Smart (J) & Co Regulatory News (SMJ)

J. SMART & CO. (CONTRACTORS) PLC

INTERIM REPORT

FOR THE SIX MONTHS TO

31st JANUARY 2015

INTERIM REPORT

Unaudited Group profit for the six months to 31st January 2015 amounted to £559,000 compared with a profit of £441,000 for the corresponding period last year. Group turnover increased by 5%. Own work capitalised decreased by 2%.

In accordance with our normal practice, there has been no revaluation of our investment properties at the end of the half year. We believe that a half year revaluation would have had little effect on the figures.

Residential sales were well down on the previous half year due to a lull between development starts. However, forward sales and reservations at our City Park Development at Pilton Drive, Edinburgh are promising.

There are no commercial or industrial developments underway at present, although we anticipate recommencing industrial development by the Autumn.

Current site progress in contracting is satisfactory.

INTERIM DIVIDEND

The Board announces an interim dividend of 0.92p per share (2014, 0.92p) to be paid on 1st June 2015 to shareholders on the register at the close of business on 8th May 2015. The interim dividend will cost the Company no more than £429,000.

FUTURE PROSPECTS

We have substantially more work in hand in contracting than at this time last year. Margins continue to be a challenge.

Private residential sales prospects are good. However, sales numbers for the current financial year will be substantially less than the previous year.

Occupancy levels and letting prospects with regard to our industrial properties are healthy. Void levels in our office properties remain unacceptably high although letting prospects here appear slightly brighter.

There are too many uncertainties to forecast the headline profit for the current year with any degree of accuracy. However, I estimate that underlying profit for the year should at least approximate to last year's underlying profit of £1,764,000.

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO INTERIM FINANCIAL STATEMENTS

1. BASIS OF PREPARATION

J. Smart & Co. (Contractors) PLC is a company domiciled in the United Kingdom. The condensed consolidated interim financial statements of the Company for the six months ended 31st January 2015 comprise the Company and its Subsidiaries, together referred to as the Group, and the Group's interest in jointly controlled entities.

The condensed consolidated interim financial statements for the six months to 31st January 2015 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34: Interim Financial Reporting as adopted by the European Union.

The condensed consolidated interim financial statements for the six months to 31st January 2015 do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year to 31st July 2014, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

The statutory financial statements for the year to 31st July 2014 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, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498 of the Companies Act 2006.

The condensed consolidated interim financial statements have not been audited or reviewed by the Company's auditors.

2. ACCOUNTING POLICIES

The condensed consolidated interim financial statements have been prepared under the historical cost convention except where the measurement of balances at fair value is required for investment properties and available for sale financial assets.

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 2014, with the exception of the policies regarding the accounting for pension scheme obligations and investment properties revaluations.

For the condensed consolidated interim financial statements the assets and liabilities of the pension scheme are estimated to be unchanged from the values included at the previous year end. Also, in accordance with long standing practice, the Group's investment properties are revalued annually on 31st July each year. No revaluation adjustment is made in the condensed consolidated interim financial statements.

Interpretations effective in period

The following new standards and amendments to standards and interpretations relevant to the Group have been issued by the International Accounting Standards Board and are mandatory for the first time for the financial year to 31st July 2015:

· IAS 32(amended): Offsetting financial assets and financial liabilities (effective for accounting periods beginning on or after 1st January 2014)

· IAS 36 (amended): Recoverable Amounts Disclosures for Non-Financial Assets (effective for accounting periods beginning on or after 1st January 2014)

· IAS 39 (amended): Financial Instruments recognition and measurement on novation of derivatives and hedge accounting (effective for accounting periods beginning on or after 1st January 2014)

· Amendments to IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Ventures and IFRS 12: Disclosures of Interests in Other Entities in relation to Investment Entities (transition guidance).

The Directors anticipate that there will be no material effect on the financial statements from these Standards.

The preparation of the condensed consolidated interim financial statements requires management to make estimates and assumptions concerning the future that may affect the application of accounting policies and the reported amounts of assets, liabilities and income and expenses. Management believes that the estimates and assumptions used in the preparation of these accounts are reasonable. However, actual outcomes may differ from those anticipated.

The Directors have a reasonable expectation that the Company and Group as a whole have adequate resources to continue in operational existence for the foreseeable future, being a period of not less than twelve months from the date of these accounts. For this reason, the Directors continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements.

3. PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties which could have a material impact on the Group's performance for the remainder of the current financial year remain the same as those detailed in the Group's Annual Report and Financial Statements for the year to 31st July 2014.

4. SEGMENTAL INFORMATION

The Group has identified operating segments on the basis of internal reporting components that are regularly reviewed by the chief operating decision maker to allow the allocation of resources to segments and assess their performance. The Board of Directors has been recognised as the chief operating decision maker.

All revenue arises from activities within the UK and therefore the Board of Directors does not consider the business from a geographical perspective. The operating segments are based on activity and performance of an operating segment is based on a measure of operating results.

5. TAXATION

The tax charge for the 6 months to 31st January 2015 is based on the corporation tax rate at 20.67% (2014, 22.33%).

6. DIVIDENDS

The interim dividend of 0.92p per share for the year to 31st July 2015 will be paid on 1st June 2015 to shareholders on the register at 8th May 2015. The interim dividend will cost the Company no more than £429,000.

7. EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the profit attributable to equity shareholders by the weighted average number of shares in issue during the period.

During the 6 months to 31st January 2015 the Company purchased for immediate cancellation 250,000 Ordinary Shares of 2p.

The earnings per share for the 6 months to 31st January 2015 is based on weighted average number of shares amounting to 46,769,057, the earnings per share for the 6 months to 31st January 2014 is based on a weighted average number of shares amounting to 47,098,504 and the earnings per share for the year to 31st July 2014 is based on a weighted average number of shares amounting to 47,023,219.

There is no difference between basic and diluted earnings per share.

8. RECONCILIATION OF PROFIT BEFORE TAX TO CASH FLOWS FROM

OPERATING ACTIVITIES

9. RELATED PARTY TRANSACTION

Related parties are consistent with those disclosed in the Group's Annual Report and Statement of Accounts for the year to 31st July 2014.

Related party transactions, including salary and benefits provided to Directors and key management, were not material to the financial position or performance of the Group for the period.

STATEMENT OF DIRECTORS' RESPONSIBILITES

The Directors named below, confirm on behalf of the Board of Directors that to the best of their knowledge that the condensed consolidated interim financial statements for the six months to 31st January 2015 have been prepared in accordance with IAS 34: Interim Financial Reporting as adopted by the European Union. The condensed consolidated interim financial statement includes a fair review of the information required by Disclosure and Transparency Rules 4.2.7 and DTR 4.2.8, being:

· an indication of important events that have occurred during the six months to 31st January 2015 and their impact on the condensed consolidated interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year, and

· material related party transactions in the six months to 31st January 2015 and any material changes in the related party transactions described in the last annual report.

The Directors of the Company are listed in the Annual Report and Statement of Accounts for the year to 31st July 2014.