Last checked at 30 Mar 2010 10:11
J. SMART & CO. (CONTRACTORS) PLC
INTERIM REPORT
6 MONTHS TO 31st JANUARY 2010
J. SMART & CO. (CONTRACTORS) PLC
CHAIRMAN'S REVIEW
INTERIM REPORT
Unaudited Group profits for the six months to 31st January 2010 amounted to £2,250,000 compared with profits of £2,556,000 for the corresponding period last year. Group construction work and share of Joint Ventures' turnover decreased by 11%. Own work capitalised decreased by 21%.
In accordance with our normal practice there has been no revaluation of our investment properties at the end of the half year. Property values have stabilised, however, and if a revaluation had been carried out the effect on the figures would have been minimal.
Private house sales have been slow but steady. The industrial development at Bilston Glen near Edinburgh is complete and the commercial development at McDonald Road, Edinburgh is virtually complete. Both developments are, as yet, unlet.
INTERIM DIVIDEND
The Board announces an interim dividend of 4.50p per share (2009, 4.50p) to be paid on 7th June 2010 to shareholders on the register at the close of business on 14th May 2010. The interim dividend will cost the Company £454,000.
FUTURE PROSPECTS
Due to the effect of the recession we are now operating at well below normal capacity in contracting and there is considerable downward pressure on prices obtainable. There seems to be little prospect of an increase in turnover here over the next twelve months.
I am reasonably confident that the steady trickle of private house sales in the first half of the current financial year will continue. We have just commenced a small speculative office block in Perth. There appears to be positive interest in the recently completed commercial and industrial space referred to above. However, the erosion in existing tenant numbers reported in the last annual review is gathering pace and rental income for the current year is now expected to be less than the previous year.
At this stage I do not anticipate that property values will fluctuate significantly between now and the end of the year. Accordingly the material effect of property revaluations on year end profit figures that has been a feature of recent years should not be repeated this year.
Subject to unforeseen circumstances, I expect that the underlying profit for the year will approximate to last year's underlying profit of £4,468,000.
|
30th March 2010 | J.M. SMART Chairman |
CONSOLIDATED INCOME STATEMENT
|
|
Notes | 6 Months ended 31.1.10 (Unaudited) £000 | 6 Months ended 31.1.09 (Unaudited) £000 | Year ended 31.7.09 (Audited) £000 |
|
|
|
|
|
|
| Group construction work carried out and share of Joint Ventures' turnover |
|
12,711 |
14,524 |
29,616 |
| Less: Share of Joint Ventures' turnover |
| - | (29) | (165) |
| Less: Own construction work capitalised |
| (1,529) | (1,928) | (4,050) |
| REVENUE
Cost of sales |
| 11,182
(9,188) | 12,567
(10,670) | 25,401
(21,707) |
| GROSS PROFIT |
| 1,994 | 1,897 | 3,694 |
|
Other operating income |
|
2,678 |
2,805 |
5,568 |
| Net operating expenses
|
| (2,707) | (2,703) | (5,230) |
| OPERATING PROFIT BEFORE NET REVALUATION DEFICIT ON INVESTMENT PROPERTIES |
|
1,965 |
1,999 |
4,032 |
|
Net deficit on valuation of investment properties
|
|
- |
- |
(5,779) |
| OPERATING PROFIT/(LOSS) |
| 1,965 | 1,999 | (1,747) |
|
Share of profits in Joint Ventures |
|
130 |
28 |
217 |
| Income from available for sale financial assets |
| 39 | 32 | 66 |
| Profit/(Loss) on sale of available for sale financial assets |
