to the bottom left, characterizing 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 their customer base.

Speaker #2: If they're UK-based, for example, the UK doesn't own enough of a global market in scientific instruments. In and of itself, make a successful company or a successful customer base.

Speaker #2: 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 look to acquire.

Tim Prestidge: Companies that are successful have clearly developed an ability to export and serve customers around the world, and that is a fundamental aspect of what we look to acquire. We do not buy turnarounds, we do not buy startups. We buy successful businesses, and inbuilt to that is that they are already diversified. The sorts of customer base would include universities, industrial customers, and other types of research group clients. We give there some examples, some typical examples across the group of the types of companies that, 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.

Speaker #2: We don't buy turnarounds. We don't buy startups. We buy successful businesses. And the implication of that is that they're already diversified. Their customer base would include universities, industrial customers, and other types of research compliance.

Speaker #2: And we did there some examples, some typical examples across the group of the types of companies that that sorry, the types of customers that are that our businesses have.

Speaker #2: If I move to the top top right, what is our growth strategy? Well, I've mentioned earlier, the companies that we acquire generate cash, low capital use, high cash conversion.

Speaker #2: 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.

Speaker #2: We turn that cash into investments in organic growth, so investments into the existing portfolio. And we turn that cash into a progressive dividend policy, to benefit our shareholders.

Tim Prestidge: We turn that cash into investments in organic growth, so investments into the existing portfolio. We turn that cash into a progressive dividend policy to benefit our shareholders. Again, those are the mechanisms through which we generate shareholder value. 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% CAGR of total revenue, 7% CAGR organic revenue, 23% CAGR of total EBIT, 8% CAGR of organic EBIT. Next slide, please. We are an experienced management team, who together bring a broad set of skills from the different experiences that they have had.

Speaker #2: Again, those are the mechanisms through which we generate shareholder value. And the execution of our strategy over the last 20 years—up to the end of the last financial year—includes 25 acquisitions and total dividend distributions of nearly ten times the admission price back in 2005.

Speaker #2: 19% CAGR of total revenue, 7% CAGR of organic revenue; 23% CAGR of total EBIT, 8% CAGR of organic EBIT. Okay, next slide please. We're an experienced management team who, together, bring a broad set of skills from the different experiences that they've had.

Speaker #2: So, on the call today: myself; Brad Ormsby, whom I mentioned earlier; also Ian Wilcock, our Group Commercial Director. Over the last couple of years, we've added into the team Rick Armitage as Group Acquisitions Executive, and John Dunn as Portfolio Chief Executive.

Tim Prestidge: On the call today, myself, Brad Ormsby, who I mentioned earlier, also Ian Wilcock, our Group Commercial Director. Over the last couple of years, we have added into the team, Rik Armitage as a Group Acquisitions Executive and John Dunne as Portfolio Chief Executive. Together we bring varied experiences from companies like Halma, Oxford Instruments, Danaher, and Renishaw. Next slide, please. I am going to start this next section by giving an overview of our performance in H1 and the key messages and key takeaways, after which I will hand over to Brad to take us through some of the more detailed financials. The headline here, challenging market conditions that weighed on our H1 performance, but our fundamentals remain intact. We certainly do not hide behind the fact that we had an exceptionally weak H1 performance. Our revenue was down 21% compared to prior year.

Speaker #2: Together, we bring varied experiences from companies like Halmer, Oxford Instruments, Danaher, and Beneficial. And next slide, please. So, I'm going to start this next section by giving an overview of our performance in H1, and the key messages and key takeaways. After that, I'll hand over to Brad, who will take us through some of the more detailed financials.

Speaker #2: So the headline here: challenging market conditions that weighed on our H1 performance. But our fundamentals remain intact. We certainly don't hide behind the fact that we had an exceptionally weak H1 performance.

Speaker #2: Our revenue was down 21% compared to the prior year. That would be 13% on a like-for-like basis. If we exclude the geotech coring expedition that happened in the first half last year—which was something that we knew wouldn't reoccur this year—and Brad will talk in more detail about that.

Tim Prestidge: That would be 13% on a like-for-like basis if we exclude the Geotek coring expedition that happened in the first half of last year, which was something that we knew would not reoccur 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. As we will talk about, for sure, we took some action on costs, but we never intend 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 is why the adjusted earnings per share is down so much. We highlight the external headwinds that affected us during the half.

Speaker #2: But adjusted earnings per share are 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.

Speaker #2: 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.

Speaker #2: 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 Geotech, which we knew about.

Tim Prestidge: Coming into the half, we mentioned already, that there was no coring expedition for Geotek, which we knew about. Also, orders and revenue were materially affected by continued uncertainties in US research funding. We knew this was an aspect which was going to affect us. It started around about, the beginning of Q2 in 2025. It continued through the balance of last year, and it is still affecting us now. In the first half of this year, we had two full quarters of that impact versus only one quarter in the first half of last year. We also continued to see postponement of offshore wind investments. Those started to impact us in H2 2025 and continued through H1 of this year. We had initially expected that those might improve a little.

Speaker #2: Also, orders and revenue were materially affected by continued uncertainties in US research funding. So we knew this was an aspect which was going to affect us.

Speaker #2: It started around about the beginning of the second quarter in 2025. It continued through the balance of last year, and it still affecting us now.

Speaker #2: So, in the first half of this year, we had two full quarters of that impact, versus only one quarter in the first half of last year.

Speaker #2: We also continued to see postponements of offshore wind investments. Those started to impact us in the second half of 2025 and continued through the first half of this year.

Speaker #2: 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, Fugro—had been highlighting in some of their announcements that they had expected to see a little bit of improvement from Q2 onwards.

Tim Prestidge: Some of the major suppliers, some of the major businesses in that industry, for example, Fugro, 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 did not occur. That did not happen. We did not see that improvement. As well, something that we had not really foreseen coming into the half were delays resulting from China's tax exemption processes. We should be clear, this is not 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 will be processes in place where those customers can be exempt from what is essentially a VAT, about 13% or so.

Speaker #2: 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 into the half were delays resulting from China's tax exemption processes.

Speaker #2: Now, we should be clear: this isn't something that is specific to Judges. This relates to any business, including domestic Chinese businesses supplying research or scientific instrumentation to customers in China, or to customers in China where those customers might benefit from government funding as part of the purchase.

Speaker #2: They would be normally, they would be processes in place where those customers can be exempt from what is essentially a VAT, about 13% or so because of the new five-year plan in China, several of those or those processes have been postponed.

Tim Prestidge: Because of the new five-year plan in China, those processes have been postponed. 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 controllables. We continued to take action to reduce costs at underperforming businesses. We took almost GBP 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 is an important point that we want to make about us.

Speaker #2: 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 laterally, orders not being placed for future business until those until those issues were resolved.

Speaker #2: Against the backdrop of these challenges, we'd highlight ongoing focus on controlling the controllables, so we continue to take action to reduce costs, but underperforming businesses.

Speaker #2: We took almost 2 million pounds 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 in to support recovery and growth opportunities.

Speaker #2: 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.

Tim Prestidge: We are 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 can be true at once. We took action to control costs at underperforming businesses while simultaneously investing elsewhere to support recovery and growth. Related to that was addressing underperformance. We highlighted in previous presentations that there were some businesses where there were product-specific issues or challenges, and we are pleased to report that there has been solid progress for those businesses. Software that needed to be developed has been launched. There has been operational improvements, there has been product rationalization, there has been cost reductions, and there is genuine order intake momentum out of those businesses.

Speaker #2: Both things can be true at once. We took action to control costs at underperforming businesses while simultaneously investing elsewhere to support recovery and growth.

Speaker #2: Related to that was addressing underperformance. 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.

Speaker #2: Software that needed to be developed has been launched. There have been operational improvements, product rationalization, cost reductions, and there is genuine order intake momentum now in those businesses.

Speaker #2: So, while we're a little behind the plan that we expected to be at by the end of the half, we're confident that by the end of the year there will be demonstrable progress at those businesses.

Tim Prestidge: While we are a little behind the plan that we expected to be at the end of the half, we are confident that by the end of the year, there will be demonstrable progress at those businesses. Concentrated growth. Despite revenue down 21%, eight of our businesses grew. As Brad will later show you a bridge, that growth was nowhere near enough to offset the decline that we saw elsewhere. 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, battery development, and some other industrial research markets. Of note, all three of those examples I gave were industrial markets. With all that, our strategy remains unchanged.

Speaker #2: Concentrated growth. So, despite revenue being down 21%, eight of our businesses grew. Now, as Brad will later show you with a bridge, that growth was nowhere near enough to offset the decline that we saw elsewhere.

Speaker #2: 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, battery development, and some other industrial research markets.

Speaker #2: So, of note, all three of those examples I gave were industrial markets. With all that, our strategy remains unchanged: discipline in the acquisition process; our structured and decentralized organic growth drivers, which Ian will talk about later.

Tim Prestidge: Disciplined acquisition process, our structured and decentralized organic growth drivers that Ian will talk about later, the importance of local definition and execution of market-led growth strategies. Each of our businesses responsible for defining their own strategy, and continued investment for long-term returns. We ended the half with a solid order book, and as we will talk about increasing momentum on order intake. 90% cash conversion, despite significantly lower profitability. We are recommending a 10% increase in the interim dividend. With that, I am now going to hand over to Brad for a detailed performance review.

Speaker #2: The importance of local definition and execution of market-led growth strategies—each of our businesses is responsible for defining their own strategy. And we will continue to invest for long-term returns.

Speaker #2: We ended the half with a solid order book and, as we'll talk about, increasing momentum in order intake. Ninety percent cash conversion, despite significantly lower profitability.

Speaker #2: And we're recommending a 10% increase in the interim dividend. With that, I'm now going to hand over to Brad for the detailed performance review.

Speaker #1: Thanks, Tim. And I think, firstly, thank you very much for your kind comments. Let me address this first. You'll be aware that I've made the decision to step down from serving as Judges' CFO. Just a couple of quick things on that.

Brad Ormsby: Thanks, Tim. Firstly, thank you very much for your kind comments. Let me address this first. You will be aware that I have made the decision to step down from serving as Judges CFO. I just want to say a couple of quick things on that. It is absolutely a very personal decision for me, and no reflection whatsoever on the great management team that is at Judges. I firmly believe they are the right people in place in order to deliver an excellent long-term future for Judges. I have been truly honored to be able to serve my colleagues and our shareholders over the past more than a decade. I know when I leave, I am going to miss Judges terribly because it is truly a wonderful company.

