Show notes
Judges Scientific Plc (JDG.L), listed on AIM, has built its entire identity around one thing: a disciplined and highly effective buy-and-build strategy. Over the years, that strategy has turned the company into a respected specialist in high-end, niche scientific instruments: pieces of mission-critical kit used by universities, research labs, manufacturers and regulators around the world.Since its founding in 2002 and its first acquisition in 2005, Judges has become one of the most successful consolidators in a fragmented industry. It targets high-quality businesses with dependable sales, profits and cash flow, and once they’re brought into the group, they benefit from steady operational support and the financial stability of a larger organisation. Their cash generation then fuels debt reduction and funds the next round of acquisitions. It’s a flywheel that has been spinning for two decades, helping the company deliver an impressive 24% compound annual growth rate since its IPO in 2003.But the last 18 months have tested that model in ways investors haven’t seen for years. The share price has fallen more than 50%, not because the strategy has failed, but because several challenges arrived all at once.First, the company’s valuation had simply run too hot. After years of near-flawless execution, the stock was priced for perfection, and that left no room for disappointment. The disappointment came in the form of a major acquisition that didn’t perform as expected in its first year, triggering a profits warning and shaking confidence.Then came external pressures. China shifted its procurement policies in favour of domestic suppliers, creating an abrupt slowdown in demand for Judges’ instruments. Meanwhile, in the US, delays and cuts in federal research budgets put pressure on university spending, squeezing order flow from another key region.And layered on top of all of this was the news that long-standing CEO and founder David Cicurel will step down in February 2026. Any leadership transition naturally results in uncertainty and anxiety among investors.Taken together, it was a perfect storm.Yet storms pass, and in Judges’ case, many of the clouds already appear to be clearing. The valuation multiple is now roughly half its peak, creating a far more reasonable starting point for new investors. The large acquisition that stumbled out of the gate is showing clear signs of recovery in its second year. Chinese demand is beginning to rebound, and US university funding conditions are improving. More particularly, the succession plan looks solid: Cicurel will move into the role of Non-Executive Chairman, while incoming CEO Dr Tim Prestidge, currently Group Business Development Director, offers continuity rather than disruption.Crucially, the earnings power of the business hasn’t deteriorated. If anything, the cadence of acquisitions means its long-term potential is stronger than ever. For some investors, the recent sell-off may look less like a red flag and more like an opportunity.Judges Scientific remains a business with a proven model, a strong culture and a two-decade track record of compounding growth. To dive deeper into the company’s history, challenges and prospects, enjoy this podcast conversation with Chris Waller of Plural Investing, author of the Hidden Gems Substack and a former Goldman Sachs Asset Management professional with an MBA from Columbia Business School. Get full access to Rock & Turner Investment Analysis at rockandturner.substack.com/subscribe