Final Results

RNS Number : 6252N
Smart(J.)&Co(Contractors) PLC
27 October 2016
 

J SMART & CO (CONTRACTORS) PLC AND SUBSIDIARY COMPANIES

ACCOUNTS FOR THE YEAR ENDED 31st JULY 2016

PRELIMINARY STATEMENT

 

ACCOUNTS

 

Headline Group profit for the year before tax, including an unrealised surplus in revalued property as required by the International Financial Reporting Standards was £3,752,000 compared with £3,544,000 last year.  If the impact of revalued property 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 £3,616,000 (including £186,000 profit from property sales) which compares with the figure for underlying profit last year of £3,755,000 (including £1,318,000 profit from property sales and joint venture property sales).

 

The Board is recommending a Final Dividend of 2.15p nett making a total for the year of 3.07p nett which compares with 3.02p nett for the previous year.  After waivers by members holding over 50% of the shares, the Final Dividend will cost the Company no more than £421,000.

 

 

TRADING ACTIVITIES

Group construction activities carried out including private residential sales increased by 42%.  Disregarding private residential sales Group construction activities increased by 23%.  Own work capitalised increased by 125%.  Group revenue increased by 39% and headline Group profit before tax increased by 6%.  Underlying Group profit before tax excluding the unrealised surplus in revalued property decreased by 4%.

 

Turnover in contracting was more than last year and the loss was reduced.  As forecast private residential sales were more than the previous year.  Sales and profit in precast concrete manufacture increased.

 

The two large mixed social housing and private residential developments at Seafield Street and Pilton Drive, Edinburgh, continue to make satisfactory progress.  A third phase of social housing at Pilton Drive and a further social housing contract at Fleming Place (adjacent to Seafield Street) have commenced.

 

Occupancy levels at our industrial estates continue to be satisfactory.  A joint venture industrial development at Gartcosh near Glasgow is contemplated.  Although interest in our commercial office premises has improved, take up of voids is still slow.

 

 

FUTURE PROSPECTS

Work in hand in contracting is slightly less than at this time last year and there is little prospect of more work in the short term.  Accordingly, turnover in this sector will be down on last year.  Prices remain competitive.

 

Private residential sales will be less than last year.  It is by no means certain that current property valuation levels will be maintained at the end of the current financial year.

 

At this early stage it is difficult to make an informed forecast of the outcome for the current year.  However, bearing in mind the foregoing circumstances and that the reduced turnover will impair the recovery of fixed overhead costs, it seems unlikely that the profit for the current year will match last year's profit.

 

 

 

 

 

J. M. SMART

 

Chairman

 

 

CONSOLIDATED INCOME STATEMENT

for the year ended 31st JULY 2016

 

 

 

 

 

2016 

 

2015 

 

 

Unaudited

 

Audited

 

 

£000 

 

£000 

 

 

 

 

 

Group construction activities

 

30,682 

 

21,556 

Less: Own construction work capitalised

 

(1,655)

 

(737)

 

 

 

 

 

 

REVENUE

 

29,027 

 

20,819 

 

 

 

 

 

Cost of sales

 

(25,260)

 

(18,061)

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

3,767 

 

2,758 

 

 

 

 

 

Other operating income

 

5,520 

 

5,241 

Net operating expenses

 

(6,095)

 

(5,839)

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT BEFORE PROFIT ON SALE AND NET SURPLUS/(DEFICIT) ON VALUATION OF INVESTMENT PROPERTIES

 

3,192 

 

2,160 

 

 

 

 

 

Profit on sale of investment properties

 

186 

 

60 

Net surplus/(deficit) on valuation of investment properties

 

136 

 

(211)

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

3,514 

 

2,009 

 

 

 

 

 

Share of profits in Joint Ventures

 

33 

 

1,306 

Income from available for sale financial assets

 

14 

 

28 

Profit on sale of available for sale financial assets

 

 

Finance income

 

191 

 

200 

 

 

 

 

 

PROFIT BEFORE TAX

 

3,752 

 

3,544 

 

 

 

 

 

Taxation

 

(264)

 

(546)

 

 

 

 

 

 

 

 

 

 

PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS

 

3,488 

 