Speaker #1: 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.

Speaker #1: I've been truly honored 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 miss Judges terribly because it is truly a wonderful company.

Speaker #1: 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 will take a break and see what comes next.

Brad Ormsby: Once my successor has been found, I will do my very best to ensure they have a really good and proper handover. Then I will take a break and see what comes next. Moving on to results in the next slide. Total revenues down 21%. As Tim touched on before, like-for-like revenues down 13% when you exclude the 2025 Geotek coring expedition that we knew was not going to repeat in the H1 this year. A 21% revenue drop for a business like ours, with high operational leverage, results in a two-third drop in adjusted operating profits. Put simply, marginal gains in revenue positively add to profitability. Unfortunately, in this case, significant decline in revenue really, really hurts profits. Earnings per share was also significantly affected with adjusted basic earnings per share of only GBP 39.

Speaker #1: So, moving on to results and the next slide. Total revenues are down 21%. And as Tim touched on before, like-for-like revenues are down 13%. When you exclude the 2025 Geotech coring expedition that we knew wasn't going to repeat in the first half this year.

Speaker #1: Now, a 21% revenue drop for a business like ours—one with high operational leverage—results in a two-thirds drop in adjusted operating profits. Put simply, marginal gains in revenue positively add to profitability.

Speaker #1: And unfortunately, in this case, significant decline in revenue really, really hits profits. Earnings per share was also significantly affected, with adjusted basic earnings per share of only 39 pence.

Speaker #1: Moving on to order intake. Order intake declined by a similar amount to the like-for-like drop in revenue, with order intake 12% down in H1.

Brad Ormsby: Moving on to order intake. Order intake declined by a similar amount to the like-for-like drop in revenue with order intake 12% down in H1. However, since the end of H1, and I will talk about this in somewhat more detail in the order intake slide, we are now in a position where like-for-like order intake year to date is now almost at parity. The effect or the reason for the 12% drop in order intake, as Tim touched on earlier, was firstly, a full six months of the continuing uncertainties in the US. We only had one quarter in the first half last year. Add to that, the delays in the implementation of the China tax exemptions and good reason for why we were down.

Speaker #1: However, since the end of H1—and I'll talk about this in somewhat more detail in the order intake slide—we are now at a position where like-for-like order intake year to date is now almost at parity.

Speaker #1: And the effect, or the reason for the 12% drop in order intake, as Tim touched on earlier, was, firstly, a full six months of the continuing uncertainties in the US.

Speaker #1: We only had one quarter in the first half last year. And to add to that, the delays in the implementation of the China tax exemptions are a good reason for why we were down.

Speaker #1: 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 see some improvement.

Brad Ormsby: As Tim touched on, and I think it is an important point to make, the environment is difficult, but at the same time, we have managed to, in the last few months, really see some improvement. If you go back to the beginning of the year, and I will talk about this later, you will see how things have changed. I think it is a very, very important one because it is now at a place where we have good momentum in our order intake for a number of months now. Moving from P&L onto cash generation, the group has a strong track record of turning our profit into cash. Tim touched on this before about high cash conversion, and whilst we only generated GBP 4.3 million cash from operations, it was at a cash conversion of 90%, in line with historic expectations.

Speaker #1: 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 point, because it's now at a place where we have good momentum in our order intake for a number of months now.

Speaker #1: Moving from P&L onto cash generation, the group has a strong track record of turning our profit into cash. Tim touched on this before, talking about high cash conversion.

Speaker #1: 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 our adjusted net debt, which increased by £3 million.

Brad Ormsby: We continue to focus on working capital, and whilst it did increase in the period, impacting on our adjusted net debt, which increased by GBP 3 million, I will come and talk about this later. We remain with strong balance sheets and plenty of headroom on our covenants. Consequently, we have also provided for a 10% increase in the interim dividend to 36 pence per share, and that is in line with our policy of providing shareholders with progressively increasing dividend returns. Lastly, before I move on, a quick comment about the outlook for the rest of the year. We said in July when we gave our trading update that there were two key things we needed to deliver in order to be able to achieve the numbers in the market.

Speaker #1: And I'll come and talk about this later. We remain with a strong balance sheet and plenty of headroom on our covenants. Consequently, we've also provided for a 10% increase in the interim dividend to 36 pence per share, and that's in line with our policy of providing shareholders with progressively increasing dividend returns.

Speaker #1: Lastly, before I move on, a quick comment 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.

Speaker #1: 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.

Brad Ormsby: The first one is that we needed to achieve a good level of order intake in line with our expectations for Q3. As you will see, and I will talk through on the order intake slide, that we have done, we are almost all the way through to Q3, quite happy with the order intake, which then leaves us with an improved order book, an improved order outlook, and pretty much the orders we need in order to be able to deliver the full year results. Quite simply, it is a case of execution now. That does not mean to say it is absolutely straightforward, and it is certainly not without risk, but it is within our gift. Moving on to the next slide, I will just touch on a couple of things on the performance slide.

Speaker #1: And as you'll see, and I'll talk through on the order intake slide, that we have done with almost all the way through Q3 quite happy with the order intake.

Speaker #1: Which then leaves us with an improved order book, an improved order outlook, and pretty much the orders we need in order to be able to deliver the full-year result.

Speaker #1: So quite simply, it's a case of execution now. Now, that doesn't mean say it's absolutely straightforward. It's certainly not without risk, but it is within our gift.

Speaker #1: So moving on to the next slide. I've just touched on a couple of things in the performance slide. I did mention beforehand in the summary slide that the group has high operational leverage and the unfortunate consequence in this first half is that we suffer greatly from declining revenue on our profits.

Brad Ormsby: I did mention beforehand, in the summary slide, that the group has high operational leverage, and the unfortunate consequence in this H1 is that we suffer greatly from declining revenue on our profits. As Tim touched on, we are not a business, and I think he used these words, so I will repeat them, not a business that would indiscriminately cut costs in order to achieve a short-term profit target. However, importantly, that does not mean to say we do not take action where action is appropriate, and we have reduced the cost base of those businesses that were underperforming by GBP 2 million in this H1. At the same time, we have continued to invest for future growth and innovation. It is a really, really important point because it takes us on to comments on tax, where our effective rate of tax we expect for this year to be 18%.

Speaker #1: 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.

Speaker #1: However, importantly, that doesn't mean to say we do not take action. We're actions appropriate and we've reduced the cost base of those businesses that were underperforming.

Speaker #1: 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 onto comments on tax for our effective rate of tax we expect for this year to be 18%.

Speaker #1: And that is a consequence of the continued innovation, the continued investment in innovation, and the side product from wanting to be able to continue to improve our products for our customers and to delight our customers is that we're also able to tap into the UK's patent box scheme, which is enabling us to reduce our tax rate.

Brad Ormsby: That is a consequence of the continued innovation, the continued investment in innovation, and the side product from wanting to be able to continue to improve our products for our customers and to delight 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. So 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 us to the statutory results. The largest of these is the GBP 4 million non-cash amortization of the intangible assets, which we are required to recognize when we acquire businesses. Moving to the next slide on order intake, which really is our bellwether.

Speaker #1: So, a nice side benefit—which we expect to continue to benefit from as the years pass—comes from our intention to continue investing in innovation.

Speaker #1: And then, lastly, for those that are not as familiar with our P&L, we do have adjusting items that take us to the statutory results. The largest of these is the £4 million non-cash amortization of the intangible assets, which is required to be recognized when we acquire businesses.

Speaker #1: So, moving to the next slide on order intake, most important for me, talking through the graph that's on the right-hand side of the slide. There are three key lines on here: a red line, a black line, and a green line.

Brad Ormsby: First thing, most important for me, talk you through the graph that's on the right-hand side of the slide. There are three key lines on here, 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 as part of our budgeting process. Don't change unless we have a major acquisition. It's our target. The black line is our trailing 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 with which to satisfy our internal sales budget. The green line, which is the last four months of orders annualized. It's a shorter-term measure.

Speaker #1: The red line is our internal sales budget, which we set once a year and do not change as part of our budgeting process. We don't change it unless we have a major acquisition.

Speaker #1: It's our target. The black line is our trailing twelve 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 to satisfy our internal sales budget.

Speaker #1: And then the green line, which is the last four months of orders annualized, is a shorter-term measure. Unsurprisingly, it's a much more jagged line, but an important line nonetheless, because if that line is tracking the red line, then we know that we also have good operational capacity.

Brad Ormsby: 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. What's happened in the period? By the way, before we go on to that, the end of the graph is pretty much up to date. I'm 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.

Speaker #1: 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.

Speaker #1: So, I'm going to start from the beginning of the year and just remind everyone that at the year-end announcement in early April, we noted that Q1 order intake was down 18% in the first quarter—not a great start to the year.

Speaker #1: We have to be honest about that, and you can see that from the declining black line throughout the first quarter. But as we went into the start of the second quarter, order intake started to improve, and you can see the black line beginning to improve.

Brad Ormsby: As we went 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, and you could see that 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.

Speaker #1: As with the green line as well. And so, by the time we got to the end of June, there was some improvement, but still 12% down.

Speaker #1: However, that improvement continued as we went into the second half. And for the last two and a half months, there has again been continued improvement.

Speaker #1: And you can see that through both the black and green lines. And 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.

Speaker #1: And because this measure is the last four months, annualized, what that really means is we've had five months of order intake at and around our budget.

Brad Ormsby: Because this measure is the last four months annualized, what that really means is we've had 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 black line as it's working its way up, one hopes inexorably towards the red line for our budget. 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.

Speaker #1: Which means that we've got momentum coming back, and you can then see that in the black line as it's working its way up on hopes, inexorably, towards the red line for our budget.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: Now, clearly, we've been affected, as you can see from the geography—effects of China, effects of the continuing uncertainty in the U.S. academic research funding arena, and its knock-on effects around the world.

Brad Ormsby: Now, clearly, we've been affected, as you can see from the geography, effects of China, 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. I'm pleased with our team's dogged determination to be able to bring in extra orders and help improve things. That gives us a good degree of confidence looking forwards, it means that we can have enough orders with which to satisfy this year's consensus performance. 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.

