J. SMART & CO. (CONTRACTORS) PLC
Unaudited Group profit for the six months to 31st January 2015 amounted to £559,000 compared with a profit of £441,000 for the corresponding period last year. Group turnover increased by 5%. Own work capitalised decreased by 2%.
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 little effect on the figures.
Residential sales were well down on the previous half year due to a lull between development starts. However, forward sales and reservations at our City Park Development at Pilton Drive, Edinburgh are promising.
There are no commercial or industrial developments underway at present, although we anticipate recommencing industrial development by the Autumn.
Current site progress in contracting is satisfactory.
The Board announces an interim dividend of 0.92p per share (2014, 0.92p) to be paid on 1st June 2015 to shareholders on the register at the close of business on 8th May 2015. The interim dividend will cost the Company no more than £429,000.
FUTURE PROSPECTS
We have substantially more work in hand in contracting than at this time last year. Margins continue to be a challenge.
Private residential sales prospects are good. However, sales numbers for the current financial year will be substantially less than the previous year.
Occupancy levels and letting prospects with regard to our industrial properties are healthy. Void levels in our office properties remain unacceptably high although letting prospects here appear slightly brighter.
There are too many uncertainties to forecast the headline profit for the current year with any degree of accuracy. However, I estimate that underlying profit for the year should at least approximate to last year's underlying profit of £1,764,000.
J.M. SMART
26th March 2015 Chairman
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Group construction work carried out 9,443 9,029 24,805
Less: Own construction work capitalised (489) (497) (1,994)
Cost of sales (8,402) (8,373) (22,521)
GROSS PROFIT 552 159290
Other operating income 2,588 2,725 5,253
Net operating expenses (2,811) (2,639) (5,652)
Profit arising on sale of investment properties
Net deficit on valuation of investment properties
Share of profits in Joint Ventures
Income from available for sale financial assets Profit/(loss) on sale of available for sale financial assets Finance income
Taxation 5
PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS 472 369 1,025 EARNINGS PER SHARE - BASIC AND DILUTED 71.01p 0.78p2.18p
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6 Months | 6 Months | Year |
ended | ended | ended |
31.1.15 | 31.1.14 | 31.7.14 |
(Unaudited) | (Unaudited) | (Audited) |
£000 | £000 | £000 |
Profit for the period Other comprehensive loss | 472 | 369 | 1,025 |
Items that may be subsequently reclassified to Income Statement: | |||
Fair value adjustment of available for sale financial assets | (24) | (87) | (1,266) |
Tax adjustment on fair value reserve | - | 19 | 180 |
Total items which may be subsequently reclassified to | |||
Income Statement | (24) | (68) | (1,086) |
Items that will not be subsequently reclassified to Income Statement:
Actuarial loss recognised in defined benefit pension scheme - - (1,793)
Deferred taxation on actuarial loss Total items that will not be reclassified subsequently to Income Statement | - - | - - | 358 (1,435) |
Total other comprehensive loss | (24) | (68) | (2,521) |
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD, NET OF TAX | 448 | 301 | (1,496) |
ATTRIBUTABLE TO EQUITY SHAREHOLDERS | 448 | 301 | (1,496) |
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J . S M A R T & C O . ( C O N T R A C T O R S ) P L C CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital
Share Capital | Redemption Fair Value Reserve Reserve | Retained Earnings | Total | |||
Notes | £000 | £000 | £000 | £000 | £000 | |
As at 1 August 2014 | 936 | 72 | - | 87,474 | 88,482 | |
