SMART (J.) & CO. (CONTRACTORS) PLC

Quarterly Report • Mar 28, 2013

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

RNS Number : 1190B

Smart(J.)&Co(Contractors) PLC

28 March 2013

J. SMART & CO. (CONTRACTORS) PLC

INTERIM REPORT

FOR THE SIX MONTHS TO

31st JANUARY 2013

J SMART & CO. (CONTRACTORS) PLC

CHAIRMAN'S REVIEW

INTERIM REPORT

Unaudited Group profit for the six months to 31st January 2013 amounted to £1,024,000 compared with a profit of £1,457,000 for the corresponding period last year.  Group turnover decreased by 2%.  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.  Had a revaluation been carried out then we believe that this would probably have resulted in a reduced headline profit figure as calculated in accordance with the International Financial Reporting Standards.

Private dwelling sales were again negligible in the period under review.  Our mixed commercial and residential development at Robertson Avenue is well advanced.  We have another industrial development in view.

Contracting work and the margins in same continue to be elusive.

INTERIM DIVIDEND

The Board announces an interim dividend of 0.92p per share (2012 0.92p) to be paid on 3rd June 2013 to shareholders on the register at the close of business on 10th May 2013.  The interim dividend will cost the Company £441,000.

FUTURE PROSPECTS

We have less contracting work in hand than at this time last year.  We are at present in the middle of a redundancy programme and it seems clear that turnover for the year will be less than last year.  As in recent years the prospect of obtaining future contracts is uncertain.

The slow rate of private dwelling sales in the first half of the year has so far not been followed by the usual Spring revival.

While letting of our recent commercial and industrial developments remains disappointing, occupancy levels in our established developments continue to hold up well, particularly in the case of small industrial units.

Trading remains difficult on most fronts.  A softening in property values is conceivable by the end of the year which, as required by the International Financial Reporting Standards, would adversely affect the headline figure for the full year.  As indicated in the last annual report, uncertainties continue to make forecasting difficult.  However it seems likely that, discounting any property sales, underlying profit for the current financial year will be considerably less than last year.

28th March 2013	J.M. SMART Chairman

CONSOLIDATED INCOME STATEMENT

	Notes	6 Months ended 31.1.13 (Unaudited) £000	6 Months ended 31.1.12 (Unaudited) £000	Year ended 31.7.12 (Audited) £000
Group construction work carried out and share of Joint Ventures' turnover		13,456	13,757	28,080
Less:  Share of Joint Ventures' turnover		-	(67)	(67)
Less:  Own construction work capitalised		(1,723)	(1,755)	(3,329)
REVENUE		11,733	11,935	24,684
Cost of sales		(10,730)	(10,561)	(20,743)
GROSS PROFIT		1,003	1,374	3,941
Other operating income		2,744	2,737	5,518
Net operating expenses		(3,036)	(2,891)	(6,102)
OPERATING PROFIT BEFORE PROFIT ON SALE AND NET DEFICIT ON VALUATION OF INVESTMENT PROPERTIES		711	1,220	3,357
Profit arising on sale of investment properties		-	-	-
Net deficit on valuation of investment properties		-	-	(4,042)
OPERATING PROFIT/(LOSS)		711	1,220	(685)
Share of profits/(losses) in Joint Ventures		203	113	(15)
Income from available for sale financial assets		68	61	128
Profit on sale of available for sale financial assets		8	-	34
Finance income		34	63	593
PROFIT BEFORE TAX		1,024	1,457	55
Taxation	5	(95)	(170)	(586)
PROFIT/(LOSS) ATTRIBUTABLE TO EQUITY SHAREHOLDERS		929	1,287	(531)
EARNINGS/(LOSS) PER SHARE - BASIC AND DILUTED	7	1.89p	2.55p	(1.06)p

