TIDMSMJ
RNS Number : 5938C
Smart(J.)&Co(Contractors) PLC
18 April 2017
J. SMART & CO. (CONTRACTORS) PLC
INTERIM REPORT
FOR THE SIX MONTHS TO
31st JANUARY 2017
J SMART & CO. (CONTRACTORS) PLC
CHAIRMAN'S REVIEW
INTERIM REPORT
Unaudited Group profit for the six months to 31st January 2017
amounted to GBP652,000 compared with GBP531,000 for the
corresponding period last year. Group turnover increased by 13%.
Own work capitalised decreased by 83%.
In accordance with our normal practice, there has been no
revaluation of our investment properties at the end of the half
year. We believe that a half year revaluation would have had no
material effect on the figures.
Residential sales were substantially less than the previous half
year due to a hiatus between development starts. Private
residential construction activity should recommence by the end of
this financial year.
We have commenced construction of the second phases of our
industrial developments at West Edinburgh Business Park, South
Gyle, Edinburgh and Inchwood Business Park, Bathgate. This follows
successful lettings at both sites and pre-lets at Bathgate.
Current site progress in contracting is satisfactory.
INTERIM DIVID
The Board announces an interim dividend of 0.95p per share
(2016, 0.92p) to shareholders on the register at the close of
business on 5th May 2017. The interim dividend will cost the
Company no more than GBP429,000.
FUTURE PROSPECTS
We have considerably less work in hand in contracting compared
with the same time last year. Margins remain disappointing.
Private residential sales numbers for the current financial year
will be substantially less than the previous year.
Occupation and re-letting levels in our industrial properties
remain buoyant. Letting of our office properties continues to be
difficult.
Uncertainties generated by the ongoing political/economic
situation may well reduce property values by the end of the current
financial year which, under the rules of the International
Financial Reporting Standards, would have a negative effect on
headline results for the year.
While it is not possible to make an accurate forecast of the
year end figures it is evident that because of costs arising from
redundancies and reduced turnover in the second half of the
financial year we will not achieve last year's underlying
profit.
J.M. SMART
18th April 2017 Chairman
CONSOLIDATED INCOME STATEMENT
6 Months 6 Months Year
ended ended ended
31.1.17 31.1.16 31.7.16
Notes (Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Group construction activities 12,195 10,746 30,682
Less: Own construction work capitalised (209) (1,254) (1,655)
------------- ------------- -----------
REVENUE 11,986 9,492 29,027
Cost of sales (11,240) (8,949) (25,260)
------------- ------------- -----------
GROSS PROFIT 746 543 3,767
Other operating income 2,941 2,744 5,520
Net operating expenses (3,119) (2,842) (6,095)
------------- ------------- -----------
OPERATING PROFIT BEFORE PROFIT
ON SALE AND NET SURPLUS ON VALUATION
OF INVESTMENT PROPERTIES 568 445 3,192
Profit arising on sale of investment
properties - - 186
Net surplus on valuation of investment
properties - - 136
------------- ------------- -----------
OPERATING PROFIT 568 445 3,514
Share of profits in Joint Ventures 20 15 33
Income from available for sale
financial assets 10 7 14
Profit on sale of available for -
sale financial assets 6 -
Finance income 48 64 191
------------- ------------- -----------
PROFIT BEFORE TAX 652 531 3,752
Taxation 5 (135) (105) (264)
------------- ------------- -----------
PROFIT ATTRIBUTABLE TO EQUITY
SHAREHOLDERS 517 426 3,488
------------- ------------- -----------
EARNINGS PER SHARE - BASIC AND
DILUTED 7 1.14p 0.93p 7.61p
------------- ------------- -----------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 Months 6 Months Year
ended ended ended
31.1.17 31.1.16 31.7.16
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Profit for the period 517 426 3,488
------------- ------------- -----------
Other comprehensive income/(loss)
Items that may be subsequently reclassified
to Income Statement:
Fair value adjustment of available
for sale financial assets 34 (57) (10)
Total items which may be subsequently
reclassified to Income Statement 34 (57) (10)
------------- ------------- -----------
Items that will not be subsequently reclassified
to Income Statement:
Actuarial loss recognised in defined
benefit
pension scheme - - (2,256)
Deferred taxation on actuarial loss - - 215
------------- ------------- -----------
Total items that will not be subsequently
reclassified to Income Statement - - (2,041)
------------- ------------- -----------
Total other comprehensive income/(loss) 34 (57) (2,051)
------------- ------------- -----------
TOTAL COMPREHENSIVE INCOME FOR THE
PERIOD, NET OF TAX 551 369 1,437
------------- ------------- -----------
ATTRIBUTABLE TO EQUITY SHAREHOLDERS 551 369 1,437
------------- ------------- -----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital
Share Redemption Fair Value Retained
Notes Capital Reserve Reserve Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
As at 1st August
2016 906 102 (56) 87,884 88,836
Profit for the period - - - 517 517
Other comprehensive income - - 34 - 34
Total comprehensive income
for period - - 34 517 551
--------- ------------ ----------- ---------- -------
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled (3) - - (178) (181)
Transfer to Capital Redemption