Speaker #1: But we've managed to do this despite no real improvement in those environments, so I'm pleased with our team's dogged determination to bring in extra orders and help improve things.

Speaker #1: And that gives us a good degree of confidence looking forward. It means that we're going to have enough orders with which to satisfy this year's consensus performance.

Speaker #1: But as I said before, we still have to execute, and there is definitely still risk, because we have a lot of high-value orders and things can go wrong.

Speaker #1: However, we're in a good position this year because we've got the orders to be able to deliver. But moving on to the next slide.

Speaker #1: And this slide is our profit bridge, which reconciles between the 2025 first half and 2026 first half profit contributions to the businesses before central costs.

Brad Ormsby: This slide is our profit bridge, which reconciles between the 2025 H1 and 2026 H1 profit contributions to the businesses before central costs. Again, 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 them. Ian Wilcock will add a bit of color to things that we did in order to be able to achieve this over that period. As Tim Prestidge touched on before, I can say the red line greatly overshadows the green line. A large chunk of that is the consequence of no coring expedition at Geotek during the period, but also decline at 13 of our companies, some of which I have to say is as a consequence of delayed order intake, and its then subsequent delivery for customers.

Speaker #1: Yeah, the two green blocks are 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.

Speaker #1: Good performance from them. Ian will add a bit of color to things that we did in order to be able to achieve this over that period.

Speaker #1: 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 coring expedition at Geotek during the period.

Speaker #1: But also, decline at 13 of our companies, some of which, I have to say, is a consequence of delayed order intake and its subsequent delivery for customers.

Speaker #1: And 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 pause.

Brad Ormsby: 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 pause. Moving on to the next slide, please. Balance sheet and cash flows. Cash conversion continues to be at historic levels, which I'm pleased about. We continue to focus on working capital, although with the weaker H1 results and the need as a consequence to plan well for the significant delivery in the H2, working capital has increased. I think 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.

Speaker #1: Moving on to the next slide, please. Balance sheet and cash flows. Cash conversion continues to be at historic levels, which I'm pleased with in terms of working capital, although with the weaker H1 results.

Speaker #1: And the need, as a consequence, to plan well for the significant delivery in the second half. Working capital has increased. I think the year-end will give us a clearer picture of progress here.

Speaker #1: Gearing has inevitably increased as a consequence of the weaker performance, and that really is a mechanical effect on this measurement. But you will also see this morning that we have announced a two-year extension to our banking facilities, such that they now mature on 1 July 2030 instead of 2028.

Brad Ormsby: You will also have seen this morning that we have announced a two-year extension to our banking facilities, such that they now mature on 1 July 2030 instead of 2028. I want to formally thank our banks, the three banks that we have, Lloyds Bank, Santander Bank, and HSBC, for their continued support, which is not unappreciated by any means. Then lastly, for anyone that's followed the fact that we do have a small defined benefit pension scheme that we've had on our balance sheet for the best part of 11 years. August this year saw the group no longer having responsibility for this defined benefit pension scheme as it was fully bought out, such that now all members' future pension payments have all been secured and the group no longer has responsibility. Moving on to the next slide. Return on total invested capital, ROTIC.

Speaker #1: And I want to formally thank our banks, the three banks that we have—Lloyds, Santander, and HSBC—for their continued support, which is not unappreciated by any means.

Speaker #1: And then lastly, for anyone that's followed the fact that we do have a small defined benefit pension scheme, that we've had on our balance sheet for the best part of 11 years—August this year saw the group no longer having responsibility for this defined benefit pension scheme, as it was fully bought out, such that now all members' future pension payments have all been secured and the group no longer has responsibility.

Speaker #1: So, moving on to the next slide: return on total invested capital at Rotick. As a quick reminder for everyone, in its purest form, it's a function of the multiples we pay for the businesses we acquire.

Brad Ormsby: As a quick reminder for everyone, in its purest form, it is a function of the multiples we pay for the businesses we acquire. You can see at the far left-hand side of the graph, when we acquired Fire Testing Technology, our first acquisition, we paid close to 5 times, start around 20%, and growing ROTIC thereafter requires improved financial performance and/or buying businesses at lower multiples. When you pay higher multiples, you can see the cliff edge effect when we acquired GDS Instruments and Scientifica, which were then very large acquisitions for the group in 2012 and 2013, the cliff edge effect of doing that. Likewise, when we paid 7 times acquire in Geotek in 2022. Smaller acquisitions impact minimally on ROTIC now. What happened in the year?

Speaker #1: You can see that on the far left-hand side of the graph, when we acquired FTT, our first acquisition, we paid close to five times, starting around 20%, and growing ROTIC thereafter.

Speaker #1: 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 GVS 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 acquiring Geotek in 2022.

Speaker #1: And smaller acquisitions, in fact, have had minimal impact on Rotick now. What happened in the year, while the declining performance unfortunately means that Rotick has declined to around 13%, and it’s clear we have much work to do to return this figure to historic levels—and work we will do.

Brad Ormsby: Well, the decline in performance unfortunately means that ROTIC has declined to around 13%. It is clear we have much work to do to return this figure to historic levels, and work we will do. Moving on to the next slide. Our penultimate one, diversification. Simply put, diversification works for us. Just a couple of things to note. One, our focus added to life science, semicon 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. So good that we are working on that. Ian Wilcock again, will 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.

Speaker #1: So, moving on to the next slide—an ultimate one: diversification. Simply put, diversification works for us. Just a couple of things to note. One, our focus has been added to life science, semiconductor areas, and also into industry, particularly as a consequence of the continued uncertainty around academic funding, not only in the US but across the world.

Speaker #1: It's good that we're working on that. Ian, again, we'll touch on a little bit of this in a short while. And then, onto my last slide.

Speaker #1: 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 challenge and period of underperformance, the group has provided shareholders with a long track record of growth.

Brad Ormsby: Whilst we are going through a prolonged, continuing challenging period for performance, the group has provided shareholders with a long track record of growth, and we will return to growth. Those key measures Tim Prestidge touched on at the beginning of CAGRs, of revenue growth, and of profit growth will return to their rightful levels. Dividends have grown by at least 10% per annum over the history of the group, and we have increased this interim dividend by 10% to 36 pence per share. Lastly, the group's continued focus on cash generation serves to enable the group to weather challenging market conditions like we have been going through, enable us to make the acquisitions we want to be able to make when we want to make them, when we are able to make them. Quickly reduce acquisition debt and continue to fund those progressively increasing dividend returns for shareholders.

Speaker #1: And we will return to growth. And those key measures Tim touched on at the beginning, such as revenue growth and profit growth, will return to their rightful levels.

Speaker #1: 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 pence per share.

Speaker #1: 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. It enables us to make the acquisitions we want to be able to make, when we want to make them.

Speaker #1: When we're able to make them, quickly reduce acquisition debt and continue to fund those progressively increasing dividend returns for shareholders. And I will pass back to Tim now.

Brad Ormsby: I will pass back to Tim Prestidge now.

Speaker #2: Thank you, Brad. I'm going to talk through the growth strategy, and I'll also hand over to Ian to talk about the organic growth aspect of that.

Tim Prestidge: Thank you, Brad. I am going to talk through the growth strategy. I will also hand over to Ian to talk about the organic growth aspect of that. If we can move to 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. 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. 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.

Speaker #2: So, if we can move to 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.

Speaker #2: 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.

Speaker #2: We collect that cash, and we recycle that cash in this priority. So, first priority for us is to recycle that cash as investments in further acquisitions.

Speaker #2: Including reducing the debt, or paying down the debt, resulting from those acquisitions. Second priority for us is investments in organic growth—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.

Tim Prestidge: The second priority for us is investments in organic growth, 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 the progressive dividend policy, and I will talk more about that on a later slide. If we move to the next slide, I will talk a little bit more about our acquisition strategy. I think the key point in the heading there is around the strict discipline. 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.

Speaker #2: And the third priority is, then, the progressive dividend policy. I'll talk more about that on a later slide. If we move to the next slide, I'll discuss our acquisition strategy in a bit more detail.

Speaker #2: And I think the key point in the heading there is around the strict discipline. Strict discipline that we have is fundamental to our acquisition strategy.

Speaker #2: We think about the attributes of target businesses. We described earlier how the deal pool works. We still see the opportunity pool as large. There are strong exporters in global niche markets for scientific instruments and techniques related to the use of scientific instruments.

Speaker #2: A strong indicator for us, what indicates success, is strong cultural alignment. Those businesses have developed innovation, entrepreneurialism, openness within their culture, and also frugality.

Tim Prestidge: A strong indicator for us, what indicates success, strong cultural alignment. Those businesses have developed innovation, entrepreneurism, openness within their culture, and also frugality. They are 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 model. We look for businesses that generate sustainable EBIT and cash flows at a high return on sales. 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.

Speaker #2: Okay, they 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.

Speaker #2: That demonstrates to us differentiation in the niche that they serve, and pricing power, both of which are fundamental to our model. We look for businesses that generate sustainable EBIT and cash flows at a high return on sales.

Speaker #2: 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.

Speaker #2: Okay, the high barrier—or high hurdle—that we have, that potential acquisitions have to be able to cross, in order for us to be able to think about acquiring them.

Tim Prestidge: The high barrier or high hurdle that we have that potential acquisitions have 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 do not acquire a business in the context of selling it after 3 years' time. If we are 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 4 to 6 times for a business. We have paid 3 times. We have paid 7 times for our largest acquisition, Geotek, and that is generally around the size. We pay a multiple of EBIT. We do not pay a multiple of EBITDA.

Speaker #2: 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 a few years time.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: We don't pay a multiple of EBITDA. We see depreciation and amortization as a cost of running the business. We've demonstrated flexibility in the deal structures that we've used over the years.

Tim Prestidge: We see depreciation and amortization as a cost of running the business. We have demonstrated flexibility in the deal structures that we have used over the years, and our deals are funded with cash and debt. We buy high-quality businesses. Importantly, we buy businesses that are for sale. Okay, that might sound 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 is not that we are attempting to persuade owners who do not want to sell the business to sell to us. Deals typically have long incubation periods, and we acknowledge crystallization is erratic. There have been periods where we have gone 2 years without securing a deal. In fact, we are within one of those periods now. That happened again a few years ago. Equally well, there have been years where we have had 3 deals that were completed.