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		6 Months ended 31.1.13 (Unaudited) £000	6 Months ended 31.1.12 (Unaudited) £000	Year ended 31.7.12 (Audited) £000
Profit/(loss) for the period		929	1,287	(531)
Fair value adjustment of available for sale financial assets		397	(98)	46
Tax adjustment on fair value reserve		(71)	28	5
Actuarial loss recognised on defined benefit pension scheme		-	-	(4,517)
Deferred taxation on actuarial loss		-	-	937
Other comprehensive income/(expense) for the period		326	(70)	(3,529)
TOTAL COMPREHENSIVE INCOME/(EXPENSE) FOR THE PERIOD		1,255	1,217	(4,060)
ATTRIBUTABLE TO EQUITY SHAREHOLDERS		1,255	1,217	(4,060)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Notes		Share Capital	Capital Redemption Reserve		Fair Value Reserve	Retained Earnings	Total
			£000	£000		£000	£000	£000
As at 1 August 2012			989	19		458	89,843	91,309
Comprehensive Income
Profit for the period			-	-		-	929	929
Other Comprehensive Income
Fair value adjustment of available for sale financial assets			-	-		397	-	397
Tax adjustment on fair value reserve			-	-		(71)	-	(71)
Actuarial loss recognised on defined benefit pension scheme			-	-		-	-	-
Deferred taxation on actuarial loss			-	-		-	-	-
Total comprehensive income			-	-		326	929	1,255
Transactions with owners, recorded directly in equity
Shares purchased and cancelled			(32)	-		-	(1,207)	(1,239)
Transfer to Capital Redemption Reserve			-	32		-	(32)	-
Dividends	6		-	-		-	(968)	(968)
Total transactions with owners			(32)	32		-	(2,207)	(2,207)
As at 31 January 2013			957	51		784	88,565	90,357

As at 1 August 2011		1,008	-		407	96,145	97,560
Comprehensive Income
Profit for the period		-	-		-	1,287	1,287
Other Comprehensive Income
Fair value adjustment of available for sale financial assets		-	-		(98)	-	(98)
Tax adjustment on fair value reserve		-	-		28	-	28
Actuarial loss recognised on defined benefit pension scheme		-	-		-	-	-
Deferred taxation on actuarial loss		-	-		-	-	-
Total comprehensive (expense)/ income		-	-		(70)	1,287	1,217
Transactions with owners, recorded directly in equity
Shares purchased and cancelled		(3)	-		-	(107)	(110)
Transfer to Capital Redemption Reserve		-	3		-	(3)	-
Dividends	6	-	-		-	(978)	(978)
Total transactions with owners		(3)	3		-	(1,088)	(1,088)
As at 31 January 2012		1,005	3		337	96,344	97,689

As at 1 August 2011		1,008	-		407	96,145	97,560
Comprehensive Income
Loss for the period		-	-		-	(531)	(531)
Other Comprehensive Income
Fair value adjustment of available for sale financial assets		-	-		46	-	46
Tax adjustment on fair value reserve		-	-		5	-	5
Actuarial loss recognised on defined benefit pension scheme		-	-		-	(4,517)	(4,517)
Deferred taxation on actuarial loss		-	-		-	937	937
Total comprehensive income/ (expense)		-	-		51	(4,111)	(4,060)
Transactions with owners, recorded directly in equity
Shares purchased and cancelled		(19)	-		-	(732)	(751)
Transfer to Capital Redemption Reserve		-	19		-	(19)	-
Dividends	6	-	-		-	(1,440)	(1,440)
Total transactions with owners		(19)	19		-	(2,191)	(2,191)
As at 31 July 2012		989	19		458	89,843	91,309

