Smart (J) & Co Regulatory News (SMJ)

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.

CONSOLIDATED INCOME STATEMENT

for the year ended 31st JULY 2016

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31st JULY 2016

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

as at 31st July 2016

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31st JULY 2016

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31st JULY 2016

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

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.