Profit for the period | - | - | - | 472 | 472 | |
Other comprehensive loss Total comprehensive (loss)/income for period | - - | - - | (24) (24) | - 472 | (24) 448 | |
Transactions with owners, recorded directly in equity | ||||||
Shares purchased and cancelled | (5) | - | - | (228) | (233) | |
Transfer to Capital Redemption Reserve | - | 5 | - | (5) | - | |
Dividends | 6 | - | - | - | (428) | (428) |
Total transactions with owners | (5) | 5 | - | (661) | (661) |
As at 31 January 2015 931 77 (24) 87,28588,269
As at 1 August 2013 | 942 | 66 | 1,086 | 89,031 | 91,125 | |
Profit for the period | - | - | - | 369 | 369 | |
Other comprehensive loss Total comprehensive (loss)/income for period | - - | - - | (68) (68) | - 369 | (68) 301 | |
Transactions with owners, recorded directly in equity | ||||||
Shares purchased and cancelled | (2) | - | - | (121) | (123) | |
Transfer to Capital Redemption Reserve | - | 2 | - | (2) | - | |
Dividends | 6 | - | - | - | (430) | (430) |
Total transactions with owners | (2) | 2 | - | (553) | (553) |
As at 31 January 2014 940 68 1,018 88,84790,873
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Capital
Share | Redemption Fair Value | Retained | |||
Capital | Reserve Reserve | Earnings | Total | ||
As at 1 August 2013 | Notes | £000 942 | £000 £000 66 1,086 | £000 89,031 | £000 91,125 |
Profit for the period | - | - | - | 1,025 | 1,025 | |
Other comprehensive loss | - | - | (1,086) | (1,435) | (2,521) | |
Total comprehensive loss for period | - | - | (1,086) | (410) | (1,496) | |
Transactions with owners, recorded directly in equity | ||||||
Shares purchased and cancelled | (6) | - | - | (279) | (285) | |
Transfer to Capital Redemption Reserve | - | 6 | - | (6) | - | |
Dividends | 6 | - | - | - | (862) | (862) |
Total transactions with owners | (6) | 6 | - | (1,147) | (1,147) | |
As at 31 July 2014 | 936 | 72 | - | 87,474 | 88,482 |
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J . S M A R T & C O . ( C O N T R A C T O R S ) P L C CONSOLIDATED STATEMENT OF FINANCIAL POSITION6 Months ended 31.1.15 (Unaudited) £000 | 6 Months ended 31.1.14 (Unaudited) £000 | Year ended 31.7.14 (Audited) £000 | |
NON-CURRENT ASSETS Property, plant and equipment | 1,281 | 1,208 | 1,380 |
Investment properties | 63,286 | 62,873 | 63,609 |
Investments in Joint Ventures | 1,428 | 940 | 1,288 |
Trade and other receivables | - | 1,055 | - |
Available for sale financial assets | 354 | 3,902 | - |
Retirement benefit surplus | 1,629 | 2,567 | 1,629 |
Deferred tax assets | 23 | 109 | 23 |
68,001 | 72,654 | 67,929 | |
CURRENT ASSETS Inventories | 7,133 | 13,425 | 6,246 |
Trade and other receivables | 8,086 | 7,413 | 11,099 |
Current tax asset | 758 | 316 | 988 |
Cash at bank and in hand | 21,143 | 12,786 | 16,802 |
37,120 | 33,940 | 35,135 | |
TOTAL ASSETS | 105,121 | 106,594 | 103,064 |
NON-CURRENT LIABILITIES Deferred tax liabilities | 1,707 | 2,030 | 1,707 |
CURRENT LIABILITIES Trade and other payables | 5,177 | 3,824 | 4,143 |
Bank overdraft | 9,968 | 9,867 | 8,732 |
15,145 | 13,691 | 12,875 | |
TOTAL LIABILITIES | 16,852 | 15,721 | 14,582 |
NET ASSETS | 88,269 | 90,873 | 88,482 |
EQUITY Called up share capital | 931 | 940 | 936 |
Capital redemption reserve | 77 | 68 | 72 |
Fair value reserve | (24) | 1,018 | - |
Retained earnings | 87,285 | 88,847 | 87,474 |
TOTAL EQUITY | 88,269 | 90,873 | 88,482 |
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J . S M A R T & C O . ( C O N T R A C T O R S ) P L C CONSOLIDATED STATEMENT OF CASH FLOWS 6 Months 6 Months Year ended ended ended 31.1.15 31.1.14 31.7.14 (Unaudited) (Unaudited) (Audited) Notes£000 £000£000 CASH FLOWS FROM OPERATING ACTIVITIES 8(332) (883)7,208Tax received/(paid) 143 (298) (798)
NET CASH FLOW FROM OPERATING ACTIVITIES (189) (1,181)6,410 CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (79) (99) (582) Additions to investment properties (177) (51) (72) Sale of property, plant and equipment 18 9 85