|
57 |
- |
(55) |
| Impairment of available for sale financial assets |
| - | - | (365) |
| Finance income |
| 59 | 497 | 677 |
| Finance costs |
| - | - | (1) |
| PROFIT/(LOSS) BEFORE TAX |
| 2,250 | 2,556 | (1,208) |
|
Taxation |
4 |
(630) |
(716) |
50 |
|
PROFIT/(LOSS) ATTRIBUTABLE TO EQUITY SHAREHOLDERS |
|
1,620 |
1,840 |
(1,158) |
|
EARNINGS/(LOSS) PER SHARE - BASIC AND DILUTED |
6 |
16.07p |
18.25p |
(11.49)p |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
|
| 6 Months ended 31.1.10 (Unaudited) £000 | 6 Months ended 31.1.09 (Unaudited) £000 | Year ended 31.7.09 (Audited) £000 |
|
PROFIT/(LOSS) FOR THE PERIOD |
|
1,620 |
1,840 |
(1,158) |
|
Other comprehensive income Actuarial loss recognised on defined benefit pension scheme Deferred taxation on actuarial loss |
|
- - |
- - |
(4,553) 1,275 |
|
Total other comprehensive income/(expense) |
|
- |
- |
(3,278) |
|
TOTAL COMPREHENSIVE INCOME/ (EXPENSE) FOR THE FINANCIAL PERIOD ATTRIBUTABLE TO EQUITY SHAREHOLDERS |
|
1,620 |
1,840 |
(4,436) |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
|
|
Notes | 6 Months ended 31.1.10 (Unaudited) £000 | 6 Months ended 31.1.09 (Unaudited) £000 | Year ended 31.7.09 (Audited) £000 |
|
TOTAL RECOGNISED INCOME AND EXPENSE FOR THE PERIOD |
|
1,620 |
1,840 |
(4,436) |
| Fair value adjustment net of tax |
| 115 | (318) | (197) |
| Impairment of available for sale financial assets taken to Income Statement |
|
- |
- |
365 |
| Dividends | 5 | (943) | (517) | (739) |
|
|
| 792 | 1,005 | (5,007) |
|
Opening shareholders' funds |
|
92,307 |
97,314 |
97,314 |
|
Closing shareholders' funds |
|
93,099 |
98,319 |
92,307 |
CONSOLIDATED BALANCE SHEET
|
|
| 6 Months ended 31.1.10 (Unaudited) £000 | 6 Months ended 31.1.09 (Unaudited) £000 | Year ended 31.7.09 (Audited) £000 |
|
NON-CURRENT ASSETS |
|
|
|
|
| Property, plant and equipment |
| 6,971 | 6,201 | 6,715 |
| Investment properties |
| 66,281 | 68,797 | 65,946 |
| Investments in Joint Ventures |
| 1,563 | 2,095 | 2,284 |
| Available for sale financial assets |
| 2,170 | 1,126 | 1,914 |
| Trade and other receivables |
| - | 4,036 | - |
| Deferred tax assets |
| 1,534 | 950 | 1,778 |
|
|
| 78,519 | 83,205 | 78,637 |
|
CURRENT ASSETS |
|
|
|
|
| Inventories |
| 8,246 | 10,039 | 8,476 |
| Trade and other receivables |
| 9,194 | 3,796 | 7,001 |
| Cash at bank and in hand |
| 21,845 | 24,013 | 23,234 |
|
|
| 39,285 | 37,848 | 38,711 |
|
|
|
|
|
|
| TOTAL ASSETS |
| 117,804 | 121,053 | 117,348 |
|
NON-CURRENT LIABILITIES |
|
|
|
|
| Retirement benefit obligations |
| 4,468 | 1,089 | 4,468 |
| Deferred tax liabilities |
| 4,563 | 5,834 | 4,763 |
|
|
| 9,031 | 6,923 | 9,231 |
|
CURRENT LIABILITIES |
|
|
|
|
| Trade and other payables |
| 5,195 | 5,871 | 4,872 |
| Current tax liabilities |
| 443 | 716 | 163 |
| Bank overdraft |
| 10,034 | 9,224 | 10,775 |
|
|
| 15,672 | 15,811 | 15,810 |
|
|
|
|
|
|
| TOTAL LIABILITIES |
| 24,703 | 22,734 | 25,041 |
|
NET ASSETS |
|
93,101 |
98,319 |
92,307 |
|
EQUITY |
|
|
|
|
| Called up share capital |
| 1,008 | 1,008 | 1,008 |
| Fair value reserve |
| 156 | (445) | 41 |
| Retained earnings |
| 91,937 | 97,756 | 91,258 |
| TOTAL EQUITY |
| 93,101 | 98,319 | 92,307 |
CONSOLIDATED CASH FLOW STATEMENT
|
|
Notes | 6 Months ended 31.1.10 (Unaudited) £000 | 6 Months ended 31.1.09 (Unaudited) £000 | Year ended 31.7.09 (Audited) £000 |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
7 |
556 |
(65) |
2,632 |
|
Tax paid on profits |
|
(350) |
(733) |
(1,333) |
|
NET CASH FLOW FROM OPERATING ACTIVITIES |
|
206 |
