Interim Results
Smart(J.)&Co(Contractors) PLC
03 April 2008
J SMART & CO (CONTRACTORS) PLC
INTERIM REPORT
6 MONTHS TO 31 JANUARY 2008
J. SMART & CO. (CONTRACTORS) PLC
CHAIRMAN'S REVIEW
INTERIM REPORT
Unaudited Group profits for the six months to 31st January 2008 amounted to
£6,566,000 compared with profits of £4,194,000 for the corresponding period last
year. Turnover increased by 28%. Turnover and own work combined increased by
11%.
The increase in profits before tax is due to the sale of an undeveloped site in
Glasgow. In accordance with our normal practice there has been no revaluation of
our investment properties at the end of the half year. Accordingly the recent
fall in property values has had no impact on the half yearly profit figures.
There were no private house sales during the half year. We completed the large
speculative industrial unit at Cardonald Business Park and the large pre-let
industrial unit in Helen Street, Glasgow. Helen Street is occupied and Cardonald
is under offer.
INTERIM DIVIDEND
The Board announces an interim dividend of 3.00p per share (2007, 3.00p) to be
paid on 9th June 2008 to shareholders on the register at the close of business
on 16th May 2008. 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 more than at this time last year
and more than at the end of last year. Most of the work has been negotiated.
Private House sales including our joint venture development with Keane
Developments will be more than last year.
Rental income should increase slightly this year although the industrial
pre-lets at our Prestonfield Park joint venture with Walker Group will make no
contribution to this year's figures.
The mixed commercial and residential development in McDonald Road, Edinburgh
continues but will not be completed this financial year.
The recent fall in property values referred to above is due to an increase in
yields. It now appears possible that this fall may be ameliorated by increases
in rental and occupation levels, although the likely value of the property
portfolio at the year end is currently far from clear. The requirement of the
International Financial Reporting Standards that unrealised gains/losses in
revalued property be included in the Income Statement could have a significant
negative impact on the headline year end profit figure which is not possible to
forecast at this stage.
Disregarding the impact of revalued property, it is anticipated that subject to
unforeseen circumstances, the underlying profit for the year will be not less
than £8,000,000.
3rd April 2008
J.M. SMART
Chairman
CONSOLIDATED INCOME STATEMENT
Notes 6 Months 6 Months Year
ended ended ended
31.1.08 31.1.07 31.7.07
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
REVENUE 12,316 9,610 19,977
Own work capitalised 1,251 2,617 4,579
-------- -------- --------
13,567 12,227 24,556
Cost of sales (11,625) (9,514) (21,464)
-------- -------- --------
GROSS PROFIT 1,942 2,713 3,092
Other operating income 2,598 2,387 5,024
Net operating expenses (2,845) (3,159) (5,033)
-------- -------- --------
OPERATING PROFIT BEFORE
PROFITS ON
SALE AND NET REVALUATION GAINS 1,695 1,941 3,083
ON
INVESTMENT PROPERTIES
Profit arising on sale of
investment properties 4,155 91 627
Net gain on valuation of
investment - - 1,944
properties ------- -------- --------
OPERATING PROFIT 5,850 2,032 5,654
Share of profits in Joint 14 1,889 1,800
Ventures
Income from investments 30 26 63
Profit on sale of investments 9 77 95
Finance income 714 286 851
Finance costs (51) (116) (319)
-------- -------- ---------
PROFIT BEFORE TAX 6,566 4,194 8,144
Taxation 4 (1,970) (1,258) (1,412)
-------- -------- ---------
PROFIT ATTRIBUTABLE TO EQUITY
