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30 Mar 2009 12:32
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J SMART & CO (CONTRACTORS) PLC
INTERIM REPORT
6 MONTHS TO 31 JANUARY 2009
Β Β J. SMART & CO. (CONTRACTORS) PLC
CHAIRMAN'S REVIEW
INTERIM REPORT
Unaudited Group profits for the six months to 31st January 2009 amounted to Β£2,556,000Β compared with profits of Β£6,566,000 for the corresponding period last year. Turnover increased by 2%. Turnover and own work capitalised combined increased by 7%.
The decrease in profits before tax is due to the fact thatΒ theΒ figures did not benefit from the profits from land and property sales generated in the previous two half years. In accordance with our normal practice there has been no revaluation of our investment properties at the end of the half year. Had such a revaluation been carried out and applied to the figuresΒ the recent further deterioration in property values would have resulted in a loss being recorded.
Private house sales were negligible during the half year. 80% of the residential Joint Venture with Kiltane Developments Ltd atΒ Duff Street,Β EdinburghΒ has either been sold or let. Our Joint Venture of industrial units with Walker Group atΒ PrestonfieldΒ Park,Β EdinburghΒ is complete and substantially let.
INTERIM DIVIDEND
The Board has decided toΒ adjustΒ the interim dividendΒ in relation to the final dividend. It is important to understand that as a result the final dividend will be less than last year. HoweverΒ the total dividends for the full year should not be less than last year. Therefore the Board announcesΒ an interim dividend of 4.50p per share (2008, 3.00p) to be paid on 8th June 2009 to shareholders on the register at the close of business on 15th May 2009. After waivers by members holding approximately 51% of the shares the interim dividend will cost the Company Β£222,000.
FUTURE PROSPECTS
While we have adequateΒ contractingΒ work in hand it is less than at this time last year and at the last year end. Most of the work has been negotiated.
PrivateΒ houseΒ sales will be negligible this year.
The mixed commercial and residential development inΒ McDonald Road,Β EdinburghΒ is well advanced and the office accommodation is attracting interest. The second office block atΒ GlenbervieΒ BusinessΒ Park, Larbert and the second phase of our industrial development at Bilston Glen nearΒ EdinburghΒ will finish this year. Both developments are attracting serious interest.
Although we still have substantial cash reserves the recent significant falls in interest rates are having an adverse affect on ourΒ financeΒ income. Our rental roll is not being eroded and we expect our rental income for the full year to be higher than last year. At this stage it seems unlikely that the recent significant deterioration in industrial and commercial property values will be reversed before the end of the year. Accordingly it isΒ likelyΒ that the requirement of the International FinancialΒ ReportingΒ Standards that unrealised gains/losses in revalued property be included in the Income Statement will erase this year's profitsΒ resulting in a headline loss for the year.
Disregarding the impact of revalued property, I anticipate that subject to unforeseen circumstances the underlying profit for the year will be notΒ less than Β£4,000,000.
|
30th March 2009 |
J.M. SMART Chairman |
CONSOLIDATED INCOME STATEMENT
|
Notes |
6 Months ended 31.1.09 (Unaudited) Β£000 |
