REG - Smart(J)Contractrs - Half-year Report
15/04/2025 10:30
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RNS Number : 0980F Smart(J.)&Co(Contractors) PLC 15 April 2025
J. SMART & CO. (CONTRACTORS) PLC
INTERIM REPORT
FOR THE SIX MONTHS TO
31st JANUARY 2025
J. SMART & CO. (CONTRACTORS) PLC
CHAIRMAN'S REVIEW
INTERIM REPORT
Unaudited Group profit for the six months to 31st January 2025 amounted to
£128,000 compared with £205,000 for the corresponding period last year.
In accordance with our normal practice, there has been no revaluation of our
investment properties at the end of the half year. If a half year
revaluation had taken place, we believe that the valuation may have had a
positive effect on the headline figures, due to rental growth, but with no
substantial change in investment yields.
The volume of sales at our private housing development at Winchburgh, Canal
Quarter, has been better than expected, albeit at a price level that continues
to affect the profitability of the development.
Construction at our residential development at Clovenstone Gardens continues
and the first block of private housing was completed, at the end of March this
year, with an unanticipated but welcome sale of the entire block to a local
housing association. The remaining blocks will be finished later in 2025.
The speculative industrial development at Inchmuir Park, Bathgate, started in
the financial year and is progressing well. This development will provide
four blocks of small to medium sized industrial units, with completion in
mid-2026.
Just prior to the end of 2024, we entered into a new Joint Venture Company,
St. Andrews 1413 Limited, with a joint venture partner, Knowe Properties
Limited. This Joint Venture Company purchased a block of 15 flats from a
housing association at Marine Place, St. Andrews. The flats are to be
refurbished and then marketed for private rental. The refurbishment work
commenced shortly after acquisition and completions are expected in
mid-2025. Marketing will progress in the near future.
The rise in the price of construction materials has not abated, and the
pre-contract process continues to be unnecessarily protracted. Both affect
the viability of all projects and delay site starts.
INTERIM DIVIDEND
The Board announces an interim dividend of 0.96p per share (2024, 0.96p) to be
paid on 2nd June 2025 to shareholders on the register at the close of business
on 2nd May 2025.
FUTURE PROSPECTS
It is uncertain as to what the eventual outcome will be from recent global
uncertainty on an already fragile UK economy. Consumer confidence in the
housing market had started to improve, but in the short term this may stall
again.
There will be private housing sales this year, but for the reasons mentioned
above, it remains to be seen whether current reservations will convert and
what the level of new reservations will be.
The lettings of both our industrial and office properties continue to be
robust. We have experienced rental growth in our commercial property, more
so in our industrial stock than our office stock.
It is still difficult to predict what the headline profit will be for the year
to 31st July 2025. We expected property values to remain steady in this
current financial year, but that is now in question. There will definitely be
profit erosion due to lack of external contracts, the lack of recovery of
overhead costs, the continued increase in material costs, prolonged programmes
due to utility infrastructure and statutory authority delays, the cost of
holding private housing stock and the reduction in rental income received due
to investment sales.
I am delighted to announce the appointment of Jane Oliver as a Director to the
Board. Jane has worked tirelessly for your Company for 25 years and will
continue to help the Company prosper in her new role as Development Director.