Reserve - 3 - (3) -
Dividends 6 - - - (418) (418)
--------- ------------ ----------- ---------- -------
Total transactions with
owners (3) 3 - (599) (599)
--------- ------------ ----------- ---------- -------
As at 31st January
2017 903 105 (22) 87,802 88,788
--------- ------------ ----------- ---------- -------
Capital
Share Redemption Fair Value Retained
Notes Capital Reserve Reserve Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
As at 1st August
2015 919 89 (46) 87,987 88,949
Profit for the period - - - 426 426
Other comprehensive loss - - (57) - (57)
Total comprehensive (loss)/income
for period - - (57) 426 369
--------- ------------ ----------- ---------- -------
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled (3) - - (139) (142)
Transfer to Capital Redemption
Reserve - 3 - (3) -
Dividends 6 - - - (425) (425)
--------- ------------ ----------- ---------- -------
Total transactions with
owners (3) 3 - (567) (567)
--------- ------------ ----------- ---------- -------
As at 31st January
2016 916 92 (103) 87,846 88,751
--------- ------------ ----------- ---------- -------
Capital
Share Redemption Fair Value Retained
Notes Capital Reserve Reserve Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
As at 1st August
2015 919 89 (46) 87,987 88,949
Profit for the period - - - 3,488 3,488
Other comprehensive loss - - (10) (2,041) (2,051)
Total comprehensive (loss)/income
for period - - (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 6 - - - (846) (846)
--------- ------------ ----------- ---------- --------
Total transactions with
owners (13) 13 - (1,550) (1,550)
--------- ------------ ----------- ---------- --------
As at 31st July 2016 906 102 (56) 87,884 88,836
--------- ------------ ----------- ---------- --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
6 Months 6 Months Year
ended ended ended
31.1.17 31.1.16 31.7.16
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
NON-CURRENT ASSETS
Property, plant and equipment 1,365 1,347 1,382
Investment properties 64,937 64,516 64,728
Investments in Joint Ventures 283 282 263
Available for sale financial
assets 1,003 280 326
Retirement benefit surplus 33 1,472 33
Deferred tax assets 41 27 41
------------- ------------- -----------
67,662 67,924 66,773
------------- ------------- -----------
CURRENT ASSETS
Inventories 2,804 8,521 2,684
Trade and other receivables 6,557 6,338 6,369
Current tax asset - 6 -
Monies held on deposit 4,529 4,508 5,519
Cash and cash equivalents 26,013 20,013 26,785
------------- ------------- -----------
39,903 39,386 41,357
------------- ------------- -----------
TOTAL ASSETS 107,565 107,310 108,130
------------- ------------- -----------
NON-CURRENT LIABILITIES
Deferred tax liabilities 1,389 1,830 1,389
------------- ------------- -----------
CURRENT LIABILITIES
Trade and other payables 4,731 5,441 5,134
Corporation tax liability 121 - 143
Bank overdraft 12,536 11,288 12,628
------------- ------------- -----------
17,388 16,729 17,905
------------- ------------- -----------
TOTAL LIABILITIES 18,777 18,559 19,294
------------- ------------- -----------
NET ASSETS 88,788 88,751 88,836
------------- ------------- -----------
EQUITY
Called up share capital 903 916 906
Capital redemption reserve 105 92 102
Fair value reserve (22) (103) (56)
Retained earnings 87,802 87,846 87,884
------------- ------------- -----------
TOTAL EQUITY 88,788 88,751 88,836
------------- ------------- -----------
CONSOLIDATED STATEMENT OF CASH FLOWS
6 Months 6 Months Year
ended ended ended
31.1.17 31.1.16 31.7.16
Notes (Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
CASH FLOWS FROM OPERATING ACTIVITIES 9 34 (2,554) 5,197
Tax (paid)/received (157) 884 634
------------- ------------- -----------
NET CASH FLOWS FROM OPERATING
ACTIVITIES (123) (1,670) 5,831
------------- ------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant
and equipment (189) (154) (488)
Additions to investment properties - (31) (45)
Expenditure on own work capitalised
- investment properties (209) (1,254) (1,655)
Sale of property, plant and
equipment 39 20 70
Sale of investment properties - - 525
Purchase of available for sale
financial assets (674) - -
Proceeds of sale of available for
sale financial assets 37 - 1
Decrease/(increase) in monies
held on deposit 990 (1,006) (2,017)
Interest received 48 64 125
Dividend received from Joint
Venture - - 37
NET CASH FLOWS FROM INVESTING
ACTIVITIES 42 (2,361) (3,447)
------------- ------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of own shares (181) (142) (704)
Dividends paid (418) (425) (846)
------------- ------------- -----------
NET CASH FLOWSFROM FINANCING
ACTIVITIES (599) (567) (1,550)
------------- ------------- -----------
(DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS (680) (4,598) 834
------------- ------------- -----------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 14,157 13,323 13,323
------------- ------------- -----------
CASH AND CASH EQUIVALENTS AT OF PERIOD 13,477 8,725 14,157
------------- ------------- -----------
NOTES TO INTERIM FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
J. Smart & Co. (Contractors) PLC is a company domiciled in
the United Kingdom. The condensed consolidated interim financial
statements of the Company for the six months ended 31st January
2017 comprise the Company and its Subsidiaries, together referred
to as the Group, and the Group's interest in jointly controlled
entities.
