Smart (J) & Co Regulatory News (SMJ)

J SMART & CO (CONTRACTORS) PLC AND SUBSIDIARY COMPANIES

ACCOUNTS FOR THE YEAR ENDED 31st JULY 2014

PRELIMINARY STATEMENT

ACCOUNTS

Headline Group profit for the year before tax, including an unrealised deficit in revalued property as required by the International Financial Reporting Standards was £1,207,000 compared with a restated headline profit for last year of £533,000. If the impact of revalued property on the figures 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 £1,764,000 (no property sales but including £1,299,000 profit from the sale of our listed stock market investment portfolio) which compares with the figure for the restated underlying profit last year of £3,660,000 (including £2,244,000 profit from property sales and a contribution from joint ventures relating to property sales).

The Board is recommending a Final Dividend of 2.04p nett making a total for the year of 2.96p nett which compares with 2.93p 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 £430,000.

TRADING ACTIVITIES

Group construction activities carried out including private residential sales increased by 20%. Disregarding private residential sales Group construction activities decreased by 26%. Own work capitalised decreased by 10%. Group revenue increased by 24% and headline Group profit increased by 126%. Underlying Group profit excluding the unrealised deficit in revalued property decreased by 52%.

As forecast, turnover in contracting was substantially less than last year and a loss was again sustained. Private residential sales were well up on last year. Sales in precast concrete manufacture increased and the loss was reduced.

Inter alia two large mixed social housing and private residential developments commenced at Seafield Street and Pilton Drive, Edinburgh, although too late to have any significant bearing on revenue for the year under review.

Occupancy levels at our industrial estates are satisfactory with Inchwood Business Park, Bathgate now filling up. Occupancy levels at our commercial office premises continue to disappoint.

FUTURE PROSPECTS

Work in hand in contracting is substantially more than at this time last year, albeit obtained at highly competitive rates.

Private residential sales will be considerably less than last year. Phase 1 of our industrial development at South Gyle, Edinburgh is now complete and has current interest. Property values continue to hold up, however should we fail to reduce the rental voids in our office properties further write downs in value will be inevitable.

Bearing in mind the foregoing and the current uncertain economic climate too many imponderables exist at this stage to permit even an approximate forecast of the outcome for the current year.

CONSOLIDATED INCOME STATEMENT for the year ended 31st JULY 2014

1. Group Revenue excludes the share of Joint Ventures' revenue of £nil (2013, £6,523,000).

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31st JULY 2014

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

as at 31st July 2014

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31st JULY 2014

CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31st JULY 2014

NOTES TO THE PRELIMINARY STATEMENT

1. Basis of Preparation

This preliminary statement is an abridged version of the Company's full consolidated accounts, which have not yet been filed with the Registrar of Companies and have not yet been reported on by the Company's auditors.

The financial information included in this preliminary statement does not include all of the disclosures required by International Financial Reporting Standards (IFRS) or the Companies Act 2006 and accordingly does not itself comply with IFRS or the Companies Act 2006.

The company prepares its annual consolidated financial statements in accordance with IFRS 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 2014 and the financial information included in this preliminary statement and the accounting policies disclosed in the 2013 Annual Report and Statement of Accounts, with the exception of the policy regarding the accounting for pension scheme obligations resulting from the application of IAS 19 (amended): Employee Benefits, the impact of which is detailed below.

The 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.

The financial information for the year to 31st July 2013 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 and which did not contain a statement under S498 of the Companies Act 2006.

Restatement of prior year

In the current financial year the application of IAS 19 (amended): Employee Benefits impacts the measurement of the various components representing movements in retirement benefit obligations and associated disclosures, but not the Group's total retirement benefit obligations. Following the replacement of expected returns on pension scheme assets with a net finance cost in the Consolidated Income Statement, the profit for the period reduces and accordingly the actuarial gain in Other comprehensive income increases in the Consolidated Statement of Comprehensive Income.

This change has been applied retrospectively and accordingly the comparative figures have been restated for the year ended 31st July 2013. The effect is to increase the interest expense by £40,000 and reduce the interest income by £256,000 on retirement benefit obligations recognised in the Consolidated Income Statement, resulting in a total reduction to profit before tax of £296,000 and to increase the actuarial gain recognised in the Consolidated Statement of Comprehensive Income also by £296,000. Deferred taxation is also impacted upon and as a result the credit to the Consolidated Income Statement is increased by £60,000 and the charge to the Consolidated Statement of Comprehensive Income is also increased by £60,000. There has been no impact on the Group's retirement benefit surplus position recorded in the Balance Sheet at 31st July 2013.

The table below details the impact of the application of IAS 19 (amended): Employee Benefits on the accounts for the year to 31st July 2013:

2. Dividends

The Company is proposing a final dividend of 2.04p per share for the year to 31st July 2014 which, after waivers, will cost the Company no more than £430,000.

The dividend if approved will be paid on 22nd December 2014 to shareholders on the Register at the close of business on 28th November 2014.