SHAREHOLDERS 4,596 2,936 6,732
-------- ======== ========
EARNINGS PER SHARE - BASIC AND
DILUTED 6 45.59p 29.12p 66.77p
======== ======== ========
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Notes 6 Months 6 Months Year
ended ended ended
31.1.08 31.1.07 31.7.07
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Actuarial gain recognised on
defined benefit pension scheme - - 2,755
Deferred taxation on actuarial - - (826)
gain ------- ------- -------
NET SURPLUS RECOGNISED
DIRECTLY IN - - 1,929
EQUITY ------- ------- -------
Profit for the period 4,596 2,936 6,732
------- ------- -------
TOTAL RECOGNISED INCOME AND
EXPENSE 4,596 2,936 8,661
FOR THE PERIOD ------- ------- -------
ATTRIBUTABLE TO EQUITY 4,596 2,936 8,661
SHAREHOLDERS ======= ======= =======
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Notes 6 Months 6 Months Year
ended ended ended
31.1.08 31.1.07 31.7.07
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
TOTAL RECOGNISED INCOME AND
EXPENSE 4,596 2,936 8,661
FOR THE PERIOD
Fair value adjustment net of (182) 49 24
tax
Dividends 5 (500) (483) (630)
------- ------- -------
3,914 2,502 8,055
Opening shareholders' funds 92,135 84,080 84,080
------- ------- -------
Closing shareholders' funds 96,049 86,582 92,135
======= ======= =======
CONSOLIDATED BALANCE SHEET
Notes 6 Months 6 Months Year
ended ended ended
31.1.08 31.1.07 31.7.07
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
NON-CURRENT ASSETS
Property, plant and equipment 1,493 5,099 2,537
Investment properties 72,649 75,601 72,545
Investments in Joint Ventures 2,040 6,394 1,996
Financial assets 1,728 1,686 1,695
Trade and other receivables 2,176 2,796 2,176
Deferred tax assets 1,561 2,531 1,641
------- ------- -------
81,647 94,107 82,590
------- ------- -------
CURRENT ASSETS
Inventories 8,970 3,615 7,635
Trade and other receivables 3,721 2,975 3,700
Cash and bank 22,793 8,449 16,468
------- ------- -------
35,484 15,039 27,803
------- ------- -------
TOTAL ASSETS 117,131 109,146 110,393
======= ======= =======
NON-CURRENT LIABILITIES
Retirement benefit obligations 5,280 8,201 5,280
Deferred tax liabilities 7,706 9,754 7,843
------- ------- -------
12,986 17,955 13,123
------- ------- -------
CURRENT LIABILITIES
Trade and other payables 6,164 3,351 4,265
Current tax liabilities 1,932 1,258 870
------- ------- -------
8,096 4,609 5,135
------- ------- -------
TOTAL LIABILITIES 21,082 22,564 18,258
------- ======= =======
NET ASSETS 96,049 86,582 92,135
======= ======= =======
EQUITY
Called up share capital 1,008 1,008 1,008
Fair value reserve 190 542 372
Retained earnings 94,851 85,032 90,755
------- ------- -------
TOTAL EQUITY 96,049 86,582 92,135
======= ======= =======
CONSOLIDATED CASH FLOW STATEMENT
Notes 6 Months 6 Months Year
ended ended ended
31.1.08 31.1.07 31.7.07
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Cash flows from operating
activities 7 2,459 594 (1,546)
Tax paid on profits (908) (1,346) (2,346)
------- --------- ---------
NET CASH FLOW FROM OPERATING
ACTIVITIES 1,551 (752) (3,892)
------- ------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant
and (155) (189) (465)
equipment
Purchase of investment (34) (29) (5)
properties
Sale of property, plant and
equipment 9 21 79
Sale of investment properties 6,335 2,020 12,046
Expenditure on own work (1,251) (2,617) (4,579)
capitalised
Purchase of investments (325) (210) (282)
Proceeds of sale of 60 168 205
investments
Interest received 635 269 740
Interest paid - - -
Dividend received from Joint
Venture - - 3,000
------- ------- -------
NET CASH FROM INVESTING 5,274 (567) 10,739
ACTIVITIES ------- ------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES
Dividends paid (500) (483) (630)
------- ------- -------
NET CASH USED IN FINANCING
ACTIVITIES (500) (483) (630)
------- ------- -------
INCREASE/(DECREASE) IN CASH,
CASH 6,325 (1,802) 6,217
EQUIVALENTS AND BANK ------- ------- -------
CASH, CASH EQUIVALENTS AND
BANK AT 16,468 10,251 10,251
BEGINNING OF PERIOD ------- ------- -------
CASH, CASH EQUIVALENTS AND
BANK AT 22,793 8,449 16,468
END OF PERIOD ======= ======= =======
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 2007 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 2007, 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
2008 (Unaudited)
Construction 13,567 (1,251) 12,316 77 - -
activities
Investment 2,598 - 2,598 5,773 - -
activities
Joint Ventures - - - 14 - -
------ ------ ------ ------ ------ ------
16,165 (1,251) 14,914 5,864 - -
------ ------ ------ ------ ------ ------
31st JANUARY
2007 (Unaudited)
Construction 12,227 (2,617) 9,610 - 914 -
activities
Investment 2,387 - 2,387 - 1,118 -
activities
Joint Ventures - - - - 1,889 -
------ ------ ------ ------ ------ ------
14,614 (2,617) 11,997 - 3,921 -
------ ------- ------ ------ ------ ------
31st JULY 2007
(Audited)
Construction 24,556 (4,579) 19,977 - - 823
activities
Investment 5,024 - 5,024 - - 4,831
activities
Joint Ventures - - - - - 1,800
------ ------ ------ ------ ------ ------
29,580 (4,579) 25,001 - - 7,454
------ ------- ------ ------ ------ ------
RESULT 5,864 3,921 7,454
Finance and
investment 753 389 1,009
income
Finance and
investment (51) (116) (319)
costs ------ ------ ------
PROFIT ON
ORDINARY 6,566 4,194 8,144
ACTIVITIES
BEFORE TAX
Tax on profit on
ordinary (1,970) (1,258) (1,412)
activities ------ ------ ------
PROFIT
ATTRIBUTABLE TO 4,596 2,936 6,732
EQUITY ====== ====== ======
SHAREHOLDERS
4. TAXATION
The tax charge for the 6 months to 31st January 2008 is based on the corporation
tax rate at 30% (2007, 30%).
5. DIVIDENDS
6 Months 6 Months Year
Ended Ended Ended
31.1.08 31.1.07 31.7.07
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
ORDINARY DIVIDENDS
2007 Final dividend declared of
10.15p per share 500 - -
2007 Interim dividend declared of
3.00p per share - - 147
2006 Final dividend of 9.80p per - 483 483
share ----- ----- -----
500 483 630
===== ===== =====
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 2006
and 31st July 2007.
The interim dividend of 3.00p per share for the year to 31st July 2008 will be
paid on 9th June 2008 to shareholders on the register at 16th May 2008. 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 2008 4,596 45.59p
====== ======
6 months to 31st January 2007 2,936 29.12p
====== ======
Year to 31st July 2007 6,732 66.77p
====== ======
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
31.1.08 31.1.07 31.7.07
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Profit before tax 6,566 4,194 8,144
Share of profits from Joint Ventures (14) (1,889) (1,800)
Depreciation 192 204 483
Unrealised revaluation gains on
investment properties - - (1,944)
Gain on sale of property, plant and
equipment - (17) (68)
Gain on sale of investment properties (4,155) (91) (627)
Gain on sale of investments (9) (77) (95)
Change in retirement benefits - - (166)
Interest received (634) (269) (740)
Interest received by Joint Ventures (80) (17) (111)
Interest paid - - -
Interest paid by Joint Ventures 51 115 150
Change in inventories (1,335) (1,309) (5,330)
Change in receivables - current (22) (270) (376)
Change in receivables - non current - - -
Change in payables 1,899 20 934
------- ------- -------
NET CASH GENERATED FROM OPERATIONS 2,459 594 (1,546)
======= ======= =======
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