The condensed consolidated interim financial statements for the
six months to 31st January 2017 have been prepared in accordance
with the Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34: Interim Financial Reporting as adopted
by the European Union.
The condensed consolidated interim financial statements for the
six months to 31st January 2017 do not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The
condensed consolidated interim financial statements should be read
in conjunction with the annual financial statements for the year to
31st July 2016, which have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union.
The statutory financial statements for the year to 31st July
2016 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, did not draw attention to any
matters by way of emphasis and did not contain a statement under
Section 498 of the Companies Act 2006.
The condensed consolidated interim financial statements have not
been audited or reviewed by the Company's auditors. A copy of the
interim financial statements will be available on the Company's
website www.jsmart.co.uk.
2. ACCOUNTING POLICIES
The condensed consolidated interim financial statements have
been prepared under the historical cost convention except where the
measurement of balances at fair value is required for investment
properties, available for sale financial assets and assets held by
defined benefit pension scheme.
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 2016, with the exception of
the policies regarding the accounting for pension scheme
obligations and investment properties revaluations.
For the condensed consolidated interim financial statements the
assets and liabilities of the pension scheme are estimated to be
unchanged from the values included at the previous year end. Also,
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 condensed consolidated
interim financial statements.
Interpretations effective in period
There are no new standards or amendments to standards or
interpretations issued by the International Accounting Standards
Board which are mandatory for the Group for the first time in the
financial year to 31st July 2017.
Estimates and assumptions
The preparation of the condensed consolidated interim financial
statements requires management to make estimates and assumptions
concerning the future that may affect the application of accounting
policies and the reported amounts of assets, liabilities and income
and expenses. Management believes that the estimates and
assumptions used in the preparation of these accounts are
reasonable. However, actual outcomes may differ from those
anticipated.
Going concern
The Directors have a reasonable expectation that the Company and
Group as a whole have adequate resources to continue in operational
existence for the foreseeable future, being a period of not less
than twelve months from the date of these accounts. For this
reason, the Directors continue to adopt the going concern basis in
preparing the condensed consolidated interim financial
statements.
3. PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties which could have a
material impact on the Group's performance for the remainder of the
current financial year remain the same as those detailed in the
Group's Annual Report and Financial Statements for the year to 31st
July 2016.
4. SEGMENTAL INFORMATION
The Group has identified operating segments on the basis of
internal reporting components that are regularly reviewed by the
chief operating decision maker to allow the allocation of resources
to segments and assess their performance. The Board of Directors
has been recognised as the chief operating decision maker.
All revenue arises from activities within the UK and therefore
the Board of Directors does not consider the business from a
geographical perspective. The operating segments are based on
activity and performance of an operating segment is based on a
measure of operating results.
External Internal Total Operating Profit/(Loss)
Revenue Revenue Revenue
31.1.17 31.1.16 31.7.16
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
31st JANUARY 2017
(Unaudited)
Construction activities 11,986 209 12,195 (1,158) - -
Investment activities 2,941 - 2,941 1,726 - -
--------- --------- --------- -------- -------- --------
14,927 209 15,136 568 - -
--------- --------- --------- -------- -------- --------
31st JANUARY 2016
(Unaudited)
Construction activities 9,492 1,254 10,746 - (1,190) -
Investment activities 2,744 - 2,744 - 1,635 -
--------- --------- --------- -------- -------- --------
12,236 1,254 13,490 - 445 -
--------- --------- --------- -------- -------- --------
31st JULY 2016
(Audited)
Construction activities 29,027 1,655 30,682 - - (102)
Investment activities 5,520 - 5,520 - - 3,616
--------- --------- --------- -------- -------- --------
34,547 1,655 36,202 - - 3,514
--------- --------- --------- -------- -------- --------
OPERATING PROFIT 568 445 3,514
Share of results of Joint
Ventures 20 15 33
Finance and investment income and profit on
sale of available
for sale financial assets 64 71 205
PROFIT BEFORE TAX ON ORDINARY ACTIVITIES 652 531 3,752
-------- -------- --------
5. TAXATION
The tax charge for the 6 months to 31st January 2017 is based on
the corporation tax rate at 19.67% (2016, 20.00%).
