Last checked at 5 Nov 2009 11:02
J SMART & CO (CONTRACTORS) PLC AND SUBSIDIARY COMPANIES
ACCOUNTS FOR THE YEAR ENDED 31st JULY 2009
PRELIMINARY STATEMENT
ACCOUNTS
As forecast and due to the requirement of the International Financial Reporting Standards that any unrealised deficit in revalued property be included in the Income Statement, I am obliged to report for the first time in the Company's history a headline group loss before tax of £1,208,000. This compares with a profit for last year of £5,871,000 which also included an unrealised deficit in revalued property. 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 of £4,468,000 (no property sales) for the year under review which compares with a figure for the previous year of £8,526,000 (including £3,890,000 profit from property sales).
The value of investment properties at the beginning of the year was £68,148,000 (cost £35,452,000). Additions during the year cost £3,577,000. The net deficit on the year end valuation was £5,779,000 leaving a value of £65,946,000 (cost £39,029,000).
The Board is recommending a Final Dividend of 9.35p nett making a total for the year of 13.85p nett which compares with 13.50p nett for the previous year. The dividends will cost the Company £1,165,000.
Loss adjusted for pension scheme deficit, dividends paid and fair value reserve when deducted from opening shareholders' funds brings the total equity of the Group to £92,307,000.
TRADING ACTIVITIES
Group turnover increased by 2%, own work capitalised increased by 88% and other operating income increased by 7%. Total Group profit decreased by 121%. Underlying Group profit excluding an unrealised deficit in revalued property decreased by 48%.
Turnover in contracting increased and a small profit was achieved. Private housing sales were negligible. Sales in precast concrete manufacture decreased and a small loss was made.
The mixed commercial and residential development in McDonald Road, Edinburgh and the second phase of our industrial development at Bilston Glen near Edinburgh are almost finished. The second office block at Glenbervie Business Park, Larbert is complete and 75% let.
FUTURE PROSPECTS
In spite of a slight erosion in tenant numbers our occupation levels are holding up quite well considering the general economic situation, and rental income is expected to increase slightly in the current year. There appears to be genuine interest in the commercial and industrial space we have built recently. Only time will tell if this interest translates into tenancies.
At McDonald Road the 25% affordable portion of the residential development has been handed over to a Housing Association. It is too early to say whether or not the promising start made to private house sales here will be maintained.
The amount of contract work in hand is less than at this time last year, prices have tumbled and it is clear that prospective contracts are thin on the ground.
Bearing the foregoing in mind, there are too many uncertainties to forecast the outcome for the current year with any degree of accuracy at this stage.
J. M. SMART
Chairman
CONSOLIDATED INCOME STATEMENT for the year ended 31st JULY 2009
| 2009 | 2008 | ||||
| £000 | £000 | ||||
|
| |||||
| Group construction work carried out and share of Joint Ventures' turnover | 29,616 | 29,169 | |||
| Less: Share of Joint Ventures' turnover | (165) | (1,596) | |||
| Less: Own construction work capitalised | (4,050) | (2,157) | |||
| Revenue | 25,401 | 25,416 | |||
| Cost of sales | (21,707) | (22,290) | |||
| Gross Profit | 3,694 | 3,126 | |||
| Other operating income | 5,568 | 5,228 | |||
| Net operating expenses | (5,230) | (5,101) | |||
| Operating Profit before profits on sale and net | |||||
| revaluation deficit on investment properties | 4,032 | 3,253 | |||
| Profit arising on sale of investment properties | - | 3,890 | |||
| Net deficit on valuation of investment properties | (5,779) | (2,655) | |||
| Operating (Loss)/Profit | (1,747) | 4,488 | |||
| Share of profits in Joint Ventures | 217 | 72 | |||
| Income from available for sale financial assets | 66 | 79 | |||
| (Loss)/profit on sale of available for sale financial assets | (55) | 33 | |||
| Impairment of available for sale financial assets | (365) | - | |||
| Finance income | 677 | 1,257 | |||
| Finance costs | (1) | (58) | |||
| (Loss)/Profit before tax | (1,208) | 5,871 | |||
| Taxation | 50 | (540) | |||
| (Loss)/Profit attributable to equity shareholders | (1,158) | 5,331 | |||
| (Loss)/Earnings per share - Basic and Diluted | (11.49)p | 52.88p | |||
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the year ended 31st JULY 2009
| 2009 | 2008 | |||
| £000 | £000 | |||
| Actuarial (loss)/gain recognised on defined benefit pension scheme | (4,553) | 1,381 | ||
| Deferred taxation on actuarial loss/(gain) | 1,275 | (387) | ||
| Net (deficit)/surplus recognised directly in equity | (3,278) | 994 | ||
| (Loss)/profit for period | (1,158) | 5,331 | ||
| Total recognised income and expense for the period | (4,436) | 6,325 | ||
| Attributable to equity shareholders | (4,436) | 6,325 | ||
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
| Share | Fair Value | Retained | |||||||
| Capital | Reserve | Earnings | Total | ||||||
| £000 | £000 | £000 | £000 | ||||||