Speaker #2: And our deals are funded with cash and debt. We buy high-quality businesses; importantly, we buy businesses that are for sale. Okay, that might sound a little tongue in cheek, but we are talking about businesses that the owners have decided they want to sell for whatever reason.

Speaker #2: 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 incubation periods, and we acknowledge crystallization is erratic.

Speaker #2: There have been periods where we've gone two years without securing a deal. In fact, we're in one of those periods now. That happened again a few years ago.

Speaker #2: Equally well, there have been years where we've had three deals that were completed. Perhaps the most important statement here is: we aim to do deals. Absolutely, it's fundamental to who we are and what we do.

Tim Prestidge: Perhaps the most important statement here is we aim to do deals. Absolutely. It is fundamental to who we are and what we do, but not any specific deal. So that high barrier, that high hurdle means that we mustn't feel compelled to do a deal. We have a reputation as an honorable acquirer. We are mindful that for most of the people that we buy from, they will go through this process just once in their life, whereas it is something that we do much more regularly. So the importance of having built a reputation, maintaining our reputation, being open in the process that we follow, is absolutely key and critical to who we are and our culture. Generate cash, reduce debt, repeat. That is the fundamentals of this model. We made no acquisitions in H1 of this year.

Speaker #2: But not any specific deal. So that high barrier, that high hurdle means that we mustn't feel compelled to do a deal. We have a reputation as an honorable acquirer.

Speaker #2: We are mindful that for most of the people that we buy from, they will go through this process just once in their life. Whereas it's something that we do much more regularly.

Speaker #2: 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 and our culture.

Speaker #2: Generate cash. Reduce debt. Repeat. That's the fundamentals of this model. We made no acquisitions in half on of this year. But we want to emphasize the group sees a 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 at the disciplined EBIT multiples that we refer to here.

Tim Prestidge: We want to emphasize, the group sees a 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 at the disciplined EBIT multiples that we refer to here. 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 strategy that we have followed. I would highlight as well that if compared to maybe 9 to 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.

Speaker #2: So we do not interpret the lack of an acquisition in the first half as either a lulling activity or that our business that our acquisition strategy is ceasing to work in some way.

Speaker #2: We have absolute faith in the strategy that we follow. I’d highlight as well that, compared to maybe 9 to 12 months ago, we do feel that there are some stronger opportunities out there.

Speaker #2: 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.

Tim Prestidge: In other words, they stopped it themselves, having restarted that process, and we are seeing some examples like that. Absolutely, we are seeing good, positive flow of opportunities. Okay, we are going to move on and talk about investments in organic growth on the next slide. At this point, I am going to hand over to Ian. Thanks, Ian.

Speaker #2: Having restarted that process. So we're seeing some examples like that. And absolutely we are seeing good positive flow of opportunities. Okay. We're going to move on and talk about investments in organic growth on the next slide.

Speaker #2: And at this point, I'm going to hand over to Ian. Thanks, Ian.

Speaker #1: Thanks, Tim. And hello everyone. Yes, it has been well traded by my colleagues. We're going to look at organic growth for a few slides.

Ian Wilcock: Thanks, Tim, and hello, everyone. I have been well trained by my colleagues. We are going to look at organic growth for a few slides. Next slide, please. 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. We are deliberately an asset light group. We have as small a head office as reasonable, so that as much as possible in terms of resources are in the businesses, close to customers, driving innovation. That model only works, that is I think 19 separate individual P&Ls. That model only works if the left-hand side points, those fundamental points are working properly.

Speaker #1: So next slide please. 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.

Speaker #1: The key word in the title is decentralized. So we are deliberately an asset light group. We have a small as head office as reasonable.

Speaker #1: So that as much as possible in terms of resources are in the businesses close to customers driving innovation. Now that model only works when we have, I think, 19 separate individual P&Ls.

Speaker #1: That model only works if the left-hand side points—those fundamental points—are working properly. So, the first one I'll focus on for a second is strong leadership teams.

Ian Wilcock: The first one I will focus on for a second is the strong leadership teams. Obviously, we cannot be in the businesses. We are not in the businesses all the time, so we rely on having exceptionally good leadership teams in our businesses, and particularly focusing on the MDs having the right entrepreneurial growth-minded MDs. We put a lot of time in talent development and making sure we have got strong leadership teams. I am pleased to report we have had a very stable period with only one change in MD in the period, which is a retirement. I think we reported last time we had up to 7. So we have 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.

Speaker #1: Obviously, we can't be in the businesses; we're not in the businesses all the time. So, we rely on having exceptionally good leadership teams in our businesses.

Speaker #1: And particularly focusing on the MDs—having the right entrepreneurial, growth-minded MDs. We've put a lot of time into talent development and making sure we've got strong leadership teams.

Speaker #1: I'm pleased to report we've had a very stable period. Only one change in MD during the period, which was a retirement. I believe we reported last time that we had up to seven.

Speaker #1: 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.

Speaker #1: So, strong leadership teams. And if we get one thing right, it is having those entrepreneurial, growth-minded leadership teams locally. The second point is, again, this model only works if it is within a framework of robust governance and financial controls.

Ian Wilcock: Strong leadership teams, and if we get one thing right, it is having that entrepreneurially growth-minded leadership teams locally. The second point is, again, this model only works if it is within a framework of robust governance and financial controls. I do not want to give the impression we over-encumber incumbent businesses with processes and structures, quite the opposite. We want to minimize 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 ESOL controls, cybersecurity, and increasingly things like AI, responsible use of AI, to provide that framework for them to work in. The third point is we also recognize that where we have capability gaps, we can bring in additional help. We can bring an external resource.

Speaker #1: Now, I don't want to give the impression that we overencumber incumbent businesses with processes and structures. Quite the opposite. We want to minimize that. We want to use the agility, the small nimbleness of our businesses to our advantage.

Speaker #1: But of course we do need to have we do need to have processes in place. Obviously financial ones, but we focus a lot on things like export controls, cybersecurity, and increasingly things like AI, responsible use of AI.

Speaker #1: To provide that framework for them to work in. And the third point is we also recognize where we have capability gaps.

Speaker #1: We can bring in additional help. We can bring in external resources. For example, we’ve done some software outsourcing, which I’ll talk about in a second.

Ian Wilcock: For example, we have done some software outsourcing I will 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. We are putting, I think, 23 people through an AI apprenticeships as a new initiative specifically focused on adoption of AI for SME manufacturing businesses, so it is a really exciting initiative. So we get all that right on the left, which then talks to having the autonomy and accountability. But they do not work in isolation. We move to the right-hand side. We have an incredible amount 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. For example, we have a very strong sales community, operations community, finance community, and so on.

Speaker #1: But where we think we need to invest in a capability—for example, AI is a growing area, which we all know—and we're putting, I think, 23 people through an AI apprenticeship as a new initiative, specifically focused on adoption of AI for SME manufacturing businesses.

Speaker #1: It's a really exciting initiative. So we're getting all that right on the left, which then feeds into having the autonomy and the accountability. But they don't work in isolation.

Speaker #1: We've moved to the right-hand side. We have an incredible amount 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.

Speaker #1: For example, we have a very strong sales community, operations community, finance community, and so on. These communities share best practices as much as they can.

Ian Wilcock: These communities share best practices as much as they can. Whilst one of us in the exec may well sponsor them, they are generally run by one of the MDs. These are ground up grassroots communities, rather than a top-down imposed sort of thing. They are really, really successful. Many examples of sharing of best practice. We promote excellence, partly through these communities, but also through sharing case studies. We have a learning management system which we are increasingly using. We do also use it actually for some of the compliance training on the left, but we are using it increasingly to improve our capabilities and promote excellence. Then finally on the bottom right is we encourage ambition, really, really strong growth ambitions. I will talk a little bit about that, particularly as regards to our strategy development process in a couple of slides.

Speaker #1: And, whilst one of us in the exec may well sponsor them, they're genuinely run by one of the MDs. So these are ground-up, grassroots communities, rather than the top-down imposed sort of thing.

Speaker #1: And it’s been really, really successful, with many examples of sharing best practices. We promote excellence, partly through these communities but also through sharing case studies. We have a learning management system which we’re increasingly using.

Speaker #1: 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.

Speaker #1: 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 as regards our strategy development process, in a couple of slides.

Speaker #1: If we get all that right on that slide, then that gives us that long-term focus, that long-term growth, which is what Judges is known for. Next slide, please.

Ian Wilcock: We get all that right on that slide then. That gives us that long term focus, that long term growth, which Judges is known for. Next slide, please. 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 are seeing. 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. We picked up two here. THT is our calorimetry business focusing on understanding heat flows, and particularly as applied to a number of industrial processes and particularly in batteries.

Speaker #1: So we alluded last time, and 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.

Speaker #1: And one of the very exciting things, in what is obviously 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.

Speaker #1: Now, we've picked up two here. THT is our calorimetry business, focusing on understanding heat flows, particularly as applied to a number of industrial processes and especially in batteries.

Speaker #1: And we're seeing a really good recovery in that battery market. That's both in EVs and in energy storage. There are also interesting applications of AI in that business as well.

Ian Wilcock: We have seen a really good recovery in that battery market, and that is 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 are some really good growth prospects there. 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 ultra-high vacuum. That has historically been typically a big science thing, often synchrotrons, national facilities and very academic, but increasingly finding opportunities in industrial applications, particularly semicon, where the move to more ultra-clean environments is becoming more and more important. So really two interesting examples of a growing sense of application of our scientific techniques into industry. Next slide, please. We alluded last time to some of our businesses which had some product-related issues.

Speaker #1: So there's some really good growth prospects there. And the second one I would draw attention to is our UHV, which is one of our longest-standing businesses in the group—actually experts in moving things in ultra-high vacuum.

Speaker #1: Now, that's historically been a big science thing—often synchrotrons, international facilities, and very academic. But increasingly, we're finding opportunities in industrial applications, particularly in semicon, where the move to ultra clean environments is becoming more and more important.

Speaker #1: So, really, two interesting examples of a growing sense of application of our scientific techniques into industry. Next slide, please. We alluded last time to some of our businesses which had some product-related issues; Tim touched on this at the beginning.

