Final Results

RNS Number : 0875Q

Smart(J.)&Co(Contractors) PLC

01 November 2012

J SMART & CO (CONTRACTORS) PLC AND SUBSIDIARY COMPANIES

ACCOUNTS FOR THE YEAR ENDED 31st JULY 2012

PRELIMINARY STATEMENT

ACCOUNTS

As forecast in the interim report, the results for the year were adversely affected by the inclusion of a further reduction in the value of our property portfolio as dictated by the International Financial Reporting Standards. Headline profit for the year turned out at £55,000 which compares with a headline profit of £656,000 last year. If the impact of revalued property on the figures 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 £4,097,000 (no property sales) which compares with the figure for underlying profit last year of £5,992,000 (including £1,929,000 profit from property sales).

The value of investment properties at the beginning of the year was £72,586,000 (cost £51,609,000). Additions during the year cost £3,423,000. Transfers to Investment Properties from Property, plant & equipment amounted to £25,000 and transfers from Investment properties to Inventories amounted to £1,555,000. The net deficit on the year end valuation was £4,042,000. Leaving a value of £70,437,000 (cost £53,502,000).

The Board is recommending a Final Dividend of 1.98p nett, making a total for the year of 2.90p nett, which compares with the equivalent figure of 2.86p nett (adjusted for the share sub-division) for the previous year. The final dividend will cost the Company £980,000.

Loss after tax adjusted for actuarial pension scheme deficit, dividends paid, fair value reserve adjustment and purchase of own shares when added to opening shareholders' funds brings the total equity of the Group to £91,309,000.

TRADING ACTIVITIES

Group construction work carried out and share of Joint Ventures' turnover increased by 43%, own work capitalised increased by 29%, Group revenue increased by 45% and headline Group profit decreased by 92%. Underlying Group profit excluding the unrealised deficit in revalued property decreased by 32%.

Turnover in contracting was higher than the previous year, although a reduced profit resulted. The modest revival in private dwelling sales in February and March mentioned in the interim report weakened during the summer months. Sales in precast concrete manufacture increased and a reduced loss was incurred.

Construction of the office block at Robertson Avenue, Edinburgh is progressing and the residential element is approximately 65% complete.

While occupancy levels at our established industrial developments have improved since this time last year and have remained stable at our established commercial sites, our recent developments at Saltire House, Whitefriars Business Park, Perth; Bridgeside House, McDonald Road, Edinburgh and Inchwood Business Park, Bathgate are proving to be a challenge and have so far failed to let.

FUTURE PROSPECTS

Work in hand in contracting is less than at this time last year and margins continue to tighten.

Private house sales are slow.

The failure to let our recent commercial and industrial developments is disappointing and there appears to be no likely improvement in the short term at least. Property values appear to have stabilised for the present, however a further softening in values before the end of the current financial year cannot be discounted.

The recession drags on and too many uncertainties exist to permit an accurate forecast of the results for the current financial year, however on balance it seems likely that, discounting any property sales, underlying profit will be less than last year.

	J.M. SMART
	Chairman

CONSOLIDATED INCOME STATEMENT for the year ended 31st JULY 2012

	2012	2011
	£000	£000

Group construction work carried out and share of Joint Ventures' turnover	28,080	19,588
Less: Share of Joint Ventures' turnover	(67)	-
Less: Own construction work capitalised	(3,329)	(2,587)

Revenue	24,684	17,001

Cost of sales	(20,743)	(13,176)


Gross Profit	3,941	3,825

Other operating income	5,518	5,523
Net operating expenses	(6,102)	(5,851)


Operating Profit before profit on sale and net valuation deficit of investment properties	3,357	3,497

Profit on sale of investment properties	-	1,929
Net deficit on valuation of investment properties	(4,042)	(5,336)


Operating (Loss)/Profit	(685)	90

Share of (losses)/profits in Joint Ventures	(15)	42
Income from available for sale financial assets	128	140
Profit on sale of available for sale financial assets	34	-
Finance income	593	384


Profit before tax	55	656

Taxation	(586)	358


(Loss)/Profit attributable to equity shareholders	(531)	1,014



(Loss)/Earnings per share - Basic and Diluted	(1.06)p	2.01p

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31st JULY 2012


	2012	2011
	£000	£000

Actuarial (loss)/gain recognised on defined benefit pension scheme	(4,517)	1,847
Deferred taxation on actuarial loss/(gain)	937	(601)

Net (deficit)/surplus recognised directly in equity	(3,580)	1,246

(Loss)/Profit for year	(531)	1,014


Total recognised income and expense for the year	(4,111)	2,260


Attributable to equity shareholders	(4,111)	2,260

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

as at 31st July 2012

	Share Capital	Capital Redemption Reserve	Fair Value Reserve	Retained Earnings	Total
	£000	£000	£000	£000	£000

