Interim Results

Smart(J.)&Co(Contractors) PLC 03 April 2008 J SMART & CO (CONTRACTORS) PLC INTERIM REPORT 6 MONTHS TO 31 JANUARY 2008 J. SMART & CO. (CONTRACTORS) PLC CHAIRMAN'S REVIEW INTERIM REPORT Unaudited Group profits for the six months to 31st January 2008 amounted to Â£6,566,000 compared with profits of Â£4,194,000 for the corresponding period last year. Turnover increased by 28%. Turnover and own work combined increased by 11%. The increase in profits before tax is due to the sale of an undeveloped site in Glasgow. In accordance with our normal practice there has been no revaluation of our investment properties at the end of the half year. Accordingly the recent fall in property values has had no impact on the half yearly profit figures. There were no private house sales during the half year. We completed the large speculative industrial unit at Cardonald Business Park and the large pre-let industrial unit in Helen Street, Glasgow. Helen Street is occupied and Cardonald is under offer. INTERIM DIVIDEND The Board announces an interim dividend of 3.00p per share (2007, 3.00p) to be paid on 9th June 2008 to shareholders on the register at the close of business on 16th May 2008. 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 more than at this time last year and more than at the end of last year. Most of the work has been negotiated. Private House sales including our joint venture development with Keane Developments will be more than last year. Rental income should increase slightly this year although the industrial pre-lets at our Prestonfield Park joint venture with Walker Group will make no contribution to this year's figures. The mixed commercial and residential development in McDonald Road, Edinburgh continues but will not be completed this financial year. The recent fall in property values referred to above is due to an increase in yields. It now appears possible that this fall may be ameliorated by increases in rental and occupation levels, although the likely value of the property portfolio at the year end is currently far from clear. The requirement of the International Financial Reporting Standards that unrealised gains/losses in revalued property be included in the Income Statement could have a significant negative impact on the headline year end profit figure which is not possible to forecast at this stage. Disregarding the impact of revalued property, it is anticipated that subject to unforeseen circumstances, the underlying profit for the year will be not less than Â£8,000,000. 3rd April 2008 J.M. SMART Chairman CONSOLIDATED INCOME STATEMENT Notes 6 Months 6 Months Year ended ended ended 31.1.08 31.1.07 31.7.07 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 REVENUE 12,316 9,610 19,977 Own work capitalised 1,251 2,617 4,579 -------- -------- -------- 13,567 12,227 24,556 Cost of sales (11,625) (9,514) (21,464) -------- -------- -------- GROSS PROFIT 1,942 2,713 3,092 Other operating income 2,598 2,387 5,024 Net operating expenses (2,845) (3,159) (5,033) -------- -------- -------- OPERATING PROFIT BEFORE PROFITS ON SALE AND NET REVALUATION GAINS 1,695 1,941 3,083 ON INVESTMENT PROPERTIES Profit arising on sale of investment properties 4,155 91 627 Net gain on valuation of investment - - 1,944 properties ------- -------- -------- OPERATING PROFIT 5,850 2,032 5,654 Share of profits in Joint 14 1,889 1,800 Ventures Income from investments 30 26 63 Profit on sale of investments 9 77 95 Finance income 714 286 851 Finance costs (51) (116) (319) -------- -------- --------- PROFIT BEFORE TAX 6,566 4,194 8,144 Taxation 4 (1,970) (1,258) (1,412) -------- -------- --------- PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS 4,596 2,936 6,732 -------- ======== ======== EARNINGS PER SHARE - BASIC AND DILUTED 6 45.59p 29.12p 66.77p ======== ======== ======== CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Notes 6 Months 6 Months Year ended ended ended 31.1.08 31.1.07 31.7.07 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 Actuarial gain recognised on defined benefit pension scheme - - 2,755 Deferred taxation on actuarial - - (826) gain ------- ------- ------- NET SURPLUS RECOGNISED DIRECTLY IN - - 1,929 EQUITY ------- ------- ------- Profit for the period 4,596 2,936 6,732 ------- ------- ------- TOTAL RECOGNISED INCOME AND EXPENSE 4,596 2,936 8,661 FOR THE PERIOD ------- ------- ------- ATTRIBUTABLE TO EQUITY 4,596 2,936 8,661 SHAREHOLDERS ======= ======= ======= CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Notes 6 Months 6 Months Year ended ended ended 31.1.08 31.1.07 31.7.07 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 TOTAL RECOGNISED INCOME AND EXPENSE 4,596 2,936 8,661 FOR THE PERIOD Fair value adjustment net of (182) 49 24 tax Dividends 5 (500) (483) (630) ------- ------- ------- 3,914 2,502 8,055 Opening shareholders' funds 92,135 84,080 84,080 ------- ------- ------- Closing shareholders' funds 96,049 86,582 92,135 ======= ======= ======= CONSOLIDATED BALANCE SHEET Notes 6 Months 6 Months Year ended ended ended 31.1.08 31.1.07 31.7.07 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 NON-CURRENT ASSETS Property, plant and equipment 1,493 5,099 2,537 Investment properties 72,649 75,601 72,545 Investments in Joint Ventures 2,040 6,394 1,996 Financial assets 1,728 1,686 1,695 Trade and other receivables 2,176 2,796 2,176 Deferred tax assets 1,561 2,531 1,641 ------- ------- ------- 81,647 94,107 82,590 ------- ------- ------- CURRENT ASSETS Inventories 8,970 3,615 7,635 Trade and other receivables 3,721 2,975 3,700 Cash and bank 22,793 8,449 16,468 ------- ------- ------- 35,484 15,039 27,803 ------- ------- ------- TOTAL ASSETS 117,131 109,146 110,393 ======= ======= ======= NON-CURRENT LIABILITIES Retirement benefit obligations 5,280 8,201 5,280 Deferred tax liabilities 7,706 9,754 7,843 ------- ------- ------- 12,986 17,955 13,123 ------- ------- ------- CURRENT LIABILITIES Trade and other payables 6,164 3,351 4,265 Current tax liabilities 1,932 1,258 870 ------- ------- ------- 8,096 4,609 5,135 ------- ------- ------- TOTAL LIABILITIES 21,082 22,564 18,258 ------- ======= ======= NET ASSETS 96,049 86,582 92,135 ======= ======= ======= EQUITY Called up share capital 1,008 1,008 1,008 Fair value reserve 190 542 372 Retained earnings 94,851 85,032 90,755 ------- ------- ------- TOTAL EQUITY 96,049 86,582 92,135 ======= ======= ======= CONSOLIDATED CASH FLOW STATEMENT Notes 6 Months 6 Months Year ended ended ended 31.1.08 31.1.07 31.7.07 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 Cash flows from operating activities 7 2,459 594 (1,546) Tax paid on profits (908) (1,346) (2,346) ------- --------- --------- NET CASH FLOW FROM OPERATING ACTIVITIES 1,551 (752) (3,892) ------- ------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and (155) (189) (465) equipment Purchase of investment (34) (29) (5) properties Sale of property, plant and equipment 9 21 79 Sale of investment properties 6,335 2,020 12,046 Expenditure on own work (1,251) (2,617) (4,579) capitalised Purchase of investments (325) (210) (282) Proceeds of sale of 60 168 205 investments Interest received 635 269 740 Interest paid - - - Dividend received from Joint Venture - - 3,000 ------- ------- ------- NET CASH FROM INVESTING 5,274 (567) 10,739 ACTIVITIES ------- ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Dividends paid (500) (483) (630) ------- ------- ------- NET