Earnings Release • Oct 27, 2016
Earnings Release
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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 | - | 1 | ||
| 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 | 1 | 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UBRKRNSARURA
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