6 Months ended 31.1.08 (Unaudited) Β£000 |
Year ended 31.7.08 (Audited) Β£000 |
|
|
REVENUE |
||||
|
Group and Share of Joint Ventures' turnover |
12,596Β |
12,316Β |
27,012Β |
|
|
Less: Share of Joint Ventures' turnover |
(29) |
- |
(1,596) |
|
|
Own work capitalised Cost of sales |
12,567Β 1,928Β 14,495Β (12,598) |
12,316Β 1,251Β 13,567Β (11,625) |
25,416Β 2,157Β 27,573Β (24,447) |
|
|
GROSS PROFIT |
1,897Β |
1,942Β |
3,126Β |
|
|
Other operating income |
2,805Β |
2,598Β |
5,228Β |
|
|
Net operating expenses |
(2,703) |
(2,845) |
(5,101) |
|
|
OPERATING PROFIT BEFOREΒ PROFITS ONΒ SALEΒ ANDΒ NETΒ REVALUATIONΒ GAINSΒ ON INVESTMENT PROPERTIES |
1,999Β |
1,695Β |
3,253 |
|
|
Profit arising on sale of investment properties |
- |
4,155Β |
3,890 |
|
|
NetΒ deficitsΒ on valuation of investment properties |
- |
- |
Β (2,655) |
|
|
OPERATING PROFIT |
1,999Β |
5,850Β |
4,488Β |
|
|
Share of profits in Joint Ventures |
31Β |
14Β |
45Β |
|
|
Income from investments |
32Β |
30Β |
79Β |
|
|
Profit on sale of investments |
- |
9Β |
33Β |
|
|
Finance income |
504Β |
714Β |
1,358Β |
|
|
Finance costs |
Β (10) |
(51) |
(154) |
|
|
PROFITΒ BEFOREΒ TAX |
2,556Β |
6,566Β |
5,849Β |
|
|
Taxation |
4 |
Β (716) |
(1,970) |
(518) |
|
PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS |
1,840Β |
Β 4,596Β |
5,331Β |
|
|
EARNINGS PER SHARE - BASIC AND DILUTED |
6 |
18.25p |
Β 45.59p |
52.88p |
Β Β CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
|
6 Months ended 31.1.09 (Unaudited) Β£000 |
6 Months ended 31.1.08 (Unaudited) Β£000 |
Year ended 31.7.08 (Audited) Β£000 |
||
|
ActuarialΒ gainΒ recognised onΒ defined benefit pension scheme |
- |
- |
1,381Β |
|
|
Deferred taxation on actuarialΒ gain |
- |
- |
(387) |
|
|
NETΒ SURPLUSΒ RECOGNISED DIRECTLY IN EQUITY |
- |
- |
994Β |
|
|
Profit for the period |
1,840Β |
4,596Β |
5,331Β |
|
|
TOTAL RECOGNISED INCOME AND EXPENSE FOR THE PERIOD |
1,840Β |
4,596Β |
6,325Β |
|
|
ATTRIBUTABLE TO EQUITY SHAREHOLDERS |
1,840Β |
4,596Β |
6,325Β |
CONSOLIDATEDΒ STATEMENT OF CHANGES INΒ SHAREHOLDERS'Β EQUITY
|
Notes |
6 Months ended 31.1.09 (Unaudited) Β£000 |
6 Months ended 31.1.08 (Unaudited) Β£000 |
Year ended 31.7.08 (Audited) Β£000 |
|
|
TOTAL RECOGNISED INCOME AND EXPENSE FOR THE PERIOD |
1,840Β |
4,596Β |
6,325Β |
|
|
Fair value adjustment net of tax |
(318) |
(182) |
(499) |
|
|
Dividends |
5 |
(517) |
(500) |
(647) |
|
1,005Β |
3,914Β |
5,179Β |
||
|
Opening shareholders' funds |
97,314Β |
92,135Β |
92,135Β |
|
|
Closing shareholders' funds |
98,319Β |
96,049Β |
97,314Β |
Β Β CONSOLIDATED BALANCE SHEET
|
6 Months ended 31.1.09 (Unaudited) Β£000 |
6 Months ended 31.1.08 (Unaudited) Β£000 |
Year ended 31.7.08 (Audited) Β£000 |
||
|
NON-CURRENT ASSETS |
||||
|
Property, plant and equipment |
6,201Β |
1,493Β |
4,331Β |
|
|
Investment properties |
68,797Β |
72,649Β |
68,148Β |
|
|
Investments in Joint Ventures |
2,095Β |
2,040Β |
2,067Β |
|
|
Financial assets |
1,126Β |
1,728Β |
1,533Β |
|
|
Trade and otherΒ receivables |
4,036Β |
2,176Β |
3,176Β |
|
|
Deferred tax assets |
950Β |
1,561Β |
936Β |
|
|
83,205Β |
81,647Β |
80,191Β |
||
|
CURRENT ASSETS |
||||
|
Inventories |
10,039Β |
8,970Β |
8,184Β |
|
|
Trade and other receivables |
3,796Β |
3,721Β |
3,833Β |
|
|
CashΒ at bank and in hand |
14,789Β |
22,793Β |
Β 18,390Β |
|
|
28,624Β |
35,484Β |
Β 30,407Β |
||
|
TOTAL ASSETS |
111,829Β |
117,131Β |
110,598Β |
|
|
NON-CURRENT LIABILITIES |
||||
|
Retirement benefit obligations |
1,089Β |
5,280Β |