As at 1st August 2010	1,008	-	216	95,317	96,541

Total recognised Income and Expense	-	-	-	2,260	2,260
Fair value adjustment	-	-	236	-	236
Tax adjustment on fair value reserve	-	-	(45)	-	(45)
Total comprehensive income	-	-	191	2,260	2,451

TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled	-	-	-	-	-
Transfer to capital redemption reserve	-	-	-	-	-
Dividends	-	-	-	(1,432)	(1,432)
Total transactions with owners	-	-	-	(1,432)	(1,432)

As at 31st July 2011	1,008	-	407	96,145	97,560

Total recognised Income and Expense	-	-	-	(4,111)	(4,111)
Fair value adjustment	-	-	46	-	46
Tax adjustment on fair value reserve	-	-	5	-	5
Total comprehensive income	-	-	51	(4,111)	(4,060)

TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled	(19)	-	-	(732)	(751)
Transfer to capital redemption reserve	-	19	-	(19)	-
Dividends	-	-	-	(1,440)	(1,440)
Total transactions with owners	(19)	19	-	(2,191)	(2,191)

As at 31st July 2012	989	19	458	89,843	91,309

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31st JULY 2012

	2012	2011
	£000	£000
Non-current assets
Property, plant and equipment	1,122	1,290
Investment properties	70,437	72,586
Investments in Joint Ventures	997	1,012
Available for sale financial assets	2,988	3,018
Retirement benefit surplus	-	1,660
Deferred tax asset	557	253

	76,101	79,819


Current assets
Inventories	10,654	7,078
Trade and other receivables	6,921	7,375
Current tax assets	-	-
Cash at bank and in hand	9,761	21,704

	27,336	36,157


Total assets	103,437	115,976



Non-current liabilities
Retirement benefit obligations	1,490	-
Deferred tax liabilities	2,180	2,852

	3,670	2,852


Current liabilities
Trade and other payables	3,961	4,376
Current tax liabilities	32	234
Bank overdraft	4,465	10,954

	8,458	15,564


Total Liabilities	12,128	18,416


Net Assets	91,309	97,560



Equity
Called up share capital	989	1,008
Capital redemption reserve	19	-
Fair value reserve	458	407
Retained earnings	89,843	96,145

	91,309	97,560

CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31st JULY 2012

	2012	2011
	£000	£000

Profit before tax	55	656
Share of losses/(profits) from Joint Ventures	15	(42)
Depreciation	363	426
Unrealised valuation deficit on investment properties	4,042	5,336
Profit on sale of property, plant and equipment	(6)	(16)
Profit on sale of investment properties	-	(1,929)
Profit on sale of available for sale financial assets	(34)	-
Change in retirement benefits	(1,367)	(1,157)
Interest received	(103)	(133)
Change in inventories	(2,021)	246
Change in receivables	454	(743)
Change in payables	(414)	(693)

	984	1,951
Tax paid on profits	(823)	(710)

Net cash flows from operating activities	161	1,241


Cash flows from investing activities
Additions to property, plant and equipment	(230)	(363)
Additions to investment properties	(94)	(2,900)
Sale of property, plant and equipment	16	54
Sale of investment properties	-	4,054
Expenditure on own work capitalised - investment properties	(3,329)	(2,587)
Purchase of available for sale financial assets	(49)	(178)
Proceeds of sale of available for sale financial assets	159	-
Interest received	103	133
Dividend from Joint Venture	-	665

Net cash used in investing activities	(3,424)	(1,122)


Cash flows from financing activities
Purchase of own shares	(751)	-
Dividends paid	(1,440)	(1,432)

Net cash used in financing activities	(2,191)	(1,432)


Decrease in cash, cash equivalents and bank	(5,454)	(1,313)


Cash, cash equivalents and bank at beginning of period	10,750	12,063


Cash, cash equivalents and bank at end of period	5,296	10,750

NOTES TO THE PRELIMINARY STATEMENT

1. Basis of Preparation

This preliminary statement is an abridged version of the Company'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 company 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 2012 and the financial information included in this preliminary statement and the accounting policies disclosed in the 2011 Annual Report and Statement of Accounts.

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.

The financial information for the year to 31st July 2011 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


	2012	2011
	£000	£000
Ordinary dividends
2010 Final dividend of 9.60p per 10p share	-	968
2011 Interim dividend of 4.60p per 10p share	-	464
2011 Final dividend of 9.70p per 10p share	978	-
2012 Interim dividend of 0.92p per 2p share	462	-


	1,440	1,432