D.W. SMART
15th April 2025 Chairman
CONSOLIDATED INCOME STATEMENT
6 Months 6 Months Year
ended ended ended
31.1.25 31.1.24 31.7.24
Notes (Unaudited) (Unaudited) (Audited)
£000 £000 £000
REVENUE 9,006 8,591 22,020
Cost of sales (6,652) (6,407) (17,993)
GROSS PROFIT 2,354 2,184 4,027
43 140
Other operating income 163
Administrative expenses (2,403) (2,307) (4,518)
OPERATING (LOSS)/PROFIT BEFORE LOSS ON SALE AND NET SURPLUS ON VALUATION OF (6) 17 (328)
INVESTMENT PROPERTIES
Loss on sale of investment properties held for sale (49) - -
Net surplus on valuation of investment properties - - 994
OPERATING (LOSS)/PROFIT (55) 17 666
(16) 55 320
Share of (losses)/profits in Joint Ventures
Income from financial assets 19 23 49
Loss on sale of financial assets - (13) (123)
Net surplus/(deficit) on valuation of financial assets 73 (34) 123
Finance income 113 164 1,346
Finance costs (6) (7) (16)
PROFIT BEFORE TAX 128 205 2,365
(60) (57) (692)
Taxation 5
PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS 68 148 1,673
EARNINGS PER SHARE
7
Basic and diluted 0.17p 0.37p 4.22p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 Months 6 Months Year
ended ended ended
31.1.25 31.1.24 31.7.24
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
PROFIT FOR THE PERIOD 1,673
68 148
OTHER COMPREHENSIVE INCOME
Items that will not be subsequently reclassified to Income Statement:
Remeasurement gains on defined benefit pension scheme - - 1,802
Deferred taxation on remeasurement gains on defined benefit pension scheme - - (450)
TOTAL ITEMS THAT WILL NOT BE SUBSEQUENTLY RECLASSIFED TO INCOME STATEMENT - - 1,352
- - 1,352
TOTAL OTHER COMPREHENSIVE INCOME
68 148 3,025
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX
ATTRIBUTABLE TO EQUITY SHAREHOLDERS 68 148 3,025
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Capital Capital Redemption Reserve Retained Earnings Total
Notes
£000 £000 £000 £000
As at 1st August 2024 789 219 125,305 126,313
Profit for the period - - 68 68
Other comprehensive income - - - -
Total comprehensive income for period - - 68 68
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled (6) - (370) (376)
Transfer to Capital Redemption Reserve - 6 (6) -
Dividends 6 - - (889) (889)
Total transactions with owners (6) 6 (1,265) (1,265)
As at 31st January 2025 783 225 124,108 125,116
As at 1st August 2023 802 206 124,459 125,467
Profit for the period - - 148 148
Other comprehensive income - - - -
Total comprehensive income for period - - 148 148
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled (10) - (756) (766)
Transfer to Capital Redemption Reserve - 10 (10) -
Dividends 6 - - (898) (898)
Total transactions with owners (10) 10 (1,664) (1,664)
As at 31st January 2024 792 216 122,943 123,951
As at 1st August 2023 802 206 124,459 125,467
Profit for the period - - 1,673 1,673
Other comprehensive income - - 1,352 1,352
Total comprehensive income for period - - 3,025 3,025
TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY
Shares purchased and cancelled (13) - (889) (902)
Transfer to Capital Redemption Reserve - 13 (13) -
Dividends 6 - - (1,277) (1,277)
Total transactions with owners (13) 13 (2,179) (2,179)
As at 31st July 2024 789 219 125,305 126,313
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
6 Months 6 Months Year
ended ended ended
31.1.25 31.1.24 31.7.24
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
NON-CURRENT ASSETS
Property, plant and equipment 2,743 2,872 2,743
Investment properties 70,988 82,833 70,038
Investments in Joint Ventures 49 1,551 65
Financial assets 1,263 1,144 1,032
Trade and other receivables 1,565 - -
Retirement benefit surplus 23,040 19,998 23,040
Deferred tax assets 54 13 54
99,702 108,411 96,972
CURRENT ASSETS
Assets held for sale - - 14,199
Inventories 20,008 18,455 18,710
Contract assets 507 304 944
Corporation tax asset 390 - 255
Trade and other receivables 2,882 5,622 2,435
Monies held on deposit 52 50 51
Cash and cash equivalents 27,261 15,182 12,932
51,100 39,613 49,526
TOTAL ASSETS 150,802 148,024 146,498
NON-CURRENT LIABILITIES
Deferred tax liabilities 9,828 8,842 9,828
Lease liabilities 212 212 212
10,040 9,054 10,040
CURRENT LIABILITIES
Trade and other payables 4,473 4,231 4,713
Lease liabilities 1 1 1
Corporation tax liability - 30 -
Bank overdraft 11,172 10,757 5,431
15,646 15,019 10,145
TOTAL LIABILITIES 25,686 24,073 20,185
NET ASSETS 125,116 123,951 126,313
EQUITY
Called up share capital 783 792 789
Capital redemption reserve 225 216 219
Retained earnings 124,108 122,943 125,305
TOTAL EQUITY 125,116 123,951 126,313
CONSOLIDATED STATEMENT OF CASH FLOWS
6 Months 6 Months Year
ended ended ended
31.1.25 31.1.24 31.7.24
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit after tax 68 148 1,673
Tax charge for year 60 57 692
Profit before tax 128 205 2,365
Adjustment for:
Share of losses/(profits) from Joint Ventures 16 (55) (320)
Depreciation 209 224 455
Unrealised valuation surplus on investment properties - - (994)
Unrealised valuation (surplus)/deficit on financial assets (73) 34 (123)