| As at 1st August 2007 | 1,008 | 372 | 90,755 | 92,135 | |||||
| Total recognised Income and Expense | - | - | 6,325 | 6,325 | |||||
| Fair value adjustment net of tax | - | (499) | - | (499) | |||||
| Dividends | - | - | (647) | (647) | |||||
| As at 31st July 2008 | 1,008 | (127) | 96,433 | 97,314 | |||||
| Total recognised Income and Expense | - | - | (4,436) | (4,436) | |||||
| Impairment of available for sale financial | |||||||||
| assets taken to Income Statement | - | 365 | - | 365 | |||||
| Fair value adjustment net of tax | - | (197) | - | (197) | |||||
| Dividends | - | - | (739) | (739) | |||||
| As at 31st July 2009 | 1,008 | 41 | 91,258 | 92,307 | |||||
CONSOLIDATED BALANCE SHEET as at 31st JULY 2009
| 2009 | 2008 | |||
| £000 | £000 | |||
| Non-current assets | ||||
| Property, plant and equipment | 6,715 | 4,331 | ||
| Investment properties | 65,946 | 68,148 | ||
| Investments in Joint Ventures | 2,284 | 2,067 | ||
| Available for sale financial assets | 1,914 | 1,533 | ||
| Other receivables | - | 3,176 | ||
| Deferred tax asset | 1,778 | 936 | ||
| 78,637 | 80,191 | |||
| Current assets | ||||
| Inventories | 8,476 | 8,184 | ||
| Trade and other receivables | 7,001 | 3,833 | ||
| Cash at bank and in hand | 23,234 | 26,883 | ||
| 38,711 | 38,900 | |||
| Total Assets | 117,348 | 119,091 | ||
| Non-current liabilities | ||||
| Retirement benefit obligations | 4,468 | 1,089 | ||
| Deferred tax liabilities | 4,763 | 5,944 | ||
| 9,231 | 7,033 | |||
| Current liabilities | ||||
| Trade and other payables | 4,872 | 5,518 | ||
| Current tax liabilities | 163 | 733 | ||
| Bank overdraft | 10,775 | 8,493 | ||
| 15,810 | 14,744 | |||
| Total Liabilities | 25,041 | 21,777 | ||
| Net Assets | 92,307 | 97,314 | ||
| Equity | ||||
| Called up share capital | 1,008 | 1,008 | ||
| Fair value reserve | 41 | (127) | ||
| Retained earnings | 91,258 | 96,433 | ||
| 92,307 | 97,314 |
CONSOLIDATED CASH FLOW STATEMENT for the year ended 31st JULY 2009
| 2009 | 2008 | |||
| £000 | £000 | |||
| (Loss)/profit before tax | (1,208) | 5,871 | ||
| Share of profits from Joint Ventures | (217) | (72) | ||
| Depreciation | 521 | 533 | ||
| Unrealised revaluation deficit on investment properties | 5,779 | 2,655 | ||
| Loss/(profit) on sale of property, plant and equipment | 42 | (31) | ||
| Profit on sale of investment properties | - | (3,890) | ||
| Loss/(profit) on sale of available for sale financial assets | 55 | (33) | ||
| Impairment of available for sale financial assets | 365 | - | ||
| Change in retirement benefits | (1,174) | (2,810) | ||
| Interest received | (602) | (1,257) | ||
| Interest paid | 1 | 7 | ||
| Change in inventories | (292) | (549) | ||
| Change in receivables - current | 8 | (133) | ||
| Change in receivables - non current | - | (1,000) | ||
| Change in payables | (646) | 1,252 | ||
| 2,632 | 543 | |||
| Tax paid on profits | (1,333) | (2,066) | ||
| Net cash flow to/(from) operating activities | 1,299 | (1,523) | ||
| Cash flows from investing activities | ||||
| Purchase of property, plant and equipment | (493) | (758) | ||
| Purchase of investment properties | (2,044) | (6) | ||
| Sale of property, plant and equipment | 64 | 69 | ||
| Sale of investment properties | - | 6,188 | ||
| Expenditure on own work capitalised - investment properties | (1,533) | (550) | ||
| Expenditure on own work capitalised - properties under construction | (2,517) | (1,607) | ||
| Purchase of available for sale financial assets | (580) | (639) | ||
| Proceeds of sale of available for sale financial assets | 11 | 145 | ||
| Interest received | 602 | 1,257 | ||
| Interest paid | (1) | (7) | ||
| Net cash (used)/from investing activities | (6,491) | 4,092 | ||
| Cash flows from financing activities | ||||
| Dividends paid | (739) | (647) | ||
| Net cash used in financing activities | (739) | (647) | ||
| (Decrease)/increase in cash, cash equivalents and bank | (5,931) | 1,922 | ||
| Cash, cash equivalents and bank at beginning of period | 18,390 | 16,468 | ||
| Cash, cash equivalents and bank at end of period | 12,459 | 18,390 | ||
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 2009 and the financial information included in this preliminary statement and the accounting policies disclosed in the 2008 Annual Report and Statement of Accounts.
The consolidated financial statements are prepared under the historical cost convention with the exception of available for sale financial assets which are recognised at fair value.
The financial information for the year to 31st July 2008 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 S237 of the Companies Act 1985.
2. Dividends
| 2009 | 2008 | ||
| £000 | £000 | ||
| Ordinary dividends | |||
| 2007 Final dividend of 10.15p per share | - | 500 | |
| 2008 Interim dividend of 3.00p per share | - | 147 | |
| 2008 Final dividend of 10.50p per share | 517 | - | |
| 2009 Interim dividend of 4.50p per share | 222 | - | |
| 739 | 647 | ||
The Company is proposing a final dividend of 9.35p per share for the year to 31st July 2009 which will cost the Company £943,000. No shareholders are waiving their right to the final dividend.
The dividend if approved will be paid on 21st December 2009 to shareholders on the Register at the close of business on 4th December 2009.