6. DIVIDS
6 Months 6 Months Year
Ended Ended Ended
31.1.17 31.1.16 31.7.16
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
ORDINARY DIVIDS
2016 Final dividend of 2.15p, after 418
waivers - -
2016 Interim dividend of 0.92p - - 421
2015 Final dividend of 2.10p, after
waivers - 425 425
------------- ------------- -----------
418 425 846
------------- ------------- -----------
The interim dividend of 0.95p per share for the year to 31st
July 2017 will be paid on 5th June 2017 to shareholders on the
register at 5th May 2017. The interim dividend will cost the
Company no more than GBP429,000.
7. EARNINGS PER SHARE
6 Months 6 Months Year
Ended Ended Ended
31.1.17 31.1.16 31.7.16
(Unaudited) (Unaudited) (Audited)
Profit attributable to equity shareholders
(GBP000) 517 426 3,488
------------- ------------- -------------
Basic earnings per share 1.14p 0.93p 7.61p
------------- ------------- -------------
Weighted average number of shares 45,216,991 45,956,844 45,845,272
------------- ------------- -------------
Basic earnings per share are calculated by dividing the profit
attributable to equity shareholders by the weighted average number
of shares in issue during the period.
During the 6 months to 31st January 2017 the Company purchased
for immediate cancellation 170,000 Ordinary Shares of 2p.
There is no difference between basic and diluted earnings per
share.
8. FAIR VALUE ASSETS
The Group's investment properties, available for sale financial
assets and assets held by defined benefit pension scheme are
measured at fair value after initial recognition.
Investment properties are only valued annually by the Directors
at the year end and not for the purposes of the interim financial
statements. The Group considers all of its investment properties
fall within 'Level 3' of the fair value hierarchy as described by
IFRS 13: Fair Value Measurement. Level 3 valuations are those using
inputs for the asset or liability that are not based on observable
market data. The main unobservable inputs relate to estimated
rental value and equivalent yield.
The Group's available for sale financial assets consisted
entirely of equities of companies listed on quoted markets which
fall within 'Level 1' of the fair value hierarchy. Assets held by
defined benefit pension scheme consist of equities and bond of
companies listed on quoted markets and cash which all fall within
'Level 1' of the fair value hierarchy. Level 1 valuations are those
using inputs which are quoted prices (unadjusted) in active markets
for identical assets or liabilities the Company can access at the
period end date.
9. RECONCILIATION OF PROFIT BEFORE TAX TO CASH FLOWS FROM
OPERATING ACTIVITIES
6 Months 6 Months Year
ended ended ended
31.1.17 31.1.16 31.7.16
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Profit before tax 652 531 3,752
Share of profits from Joint Ventures (20) (15) (33)
Depreciation 185 184 465
Unrealised valuation surplus on investment
properties - - (136)
Profit on sale of property, plant and
equipment (18) (15) (47)
Profit on sale of investment properties - - (186)
Profit on sale of available for sale (6)
financial assets - -
Change in retirement benefits - - (817)
Interest received (48) (64) (125)
Change in inventories (120) (2,786) 3,051
Change in receivables (188) (1,830) (1,861)
Change in payables (403) 1,441 1,134
------------- ------------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES 34 (2,554) 5,197
------------- ------------- -----------
10. RELATED PARTY TRANSACTION
Related parties are consistent with those disclosed in the
Group's Annual Report and Statement of Accounts for the year to
31st July 2016.
Related party transactions, including salary and benefits
provided to Directors and key management, were not material to the
financial position or performance of the Group for the period.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors named below, confirm on behalf of the Board of
Directors that to the best of their knowledge that the condensed
consolidated interim financial statements for the six months to
31st January 2017 have been prepared in accordance with IAS 34:
Interim Financial Reporting as adopted by the European Union. The
condensed consolidated interim financial statements include a fair
review of the information required by Disclosure and Transparency
Rules 4.2.7 and 4.2.8, being:
-- an indication of important events that have occurred during
the six months to 31st January 2017 and their impact on the
condensed consolidated interim financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the financial year, and
-- material related party transactions in the six months to 31st
January 2017 and any material changes in the related party
transactions described in the last annual report.
The Directors of the Company are listed in the Annual Report and
Statement of Accounts for the year to 31st July 2016.
By order of the Board
J.M. SMART, Director D.W. SMART, Director
18th April 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
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