Final Results

RNS Number : 8448D

Smart(J.)&Co(Contractors) PLC

29 October 2015

 



J SMART & CO (CONTRACTORS) PLC AND SUBSIDIARY COMPANIES

ACCOUNTS FOR THE YEAR ENDED 31st JULY 2015

PRELIMINARY STATEMENT

ACCOUNTS

Headline Group profit for the year before tax, including an unrealised deficit in revalued property as required by the International Financial Reporting Standards came out higher than anticipated at £3,544,000 compared with £1,207,000 for last year.  If the impact of revalued property is disregarded, then a truer reflection of Group performance emerges in the form of an underlying profit before tax for the year under review of £3,755,000 (including £1,318,000 profit from property sales and joint venture property sales) which compares with the figure for underlying profit last year of £1,764,000 (no property sales but including £1,299,000 profit from the sale of our listed stock market investment portfolio).

The Board is recommending a Final Dividend of 2.10p nett making a total for the year of 3.02p nett which compares with 2.96p nett for the previous year.  After waivers by members holding over 50% of the shares, the Final Dividend will cost the Company no more than £426,000.

TRADING ACTIVITIES

Group construction activities carried out including private residential sales decreased by 13%.  Disregarding private residential sales Group construction activities increased by 40%.  Own work capitalised decreased by 63%.  Group revenue decreased by 9% and headline Group profit increased by almost threefold.  Underlying Group profit excluding the unrealised deficit in revalued property increased by 113%.

Turnover in contracting was considerably more than last year and the loss was reduced.  As forecast private residential sales were substantially less than the previous year.  Sales in precast concrete manufacture were marginally up on last year and a small profit was achieved.

The two large mixed social housing and private residential developments at Seafield Street and Pilton Drive, Edinburgh, referred to in the last annual report are proceeding satisfactorily.  A second phase of social housing has commenced at Pilton Drive.

Occupancy levels at our industrial estates remain satisfactory.  Whilst occupancy levels at our commercial office premises continue to struggle, the level of interest is now more encouraging.

FUTURE PROSPECTS

Work in hand in contracting is less than at this time last year, although there is a reasonable prospect of more work in the short to medium term.  As has become the norm prices for this work are highly competitive.

Private residential sales will be more than last year.  The first phase of our industrial development which commenced recently at Bellshill Industrial Estate, Glasgow is attracting healthy interest.  Property values remain buoyant, however writedowns in certain instances cannot be ruled out.

Taking the foregoing into account and the fragile state of the current economic recovery it is not possible at this stage to make an informed forecast of the outcome for the current year.

	J. M. SMART
	Chairman

CONSOLIDATED INCOME STATEMENT

for the year ended 31st JULY 2015

		2015		2014
		£000		£000
Group construction activities		21,556		24,805
Less: Own construction work capitalised		(737)		(1,994)
REVENUE		20,819		22,811
Cost of sales		(18,061)		(22,521)
GROSS PROFIT		2,758		290
Other operating income		5,241		5,253
Net operating expenses		(5,839)		(5,652)
OPERATING PROFIT/(LOSS) BEFORE PROFIT ON SALE AND NET DEFICIT ON VALUATION OF INVESTMENT PROPERTIES		2,160		(109)
Profit on sale of investment properties		60		-
Net deficit on valuation of investment properties		(211)		(782)
OPERATING PROFIT/(LOSS)		2,009		(891)
Share of profits in Joint Ventures		1,306		469
Income from available for sale financial assets		28		143
Profit on sale of available for sale financial assets		1		1,299
Finance income		200		187
PROFIT BEFORE TAX		3,544		1,207
Taxation		(546)		(182)
PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS		2,998		1,025
EARNINGS PER SHARE - BASIC AND DILUTED		6.45p		2.18p

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31st JULY 2015

	2015		2014
	£000		£000
PROFIT FOR THE YEAR	2,998		1,025
OTHER COMPREHENSIVE LOSS
Items that may be subsequently reclassified to the Income Statement:
Fair value adjustment of available for sale financial assets	(46)		-
Fair value of available for sale financial assets reclassified to Income Statement	-		(1,266)
Tax adjustment on fair value reserve	-		180
TOTAL ITEMS WHICH MAY BE SUBSEQUENTLY RECLASSIFIED TO INCOME STATEMENT	(46)		(1,086)
Items that will not be subsequently reclassified to the Income Statement:
Actuarial loss recognised in defined benefit pension scheme	(1,003)		(1,793)
Deferred taxation on actuarial loss	201		358
TOTAL ITEMS THAT WILL NOT BE SUBSEQUENTLY RECLASSIFIED TO INCOME STATEMENT	(802)		(1,435)
TOTAL OTHER COMPREHENSIVE LOSS	(848)		(2,521)
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR, NET OF TAX	2,150		(1,496)
ATTRIBUTABLE TO EQUITY SHAREHOLDERS	2,150		(1,496)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

as at 31st July 2015

	Share Capital	Capital Redemption Reserve	Fair Value Reserve	Retained Earnings		Total
	£000	£000	£000	£000		£000
At 1st August 2013	942	66	1,086	89,031		91,125
Profit for the year	-	-	-	1,025		1,025
Other comprehensive loss	-	-	(1,086)	(1,435)		(2,521)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR	-	-	(1,086)	(410)		(1,496)
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled	(6)	-	-	(279)		(285)
Transfer to capital redemption reserve	-	6	-	(6)		-
Dividends	-	-	-	(862)		(862)
TOTAL TRANSACTIONS WITH OWNERS	(6)	6	-	(1,147)		(1,147)
At 31st July 2014	936	72	-	87,474		88,482
Profit for the year	-	-	-	2,998		2,998
Other comprehensive loss	-	-	(46)	(802)		(848)
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR	-	-	(46)	2,196		2,150
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled	(17)	-	-	(814)		(831)
Transfer to capital redemption reserve	-	17	-	(17)		-
Dividends	-	-	-	(852)		(852)
TOTAL TRANSACTIONS WITH OWNERS	(17)	17	-	(1,683)		(1,683)
At 31st July 2015	919	89	(46)	87,987		88,949