2,998 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE - BASIC AND DILUTED

 

7.61p

 

6.45p

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31st JULY 2016

                                                                                                                          

 

 

 

 

 

2016 

 

2015 

 

Unaudited

 

Audited

 

£000 

 

£000 

 

 

 

 

PROFIT FOR THE YEAR

3,488 

 

2,998 

 

 

 

 

OTHER COMPREHENSIVE LOSS

 

 

 

Items that may be subsequently reclassified to the Income Statement:

 

 

 

Fair value adjustment of available for sale financial assets

(10)

 

(46)

 

 

 

 

TOTAL ITEMS WHICH MAY BE SUBSEQUENTLY RECLASSIFIED TO INCOME STATEMENT

(10)

 

(46)

 

 

 

 

Items that will not be subsequently reclassified to the Income Statement:

 

 

 

Actuarial loss recognised in defined benefit pension scheme

(2,256)

 

(1,003)

Deferred taxation on actuarial loss

215 

 

201 

 

 

 

 

TOTAL ITEMS THAT WILL NOT BE SUBSEQUENTLY RECLASSIFIED TO INCOME STATEMENT

(2,041)

 

(802)

 

 

 

 

TOTAL OTHER COMPREHENSIVE LOSS

(2,051)

 

(848)

 

 

 

 

 

 

 

 

TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX

1,437

 

2,150

 

 

 

 

 

 

 

 

ATTRIBUTABLE TO EQUITY SHAREHOLDERS

1,437

 

2,150

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

as at 31st July 2016

 

 

Share Capital

Capital Redemption Reserve

Fair Value Reserve

Retained Earnings

 

Total 

 

£000 

£000 

£000 

£000 

 

£000 

 

 

 

 

 

 

 

At 1st August 2014

936 

72

87,474 

 

88,482

 

 

 

 

 

 

 

Profit for the year

2,998 

 

2,998 

Other comprehensive loss

(46)

(802)

 

(848)

TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR

(46)

2,196 

 

2,150 

 

 

 

 

 

 

 

TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY

 

 

 

Shares purchased and cancelled

(17)

(814)

 

(831)

Transfer to capital redemption reserve

17

(17)

 

Dividends

(852)

 

(852)

TOTAL TRANSACTIONS WITH OWNERS

(17)

17

(1,683)

 

(1,683)

 

 

 

 

 

 

 

At 31st July 2015

919 

89

(46)

87,987 

 

88,949

 

 

 

 

 

 

 

Profit for the year

3,488 

 

3,488 

Other comprehensive loss

(10)

(2,041)

 

(2,051)

TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR

(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

(846)

 

(846)

TOTAL TRANSACTIONS WITH OWNERS

(13)

13

(1,550)

 

(1,550)

 

 

 

 

 

 

 

At 31st July 2016

906 

102

(56)

87,884 

 

88,836

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31st JULY 2016

 

 

2016 

 

2015 

 

Unaudited

 

Audited

 

£000 

 

£000 

NON-CURRENT ASSETS

 

 

 

Property, plant and equipment

1,382 

 

1,382 

Investment properties

64,728 

 

63,231 

Investments in Joint Ventures

263 

 

267 

Available for sale financial assets

326 

 

337 

Retirement benefit surplus

33 

 

1,472 

Deferred tax asset

41 

 

27 

 

 

 

 

 

66,773 

 

66,716 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

Inventories

2,684 

 

5,735 

Trade and other receivables

6,369 

 

4,508 

Current tax asset

 

995 

Monies held on deposit

5,519 

 

3,502 

Cash and cash equivalents

26,785 

 

26,047 

 

 

 

 

 

41,357 

 

40,787 

 

 

 

 

 

 

 

 

TOTAL ASSETS

108,130 

 

107,503 

 

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

Deferred tax liabilities

1,389 

 

1,830 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

Trade and other payables

5,134 

 

4,000 

Current tax liability

143 

 

Bank overdraft

12,628 

 

12,724 

 

 

 

 

 

17,905 

 

16,724 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

19,294 

 

18,554 

 

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

88,836 

 

88,949 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

Called up share capital

906 

 

919 

Capital redemption reserve

102 

 