(798) |
1,299 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
| Additions to property, plant and equipment |
| (159) | (186) | (493) |
| Additions to investment properties |
| (514) | (641) | (2,044) |
| Sale of property, plant and equipment |
| 36 | 8 | 64 |
| Sale of investment properties |
| 1,384 | - | - |
| Expenditure on own work capitalised - investment properties |
|
(84) |
(8) |
(1,533) |
| Expenditure on own work capitalised - property under construction |
|
(1,445) |
(1,920) |
(2,517) |
| Purchase of available for sale financial assets |
| (258) | (36) | (580) |
| Proceeds of sale of available for sale financial assets |
|
219 |
- |
11 |
| Interest received |
| 59 | 497 | 602 |
| Interest paid |
| - | - | (1) |
| Dividends received from Joint Venture |
| 850 | - | - |
| NET CASH FROM/(USED IN) INVESTING ACTIVITIES |
|
88 |
(2,286) |
(6,491) |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
| Dividends paid |
| (943) | (517) | (739) |
| NET CASH USED IN FINANCING ACTIVITIES |
|
(943) |
(517) |
(739) |
|
DECREASE IN CASH, CASH EQUIVALENTS AND BANK |
|
(649) |
(3,601) |
(5,931) |
|
CASH, CASH EQUIVALENTS AND BANK AT BEGINNING OF PERIOD |
|
12,459 |
18,390 |
18,390 |
|
CASH, CASH EQUIVALENTS AND BANK AT END OF PERIOD |
|
11,810 |
14,789 |
12,459 |
NOTES TO INTERIM FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
These interim financial statements do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.
The statutory financial statements for the year to 31st July 2009 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 Section 498 of the Companies Act 2006.
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 2009, 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 31st July each year. No revaluation adjustment is made in the interim financial statements.
3. SEGMENTAL INFORMATION
The group's primary basis of segmentation is by activities, all construction work relates to activities in Scotland.
|
|
| Inter |
|
|
|
|
|
| Total | Segment | External | Profit /(Loss) attributable to | ||
|
| Revenue | Revenue | Revenue | equity shareholders | ||
|
| £000 | £000 | £000 | £000 | £000 | £000 |
| 31st JANUARY 2010 (Unaudited) |
|
|
|
|
|
|
| Construction activities | 12,711 | (1,529) | 11,182 | 118 | - | - |
| Investment activities | 2,678 | - | 2,678 | 1,847 | - | - |
| Joint Ventures | - | - | - | 130 | - | - |
|
| 15,389 | (1,529) | 13,860 | 2,095 | - | - |
|
|
|
|
|
|
|
|
| 31st JANUARY 2009 (Unaudited) |
|
|
|
|
|
|
| Construction activities | 14,495 | (1,956) | 12,539 | - | 62 | - |
| Investment activities | 2,805 | - | 2,805 | - | 1,937 | - |
| Joint Ventures | 29 | - | 29 | - | 28 | - |
|
| 17,329 | (1,956) | 15,373 | - | 2,027 | - |
|
|
|
|
|
|
|
|
| 31st JULY 2009 (Audited) |
|
|
|
|
|
|
| Construction activities | 29,451 | (4,050) | 25,401 | - | - | 39 |
| Investment activities | 5,568 | - | 5,568 | - | - | (1,786) |
| Joint Ventures | 165 | - | 165 | - | - | 217 |
|
| 35,184 | (4,050) | 31,134 | - | - | (1,530) |
|
RESULT |
|
|
|
2,095 |
2,027 |
(1,530) |
| Finance and investment income |
|
|
| 155 | 529 | 743 |
| Finance and investment costs |
|
|
| - | - | (421) |
| PROFIT/(LOSS) BEFORE TAX ON ORDINARY ACTIVITIES |
|
2,250 |
2,556 |
(1,208) | ||
|
|
|
|
|
|
|
|
| Tax on Profit /(Loss) on ordinary activities |
|
| (630) | (716) | 50 | |
| PROFIT/(LOSS) ATTRIBUTABLE TO EQUITY SHAREHOLDERS |
1,620 |
1,840 |
(1,158) | |||
4. TAXATION
The tax charge for the 6 months to 31st January 2010 is based on the corporation tax rate at 28% (2009, 28%).