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		6 Months ended 31.1.13 (Unaudited) £000	6 Months ended 31.1.12 (Unaudited) £000	Year ended 31.7.12 (Audited) £000
NON-CURRENT ASSETS
Property, plant and equipment		1,175	1,305	1,122
Investment properties		71,189	74,411	70,437
Investments in Joint Ventures		1,200	1,125	997
Available for sale financial assets		3,421	2,920	2,988
Retirement benefit surplus		-	1,660	-
Deferred tax assets		557	253	557
		77,542	81,674	76,101
CURRENT ASSETS
Inventories		11,983	8,516	10,654
Trade and other receivables		7,627	7,660	6,921
Current tax assets		34	-	-
Cash at bank and in hand		4,872	14,276	9,761
		24,516	30,452	27,336
TOTAL ASSETS		102,058	112,126	103,437
NON-CURRENT LIABILITIES
Retirement benefit obligations		1,490	-	1,490
Deferred tax liabilities		2,251	2,824	2,180
		3,741	2,824	3,670
CURRENT LIABILITIES
Trade and other payables		4,627	4,266	3,961
Current tax liabilities		-	130	32
Bank overdraft		3,333	7,217	4,465
		7,960	11,613	8,458
TOTAL LIABILITIES		11,701	14,437	12,128
NET ASSETS		90,357	97,689	91,309
EQUITY
Called up share capital		957	1,005	989
Capital redemption reserve		51	3	19
Fair value reserve		784	337	458
Retained earnings		88,565	96,344	89,843
TOTAL EQUITY		90,357	97,689	91,309

CONSOLIDATED STATEMENT OF CASH FLOWS

	Notes	6 Months ended 31.1.13 (Unaudited) £000	6 Months ended 31.1.12 (Unaudited) £000	Year ended 31.7.12 (Audited) £000
CASH FLOWS FROM OPERATING ACTIVITIES	8	(438)	(378)	984
Tax paid on profits		(161)	(274)	(823)
NET CASH FLOW FROM OPERATING ACTIVITIES		(599)	(652)	161
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment		(241)	(196)	(230)
Additions to investment properties		(29)	(70)	(94)
Sale of property, plant and equipment		36	7	16
Sale of investment properties		1,000	-	-
Expenditure on own work capitalised - investment properties		(1,723)	(1,755)	(3,329)
Purchase of available for sale financial assets		(220)	-	(49)
Proceeds of sale of available for sale financial assets		192	-	159
Interest received		34	63	103
NET CASH USED IN INVESTING ACTIVITIES		(951)	(1,951)	(3,424)
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of own shares		(1,239)	(110)	(751)
Dividends paid		(968)	(978)	(1,440)
NET CASH USED IN FINANCING ACTIVITIES		(2,207)	(1,088)	(2,191)
DECREASE IN CASH, CASH EQUIVALENTS AND BANK		(3,757)	(3,691)	(5,454)
CASH, CASH EQUIVALENTS AND BANK AT BEGINNING OF PERIOD		5,296	10,750	10,750
CASH, CASH EQUIVALENTS AND BANK AT END OF PERIOD		1,539	7,059	5,296

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 2013 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 2013 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services 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 2013 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 2012, 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 2012 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.

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 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 2012, with the exception of the following policies regarding the accounting for pension scheme deficit 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.

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

The following new standards and amendments to standards are mandatory for the first time for the financial year to 31st July 2013 but have no impact on the Group other than the presentation of information in the financial statements:

·     Amendment to IAS1 - Presentation of Financial Statements

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, 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 2012.

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 profit/(loss).

	External Revenue £000	Internal Revenue £000	Total Revenue £000	Operating Profit/(Loss)
31.1.13 £000	31.1.12 £000	31.7.12 £000
31st JANUARY 2013 (Unaudited)
Construction activities	11,733	1,723	13,456	(1,144)	-	-
Investment activities	2,744	-	2,744	1,855	-	-
	14,477	1,723	16,200	711	-	-
31st JANUARY 2012 (Unaudited)
Construction activities	11,935	1,755	13,690	-	(455)	-
Investment activities	2,737	-	2,737	-	1,675	-
	14,672	1,755	16,427	-	1,220	-
31st JULY 2012 (Audited)
Construction activities	24,684	3,329	28,013	-	-	(25)
Investment activities	5,518	-	5,518	-	-	(660)
	30,202	3,329	33,531	-	-	(685)
OPERATING PROFIT/(LOSS)				711	1,220	(685)
Share of results of Joint Ventures				203	113	(15)
Finance and investment income				110	124	755
PROFIT BEFORE TAX ON ORDINARY ACTIVITIES				1,024	1,457	55

5.         TAXATION

The tax charge for the 6 months to 31st January 2013 is based on the corporation tax rate at 23.67% (2012, 25.33%).

