Interim Results

Smart(J.)&Co(Contractors) PLC 23 April 2007 J SMART & CO (CONTRACTORS) PLC INTERIM REPORT 6 MONTHS TO 31 JANUARY 2007 CHAIRMAN'S REVIEW INTERIM REPORT Unaudited Group profits for the six months to 31st January 2007 amounted to Â£4,194,000 compared with profits of Â£3,026,000 for the corresponding period last year. Turnover decreased by 25%. Turnover and own work capitalised combined decreased by 5%. The 39% increase in profits before tax compared with the corresponding period last year is entirely due to our share of the large increase in profits from the joint venture company Edinburgh Industrial Estates Limited arising from investment property sales flagged up in the last annual report. Private house sales are similar to those in the last half year. The construction of the two industrial units at Cardonald Business Park and Helen Street, Glasgow and the refurbishment of the office development at Links Place, Edinburgh are well advanced. INTERIM DIVIDEND The Board announces an interim dividend of 3.00p per share (2006, 3.00p) to be paid on 9th July 2007 to shareholders on the register at close of business on 15th June 2007. After waivers by members holding approximately 51% of the shares, the interim dividend will cost the Company Â£147,000. FUTURE PROSPECTS The amount of work in hand in contracting is the same as at this time last year and more than at the end of last year. Most of the work has been negotiated. Private house sales will be less than last year. Investment values in industrial and commercial property have stabilised and negligible growth is anticipated this year. Accordingly, the significant boost that the recent requirement to book unrealised profits in revalued property gave to the profit figures for the last two financial years will not occur this year. The contribution from our share of joint venture profits in the half year under review will not be repeated in the second half. Bearing the foregoing in mind and subject to unforeseen or exceptional circumstances, it is anticipated that profit for the full year will be not less than Â£6,000,000. 23rd April 2007 J.M. SMART Chairman CONSOLIDATED INCOME STATEMENT Notes 6 Months 6 Months Year ended ended ended 31.1.07 31.1.06 31.7.06 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 REVENUE 9,610 12,843 26,149 Own work capitalised 2,617 49 98 ------ ------ ------ 12,227 12,892 26,247 Cost of sales (9,514) (10,771) (21,378) ------ ------- ------- GROSS PROFIT 2,713 2,121 4,869 Other operating income 2,387 3,103 5,819 Net operating expenses (3,159) (2,569) (5,307) ------ ------ ------ OPERATING PROFIT BEFORE PROFITS ON SALE AND NET REVALUATION GAINS ON INVESTMENT PROPERTIES 1,941 2,655 5,381 Profit arising on sale of investment properties 91 - 899 Net gain on valuation of investment properties - - 5,546 ------- ------ ------ OPERATING PROFIT 2,032 2,655 11,826 Share of profits in Joint Ventures 1,889 206 1,651 Income from investments 26 27 84 Decrease in amount written off investments - 21 - Profit/(Loss) on sale of investments 77 - (40) Finance income 286 182 382 Finance costs (116) (65) (143) ----- ----- ------ PROFIT BEFORE TAX 4,194 3,026 13,760 Taxation 4 (1,258) (908) (3,131) ------ ----- ------ PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS 2,936 2,118 10,629 ======= ======= ======== EARNINGS PER SHARE - BASIC AND DILUTED 6 29.12p 21.01p 105.43p ======== ======== ========= CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Notes 6 Months 6 Months Year ended ended ended 31.1.07 31.1.06 31.7.06 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 Actuarial loss recognised on defined benefit pension schemes - - (1,538) Deferred taxation on actuarial loss - - 461 ----- ----- ----- NET DEFICIT RECOGNISED DIRECTLY IN EQUITY - - (1,077) Profit for the period 2,936 2,118 10,629 ------- ------- -------- TOTAL RECOGNISED INCOME AND EXPENSE FOR THE PERIOD 2,936 2,118 9,552 ======= ======= ======= ATTRIBUTABLE TO EQUITY SHAREHOLDERS 2,936 2,118 9,552 ======= ======= ======= CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Notes 6 Months 6 Months Year ended ended ended 31.1.07 31.1.06 31.7.06 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 TOTAL RECOGNISED INCOME AND EXPENSE FOR THE PERIOD 2,936 2,118 9,552 Fair value adjustment net of tax 49 - 177 Dividends 5 (483) (468) (615) ------ ------ ------ 2,502 1,650 9,114 Opening shareholders' funds 84,080 74,597 74,597 Adoption of IAS32 and 39 - - 369 ------ ------ ------ Closing shareholders' funds 86,582 76,247 84,080 ======== ======== ======== CONSOLIDATED BALANCE SHEET Notes 6 Months 6 Months Year ended ended ended 31.1.07 31.1.06 31.7.06 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 NON-CURRENT ASSETS Property, plant and equipment 5,099 1,564 2,566 Investment properties 75,601 73,825 77,436 Investments in Joint Ventures 6,394 3,317 4,604 Financial assets 1,686 - 1,499 Other receivables 2,796 2,056 2,796 Deferred tax assets 2,531 - 2,531 -------- -------- -------- 94,107 80,762 91,432 -------- -------- -------- CURRENT ASSETS Inventories 3,615 4,758 2,305 Other investments - 1,039 - Trade and other receivables 2,975 3,401 2,704 Cash and bank 8,449 5,039 10,251 ------- ------- -------- 15,039 14,237 15,260 -------- -------- -------- TOTAL ASSETS 109,146 94,999 106,692 ======== ======== ======== NON-CURRENT LIABILITIES Retirement benefit obligations 8,201 7,028 8,201 Deferred tax liabilities 9,754 6,768 9,734 ------- ------- ------- 17,955 13,796 17,935 ------- ------- ------- CURRENT LIABILITIES Trade and other payables 3,351 3,965 3,331 Current tax liabilities 1,258 991 1,346 ------- ----- ------- 4,609 4,956 4,677 ------- ------- ------- TOTAL LIABILITIES 22,564 18,752 22,612 ======= ======= ======= NET ASSETS 86,582 76,247 84,080 ======= ======= ======= EQUITY Called up share capital 1,008 1,008 1,008 Fair value reserve 542 - 473 Retained earnings 85,032 75,239 82,599 ------- ------- ------- TOTAL EQUITY 86,582 76,247 84,080 ======= ======= ======= CONSOLIDATED CASH FLOW STATEMENT Notes 6 Months 6 Months Year ended ended ended 31.1.07 31.1.06 31.7.06 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 Cash flows from operating activities 7 594 2,040 5,551 Tax paid on profits (1,346) (590) (1,520) ------- ------- ------- NET CASH FLOW FROM OPERATING ACTIVITIES (752) 1,450 4,031 ------- ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (189) (348) (662) Purchase of investment properties (29) (21) (27) Sale of property, plant and equipment 21 19 50 Sale of investment properties 2,020 2,443 5,119 Expenditure on own work capitalised (2,617) (49) (98) Purchase of investments (210) - (369) Proceeds of sale of investments 168 - 456 Interest received 269 - 353 Interest paid - (1) (1) ------ ------ ------ NET CASH USED IN INVESTING ACTIVITIES (567) 2,043 4,821 ------- ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES --- --- Dividends paid (483) (468) (615) ------- ------- ------- NET CASH USED IN FINANCING ACTIVITIES (483) (468) (615) ------- ------- ------- INCREASE IN CASH, CASH EQUIVALENTS AND BANK (1,802) 3,025 8,237 ------- ------- ------- CASH, CASH EQUIVALENTS AND BANK AT BEGINNING OF PERIOD 10,251 2,014 2,014 ------- ------- ------- CASH, CASH EQUIVALENTS AND BANK AT END OF PERIOD 8,449 5,039 10,251 ======= ======= ======== 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 2006 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 2006, 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 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 31st JANUARY 2007 (Unaudited) Construction activities 12,227 (2,617) 9,610 914 - - Investment activities 2,387 - 2,387 1,118 - - Joint Ventures - - - 1,889 - - ------ ------ ------ ------- --- --- 14,614 (2,617) 11,997 3,921 - - ------ ------ ------ ------- --- --- 31st JANUARY 2006 (Unaudited) Construction activities 12,892 (49) 12,843 - 484 - Investment activities 3,103 - 3,103 - 2,171 - Joint Ventures - - - - 206 - ------ ------ ------ --- ----- --- 15,995 (49) 15,946 - 2,861 - ------ ------ ------ --- ----- --- 31st JULY 2006 (Audited) Construction activities 26,247 (98) 26,149 - - 1,694 Investment activities 5,819 - 5,819 - - 10,132 Joint Ventures - - - - - 1,651 ------ --- ------ --- --- ------- 32,066 (98) 31,968 - - 13,477 ------ ---- ------ --- --- ------- RESULT 3,921 2,861 13,477 Finance income 389 230 466 Finance cost (116) (65) (183) ------- ------ ------- PROFIT BEFORE TAX 4,194 3,026 13,760 Taxation (1,258) (908) (3,131) ------- ------ ------- PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS 2,936 2,118 10,629 ======= ======= ======= 4. TAXATION The tax charge for the 6 months to 31st January 2007 is based on the corporation tax rate at 30% (2006, 30%). 5. DIVIDENDS 6 Months 6 Months Year Ended Ended Ended 31.1.07 31.1.06 31.7.06 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 ORDINARY DIVIDENDS 2006 Final dividend declared of 9.80p per share 483 - - 2006 Interim dividend declared of 3.00p per share - - 147 2005 Final dividend of 9.50p per share - 468 468 ----- ----- ----- 483 468 615 ===== ===== ===== 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 2005 and 31st July 2006. The interim dividend of 3.00p per share for the year to 31st July 2007 will be paid on 9th July 2007 to shareholders on the register at 15th June 2007. After waivers by members holding approximately 51% of the shares the interim dividend will cost the company Â£147,000. 6. EARNINGS PER SHARE Profit attributable Basic to equity Earnings shareholders per share Â£000 6 months to 31st January 2007 2,936 29.12p ======= ======= 6 months to 31st January 2006 2,118 21.01p ======= ======= Year to 31st July 2006 10,629 105.43p ======= ======= 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 31.1.07 31.1.06 31.7.06 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 Profit before tax 4,194 3,026 13,760 Share of profits from Joint Ventures (1,889) (206) (1,651) Depreciation 204 200 488 Unrealised revaluation gains on investment properties - - (5,546) Gain on sale of property, plant and equipment (17) (6) (14) Gain on sale of investment properties (91) (213) (899) (Gain)/Loss on sale of investments (77) (54) 40 Amounts written back to investments - (21) - Change in retirement benefits - - (365) Interest received (269) - (353) Interest received by Joint Ventures (17) (3) (7) Interest paid - 1 1 Interest paid by Joint Ventures 115 65 142 Proceeds of sale of investments - 194 - Purchase of investments - (120) - Change in inventories (1,309) 166 1,619 Change in receivables - current (270) (635) 62 Change in receivables - non current - (400) (1,140) Change in payables 20 46 (586) ------- ------- ------- NET CASH GENERATED FROM OPERATIONS 594 2,040 5,551 ======= ======= ======= This information is provided by RNS The company news service from the London Stock Exchange

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