Sale of investment properties 1,000 - -
Expenditure on own work capitalised -
investment properties (489) (497) (1,994) Purchase of available for sale financial assets (378) (406) (406) Proceeds of sale of available for sale financial assets 3,997 212 260
Acquisition of investment in subsidiary, net of cash acquired - (39) (39)
Interest received 61 31 62
Dividend received from Joint Venture 2 - -
Purchase of own shares (233) (123) (285) Dividends paid (428) (430) (862) NET CASH FROM FINANCING
ACTIVITIES (661) (553)(1,147) INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS 3,105 (2,574)2,577 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 8,070 5,493 5,493 CASH AND CASH EQUIVALENTS AT END OF PERIOD 11,175 2,919 8,0707
J . S M A R T & C O . ( C O N T R A C T O R S ) P L C 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 2015 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 2015 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 2015 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 2014, 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 2014 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.
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 and available for sale financial assets.
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 2014, 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.
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The following new standards and amendments to standards and interpretations relevant to the Group have been issued by the International Accounting Standards Board and are mandatory for the first time for the financial year to 31st July 2015:
• IAS 32(amended): Offsetting financial assets and financial liabilities (effective for accounting periods
beginning on or after 1st January 2014)
• IAS 36 (amended): Recoverable Amounts Disclosures for Non-Financial Assets (effective for accounting
periods beginning on or after 1st January 2014)
• IAS 39 (amended): Financial Instruments recognition and measurement on novation of derivatives
and hedge accounting (effective for accounting periods beginning on or after 1st January 2014)
• Amendments to IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Ventures and IFRS 12:
Disclosures of Interests in Other Entities in relation to Investment Entities (transition guidance).
The Directors anticipate that there will be no material effect on the financial statements from these
Standards.
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.
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.
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 2014.
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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 £000 | Revenue £000 | Revenue £000 | 31.1.15 £000 | 31.1.14 £000 | 31.7.14 £000 | |
31st JANUARY 2015 (Unaudited) | ||||||
Construction activities | 8,954 | 489 | 9,443 | (1,213) | - | - |
Investment activities | 2,588 | - | 2,588 | 1,553 | - | - |
11,542 | 489 | 12,031 | 340 | - | - | |
31st JANUARY 2014 (Unaudited) Construction activities | 8,532 | 497 | 9,029 | - | (1,700) | - |
Investment activities | 2,725 | - | 2,725 | - | 1,945 | - |
11,257 | 497 | 11,754 | - | 245 | - | |
31st JULY 2014 (Audited) Construction activities | 22,811 | 1,994 | 24,805 | - | - | (3,547) |
Investment activities | 5,253 | - | 5,253 | - | - | 2,656 |
28,064 | 1,994 | 30,058 | - | - | (891) |
OPERATING PROFIT / (LOSS) | 340 | 245 | (891) |
Share of results of Joint Ventures | 142 | 121 | 469 |
Finance and investment income and profit on sale of available | |||
for sale financial assets | 77 | 97 | 1,629 |
Finance costs and loss on sale of available for sale financial assets | - | (22) | - |
PROFIT BEFORE TAX ON ORDINARY ACTIVITIES | 559 | 441 | 1,207 |
5. TAXATION |
The tax charge for the 6 months to 31st January 2015 is based on the corporation tax rate at 20.67% (2014, 22.33%).
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