6.         DIVIDENDS

	6 Months Ended 31.1.13 (Unaudited) £000	6 Months Ended 31.1.12 (Unaudited) £000	Year Ended 31.7.12 (Audited) £000
ORDINARY DIVIDENDS
2012 Final dividend of 1.98p per 2p share	968	-	-
2012 Interim dividend of 0.92p per 2p share	-	-	462
2011 Final dividend of 9.70p per 10p share	-	978	978
	968	978	1,440

The interim dividend of 0.92p per share for the year to 31st July 2013 will be paid on 3rd June 2013 to shareholders on the register at 10th May 2013.  The interim dividend will cost the company £441,000.

7.         EARNINGS/(LOSS) PER SHARE

	Profit/(Loss) attributable to equity shareholders £000	Basic Earnings/ (Loss) per share
6 months to 31st January 2013	929	1.89p
6 months to 31st January 2012	1,287	2.55p
Year to 31st July 2012	(531)	(1.06)p

Basic earnings/(loss) per share are calculated by dividing the profit/(loss) attributable to equity shareholders by the weighted average number of shares in issue during the period.

During the 6 months to 31st January 2013 the Company purchased for immediate cancellation 1,587,695 Ordinary Shares of 2p.

The earnings per share for the 6 months to 31st January 2013 is based on weighted average number of shares amounting to 49,092,359, the earnings per share for the 6 months to 31st January 2012 is based on a weighted average number of shares amounting to 50,401,033 and the basic loss per share for the year to 31st July 2012 is based on a weighted average number of shares amounting to 50,201,047.

There is no difference between basic and diluted earnings per share.

8.         RECONCILIATION OF OPERATING PROFIT/(LOSS) TO CASH FLOWS FROM

OPERATING ACTIVITIES

	6 Months ended 31.1.13 (Unaudited) £000	6 Months ended 31.1.12 (Unaudited) £000	Year ended 31.7.12 (Audited) £000
Profit before tax	1,024	1,457	55
Share of (profits)/losses from Joint Ventures	(203)	(113)	15
Depreciation	169	178	363
Unrealised valuation deficit on investment properties	-	-	4,042
Profit on sale of property, plant and equipment	(17)	(4)	(6)
Profit on sale of investment properties	-	-	-
Profit on sale of available for sale financial assets	(8)	-	(34)
Change in retirement benefits	-	-	(1,367)
Interest received	(34)	(63)	(103)
Change in inventories	(1,329)	(1,438)	(2,021)
Change in receivables	(706)	(285)	454
Change in payables	666	(110)	(414)
NET CASH GENERATED FROM OPERATIONS	(438)	(378)	984

9.         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 2012.

On 13th December 2012 the group sold one of its investment properties to The Roofing and Building Supply Co Limited, a company in which directors D. W. Smart and J. R. Smart have a material beneficial interest, for £1,000,000.  This transaction was at normal commercial rates. 

Other 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' RESPONSIBILITES

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 2013 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.  The condensed consolidated interim financial statement includes a fair review of the information required by Disclosure and Transparency Rules 4.2.7 and DTR 4.2.8, being:

·     an indication of important events that have occurred during the six months to 31st January 2013 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 2013 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 2012.  Since that year end, L. E. Glenday retired as a director on 22nd January 2013 and J. R. Smart was appointed a Director on 23rd January 2013.

By order of the Board
J.M. SMART, Director	D.W. SMART, Director
28th March 2013

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR GCGDXUXDBGXI