1,089Β |
|
|
Deferred tax liabilities |
5,834Β |
7,706Β |
5,944Β |
|
|
6,923Β |
12,986Β |
7,033Β |
||
|
CURRENT LIABILITIES |
||||
|
Trade and other payables |
5,871Β |
6,164Β |
5,518Β |
|
|
Current taxΒ liabilities |
716Β |
1,932Β |
733Β |
|
|
6,587Β |
8,096Β |
6,251Β |
||
|
TOTAL LIABILITIES |
13,510Β |
21,082Β |
13,284Β |
|
|
NET ASSETS |
98,319Β |
96,049Β |
97,314Β |
|
|
EQUITY |
||||
|
Called up share capital |
1,008Β |
1,008Β |
1,008Β |
|
|
Fair value reserve |
(445) |
190Β |
(127) |
|
|
Retained earnings |
97,756Β |
94,851Β |
96,433Β |
|
|
TOTAL EQUITY |
98,319Β |
96,049Β |
97,314Β |
Β Β
CONSOLIDATED CASH FLOW STATEMENT
|
Notes |
6 Months ended 31.1.09 (Unaudited) Β£000 |
6 Months ended 31.1.08 (Unaudited) Β£000 |
Year ended 31.7.08 (Audited) Β£000 |
|
|
Cash flows from operating activities |
7 |
(65) |
2,459Β |
543Β |
|
Tax paid on profits |
(733) |
(908) |
(2,066) |
|
|
NET CASH FLOW FROM OPERATING ACTIVITIES |
(798) |
1,551Β |
(1,523) |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
||||
|
Purchase of property, plant and equipment |
(186) |
(155) |
(758) |
|
|
Purchase of investment properties |
(641) |
(34) |
(6) |
|
|
SaleΒ of property, plant and equipment |
8Β |
9Β |
69Β |
|
|
SaleΒ of investment properties |
- |
6,335Β |
6,188 |
|
|
Expenditure on own work capitalised |
(1,928) |
(1,251) |
(2,157) |
|
|
Purchase of investments |
(36) |
(325) |
(639) |
|
|
Proceeds of sale of investments |
- |
60Β |
145Β |
|
|
Interest received |
497Β |
635Β |
1,257Β |
|
|
Interest paid |
- |
- |
(7) |
|
|
NET CASHΒ (USED IN)/FROMΒ INVESTING ACTIVITIES |
(2,286) |
5,274Β |
4,092Β |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
||||
|
Dividends paid |
(517) |
(500) |
(647) |
|
|
NET CASH USED IN FINANCING ACTIVITIES |
(517) |
(500) |
(647) |
|
|
(DECREASE)/INCREASEΒ IN CASH, CASH EQUIVALENTS AND BANKΒ |
(3,601) |
6,325Β |
1,922Β |
|
|
CASH, CASH EQUIVALENTS AND BANK AT BEGINNING OF PERIOD |
18,390Β |
16,468Β |
16,468Β |
|
|
CASH, CASH EQUIVALENTS AND BANK AT END OF PERIOD |
14,789Β |
22,793Β |
18,390Β |
Β Β NOTES TO INTERIM FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
These interim financial statements do not constitute statutory accounts as defined in Section 240 of the Companies Act 1985.
The statutory financial statements for the year to 31st July 2008Β have been filed with the Registrar of Companies and a copy may be obtained from Companies House. These have been audited and contain an unqualified audit opinion and do not contain a statement under Sections 237(2) or (3) of the Companies Act 1985.
2. ACCOUNTING POLICIES
The interim financial statements have been prepared under the historical cost convention.
The accounting policies adopted are consistent with those followed in the preparation of the group's annual financial statements for the year ended 31st July 2008, with the exception of the following policies regarding the accounting for pension scheme deficits and investment properties revaluations.
For the interim accounts the assets and liabilities of the pension scheme are estimated to be unchanged from the values included at the previous year end.
In accordance with long standing practice, the group's investment properties are revalued annually on 31stΒ July each year. No revaluation adjustment is made in the interim financial statements.
Β Β
3. SEGMENTAL INFORMATION
The group's primary basis of segmentation is by activities, all construction work relates to activities inΒ Scotland.