CASH USED IN FINANCING ACTIVITIES (500) (483) (630) ------- ------- ------- INCREASE/(DECREASE) IN CASH, CASH 6,325 (1,802) 6,217 EQUIVALENTS AND BANK ------- ------- ------- CASH, CASH EQUIVALENTS AND BANK AT 16,468 10,251 10,251 BEGINNING OF PERIOD ------- ------- ------- CASH, CASH EQUIVALENTS AND BANK AT 22,793 8,449 16,468 END OF PERIOD ======= ======= ======= 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 2007 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 2007, 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 2008 (Unaudited) Construction 13,567 (1,251) 12,316 77 - - activities Investment 2,598 - 2,598 5,773 - - activities Joint Ventures - - - 14 - - ------ ------ ------ ------ ------ ------ 16,165 (1,251) 14,914 5,864 - - ------ ------ ------ ------ ------ ------ 31st JANUARY 2007 (Unaudited) Construction 12,227 (2,617) 9,610 - 914 - activities Investment 2,387 - 2,387 - 1,118 - activities Joint Ventures - - - - 1,889 - ------ ------ ------ ------ ------ ------ 14,614 (2,617) 11,997 - 3,921 - ------ ------- ------ ------ ------ ------ 31st JULY 2007 (Audited) Construction 24,556 (4,579) 19,977 - - 823 activities Investment 5,024 - 5,024 - - 4,831 activities Joint Ventures - - - - - 1,800 ------ ------ ------ ------ ------ ------ 29,580 (4,579) 25,001 - - 7,454 ------ ------- ------ ------ ------ ------ RESULT 5,864 3,921 7,454 Finance and investment 753 389 1,009 income Finance and investment (51) (116) (319) costs ------ ------ ------ PROFIT ON ORDINARY 6,566 4,194 8,144 ACTIVITIES BEFORE TAX Tax on profit on ordinary (1,970) (1,258) (1,412) activities ------ ------ ------ PROFIT ATTRIBUTABLE TO 4,596 2,936 6,732 EQUITY ====== ====== ====== SHAREHOLDERS 4. TAXATION The tax charge for the 6 months to 31st January 2008 is based on the corporation tax rate at 30% (2007, 30%). 5. DIVIDENDS 6 Months 6 Months Year Ended Ended Ended 31.1.08 31.1.07 31.7.07 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 ORDINARY DIVIDENDS 2007 Final dividend declared of 10.15p per share 500 - - 2007 Interim dividend declared of 3.00p per share - - 147 2006 Final dividend of 9.80p per - 483 483 share ----- ----- ----- 500 483 630 ===== ===== ===== 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 2006 and 31st July 2007. The interim dividend of 3.00p per share for the year to 31st July 2008 will be paid on 9th June 2008 to shareholders on the register at 16th May 2008. 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 2008 4,596 45.59p ====== ====== 6 months to 31st January 2007 2,936 29.12p ====== ====== Year to 31st July 2007 6,732 66.77p ====== ====== 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 31.1.08 31.1.07 31.7.07 (Unaudited) (Unaudited) (Audited) Â£000 Â£000 Â£000 Profit before tax 6,566 4,194 8,144 Share of profits from Joint Ventures (14) (1,889) (1,800) Depreciation 192 204 483 Unrealised revaluation gains on investment properties - - (1,944) Gain on sale of property, plant and equipment - (17) (68) Gain on sale of investment properties (4,155) (91) (627) Gain on sale of investments (9) (77) (95) Change in retirement benefits - - (166) Interest received (634) (269) (740) Interest received by Joint Ventures (80) (17) (111) Interest paid - - - Interest paid by Joint Ventures 51 115 150 Change in inventories (1,335) (1,309) (5,330) Change in receivables - current (22) (270) (376) Change in receivables - non current - - - Change in payables 1,899 20 934 ------- ------- ------- NET CASH GENERATED FROM OPERATIONS 2,459 594 (1,546) ======= ======= ======= This information is provided by RNS The company news service from the London Stock Exchange

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