Ian Wilcock: Tim touched on this at the beginning. Pleased to report some very good progress on these. Firstly, in Fire Testing Technology, it is our longest standing business in the group, right over 20 years. Ran into some particular competitive issues, particularly around software, required additional investment, particular focus on cost base and capabilities. We brought in quite a lot of external expertise there, and that has resulted in some really exciting new product launches. Very pleased to report some significant order growth, well on the way to recovery. These are multi-year projects, and big projects is where I report on. So really pleased to report some good progress there. The second one we drew attention to last time was Armfield. It is a business which focuses on educational equipment and through technology area. Again, product-related issue, slightly different, more to do with the extent of the product range.

Speaker #1: 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.

Speaker #1: We ran into some particular competitive issues, particularly around software, which required additional investment with a particular focus on cost base and capabilities. We brought in quite a lot of external expertise there.

Speaker #1: And that's resulted in some really exciting new product launches. I'm very pleased to report some significant order growth, well on the way to recovery. These are multi-year projects.

Speaker #1: And big, big projects are what we report on. So, really pleased to report some good progress there. The second one we drew attention to last time was Armfield.

Speaker #1: It's a business which focuses on educational equipment and food technology. Again, product-related issues are slightly different—more to do with the extent of the product range.

Speaker #1: So we did a lot around product rationalization, focus on margin improvement, cost reductions, and operations improvement. So, a multi-strand set of activities that we have good progress to report as well.

Ian Wilcock: We did a lot around product rationalization, focused on margin improvement, cost reductions, and operations improvement. Multi-strand set of activities there. Good progress to report as well. Order intake is up and new products being launched as well. Great progress on those two. The final slide from me. We have a very robust strategy process, which in fact have just come to the end of. We tend to do it in the summer. We run a, obviously, a budgeting process in the autumn, but we deliberately separate budgeting from strategy because they are fundamentally different disciplines. When we are developing the strategies, we ask the businesses to really think big. What do they need to do to double the EBIT in a 3-to-5-year period? What are those big rocks?

Speaker #1: Order intake is up, and new products are being launched as well. So, great progress on those two. And then, final slide for me: we've got a very robust strategy process, which we've actually just come to the end of.

Speaker #1: We tend to do it in the summer. We run, obviously, a budgeting process in the autumn, but we deliberately separate budgeting from strategy because they are fundamentally different disciplines.

Speaker #1: Now, when we're developing strategies, we ask the businesses to really think big. What do they need to do to double the EBITs in a three- to five-year period?

Speaker #1: What are those big rocks? What are those big key issues you can—initiatives they need to do? They need to be investing in now.

Ian Wilcock: 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 is my favorite time of the year because I really think it brings out the creativity and entrepreneurial nature of some of our businesses. They put that together into a strategy, into a 3-year plan, which is then presented. We are just at the end of that process. That then flows into the budget, which is more of a short-term commitment. I think I cannot overemphasize 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 is all from me. I will hand back to Tim.

Speaker #1: 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.

Speaker #1: And they put that together into a strategy, into a three-year plan, which is then presented. And just at the end of that process, that then flows into the budgets, which are more of a short-term commitment.

Speaker #1: And I think I kind of overemphasize how important that strategy process is. It helps us identify the investments we need to be making now to deliver growth in the longer term.

Speaker #1: Okay, I think that's all from me, so I'll hand back to Tim.

Speaker #2: Thanks, Stephen. So, the last point I wanted to touch on in our growth strategy and progressive dividend policy — just a reminder.

Tim Prestidge: Great. Thanks, Ian. Thanks. The last point I wanted to touch on in our growth strategy, a progressive dividend policy. Just a reminder, the 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. The board has increased the interim dividend by 10%. The cover for that, the dividend cover is 1.1, and we recognize completely that viewed in isolation, that level of cover is not sustainable.

Speaker #2: The businesses generate cash. We recycle that cash: investments in acquisitions, including paying down debt, investments in organic growth, and then a progressive dividend policy.

Speaker #2: That policy is to increase our total annual dividend by a minimum of 10% annually, subject always to appropriate cover and to no constraint on the group's capacity to continue to invest in its priorities, one or two.

Speaker #2: So, investments in acquisitions and investments in organic growth. The Board has increased the interim dividend by 10%. Now, the cover for that dividend is 1.1.

Speaker #2: And we recognize completely, 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.

Tim Prestidge: But it is important to understand that that is driven by the particularly low result in the H1 of the year. Okay. We do expect as a result comes through for the H2, that mechanistically that number will improve. The increase in the interim dividend is a statement of confidence from the group that the group will weather the current headwinds, the current macro headwinds and the confidence in the future potential of the group. Okay. Importantly, the group is not constrained in its capacity for investments in acquisitions and investments in organic growth. Okay, I will move on to the final couple of slides, the outlook and investment case. Next slide, please. I just want to summarize what I have 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.

Speaker #2: Okay, we do expect, as the results come 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 headwinds, the current macro headwinds, and confidence in the future potential of the Group.

Speaker #2: Okay, and importantly, the Group is not constrained in its capacity for investments in acquisitions and investments in organic growth. Okay, let's move on to the final couple of slides: the outlook and investment case.

Speaker #2: So, next slide, please. I just want to summarize what I've 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.

Speaker #2: So, positively, we are seeing real momentum in order intake. As Brad mentioned, order intake was 18% down at the end of the first quarter, largely because the comparative quarter in the previous year was not impacted by US federal funding and science challenges.

Tim Prestidge: Positively, we are seeing real momentum in order intake. As Brad mentioned, 18% down at the end of the Q1, largely because of that impact of the comparative quarter previous year was not impacted by US federal funding of science challenges, whereas this year it was. 18% down at the end of the Q1, 12% down by the end of the H1. At the end of last week, just 1% down year to date. It feels like momentum building there. Also positively, early signs that the China's tax exemption processes are being resolved. We are having customers who had ordered equipment but asked us to delay sending them until these things resolved. They are now starting to ask for those things to be supplied.

Speaker #2: Whereas this year it was—so, 18% down at the end of the first quarter, 12% down by the end of the half, and at the end of last week, just 1% down.

Speaker #2: It reiterated, so it feels like momentum is building there. Also, positively, there are early signs that China’s tax exemption processes are being resolved. We’re seeing customers who had ordered equipment, but asked us to delay sending it until these things were resolved—they’re now starting to ask for those things to be supplied.

Speaker #2: The timing of these things—the improvements in order intake and the tax exemption process being resolved—inevitably leads to significant H2 weighting, indeed Q4 weighting.

Tim Prestidge: The timing of these things, the improvements in order intake, and the tax exemption process being resolved inevitably leads to a significant H2 waiting, indeed Q4 waiting, in terms of revenue. That has some execution risks, execution challenges for us. We are a collection of businesses that produce high-value capital equipment. A single instrument or two instruments missing or shifting a month could have an impact there. For example, if there is an instrument that is being shipped under specific terms or maybe it is delayed during shipment, we are mindful those are risks that exist. But the risks that we have are predominantly within our control. We now have good visibility with the improved order intake on the revenue that we need to deliver through the balance of the year.

Speaker #2: In terms of revenue, that has some execution risks and execution challenges for us. We are a collection of businesses that produce high-value capital equipment.

Speaker #2: 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 the specific terms—or maybe it's delayed during shipment—we are mindful those are risks that exist.

Speaker #2: But the risks that we have are predominantly within our control. Okay, so we now have good visibility, with the improved order intake, on the revenue that we need to deliver through the balance of the year.

Speaker #2: 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 at those businesses that have underperformed, in particular examples that I gave in the endgame earlier.

Tim Prestidge: 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 in the particular examples that I gave and Ian gave earlier. We are guiding trading in line with FY26 market expectations. We highlight some resilient markets, in particular those related to industrial. We are talking about the exposure that we have to semiconductor, improvements in battery development and battery technologies. Some other industrial research markets. But absolutely highlighting continued headwinds in scientific research. We see challenges remaining through the balance of this year with uncertainties from the US. Of course, we have the midterm elections coming up soon. The US budget for scientific research, where there were proposed cuts that were rejected by Congress.

Speaker #2: So we're guiding and training in line with FY26 market expectations. We highlight some resilient markets, in particular those related to industrial. We're talking about the exposure that we have to semiconductors, improvements in battery development and battery technologies, as well as some other industrial research markets.

Speaker #2: But it absolutely highlights continued headwinds in scientific research. We see challenges remaining through the balance of this year, with uncertainties from the US. Of course, we have the midterm elections coming up soon. The US budget for scientific research had proposed cuts that were rejected by Congress, but those funds never really flowed properly through the balance of 2026, and we don't expect to see a recovery there.

Tim Prestidge: But those funding never really flowed properly through the balance of 2026, and we do not expect to see a recovery there. We are also now very mindful that the US administration is talking about similar cuts to the 2027 budget. We do expect continued headwinds in the scientific research market generally. We understand the next Geotek coring expedition is not now expected earlier than 2028. Previously, we had anticipated that there might be a contract signed later this year for delivery at some point next year. The good news is that particular customer has had their funding approved, but we now understand that they are going to reverse the order of some of their projects, and so the coring expedition is unlikely to happen before 2028. We have confidence in the long-term drivers, and our business model for the group remains intact.

Speaker #2: And we're also now very mindful that the U.S. administration is talking about similar cuts to the 2027 budget. So we do expect continued headwinds in the scientific research market generally.

Speaker #2: We understand that the next-year tech quarry expedition is now not expected earlier than 2028. Previously, we had anticipated that there might be a contract signed later this year for delivery at some point next year.

Speaker #2: The good news is that that particular customer has had their funding approved, but we now understand that they're going to reverse the order of some of their projects.

Speaker #2: And so, the quarry expedition is unlikely to happen before 2028. We have confidence in the long-term drivers, and that business model for the group remains intact.

Speaker #2: That brings us on to the investment case for the group. So next slide please. So I reiterate, the 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, all together continue to generate shareholder value.

Tim Prestidge: That brings us on to the investment case for the group. Next slide, please. 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, all together continue to generate shareholder value. We have a robust business model that we pursue with discipline. Earnings enhancing acquisitions. We are diversified by geography and by application, and we note increasing diversification, particularly in industrial and commercial opportunities. Dividend growth greater than 10% for the last 19 years, actually at a CAGR of 21%. Okay, thank you. That is the last slide. We are going to now move to Q&A. Thank you.

Speaker #2: We have a robust business model that we pursue with discipline. Earnings-enhancing acquisitions are diversified by geography and by application, and we note increasing diversification, particularly in industrial and commercial opportunities.