|
Inter |
||||||
|
Total |
Segment |
External |
Profit attributable toΒ |
|||
|
Revenue |
Revenue |
Revenue |
equity shareholders |
|||
|
Β£000 |
Β£000 |
Β£000 |
Β£000 |
Β£000 |
Β£000 |
|
|
31st JANUARY 2009Β (Unaudited) |
||||||
|
Construction activities |
14,495Β |
(1,956) |
12,539Β |
62Β |
- |
- |
|
Investment activities |
2,805Β |
- |
2,805Β |
1,937Β |
- |
- |
|
Joint Ventures |
29Β |
- |
29Β |
31Β |
- |
- |
|
17,329Β |
(1,956) |
15,373Β |
2,030Β |
- |
- |
|
|
31stΒ JANUARY 2008Β (Unaudited) |
||||||
|
Construction activities |
13,567Β |
(1,251) |
12,316Β |
- |
77Β |
- |
|
Investment activities |
2,598Β |
- |
2,598Β |
- |
5,773Β |
- |
|
Joint Ventures |
- |
- |
- |
- |
14Β |
- |
|
16,165Β |
(1,251) |
14,914Β |
- |
5,864Β |
- |
|
|
31stΒ JULY 2008Β (Audited) |
||||||
|
Construction activities |
27,573Β |
(2,157) |
25,416Β |
- |
- |
(14) |
|
Investment activities |
5,228Β |
- |
5,228Β |
- |
- |
4,502Β |
|
Joint Ventures |
1,596Β |
- |
1,596Β |
- |
- |
45Β |
|
34,397Β |
(2,157) |
32,240Β |
- |
- |
4,533Β |
|
|
RESULT |
2,030Β |
5,864Β |
4,533Β |
|||
|
FinanceΒ and investmentΒ income |
536Β |
753Β |
1,470Β |
|||
|
FinanceΒ and investmentΒ costs |
(10) |
(51) |
(154) |
|||
|
PROFIT BEFORE TAXΒ ON ORDINARY ACTIVITIES |
2,556Β |
6,566Β |
5,849 |
|||
|
Tax on profit on ordinary activities |
(716) |
(1,970) |
(518) |
|||
|
PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS |
1,840Β |
4,596Β |
5,331Β |
|||
Β
4. TAXATION
The tax charge for the 6 months to 31st January 2009Β is based on the corporation tax rate atΒ 28% (2008,Β 30%).
Β Β
5. DIVIDENDS
|
6 Months |
6 Months |
Year |
|
|
Ended |
Ended |
Ended |
|
|
31.1.09 |
31.1.08 |
31.7.08 |
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
Β£000 |
Β£000 |
Β£000 |
|
|
ORDINARY DIVIDENDS |
|||
|
2008Β Final dividend declared ofΒ 10.50pΒ per share |
517Β |
- |
- |
|
2008Β Interim dividend declared ofΒ 3.00pΒ per share |
- |
- |
147Β |
|
2007Β Final dividend ofΒ 10.15pΒ per share |
- |
500Β |
500Β |
|
517Β |
500Β |
647Β |
Certain shareholders holding approximately 51% of the shares have waived their rights to the interim and final dividends paid for the years to 31st July 2007 and 31st July 2008.
The interim dividend of 4.50pΒ per share for the year to 31st July 2009Β will be paidΒ on 8th June 2009Β to shareholders on the register at 15th May 2009. After waivers by members holding approximately 51% of the shares the interim dividend will cost the company Β£220,000.
6. EARNINGS PER SHARE
|
Profit |
||
|
attributable |
Basic |
|
|
to equity |
Earnings |
|
|
shareholders |
per share |
|
|
Β£000 |
||
|
6 months to 31st January 2009 |
1,840Β |
18,25p |
|
6 months to 31st January 2008 |
4,596Β |
45.59p |
|
Year to 31st July 2008 |
5,331Β |
52.88p |
Basic earnings per share are calculated by dividing the profit attributable to equity shareholders byΒ 10,082,000 shares,Β the number of ordinary shares in issue during the period.
There is no difference between basic and diluted earnings per share.
Β Β
7. RECONCILIATION OF OPERATING PROFIT TO CASH FLOWS FROMΒ OPERATING ACTIVITIES
|
6 Months |
6 Months |
Year |
|
|
ended |
ended |
ended |
|
|
31.1.09 |
31.1.08 |
31.7.08 |
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
Β£000 |
Β£000 |
Β£000 |
|
|
Profit before tax |
2,556Β |
6,566Β |
5,849Β |
|
Share of profits from Joint Ventures |
(31) |
(14) |
(45) |
|
Depreciation |
231Β |
192Β |
533Β |
|
Unrealised revaluationΒ deficitΒ on investment properties |
- |
- |
2,655Β |
|
ProfitΒ on sale of property, plant and equipment |
- |
- |
(31) |
|
ProfitΒ on sale of investment properties |
- |
(4,155) |
(3,890) |
|
ProfitΒ on sale of investments |
- |
(9) |
(33) |
|
Change in retirement benefits |
- |
- |
(2,810) |
|
Interest received |
(497) |
(634) |
(1,257) |
|
Interest received by Joint Ventures |
(7) |
(80) |
(101) |
|
Interest paid |
- |
- |
7Β |
|
Interest paid by Joint Ventures |
10Β |
51Β |
96Β |
|
Change in inventories |
(1,855) |
(1,335) |
(549) |
|
Change in receivables - current |
34Β |
(22) |
(133) |
|
Change in receivables - non current |
(860) |
- |
(1,000) |
|
Change in payables |
354Β |
1,899Β |
1,252Β |
|
NET CASH GENERATED FROM OPERATIONS |
(65) |
2,459Β |
543Β |
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