89 

Fair value reserve

(56)

 

(46)

Retained earnings

87,884 

 

87,987 

 

 

 

 

TOTAL EQUITY

88,836 

 

88,949 

                                                                                                                          

 

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31st JULY 2016

 

 

2016 

 

2015 

 

Unaudited

 

Audited

 

£000 

 

£000 

 

 

 

 

Profit before tax

3,752 

 

3,544 

Share of profits from Joint Ventures

(33)

 

(1,306)

Depreciation

465 

 

450 

Unrealised valuation (surplus)/deficit on investment properties

(136)

 

211 

Profit on sale of property, plant and equipment

(47)

 

(47)

Profit on sale of investment properties

(186)

 

(60)

Profit on sale of available for sale financial assets

 

(1)

Change in retirement benefits

(817)

 

(846)

Interest received

(125)

 

(117)

Change in inventories

3,051 

 

711 

Change in receivables

(1,861)

 

2,595 

Change in payables

1,134 

 

(143)

 

 

 

 

 

5,197 

 

4,991 

Tax received/(paid)

634 

 

(233)

 

 

 

 

NET CASH FLOWS FROM OPERATING ACTIVITIES

5,831 

 

4,758 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Additions to property, plant and equipment

(488)

 

(483)

Additions to investment properties

(45)

 

(236)

Expenditure on own work capitalised - investment properties

(1,655)

 

(737)

Sale of property, plant and equipment

70 

 

78 

Sale of investment properties

525 

 

1,000 

Purchase of available for sale financial assets

 

(383)

Proceeds of sale of available for sale financial assets

 

3,997 

Increase on monies held on deposit

(2,017)

 

(3,502)

Interest received

125 

 

117 

Dividend from Joint Ventures

37 

 

2,327 

 

 

 

 

NET CASH FLOWS FROM INVESTING ACTIVITIES

(3,447)

 

2,178 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Purchase of own shares

(704)

 

(831)

Dividends paid

(846)

 

(852)

 

 

 

 

NET CASH FLOWS FROM FINANCING ACTIVITIES

(1,550)

 

(1,683)

 

 

 

 

 

 

 

 

INCREASE IN CASH AND CASH EQUIVALENTS

834 

 

5,253 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

13,323 

 

8,070 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT END OF YEAR

14,157 

 

13,323 

 

 

 

 

 

NOTES TO THE PRELIMINARY STATEMENT

 

1.         BASIS OF PREPARATION

 

The financial information set out in this unaudited preliminary statement does not constitute the Group's statutory financial statements.  The financial statements for the year to 31st July 2016 have not yet been filed with the Registrar of Companies and have not yet been reported on by the Company's auditors.

 

The unaudited financial information included in this preliminary statement does not include all of the disclosures required by International Financial Reporting Standards (IFRSs) or the Companies Act 2006 and accordingly does not itself comply with IFRSs or the Companies Act 2006.

 

The Group prepares its annual consolidated financial statements in accordance with IFRSs 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 2016 and the unaudited financial information included in this preliminary statement and the accounting policies disclosed in the 2015 Annual Report and Statement of Accounts.  There have been no new IFRSs or amendments to existing standards which impact the Group's financial statements in the year to 31st July 2016.

 

The unaudited 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 and, are prepared on a going concern basis.

 

The financial information for the year to 31st July 2015 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, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report and did not contain a statement under S498 (2) or S498 (3) of the Companies Act 2006.

 

 

 

2.         DIVIDENDS

 

 

2016 

 

2015 

 

£000 

 

£000 

 

Unaudited

 

Audited

Ordinary dividends

 

 

 

2014 Final dividend of 2.04p per share, after waivers

 

428 

2015 Interim dividend of 0.92p per share

 

424 

2015 Final dividend of 2.10p per share, after waivers

425 

 

2016 Interim dividend of 0.92p per share

421 

 

 

 

 

 

 

846 

 

852 

 

 

 

 

 

The Company is proposing a final dividend of 2.15p per share for the year to 31st July 2016 which, after waivers, will cost the Company no more than £421,000.

 

The dividend if approved will be paid on 21st December 2016 to shareholders on the Register at the close of business on 25th November 2016.


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