Final Results

RNS Number : 6252N

Smart(J.)&Co(Contractors) PLC

27 October 2016

 

J SMART & CO (CONTRACTORS) PLC AND SUBSIDIARY COMPANIES

ACCOUNTS FOR THE YEAR ENDED 31st JULY 2016

PRELIMINARY STATEMENT

ACCOUNTS

Headline Group profit for the year before tax, including an unrealised surplus in revalued property as required by the International Financial Reporting Standards was £3,752,000 compared with £3,544,000 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 £3,616,000 (including £186,000 profit from property sales) which compares with the figure for underlying profit last year of £3,755,000 (including £1,318,000 profit from property sales and joint venture property sales).

The Board is recommending a Final Dividend of 2.15p nett making a total for the year of 3.07p nett which compares with 3.02p 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 £421,000.

TRADING ACTIVITIES

Group construction activities carried out including private residential sales increased by 42%.  Disregarding private residential sales Group construction activities increased by 23%.  Own work capitalised increased by 125%.  Group revenue increased by 39% and headline Group profit before tax increased by 6%.  Underlying Group profit before tax excluding the unrealised surplus in revalued property decreased by 4%.

Turnover in contracting was more than last year and the loss was reduced.  As forecast private residential sales were more than the previous year.  Sales and profit in precast concrete manufacture increased.

The two large mixed social housing and private residential developments at Seafield Street and Pilton Drive, Edinburgh, continue to make satisfactory progress.  A third phase of social housing at Pilton Drive and a further social housing contract at Fleming Place (adjacent to Seafield Street) have commenced.

Occupancy levels at our industrial estates continue to be satisfactory.  A joint venture industrial development at Gartcosh near Glasgow is contemplated.  Although interest in our commercial office premises has improved, take up of voids is still slow.

FUTURE PROSPECTS

Work in hand in contracting is slightly less than at this time last year and there is little prospect of more work in the short term.  Accordingly, turnover in this sector will be down on last year.  Prices remain competitive.

Private residential sales will be less than last year.  It is by no means certain that current property valuation levels will be maintained at the end of the current financial year.

At this early stage it is difficult to make an informed forecast of the outcome for the current year.  However, bearing in mind the foregoing circumstances and that the reduced turnover will impair the recovery of fixed overhead costs, it seems unlikely that the profit for the current year will match last year's profit.

	J. M. SMART
	Chairman

CONSOLIDATED INCOME STATEMENT

for the year ended 31st JULY 2016

		2016		2015
		Unaudited		Audited
		£000		£000
Group construction activities		30,682		21,556
Less: Own construction work capitalised		(1,655)		(737)
REVENUE		29,027		20,819
Cost of sales		(25,260)		(18,061)
GROSS PROFIT		3,767		2,758
Other operating income		5,520		5,241
Net operating expenses		(6,095)		(5,839)
OPERATING PROFIT BEFORE PROFIT ON SALE AND NET SURPLUS/(DEFICIT) ON VALUATION OF INVESTMENT PROPERTIES		3,192		2,160
Profit on sale of investment properties		186		60
Net surplus/(deficit) on valuation of investment properties		136		(211)
OPERATING PROFIT		3,514		2,009
Share of profits in Joint Ventures		33		1,306
Income from available for sale financial assets		14		28
Profit on sale of available for sale financial assets		-		1
Finance income		191		200
PROFIT BEFORE TAX		3,752		3,544
Taxation		(264)		(546)
PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS		3,488		2,998
EARNINGS PER SHARE - BASIC AND DILUTED		7.61p		6.45p

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31st JULY 2016

	2016		2015
	Unaudited		Audited
	£000		£000
PROFIT FOR THE YEAR	3,488		2,998
OTHER COMPREHENSIVE LOSS
Items that may be subsequently reclassified to the Income Statement:
Fair value adjustment of available for sale financial assets	(10)		(46)
TOTAL ITEMS WHICH MAY BE SUBSEQUENTLY RECLASSIFIED TO INCOME STATEMENT	(10)		(46)
Items that will not be subsequently reclassified to the Income Statement:
Actuarial loss recognised in defined benefit pension scheme	(2,256)		(1,003)
Deferred taxation on actuarial loss	215		201
TOTAL ITEMS THAT WILL NOT BE SUBSEQUENTLY RECLASSIFIED TO INCOME STATEMENT	(2,041)		(802)
TOTAL OTHER COMPREHENSIVE LOSS	(2,051)		(848)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX	1,437		2,150
ATTRIBUTABLE TO EQUITY SHAREHOLDERS	1,437		2,150