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31st JULY 2015

	2015		2014
	£000		£000
NON-CURRENT ASSETS
Property, plant and equipment	1,382		1,380
Investment properties	63,231		63,609
Investments in Joint Ventures	267		1,288
Available for sale financial assets	337		-
Retirement benefit surplus	1,472		1,629
Deferred tax asset	27		23
	66,716		67,929
CURRENT ASSETS
Inventories	5,735		6,246
Trade and other receivables	4,508		11,099
Current tax asset	995		988
Monies held on deposit	3,502		-
Cash and cash equivalents	26,047		16,802
	40,787		35,135
TOTAL ASSETS	107,503		103,064
NON-CURRENT LIABILITIES
Deferred tax liabilities	1,830		1,707
CURRENT LIABILITIES
Trade and other payables	4,000		4,143
Bank overdraft	12,724		8,732
	16,724		12,875
TOTAL LIABILITIES	18,554		14,582
NET ASSETS	88,949		88,482
EQUITY
Called up share capital	919		936
Capital redemption reserve	89		72
Fair value reserve	(46)		-
Retained earnings	87,987		87,474
TOTAL EQUITY	88,949		88,482

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31st JULY 2015

	2015		2014
	£000		£000
Profit before tax	3,544		1,207
Share of profits from Joint Ventures	(1,306)		(469)
Depreciation	450		446
Unrealised valuation deficit on investment properties	211		782
Profit on sale of property, plant and equipment	(47)		(50)
Profit on sale of investment properties	(60)		-
Profit on sale of available for sale financial assets	(1)		(1,299)
Change in retirement benefits	(846)		(855)
Interest received	(117)		(62)
Change in inventories	711		7,374
Change in receivables	2,595		(453)
Change in payables	(143)		587
	4,991		7,208
Tax paid on profits	(233)		(798)
NET CASH FLOWS FROM OPERATING ACTIVITIES	4,758		6,410
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment	(483)		(582)
Additions to investment properties	(236)		(72)
Expenditure on own work capitalised - investment properties	(737)		(1,994)
Sale of property, plant and equipment	78		85
Sale of investment properties	1,000		-
Purchase of available for sale financial assets	(383)		(406)
Proceeds of sale of available for sale financial assets	3,997		260
Increase on monies held on deposit	(3,502)		-
Acquisition of investment in subsidiary, net of cash acquired	-		(39)
Interest received	117		62
Dividend from Joint Ventures	2,327		-
NET CASH FLOWS FROM INVESTING ACTIVITIES	2,178		(2,686)
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of own shares	(831)		(285)
Dividends paid	(852)		(862)
NET CASH FLOWS FROM FINANCING ACTIVITIES	(1,683)		(1,147)
INCREASE IN CASH AND CASH EQUIVALENTS	5,253		2,577
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	8,070		5,493
CASH AND CASH EQUIVALENTS AT END OF YEAR	13,323		8,070

NOTES TO THE PRELIMINARY STATEMENT

1.         BASIS OF PREPARATION

This preliminary statement is an abridged version of the Group's full consolidated accounts, which have not yet been filed with the Registrar of Companies and have not yet been reported on by the Company's auditors.

The financial information included in this preliminary statement does not include all of the disclosures required by International Financial Reporting Standards (IFRS) or the Companies Act 2006 and accordingly does not itself comply with IFRS or the Companies Act 2006.

The Group prepares its annual consolidated financial statements in accordance with IFRS and its interpretations issued by the International Accounting Standards Board as adopted by the European Union.  There are no differences in the accounting policies applied in the preparation of the consolidated financial statements for the year to 31st July 2015 and the financial information included in this preliminary statement and the accounting policies disclosed in the 2014 Annual Report and Statement of Accounts except for the adoption of the following standards, amendments to standards and interpretations which became mandatory for the first time for the financial year to 31st July 2015:

·      IAS 32 (amended): Financial Instruments: Presentation.

·      IAS 36 (amended): Impairment of Assets.

·      IAS 39 (amended): Financial Instruments: Recognition and Measurement.

·      Amendments to IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Ventures and IFRS 12: Disclosures of Interests in Other Entities in relation to Investment Entities (transition guidance).

·      IFRIC 21: Levies.

The adoption of these standards, amendments to standards and interpretations had no material impact on the Group's financial statements but resulted in minor changes in terms of disclosure.

The consolidated financial statements are prepared under the historical cost convention with the exception of investment properties and available for sale financial assets which are recognised at fair value and, are prepared on a going concern basis.

The financial information for the year to 31st July 2014 is derived from the statutory accounts for that year which were submitted to the Registrar of Companies and upon which the Company's auditors provided an unqualified audit report and which did not contain a statement under S498 of the Companies Act 2006.

2.         DIVIDENDS

	2015		2014
	£000		£000
Ordinary dividends
2013 Final dividend of 2.01p per share, after waivers	-		430
2014 Interim dividend of 0.92p per share	-		432
2014 Final dividend of 2.04p per share, after waivers	428		-
2015 Interim dividend of 0.92p per share	424		-
	852		862

The Company is proposing a final dividend of 2.10p per share for the year to 31st July 2015 which, after waivers, will cost the Company no more than £426,000.

The dividend if approved will be paid on 21st December 2015 to shareholders on the Register at the close of business on 27th November 2015.

 

END

 

 

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