Speaker #2: 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.

Speaker #2: Thank you.

Speaker #1: 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 it into the Q&A box situated on the right-hand side of your screen.

Moderator: 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 situated on the right-hand side of your screen. 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.

Speaker #1: 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?

Speaker #1: This slightly—sorry, 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 end policy.

Speaker #1: Dividend policy, sorry.

Brad Ormsby: I am very happy to take that one.

Speaker #2: I'm very happy to take that one.

Speaker #3: Right, do you want to start by taking this one?

Tim Prestidge: Right. Do you want to start by taking that one? Yeah.

Speaker #2: I think there are two points to the question here. One is your point about some respect, suggesting that we shouldn't do more than 10% increases to our dividend over the longer term, and perhaps apply that to share buybacks.

Brad Ormsby: I think there are two points to the question here. One is your point, in some respects, suggests that we should not do more than 10% increases to our dividend over the longer term, and perhaps apply that to share buybacks. Yes, to answer the first part of the question, absolutely, we have 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 is something which we continue to talk about. Given the last couple of years' performance, where we have not been at historic highs, we have retained a 10% increase and have not sought for the last few years to increase anything higher than 10%.

Speaker #2: And yes, to answer the first part of the question, absolutely. We've looked at and thought about share buybacks, and we see them as a viable use of capital allocation, but not necessarily at the moment.

Speaker #2: 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.

Speaker #2: And given the last couple of years' performance, where we haven't been at historic highs, we've retained the 10% increase and haven't sought, for the last few years, to increase anything higher than 10%.

Speaker #2: As regards the current situation, the groups in relation to share buybacks are probably—add this in now—that I don't feel personally, and I think the Board is 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.

Brad Ormsby: As regards the current situation, the groups in relation to share buybacks, I will probably add this in now, that I do not feel personally, and I think the board is in agreement with this, that the use of increasing debt in order to achieve share buybacks outside of everything else we are doing is necessarily an excellent use of our capital allocation at the moment. I certainly would feel that. I have always said when we do our acquisitions, you never want your latest acquisition to be your last one, where you accidentally over-leverage the group and cannot recover from that. The same thing, I would argue, would be said for share buybacks that increase our leverage, and we do need to de-leverage with improved performance first and foremost.

Speaker #2: I certainly would feel that; I've always said, when we do acquisitions, you never want your latest acquisition to be your last one—where you accidentally over-leverage the group and can't recover from that.

Speaker #2: The same thing I would argue would be the same would be said for share buybacks that increase our leverage. And we do need to deleverage with improved performance first and foremost.

Speaker #3: And I'd add to that, 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 have been an increasingly common point that's been raised.

Tim Prestidge: I would add to that. I think we acknowledge that since the share price has come off the highs of a couple of years ago, in conversations that we have had with investors, share buybacks has been an increasingly common point that has been raised. As we mentioned in the interim statement, it is not what we felt to be the most effective way of adding value, of returning cash to investors. We wanted to take the opportunity in these enhancements in the presentation we have given to reiterate that first and foremost in our capital allocation priority, we are a dividend stock. That does not mean that at some point in the future, we might also consider other ways of returning cash to investors. There have been examples in the past with special dividends as well.

Speaker #3: But as we mentioned in the interim statement, it's not what we felt to be the most effective way of adding value or returning cash to investors.

Speaker #3: So, we wanted to take the opportunity in this announcement and in the presentation we've given to reiterate that, first and foremost, in our capital allocation priority, we're a dividend stock.

Speaker #3: That doesn't mean that, at some point in the future, we might also consider other ways of returning cash to investors. And there have been examples in the past with special dividends as well, so yeah, it's something that we may again come to look at. But the conclusion we came to was that, at least in recent history, it was not the most effective way of us returning cash to investors.

Tim Prestidge: It is something that we may again come to look at, but the conclusion we came to was that, at least in recent history, it was not the most effective way of us returning cash to investors.

Speaker #1: Thank you. Our next question is on margin resilience. You noted a £2 million reduction in the cost base of underperforming businesses during H1.

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

Speaker #1: How much of this—sorry, 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?

Speaker #3: So, I think if I give a general overview there—and Ian perhaps will comment on some of that as well—the majority of that cost is absolutely in targeting underperforming businesses. The majority of that cost is related to headcount costs, okay?

Tim Prestidge: I think if I give a general overview there, and Ian perhaps would want to comment on some of that as well, the majority of that cost is absolutely in targeting underperforming businesses, the majority of that cost related to headcount cost. Absolutely, there were some difficult decisions to make, and that is part of, I think, what necessarily had to be made, where we had examples of businesses in the group where investments had been made previously that hadn't resulted in growth, hadn't delivered the growth that we expected. Then we had to make some tough decisions with those businesses to reverse some of those investments. Indeed, yeah, there were some structural reductions in headcount across some of those businesses. Ian, do you want to elaborate a bit more on that?

Speaker #3: And absolutely, there were some difficult decisions to make, and that is part of, I think, what necessarily had to be made, where we had examples of businesses in the group where investments had been made previously that hadn't resulted in growth, hadn't delivered the growth that we expected.

Speaker #3: Then we had to make some tough decisions with those businesses to reverse some of those investments. So, indeed, yeah, there were some structural reductions in headcount across some of those businesses.

Speaker #3: Ian, do you want to lay a little bit more on that?

Speaker #4: Yeah, I was just going to add, Tim, that, in fact, the two examples that we gave—FTT and Armfield—both launched new products, or updated products, as well as did the cost reduction.

Ian Wilcock: Yeah, I was just going to add, Tim, that in fact, the two examples that we gave, FTT and Armfield, both launched new products and/or updated products, as well as did the cost reduction. 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 cost.

Speaker #4: So it was done in a way which protected the innovation because the innovation particularly around the products, which were the two issues and the main issues in those businesses, had been maybe lacking and we need to address that.

Speaker #4: So, it was done in a way which protected that core innovation. Developments allowed us to launch new products while still, overall, reducing the envelope of cost.

Speaker #1: Thank you. And next, you have 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 intake?

Moderator: Thank you. Next we have, you reaffirm the current full-year market expectations. Could you please explain the key assumptions behind this guidance, particularly regarding second half revenue, operating margins and Q3 order intake?

Speaker #3: Do you want to take that initially, Bai?

Tim Prestidge: Do you want to take that initially, Brad? Add anything on top of your

Speaker #2: And this is on top of your.

Speaker #4: Yeah, I guess that's the key thing we said that we needed to get appropriate level of Q3 order intake. I think we've been quite clear in showing shareholders in the order intake slide that that certainly happened for us throughout the period, bearing in mind we still have another week or so left in Q3.

Brad Ormsby: Yeah, I guess that is the key thing. We said that we needed to get the appropriate level of Q3 order intake. I think we have been quite clear in showing shareholders in the order intake slide that that certainly happened for us throughout the period. Bear in mind, we still have another week or so left in Q3, but up to date, more than happy with that. So it is in line with our expectations. It gives us, together with the half year order book and what we have delivered so far in Q3, yes, a higher volume to deliver in Q4, but not something that we have not delivered before as a group. If you look from an earnings perspective, what we have got to do to meet market expectations is basically deliver 160 pence in the second half. We have done that before.

Speaker #4: But up to date, I'm more than happy with that. So it's in line with our expectations. It gives us, together with the half-year order book and what we've delivered so far in Q3, a higher volume to deliver.

Speaker #4: 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 160 pence in the second half now.

Speaker #4: We've done that before. We certainly, last year in not a brilliant year, did about 140 or so pence. What is slightly different this year versus last year is the effect of some of the adjustments to our cost base, which means that we will have a lower cost base in H2 this year compared to last year. Plus, also as I mentioned earlier, the benefits that we had besides 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.

Brad Ormsby: We certainly last year, in not a brilliant year, did 140-odd 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 also, as I mentioned earlier, the benefits that we had, 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 have never done before. As we said beforehand, it will be very much Q4 weighted just as a consequence of the fact that orders needed to come in Q3.

Speaker #4: 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 said beforehand, it will be very much Q4 weighted just as a consequence of the fact that orders needed to come in in Q3.

Speaker #4: We're building and continuing to build, but clearly it's not a balanced year—H1 versus H2—so there's more to deliver in H2 than H1.

Brad Ormsby: We are building and continuing to build, but clearly it is not a balanced year, H1 versus H2, so there is more to deliver in H2 than H1. Overall, it is not like we are asking our businesses to do something they have never done before, and I think that is the important point, and with a pretty reasonable order book. They can see that even at this stage, and we are not yet at the end of Q3. So I said it before, it is not without risk. Tim has mentioned it, I mentioned it. Things can go wrong. This is not a bulletproof guarantee from us that things cannot go wrong. But as I said, it is within our gift, and our businesses all have the opportunity and responsibility to make sure that they have planned properly, they have done everything they can to reduce the risk of it going wrong.

Speaker #4: 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, they can see that even at this stage—and we are not yet at the end of Q3.

Speaker #4: So I said it before, it's not without risk. Tim's mentioned it. I've 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.

Speaker #4: And we're not in a position, thankfully, where we're desperately waiting for a load of orders to come in in November that we hopefully can get out in December.

Brad Ormsby: 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.

Tim Prestidge: Just to reiterate, the bridge that we see is a lower cost base compared to the second half of last year, some impact from Patent 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 favor in H2, somewhat in reverse of the way it worked in H1.

Speaker #3: Just to reiterate, the bridge that we see is a lower cost base compared to the second half last year, some impact from pattern 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.

Speaker #4: It would be nice if it works in our favour in H2, somewhat in reverse of the way it worked in H1.

Speaker #1: Thank you. Our next question is: aside from recent disruption, what impact, if any, will the new Chinese procurement processes have on the group in the medium term?

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

Speaker #3: I mean, those processes are replacing previous ones. That really were I mean, we don't expect them to have a long-term impact on the group.

Tim Prestidge: Those processes are replacing previous ones that really were. We don't expect them to have a long term impact on the group. And 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 newly defined processes. Ian, do you have any other?

Speaker #3: 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.

Speaker #3: The impact that we've seen is delays. We don't think we've seen orders being lost, delays having orders having been received delays in shipping those orders, and then beyond that, delays in orders being placed until these processes have resolved.

