Interim Results
Smart(J.)&Co(Contractors) PLC
23 April 2007
J SMART & CO (CONTRACTORS) PLC
INTERIM REPORT
6 MONTHS TO 31 JANUARY 2007
CHAIRMAN'S REVIEW
INTERIM REPORT
Unaudited Group profits for the six months to 31st January 2007 amounted to
£4,194,000 compared with profits of £3,026,000 for the corresponding period last
year. Turnover decreased by 25%. Turnover and own work capitalised combined
decreased by 5%.
The 39% increase in profits before tax compared with the corresponding period
last year is entirely due to our share of the large increase in profits from the
joint venture company Edinburgh Industrial Estates Limited arising from
investment property sales flagged up in the last annual report. Private house
sales are similar to those in the last half year. The construction of the two
industrial units at Cardonald Business Park and Helen Street, Glasgow and the
refurbishment of the office development at Links Place, Edinburgh are well
advanced.
INTERIM DIVIDEND
The Board announces an interim dividend of 3.00p per share (2006, 3.00p) to be
paid on 9th July 2007 to shareholders on the register at close of business on
15th June 2007. After waivers by members holding approximately 51% of the
shares, the interim dividend will cost the Company £147,000.
FUTURE PROSPECTS
The amount of work in hand in contracting is the same as at this time last year
and more than at the end of last year. Most of the work has been negotiated.
Private house sales will be less than last year.
Investment values in industrial and commercial property have stabilised and
negligible growth is anticipated this year. Accordingly, the significant boost
that the recent requirement to book unrealised profits in revalued property gave
to the profit figures for the last two financial years will not occur this year.
The contribution from our share of joint venture profits in the half year under
review will not be repeated in the second half.
Bearing the foregoing in mind and subject to unforeseen or exceptional
circumstances, it is anticipated that profit for the full year will be not less
than £6,000,000.
23rd April 2007 J.M. SMART
Chairman
CONSOLIDATED INCOME STATEMENT
Notes 6 Months 6 Months Year
ended ended ended
31.1.07 31.1.06 31.7.06
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
REVENUE 9,610 12,843 26,149
Own work capitalised 2,617 49 98
------ ------ ------
12,227 12,892 26,247
Cost of sales (9,514) (10,771) (21,378)
------ ------- -------
GROSS PROFIT 2,713 2,121 4,869
Other operating income 2,387 3,103 5,819
Net operating expenses (3,159) (2,569) (5,307)
------ ------ ------
OPERATING PROFIT BEFORE
PROFITS ON
SALE AND NET REVALUATION GAINS
ON INVESTMENT PROPERTIES 1,941 2,655 5,381
Profit arising on sale of
investment properties 91 - 899
Net gain on valuation of
investment properties - - 5,546
------- ------ ------
OPERATING PROFIT 2,032 2,655 11,826
Share of profits in Joint Ventures 1,889 206 1,651
Income from investments 26 27 84
Decrease in amount written off
investments - 21 -
Profit/(Loss) on sale of
investments 77 - (40)
Finance income 286 182 382
Finance costs (116) (65) (143)
----- ----- ------
PROFIT BEFORE TAX 4,194 3,026 13,760
Taxation 4 (1,258) (908) (3,131)
------ ----- ------
PROFIT ATTRIBUTABLE TO EQUITY
SHAREHOLDERS 2,936 2,118 10,629
======= ======= ========
EARNINGS PER SHARE - BASIC AND
DILUTED 6 29.12p 21.01p 105.43p
======== ======== =========
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Notes 6 Months 6 Months Year
ended ended ended
31.1.07 31.1.06 31.7.06
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Actuarial loss recognised on
defined benefit pension schemes - - (1,538)
Deferred taxation on actuarial loss - - 461
----- ----- -----
NET DEFICIT RECOGNISED
DIRECTLY IN EQUITY - - (1,077)
Profit for the period 2,936 2,118 10,629
------- ------- --------
TOTAL RECOGNISED INCOME AND
EXPENSE FOR THE PERIOD 2,936 2,118 9,552
======= ======= =======
ATTRIBUTABLE TO EQUITY SHAREHOLDERS 2,936 2,118 9,552
======= ======= =======
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Notes 6 Months 6 Months Year
ended ended ended
31.1.07 31.1.06 31.7.06
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