Profit on sale of property, plant and equipment (29) (97) (114)
Loss on sale of investment properties held for sale 49 - -
Loss on sale of financial assets - 13 123
Change in retirement benefits - - (154)
Interest received (113) (164) (1,346)
Interest paid 6 7 16
Change in inventories (1,298) (695) (950)
Change in contract assets 437 (271) (911)
Change in receivables (447) (237) (180)
Change in payables (240) 1,319 1,801
CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (1,355) 283 (332)
Tax (paid)/refund (195) 247 (178)
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (1,550) 530 (510)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (215) (1,453) (1,554)
Additions to investment properties (158) (59) (81)
Expenditure on own work capitalised - investment properties
(792) (1,385) (1,765)
Proceeds of sale of property, plant and equipment 35 124 132
Proceeds of sale of investment properties held for sale 14,150 - -
Purchase of financial assets (158) - (51)
Proceeds of sale of financial assets - 34 244
Increase on monies held on deposit (1) (1) (2)
Interest received 113 141 357
Interest paid - (1) (4)
Loan to Joint Venture (1,565) - -
Loan to Joint Venture repaid - - 3,010
Return of capital contribution to Joint Ventures - - 1,040
Dividend received from Joint Venture - - 711
NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES 2,037
11,409 (2,600)
CASH FLOWS FROM FINANCING ACTIVITIES
Interest costs on leases (6) (6) (12)
Purchase of own shares (376) (766) (902)
Dividends paid (889) (898) (1,277)
NET CASH OUTFLOW FROM FINANCING ACTIVITIES
(1,271) (1,670) (2,191)
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (3,740) (664)
8,588
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
7,501 8,165 8,165
CASH AND CASH EQUIVALENTS AT END OF PERIOD
16,089 4,425 7,501
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 2025 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 2025 have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Conduct Authority and with IAS 34: Interim
Financial Reporting under UK adopted International Accounting Standards.
The condensed consolidated interim financial statements for the six months to
31st January 2025 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 2024, which have been prepared in accordance with UK
adopted International Accounting Standards.
The statutory financial statements for the year to 31st July 2024 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 auditor. A copy of the interim financial
statements will be available on the Company's website www.jsmart.co.uk.
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, financial assets and
assets held by defined benefit pension scheme.
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 2024, 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 and therefore, no revaluation adjustment is made in the
condensed consolidated interim financial statements.
Standards, Amendments to Standards and Interpretations effective in period
The following new standards, amendments to standards and interpretations,
which are relevant to the Group, were issued by the International Accounting
Standards Board and are mandatory for the Group for the first time in the
financial year to 31st July 2025:
· IAS 1 (amended): Presentation of Financial Statements.
· IFRS S1: General Requirements for Disclosure of
Sustainability-related Financial Information
· IFRS S2: Climate-related Disclosures
The Directors anticipate that there will be no material impact of these
amendments to standards on the financial statements.
Estimates and assumptions
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.
Going concern
The financial statements have been prepared on a going concern basis. The
Directors have prepared a number of cashflows scenarios taking account of
trading activities around construction projects in hand and anticipated
projects, land acquisitions, rental income, investment property acquisitions
and disposals and other capital expenditure. In each scenario reviewed by
the Directors the Group remains cash positive with no reliance on external
funding and therefore remains net debt free. The net assets of the Group are
£125,116,000 at 31st January 2025 and the Group's net current assets amount
to £35,454,000. Taking all of the information the Directors currently have
they are of the opinion that the Group is well placed to manage its financial
and business risks and have a reasonable expectation that the Group has
adequate financial resources to continue in operational existence for a period
of at least twelve months from the date of approval of these financial
statements and therefore consider the adoption of the going concern basis as
appropriate for the preparation of these 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 2024. The Directors regularly review
the risks and uncertainties facing the Group and their impact on the trading
performance of the Group and take appropriate actions to help mitigate their
impact on the Group's performance and future prospects.