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

as at 31st July 2016

	Share Capital	Capital Redemption Reserve	Fair Value Reserve	Retained Earnings		Total
	£000	£000	£000	£000		£000
At 1st August 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
Profit for the year	-	-	-	3,488		3,488
Other comprehensive loss	-	-	(10)	(2,041)		(2,051)
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR	-	-	(10)	1,447		1,437
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled	(13)	-	-	(691)		(704)
Transfer to capital redemption reserve	-	13	-	(13)		-
Dividends	-	-	-	(846)		(846)
TOTAL TRANSACTIONS WITH OWNERS	(13)	13	-	(1,550)		(1,550)
At 31st July 2016	906	102	(56)	87,884		88,836

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31st JULY 2016

	2016		2015
	Unaudited		Audited
	£000		£000
NON-CURRENT ASSETS
Property, plant and equipment	1,382		1,382
Investment properties	64,728		63,231
Investments in Joint Ventures	263		267
Available for sale financial assets	326		337
Retirement benefit surplus	33		1,472
Deferred tax asset	41		27
	66,773		66,716
CURRENT ASSETS
Inventories	2,684		5,735
Trade and other receivables	6,369		4,508
Current tax asset	-		995
Monies held on deposit	5,519		3,502
Cash and cash equivalents	26,785		26,047
	41,357		40,787
TOTAL ASSETS	108,130		107,503
NON-CURRENT LIABILITIES
Deferred tax liabilities	1,389		1,830
CURRENT LIABILITIES
Trade and other payables	5,134		4,000
Current tax liability	143		-
Bank overdraft	12,628		12,724
	17,905		16,724
TOTAL LIABILITIES	19,294		18,554
NET ASSETS	88,836		88,949
EQUITY
Called up share capital	906		919
Capital redemption reserve	102		89
Fair value reserve	(56)		(46)
Retained earnings	87,884		87,987
TOTAL EQUITY	88,836		88,949

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31st JULY 2016

	2016		2015
	Unaudited		Audited
	£000		£000
Profit before tax	3,752		3,544
Share of profits from Joint Ventures	(33)		(1,306)
Depreciation	465		450
Unrealised valuation (surplus)/deficit on investment properties	(136)		211
Profit on sale of property, plant and equipment	(47)		(47)
Profit on sale of investment properties	(186)		(60)
Profit on sale of available for sale financial assets	-		(1)
Change in retirement benefits	(817)		(846)
Interest received	(125)		(117)
Change in inventories	3,051		711
Change in receivables	(1,861)		2,595
Change in payables	1,134		(143)
	5,197		4,991
Tax received/(paid)	634		(233)
NET CASH FLOWS FROM OPERATING ACTIVITIES	5,831		4,758
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment	(488)		(483)
Additions to investment properties	(45)		(236)
Expenditure on own work capitalised - investment properties	(1,655)		(737)
Sale of property, plant and equipment	70		78
Sale of investment properties	525		1,000
Purchase of available for sale financial assets	-		(383)
Proceeds of sale of available for sale financial assets	1		3,997
Increase on monies held on deposit	(2,017)		(3,502)
Interest received	125		117
Dividend from Joint Ventures	37		2,327
NET CASH FLOWS FROM INVESTING ACTIVITIES	(3,447)		2,178
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of own shares	(704)		(831)
Dividends paid	(846)		(852)
NET CASH FLOWS FROM FINANCING ACTIVITIES	(1,550)		(1,683)
INCREASE IN CASH AND CASH EQUIVALENTS	834		5,253
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	13,323		8,070
CASH AND CASH EQUIVALENTS AT END OF YEAR	14,157		13,323

NOTES TO THE PRELIMINARY STATEMENT

1.         BASIS OF PREPARATION

The financial information set out in this unaudited preliminary statement does not constitute the Group's statutory financial statements.  The financial statements for the year to 31st July 2016 have not yet been filed with the Registrar of Companies and have not yet been reported on by the Company's auditors.

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

The Group prepares its annual consolidated financial statements in accordance with IFRSs 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 2016 and the unaudited financial information included in this preliminary statement and the accounting policies disclosed in the 2015 Annual Report and Statement of Accounts.  There have been no new IFRSs or amendments to existing standards which impact the Group's financial statements in the year to 31st July 2016.

The unaudited 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 2015 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, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report and did not contain a statement under S498 (2) or S498 (3) of the Companies Act 2006.

2.         DIVIDENDS

	2016		2015
	£000		£000
	Unaudited		Audited
Ordinary dividends
2014 Final dividend of 2.04p per share, after waivers	-		428
2015 Interim dividend of 0.92p per share	-		424
2015 Final dividend of 2.10p per share, after waivers	425		-
2016 Interim dividend of 0.92p per share	421		-
	846		852

The Company is proposing a final dividend of 2.15p per share for the year to 31st July 2016 which, after waivers, will cost the Company no more than £421,000.

The dividend if approved will be paid on 21st December 2016 to shareholders on the Register at the close of business on 25th November 2016.

 

END

 

 

FR UBRKRNSARURA