TOTAL RECOGNISED INCOME AND
EXPENSE FOR THE PERIOD 2,936 2,118 9,552
Fair value adjustment net of tax 49 - 177
Dividends 5 (483) (468) (615)
------ ------ ------
2,502 1,650 9,114
Opening shareholders' funds 84,080 74,597 74,597
Adoption of IAS32 and 39 - - 369
------ ------ ------
Closing shareholders' funds 86,582 76,247 84,080
======== ======== ========
CONSOLIDATED BALANCE SHEET
Notes 6 Months 6 Months Year
ended ended ended
31.1.07 31.1.06 31.7.06
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
NON-CURRENT ASSETS
Property, plant and equipment 5,099 1,564 2,566
Investment properties 75,601 73,825 77,436
Investments in Joint Ventures 6,394 3,317 4,604
Financial assets 1,686 - 1,499
Other receivables 2,796 2,056 2,796
Deferred tax assets 2,531 - 2,531
-------- -------- --------
94,107 80,762 91,432
-------- -------- --------
CURRENT ASSETS
Inventories 3,615 4,758 2,305
Other investments - 1,039 -
Trade and other receivables 2,975 3,401 2,704
Cash and bank 8,449 5,039 10,251
------- ------- --------
15,039 14,237 15,260
-------- -------- --------
TOTAL ASSETS 109,146 94,999 106,692
======== ======== ========
NON-CURRENT LIABILITIES
Retirement benefit obligations 8,201 7,028 8,201
Deferred tax liabilities 9,754 6,768 9,734
------- ------- -------
17,955 13,796 17,935
------- ------- -------
CURRENT LIABILITIES
Trade and other payables 3,351 3,965 3,331
Current tax liabilities 1,258 991 1,346
------- ----- -------
4,609 4,956 4,677
------- ------- -------
TOTAL LIABILITIES 22,564 18,752 22,612
======= ======= =======
NET ASSETS 86,582 76,247 84,080
======= ======= =======
EQUITY
Called up share capital 1,008 1,008 1,008
Fair value reserve 542 - 473
Retained earnings 85,032 75,239 82,599
------- ------- -------
TOTAL EQUITY 86,582 76,247 84,080
======= ======= =======
CONSOLIDATED CASH FLOW STATEMENT
Notes 6 Months 6 Months Year
ended ended ended
31.1.07 31.1.06 31.7.06
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Cash flows from operating
activities 7 594 2,040 5,551
Tax paid on profits (1,346) (590) (1,520)
------- ------- -------
NET CASH FLOW FROM OPERATING
ACTIVITIES (752) 1,450 4,031
------- ------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant
and equipment (189) (348) (662)
Purchase of investment properties (29) (21) (27)
Sale of property, plant and
equipment 21 19 50
Sale of investment properties 2,020 2,443 5,119
Expenditure on own work capitalised (2,617) (49) (98)
Purchase of investments (210) - (369)
Proceeds of sale of investments 168 - 456
Interest received 269 - 353
Interest paid - (1) (1)
------ ------ ------
NET CASH USED IN INVESTING
ACTIVITIES (567) 2,043 4,821
------- ------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES --- ---
Dividends paid (483) (468) (615)
------- ------- -------
NET CASH USED IN FINANCING
ACTIVITIES (483) (468) (615)
------- ------- -------
INCREASE IN CASH, CASH
EQUIVALENTS AND BANK (1,802) 3,025 8,237
------- ------- -------
CASH, CASH EQUIVALENTS AND
BANK AT BEGINNING OF PERIOD 10,251 2,014 2,014
------- ------- -------
CASH, CASH EQUIVALENTS AND
BANK AT END OF PERIOD 8,449 5,039 10,251
======= ======= ========
NOTES TO INTERIM FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
These interim financial statements do not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985.
The statutory financial statements for the year to 31st July 2006 have been
filed with the Registrar of Companies and a copy may be obtained from Companies
House. These have been audited and contain an unqualified audit opinion and do
not contain a statement under Sections 237(2) or (3) of the Companies Act 1985.
2. ACCOUNTING POLICIES
The interim financial statements have been prepared under the historical cost
convention.
The accounting policies adopted are consistent with those followed in the
preparation of the group's annual financial statements for the year ended 31st
July 2006, with the exception of the following policies regarding the accounting
for pension scheme deficits and investment properties revaluations.
For the interim accounts the assets and liabilities of the pension scheme are
estimated to be unchanged from the values included at the previous year end.