Speaker #3: But I don't think we anticipate any fundamental changes in the future as a result of those newly defined processes. Ian, do you have any other?

Ian Wilcock: No, I would agree. We would largely see its orders, particularly the bidding processes, have been frozen by a lot of customers until it is resolved. Quite a lot of orders have moved to the right in China, but there is no indication that they will drop off. We would anticipate some decent recovery next year, I think, in the Chinese market.

Speaker #4: 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.

Speaker #4: So 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.

Speaker #1: Thank you. Next, we have the delay in sorry. The delay in a new quoring expedition seems longer than usual. If that is correct, what is the reason for this?

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

Tim Prestidge: The reason in this particular case is related to that. As I said, that customer has their funding approved, but they have elected to reverse the order of a couple of different things that they wanted to do. As we currently understand it, the coring expedition that we were to be involved in will follow another scientific or another expedition that they are doing about something slightly different. What we also highlight is that Geotek 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. The outcome of that is that we understand there are still plenty of opportunities out there.

Speaker #3: I mean, the reason in this particular case is related to that. So, as I said, 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.

Speaker #3: And so, as we currently understand it, the quoring expedition that we were to be involved in will follow another scientific or another expedition that they're doing about something slightly different.

Speaker #3: Whether that's 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.

Speaker #3: There was a show or an event a few months ago in France that was all about gas hydrate exploration and science. And the outcome of that is that we understand there are still plenty of opportunities out there.

Speaker #3: It's just we don't at current see any of those being viable to say, "Yes, there will definitely be a quoring expedition in 2027." But we're not highlighting at this stage any fundamental change in the market.

Tim Prestidge: It is just we do not currently see any of those being viable to say, "Yes, there will definitely be a coring expedition in 2027." We are not highlighting at this stage any fundamental change in the market.

Speaker #4: I think important to remind shareholders that these projects are incredibly expensive usually multiple tens of millions to actually put one of these projects on.

Brad Ormsby: I think important to remind shareholders that these projects are incredibly expensive. They are usually multiple tens of millions to actually put one of these projects on. So you have got to get significant amount of funding to be able to do this, and it is research. A lot of this is completely out of our control, unfortunately. Once a project is funded and we know it is going to happen, doing the pressure coring that we do for gas hydrates, we are the only company that can do it. That is very reassuring to us. But the timing, unfortunately, remains one which we do not have the control over.

Speaker #4: So you've got to get 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.

Speaker #4: Once a project is funded and we know it's going to happen, doing the pressure quoring that we do for gas hydrates—we are the only company that can do it.

Speaker #4: And so that's very reassuring to us, but the timing unfortunately remains one which we don't have control over.

Speaker #1: 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?

Moderator: Thank you. This next one is for you, Tim. How did your experience as a CEO at Renishaw and Halma prepare you for your current role as executive officer at Judges Scientific?

Speaker #3: Great question. Thank you. I guess, how long have we got? In several different ways. I think we're all, aren't we, the sum somewhat of our prior experiences.

Tim Prestidge: Great question. Thank you. I guess, how long have we got? In several different ways. I think, we are all, aren't we, the sum somewhat of our prior experiences, and I think it has 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, recognizing some of the real strengths in the previous companies I have worked for, around innovation, and patenting in particular, and bringing that to the fore here as a means of how to use patents and patentability as a driver of innovation. That is absolutely something that has been something that I have learned in the past and look to deploy here.

Speaker #3: 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—how to bring them and deploy them in this situation.

Speaker #3: So I think recognising some of the real strengths in those in the previous companies I've worked for, around innovation, and patenting in particular, and bringing that to the fore 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 looked to deploy here.

Speaker #3: And I think the people that already the model that Halmer has is really rather similar, to what we do here in terms of decentralised and autonomous structure.

Tim Prestidge: I think the people will know already that the model that Halma has is really rather similar to what we do here in terms of decentralized and autonomous structure. But many of the things that I learned there and fabulous people that I learned it from, in terms of thinking about operational metrics, and about expectations of what it means to operate really within a decentralized structure, are things that I have been able to introduce, develop and deploy here.

Speaker #3: But many of the things that I learned there, and the fabulous people that I learned from, in terms of thinking about operational metrics and about expectations of what it means to operate really within a decentralised structure, are things that I've been able to introduce, develop, and deploy here.

Speaker #1: Thank you, Tim. Our next question is: Are current market uncertainties leading to lower valuation multiples for potential acquisition targets in the scientific instruments niche?

Moderator: Thank you, Tim. Our next question is, are current markets and uncertainties leading to lower valuation multiples for potential acquisition targets in the scientific instruments niche?

Speaker #3: I think the simple answer to that is no. That's not our experience. If I think about the experience that we're having—9 to 12 months ago, let's say—we have to always put this into the context of the bar that we have.

Tim Prestidge: I think the simple answer to that is no. That is not our experience. If I think about the experience that we were having 9 to 12 months ago, let us say, we have to always put this into the context of the bar that we have here. We look to acquire successful businesses, and we look to acquire them in the context of keeping them forever. That is a really high bar. When you are looking at successful businesses, if you are having a conversation with a business and they are coming in off the back of a tough year, for example, but the owner of that successful business probably has a number in mind relative to where they used to be. So if anything, the inferred multiple might be higher rather lower. That can lead to some challenges in terms of how the deal might be structured, that still benefits both sides.

Speaker #3: We look to acquire successful businesses, and we look to acquire them in the context of keeping them forever. Okay? That's a really high bar.

Speaker #3: When you're looking at successful businesses, if you're having a conversation with a business and they're coming in off the back of a tough year, for example, the owner of that successful business probably has a number in mind relative to where they used to be.

Speaker #3: So, if anything, the inferred multiple might be higher rather than lower. That can lead to some challenges in terms of how the deal might be structured, while still benefiting both sides.

Speaker #3: And what we're seeing now is perhaps certainly a greater level of quality businesses coming into the sort of active deal opportunities that they were looking at.

Tim Prestidge: What we are seeing now is perhaps, certainly, a greater level of quality businesses coming into the sort of active deal opportunities that we are looking at. I do not think we are seeing that these are high-quality, successful businesses. So we are not seeing any sort of reduction or deterioration in that sense of the multiple expectations. On the other hand, we absolutely still see that our disciplined approach and the multiples that we offer, we still see an ability to attract and acquire businesses within those sort of multiples.

Speaker #3: But I don't think we're seeing that. These are high-quality successful businesses. So we're not seeing any sort of reduction or deterioration in that sense of the multiple expectations on the other hand, we absolutely still see that our disciplined approach and the multiples that we offer we still see an ability to attract and acquire businesses within those sort of multiples.

Speaker #1: Thank you, Tim. Our next question is: Does the improved order intake, from minus 12% in H1 to minus 1% year to date, imply Q3 orders are roughly plus 20%?

Moderator: Thank you, Tim. Our next question is, does the improved order intake from -12% in H1 to -1% year to date imply Q3 orders are roughly +20%?

Speaker #4: And that may be one implication of your calculation. What I can say is, I think it's quite helpful. Slightly different, but very, very close is the last four months of orders, which certainly have been at that level as well.

Brad Ormsby: That may be one implication of your calculation. What I can tell you that I think is quite helpful, slightly different, but very close is the last four months of orders certainly have been at that level as well. So it is a pleasing improvement for us. Don't get me wrong, I would much prefer to be talking about growth rather than a lack of negative decline. But all the same, going from -18 to -1 now, is a much more positive scenario for us. More importantly, as you would have seen earlier, the order intake slide showing the trailing 12 months ticking upwards, that really is the sign of progress, and that is the important thing for us, which we are very, very pleased about. But much work still to go, and we want that to keep ticking up.

Speaker #4: So, it's a pleasing improvement for us. Don't get me wrong; I'd much prefer to be talking about growth rather than a lack of negative decline.

Speaker #4: But all the same, going from 18 minus 18 to minus 1 now is a much more positive scenario for us. And more importantly, as you'll have seen earlier, the order intake slides showing the trailing 12 months ticking upwards.

Speaker #4: That really is the sign of progress, and that's the important thing for us, which we're very, very pleased about. But much work still to go, and we want that to keep ticking up.

Speaker #1: Thank you, Brad. The next question is: What equipment do you supply to the offshore wind sector?

Moderator: Thank you, Brad. The next question is, what equipment do you supply to the offshore wind sector?

Speaker #3: So in particular, that relates to our company GDS. GDS instruments. And so actually, the story I tell upon first being introduced to that business, the MD at the time told me that the best way to understand the type of equipment that they produce is to say, if they had existed several hundred years ago, we probably would not be visiting the tower of Pisa.

Tim Prestidge: In particular, that relates to our company, GDS Instruments. So, actually, the story I tell upon first being introduced to that business, the MD at the time told me that the best way to understand the type of equipment that they produce is to say if they had existed several hundred years ago, we would probably not be visiting the Tower of Pisa rather than visiting the Leaning Tower of Pisa, if that makes sense. In other words, it is the type of equipment for looking at static and dynamic loading of soils in foundations or unusual building environments. When you are looking to build offshore wind installations, particularly those that are tethered to the base of the sea, the material there, the soil, I think it has been described to me as more like yogurt than rock or a hard surface.

Speaker #3: Rather than visiting the Leaning Tower of Pisa, if that makes sense. In other words, it's the type of equipment for looking at static and dynamic loading of soils in foundations, or unusual building environments.

Speaker #3: And so when you're looking to build offshore wind installations, particularly those that are tethered to the base of the sea, the material and the soil—I think it's been described to me as more like yoghurt.

Speaker #3: The rock or hard surface. And so, there needs to be a really excellent understanding of its performance under dynamic and static load, because the types of loads that wind turbines are experiencing are very variable and very dynamic, depending on tides, wind, waves, and so on and so forth.

Tim Prestidge: There needs to be a really excellent understanding of its performance under dynamic and static load, because the types of loads that wind turbines are experiencing are very variable and very dynamic, depending on tides, wind, waves, and so on and so forth. So, the instruments are all about laboratory testing of subsea soil samples as a precursor to determining which sites are going to be used or which exact locations are going to be used for offshore wind turbines.

Speaker #3: So the instruments are all about laboratory testing of subsea soil samples as a precursor to determining which sites are going to be used or which exact locations are going to be used for offshore wind turbines.

Speaker #1: Thank you. Next, we have: 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?