4. SEGMENTAL INFORMATION
IFRS 8: Operating Segments requires operating segments to be identified on the
basis of internal reporting about components of the Group and they are
regularly reviewed by the chief operating decision maker to allow the
allocation of resources to the segments and to assess their performance. The
chief operating decision maker has been identified as the Board of
Directors. The chief operating decision maker has identified two distant
areas of activities in the Group being construction activities and investment
property activities.
All revenue from construction and investment property income 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.
Revenue Operating Profit/(Loss)
31.1.25 31.1.24 31.7.24
£000 £000 £000 £000
31st JANUARY 2025 (Unaudited)
Construction activities 5,756 (1,277) - -
Investment property activities 3,250 1,222 - -
9,006 (55) - -
31st JANUARY 2024 (Unaudited)
Construction activities 4,919 - (1,964) -
Investment property activities 3,672 - 1,981 -
8,591 - 17 -
31st JULY 2024 (Audited)
Construction activities 14,350 - - (3,968)
Investment property activities 7,670 - - 4,634
22,020 - - 666
(55) 17 666
OPERATING (LOSS)/PROFIT
Share of results of Joint Ventures (16) 55 320
Finance and investment income 205 187 1,518
Finance and investment costs (6) (54) (139)
PROFIT BEFORE TAX ON ORDINARY ACTIVITIES 128 205 2,365
5. TAXATION
The tax charge for the six months to 31st January 2025 is based on the
corporation tax rate at 25.00% (2024, 25.00%).
6. DIVIDENDS
6 Months 6 Months Year
Ended Ended Ended
31.1.25 31.1.24 31.7.24
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
ORDINARY DIVIDENDS
2023 Final Dividend of 2.27p per share - 898 898
2024 Interim Dividend of 0.96p per share - - 379
2024 Final Dividend of 2.27p per share 889 - -
889 898 1,277
The interim dividend of 0.96p per share for the year to 31st July 2025 will be
paid on 2nd June 2025 to shareholders on the register at 2nd May 2025.
7. EARNINGS PER SHARE
6 Months 6 Months Year
Ended Ended Ended
31.1.25 31.1.24 31.7.24
(Unaudited) (Unaudited) (Audited)
Profit attributable to Equity Shareholders £000 68 148 1,673
Basic and diluted Earnings per share 0.17p 0.37p 4.22p
Weighted average number of shares
39,233,025 39,748,231 39,607,931
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 six months to 31st January 2025 the Company purchased for immediate
cancellation 296,288 Ordinary Shares of 2p.
There is no difference between basic and diluted earnings per share.
8. FAIR VALUE ASSETS
The Group's investment properties, financial assets and assets held by defined
benefit pension scheme are measured at fair value after initial recognition.
Investment properties are only valued annually by the Directors at the year
end and not for the purposes of the interim financial statements. The Group
considers all of its investment properties fall within 'Level 3' of the fair
value hierarchy as described by IFRS 13: Fair Value Measurement. Level 3
valuations are those using inputs for the asset or liability that are not
based on observable market data. The main unobservable inputs relate to
estimated rental value and equivalent yield.
The Group's financial assets consisted entirely of equities of companies
listed on quoted markets which fall within 'Level 1' of the fair value
hierarchy. Assets held by defined benefit pension scheme consist of equities
and bonds of companies listed on quoted markets and cash which all fall within
'Level 1' of the fair value hierarchy. Level 1 valuations are those using
inputs which are quoted prices (unadjusted) in active markets for identical
assets or liabilities the Group can access at the period end date.
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 2024.
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' RESPONSIBILITIES
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 2025 have been prepared in
accordance with IAS 34: Interim Financial Reporting under UK adopted
International Accounting Standards. The condensed consolidated interim
financial statements include a fair review of the information required by
Disclosure and Transparency Rules 4.2.7 and 4.2.8, being:
· an indication of important events that have occurred during the six
months to 31st January 2025 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
2025 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 2024. Jane Oliver was appointed to the
Board as an Executive Director on 4th April 2025.
By order of the Board
D.W. SMART, Director J.R. SMART, Director
15th April 2025
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