In accordance with long standing practice, the group's investment properties are
revalued annually on 31st July each year. No revaluation adjustment is made in
the interim financial statements.
3. SEGMENTAL INFORMATION
The group's primary basis of segmentation is by activities, all construction
work relates to activities in Scotland.
Inter
Total Segment External Profit attributable to
Revenue Revenue Revenue equity shareholders
£000 £000 £000 £000 £000 £000
31st JANUARY 2007
(Unaudited)
Construction
activities 12,227 (2,617) 9,610 914 - -
Investment
activities 2,387 - 2,387 1,118 - -
Joint Ventures - - - 1,889 - -
------ ------ ------ ------- --- ---
14,614 (2,617) 11,997 3,921 - -
------ ------ ------ ------- --- ---
31st JANUARY 2006
(Unaudited)
Construction
activities 12,892 (49) 12,843 - 484 -
Investment
activities 3,103 - 3,103 - 2,171 -
Joint Ventures - - - - 206 -
------ ------ ------ --- ----- ---
15,995 (49) 15,946 - 2,861 -
------ ------ ------ --- ----- ---
31st JULY 2006
(Audited)
Construction
activities 26,247 (98) 26,149 - - 1,694
Investment
activities 5,819 - 5,819 - - 10,132
Joint Ventures - - - - - 1,651
------ --- ------ --- --- -------
32,066 (98) 31,968 - - 13,477
------ ---- ------ --- --- -------
RESULT 3,921 2,861 13,477
Finance income 389 230 466
Finance cost (116) (65) (183)
------- ------ -------
PROFIT BEFORE TAX 4,194 3,026 13,760
Taxation (1,258) (908) (3,131)
------- ------ -------
PROFIT ATTRIBUTABLE TO
EQUITY SHAREHOLDERS 2,936 2,118 10,629
======= ======= =======
4. TAXATION
The tax charge for the 6 months to 31st January 2007 is based on the corporation
tax rate at 30% (2006, 30%).
5. DIVIDENDS
6 Months 6 Months Year
Ended Ended Ended
31.1.07 31.1.06 31.7.06
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
ORDINARY DIVIDENDS
2006 Final dividend declared of 9.80p
per share 483 - -
2006 Interim dividend declared of
3.00p per share - - 147
2005 Final dividend of 9.50p per share - 468 468
----- ----- -----
483 468 615
===== ===== =====
Certain shareholders holding approximately 51% of the shares have waived their
rights to the interim and final dividends paid for the years to 31st July 2005
and 31st July 2006.
The interim dividend of 3.00p per share for the year to 31st July 2007 will be
paid on 9th July 2007 to shareholders on the register at 15th June 2007. After
waivers by members holding approximately 51% of the shares the interim dividend
will cost the company £147,000.
6. EARNINGS PER SHARE
Profit
attributable Basic
to equity Earnings
shareholders per share
£000
6 months to 31st January 2007 2,936 29.12p
======= =======
6 months to 31st January 2006 2,118 21.01p
======= =======
Year to 31st July 2006 10,629 105.43p
======= =======
Basic earnings per share are calculated by dividing the profit attributable to
equity shareholders by 10,082,000 shares, the number of ordinary shares in issue
during the period.
There is no difference between basic and diluted earnings per share.
7. RECONCILIATION OF OPERATING PROFIT TO CASH FLOWS FROM OPERATING ACTIVITIES
6 Months 6 Months Year
ended ended ended
31.1.07 31.1.06 31.7.06
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Profit before tax 4,194 3,026 13,760
Share of profits from Joint Ventures (1,889) (206) (1,651)
Depreciation 204 200 488
Unrealised revaluation gains on
investment properties - - (5,546)
Gain on sale of property, plant and
equipment (17) (6) (14)
Gain on sale of investment properties (91) (213) (899)
(Gain)/Loss on sale of investments (77) (54) 40
Amounts written back to investments - (21) -
Change in retirement benefits - - (365)
Interest received (269) - (353)
Interest received by Joint Ventures (17) (3) (7)
Interest paid - 1 1
Interest paid by Joint Ventures 115 65 142
Proceeds of sale of investments - 194 -
Purchase of investments - (120) -
Change in inventories (1,309) 166 1,619
Change in receivables - current (270) (635) 62
Change in receivables - non current - (400) (1,140)
Change in payables 20 46 (586)
------- ------- -------
NET CASH GENERATED FROM OPERATIONS 594 2,040 5,551
======= ======= =======
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