Moderator: Thank you. Next we have, 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?

Tim Prestidge: You want to take that one, Graham?

Tim Prestidge: You want to take that one, Brad?

Speaker #4: I mean, to be clear, I can't give you a direct answer to that because we can't just can't measure that accurately. What we've always historically tried to explain to our shareholders is that we believe that certainly as of last year, around half of our revenue comes from the it from some of the world that is sort of indirectly financed as an example through entities like the NIH or other research institutes, etc.

Brad Ormsby: Well, to be clear, I cannot give you a direct answer to that because we just cannot measure that accurately. What we have always historically tried to explain to our shareholders is that we believe that certainly as of last year, around half of our revenue comes from the academic world, around a sixth of it from some of the world that is indirectly financed, as an example, through entities like the National Institutes of Health or other research institutes, et cetera. So if you then apply that into the US, somewhere between half and two-thirds of the revenue that we are able to deliver for the group in the US will be affected by federal funding. But how much of that, cannot absolutely say, simply because it is a piece of the funding that they will get because universities will have direct funding, they will have funding that comes from other sources.

Speaker #4: So if you then apply that to the US, somewhere between half and two-thirds of the revenue that we're able to deliver for the group in the US will be affected by federal funding.

Speaker #4: But how much of that can't absolutely say simply because it is a piece of the funding that they will get, because universities will have direct funding or funding that comes from other sources.

Speaker #4: But an institute like the NIH will also have that situation where a large piece of funding comes from government, but they'll also have other funding arrangements as well.

Brad Ormsby: But an institute like the National Institutes of Health will also have that situation where a large piece of funding comes from government, but they will also have other funding arrangements as well. So trying to work out a number is nigh on impossible. But we looked at last year in the region of 25% of our total revenue was generated in the US, and that the revenue that we have normally generated, around two-thirds of that, is exposed to the effects of reductions or uncertainties in federal funding, but you certainly cannot put an absolute number on that, unfortunately. I hope that is helpful, but I appreciate that there is a degree of vagueness in that answer because we just cannot give anything clearer.

Speaker #4: So trying to work out a number is nigh on impossible. But we looked at last year in the region of 25% of our total revenue was generated in the US and that the revenue that we've normally generated around two-thirds of that is exposed to the effects of reductions or uncertainties in federal funding.

Speaker #4: But you certainly can't put an absolute number on that, unfortunately. I hope that's helpful, but I appreciate there's a degree of vagueness in that answer, because we just can't give anything clearer.

Speaker #1: Thank you. And of the revenue, do you think any comes back versus it's gone for good?

Moderator: Thank you. Of the revenue lost in China this half, how much do you think comes back versus is gone for good?

Speaker #4: I would say that the vast majority of that is about delay. And one example I can speak of is that we had a significant OEM order and a distributor order in the first quarter of last year that we were expecting to have at least in the first half of this year.

Brad Ormsby: I would say that the vast majority of that is about delay. One example I can speak of was we had a significant OEM order, I am sorry, distributor order in Q1 of last year that we were expecting to have at least in H1 this year. I say at least in H1 because we were expecting it towards the end of Q1, then pushed out into Q2. The consequence of this is now it is expected at some point in H2. It is not yet come in, so we are expecting Q4. It has not done and has gone away, but until there is the resolution of the 13% tax, which is purely a once this has been processed and they are in a position to be able to claim the exemption, they will place an order with us.

Speaker #4: And I say at least in the first half because we were expecting it towards the end of the first quarter. Then pushed out into the second quarter.

Speaker #4: And the consequence of this is now it's expected at some point in H2. It's not yet come in. So we're expecting Q4. What it hasn't done and has gone away, but until there is the resolution of the 13% tax, which is purely a once this has been processed and they're in a position to be able to claim the exemption, they will place an order with us.

Speaker #4: So I don't believe we've really lost much at all. But we're certainly very clear that existing orders - their delivery has been pushed to the right and expected routine and other orders have also been pushed to the right.

Brad Ormsby: I do not believe we have really lost much at all, but we are certainly very clear that existing orders, their delivery has been pushed to the right, and expected routine and other orders have also been pushed to the right. So whether they come in this year or whether they come in the start of next year into 2027, at the moment is still slightly a question. But we are feeling a lot better that the process there is improving because we have had examples of existing orders now being asked to be delivered. So progress is definitely happening. What we cannot do is put an absolute on when everything is back to complete norm or normality.

Speaker #4: So whether they come in this year or whether they come in start of next year into 27, at the moment is still slightly a question.

Speaker #4: But we're feeling a lot better that the process there is improving, because we've had examples of existing orders now being asked to be delivered.

Speaker #4: So progress is definitely happening. And what we can't do is put an absolute on when everything's back to complete normal or normality.

Speaker #1: Thank you, Brad. Next, we have: Where is the order intake inflection coming from? Is it universities or industrial activity?

Moderator: Thank you, Brad. Next we have, where is the order intake inflection coming from? Is it universities or industrial activity?

Tim Prestidge: I am happy to take that one. It is a real mix, actually, and I think it is worth highlighting that we are seeing this improved momentum, but we are also flagging that we are still seeing and expect to continue to see into 2027, continued challenges around the US federal funding research. The improved order momentum, we are not characterizing it as a general sort of rising tide, if you like, or a general recovery in the scientific instrumentation market. Rather, what we are seeing is, pretty broadly across our businesses, we are seeing big-ticket items, instruments, opportunities, contracts coming through that are across. Certainly, there is some in scientific instrumentation, but also in industrial spheres, including battery technology, including in semiconductor. So pretty broad across the group, across multiple businesses and across those sectors.

Speaker #3: I'm happy to take that one. It's a real mix, actually. And I think it is worth highlighting that what we are seeing this improvement momentum but we're also flagging that we expect we are still seeing and expect to continue to see into 2027 continued challenges around the US federal funding of research.

Speaker #3: So what the improved order momentum we are not characterising it as a general sort of rising tide, if you like, or a general recovery in the scientific instrumentation market.

Speaker #3: Rather, what we're seeing is pretty broadly across our businesses we are seeing big ticket items, instruments, opportunities, contracts coming through that are across certainly yeah, there's some in scientific instrumentation but also in industrial including batteries and battery technology, including in semiconductor.

Speaker #3: So pretty broad across the group, across multiple businesses and across those sectors. Worth highlighting then that we are seeing that high-value scientific instrumentation is still being ordered from time to time out of the US.

Tim Prestidge: Worth highlighting, then, that we are seeing that high-value scientific instrumentation is still being ordered from time to time out of the US. That is examples where there are research groups in the US who are finding a way through the processes, justifying and getting the funding that they need, and those things are coming through, they are being ordered. So what we are seeing across the group is, are these opportunities that have been typically in the opportunity pipeline for quite some time. The businesses have been saying, "We expect these things to come through," and they have diligently working on that, and those things have been coming through over the last few months.

Speaker #3: That is an example where there are research groups in the US who are finding a way—finding a way through the processes, justifying and getting the funding that they need.

Speaker #3: And those things are coming through. They're being ordered. So what we're seeing across the group is that these opportunities that have been typically in the opportunity pipeline for quite some time the businesses have been saying we expect these things to come through and their diligently working on that.

Speaker #3: And those things have been coming through over the last few months.

Speaker #1: Thank you, Tim. We are now moving on to our final question. If you have any further questions, please email the team or respond to any questions that weren't covered today.

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

Speaker #1: 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?

Speaker #4: 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 our North America was down.

Tim Prestidge: I think, the data that we showed, Europe was down 20% through the H1. North America was down 7%. What we did highlight was that while North America was down, there was a bigger impact than 7% related to the challenges with continued uncertainty in federal funding of science. But we did benefit from some of our businesses seeing quite region-specific recovery in order intake. Okay, and that was non-academic recovery in order intake in the States. So that offset that. The 7% decline was perhaps less than we might normally have expected, if that makes sense, relative to some of that recovery in some of the businesses. The decline in Europe was relatively broad. We certainly saw a decline at some OEMs, where those OEMs might be scientific instrument OEMs that we sell to, and they supply into the US.

Speaker #4: There was a bigger impact than 7% related to the challenges with continued uncertainty in federal funding of science. But we did benefit from some of our businesses seeing quite region-specific recovery in order intake.

Speaker #4: And that was non-academic recovery in order intake in the States. So that offset that. The 7% decline was perhaps less than we might normally have expected if that makes sense, relative to some of that recovery in some of the businesses.

Speaker #4: And the decline in Europe was relatively broad. We certainly saw a decline at some OEMs, where those OEMs might be scientific instrument OEMs that we sell to and they supply into the US.

Speaker #4: And there was also a reasonably significant impact from a one-off, non-recurring industrial order that we saw last year, that we didn't expect to see this year.

Tim Prestidge: And there was also a reasonably significant impact from a sort of one-off non-recurring order that we saw, industrial order that we saw last year, that we didn't expect to see this year.

Speaker #1: Thank you, Tim. That's all the questions we have time for today, so I'll hand back over to you for any closing remarks.

Moderator: 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.

Speaker #3: Thank you very much. Thanks, everyone, for attending. I think the main closing remarks are just to reiterate that we acknowledge a very challenging set of results in the first half.

Tim Prestidge: I think 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 H1, 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 H2 around order intake, as a result of which we maintain guidance for the end of the year, and acknowledge that there remains considerable risk to the execution, challenges for the execution, but those things are predominantly within our control. But fundamentally, a high degree of confidence in the future of the business, whether the current geopolitical challenges and the strategy remains intact, the fundamental long-term drivers and secular growth trends remain intact. Thank you.

Speaker #3: But there are some positives in terms of continuing to control the controllables and solid progress at businesses that have been underperforming. We also highlight the momentum that's been building through the second half around order intake.

Speaker #3: As a result of which we maintain guidance for the end of the year. And acknowledge that there remains considerable risk to the execution challenges for the execution but those things are predominantly within our control.

Speaker #3: But fundamentally, a high degree of confidence in the future of the business, whether the current geopolitical challenges and the strategy remain intact, the fundamental long-term drivers, the secular growth trends remain intact.

Speaker #3: Thank you.

Speaker #1: Thank you to 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.

Moderator: 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.

Browse all earnings call transcripts

Half Year 2026 Judges Scientific PLC Earnings Call

Request TrialDemo

Judges Scientific

Earnings