5. DIVIDENDS
|
| 6 Months | 6 Months | Year |
|
| Ended | Ended | Ended |
|
| 31.1.10 | 31.1.09 | 31.7.09 |
|
| (Unaudited) | (Unaudited) | (Audited) |
|
| £000 | £000 | £000 |
|
ORDINARY DIVIDENDS |
|
|
|
| 2009 Final dividend of 9.35p per share | 943 | - | - |
| 2009 Interim dividend of 4.50p per share | - | - | 222 |
| 2008 Final dividend of 10.50p per share | - | 517 | 517 |
|
| 943 | 517 | 739 |
Certain shareholders holding approximately 51% of the shares have waived their rights to the final dividend paid for the year to 31st July 2008 and the interim dividend paid for the year to 31st July 2009.
The interim dividend of 4.50p per share for the year to 31st July 2010 will be paid on 7th June 2010 to shareholders on the register at 14th May 2010. The interim dividend will cost the company £454,000.
6. EARNINGS/(LOSS) PER SHARE
|
| Profit/(Loss) | Basic |
|
| attributable | Earnings/ |
|
| to equity | (Loss) |
|
| shareholders | per share |
|
| £000 |
|
|
6 months to 31st January 2010 |
1,620 |
16.07p |
|
6 months to 31st January 2009 |
1,840 |
18.25p |
|
Year to 31st July 2009 |
(1,158) |
(11.49)p |
Basic earnings/(loss) per share are calculated by dividing the profit/(loss) attributable to equity shareholders by 10,082,000 shares, the number of ordinary shares in issue during the period.
There is no difference between basic and diluted earnings per share.
7. RECONCILIATION OF PROFIT/(LOSS) TO CASH FLOWS FROM OPERATING ACTIVITIES
|
| 6 Months | 6 Months | Year |
|
| ended | ended | ended |
|
| 31.1.10 | 31.1.09 | 31.7.09 |
|
| (Unaudited) | (Unaudited) | (Audited) |
|
| £000 | £000 | £000 |
|
|
|
|
|
| Profit/(Loss) before tax | 2,250 | 2,556 | (1,208) |
| Share of profits from Joint Ventures | (130) | (28) | (217) |
| Depreciation | 207 | 231 | 521 |
| Unrealised revaluation deficits on investment properties | - | - | 5,779 |
| (Profit)/Loss on sale of property, plant and equipment | (15) | - | 41 |
| (Profit)/Loss on sale of available for sale financial assets | (57) | - | 55 |
| Impairment of available for sale financial assets | - | - | 365 |
| Change in retirement benefits | - | - | (1,174) |
| Interest received | (59) | (497) | (602) |
| Interest paid | - | - | 1 |
| Change in inventories | 230 | (1,855) | (292) |
| Change in receivables - current | (2,193) | 34 | 8 |
| Change in receivables - non current | - | (860) | - |
| Change in payables | 323 | 354 | (645) |
|
NET CASH GENERATED FROM OPERATIONS |
556 |
(65) |
2,632 |