LONDON (Alliance News) - Construction and property company J Smart & Co (Contractors) PLC on Monday warned that its full-year underlying profit is unlikely to match figures from one year earlier, with "no prospect" at present of profit from property sales reaching the same high, as the company posted a 5.0% drop in pretax profit for the first half of its financial year.
Pretax profit fell to GBP531,000 for the six months to the end of January, from GBP559,000 a year earlier, J Smart said, even though revenue rose to GBP9.5 million from GBP9.0 million, as a higher cost of sales put pressure on margins and the company posted a smaller share of profits in joint ventures.
The company will pay a flat interim dividend of 0.92 pence per share, it said.
J Smart said residential forward sales and reservations have been buoyant at its City Park Development in Edinburgh, but said they will have no effect on revenue until the second half of the current financial year. Private residential sales numbers for the year are expected to be better than in 2015, the company said.
J Smart said occupancy levels and letting prospects in its industrial properties generally remain healthy, but added that "while there is a slight improvement in our office property occupancy levels, void levels here remain unacceptably high".
The company also noted the potential negative impact coming from the Scottish government's decision to levy rates on empty industrial property, along with an uncertain political environment, which could hit the valuation of its property portfolio and reduce profit for the current financial year.
"Bearing in mind that there is at present no prospect of a repeat of last year's profit of GBP1.3 million on property sales and joint venture property sales, underlying profit for the year is unlikely to achieve last year's figure of GBP3.8 million," J Smart said.
Shares in J Smart were down 1.8% at 107.00 pence on Monday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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Smart (J) & Co (SMJ)