SMART
I N T E R I M R E P O R T
F O R T H E S I X M O N T H S T O
3 1 s t J A N U A R Y 2 0 2 3
J . SMART & CO . (CONTRACTORS) PLC
CHAIRMAN'S REVIEW
INTERIM REPORT
Unaudited Group profit for the six months to 31st January 2023 amounted to £260,000 compared with £6,334,000 for the corresponding period last year. This decrease in profit was largely due to there being no profit from investment sales of commercial property as was the case in the previous 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 detrimental effect on the headline figures, due to a decrease in yields.
The private housing development at Winchburgh, Canal Quarter, is progressing well on site and there have been sales completed. However, whilst reservations were encouraging until the end of 2022, there have been next to no reservations in 2023. The majority of the development will be complete at the end of the current financial year.
The construction of the second phase at Belgrave Point, Bellshill continues apace, with completion due later in 2023, after the financial year end. Interest is promising at present.
The residential development at Clovenstone Gardens has commenced and as the first completions are not due until the middle of 2024, no marketing has taken place yet.
We continue to see rises in the prices of construction materials, which still affects the viability of all types of potential projects. The erosion of profits of recently completed and soon to be completed projects has not abated. Moreover, this erosion of profit on our private housing developments will be exacerbated by the recent lull in reservations. The delays in processing contracting work and commencing new private housing work continue.
INTERIM DIVIDEND
The Board announces an interim dividend of 0.96p per share (2022, 0.96p) to be paid on 5th June 2023 to shareholders on the register at the close of business on 5th May 2023. The interim dividend will cost the Company no more than £389,000.
FUTURE PROSPECTS
There will be further private housing sales this year, albeit not as many as had been expected. As predicted, the current economic issues of interest rate rises, high inflation and the cost of living crisis, have had an impact on consumer confidence in the housing sector, which has resulted in a near standstill in reservations.
Whilst commercial property values may fall, as predicted, due to the decrease in investment yields, lettings of both our industrial stock and office stock remain steady. Rental levels, more so in the industrial sector than the office sector, have not fallen yet and are still robust.
Whilst no external contracts with housing associations have been secured, we have agreed a contract with a manufacturing company for a new office facility and an industrial unit extension. This contract will likely commence prior to the end of the financial year.
Whilst we might make an underlying profit, it is unlikely to be better than the underlying profit last year, due to the aforementioned reasons and the lack of recovery of overhead costs.
It is evident that due to the potential decrease in commercial property values, as described above, we may make a minimal headline profit or indeed a headline loss.
18th April 2023 | D.W. SMART |
Chairman |
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J . SMART & CO . (CONTRACTORS) PLC
CONSOLIDATED INCOME STATEMENT
6 Months | 6 Months | Year | |||||||||||||
ended | ended | ended | |||||||||||||
31.1.23 | 31.1.22 | 31.7.22 | |||||||||||||
(Unaudited) | (Unaudited) | (Audited) | |||||||||||||
Notes | £000 | £000 | £000 | ||||||||||||
Group construction activities | 5,438 | 6,231 | 9,597 | ||||||||||||
Less: Own construction work capitalised | (3,318) | (1,072) | (2,167) | ||||||||||||
REVENUE | 2,120 | 5,159 | 7,430 | ||||||||||||
Cost of sales | (2,083) | (4,712) | (5,853) | ||||||||||||
GROSS PROFIT | 37 | 447 | 1,577 | ||||||||||||
Other operating income | 3,528 | 3,596 | 7,012 | ||||||||||||
Net operating expenses | (3,471) | (3,813) | (7,295) | ||||||||||||
OPERATING PROFIT BEFORE PROFIT ON | |||||||||||||||
SALE AND NET SURPLUS ON VALUATION | 230 | 1,294 | |||||||||||||
OF INVESTMENT PROPERTIES | 94 | ||||||||||||||
Profit on sale of investment properties | - | 6,055 | 6,055 | ||||||||||||
Net surplus on valuation of investment properties | - | - | 473 | ||||||||||||
OPERATING PROFIT | 94 | 6,285 | 7,822 | ||||||||||||
Share of (losses)/profits in Joint Ventures | (17) | 27 | 254 | ||||||||||||
Income from financial assets | 28 | 31 | 63 | ||||||||||||
(Loss)/profit on sale | of | financial assets | (15) | 4 | 17 | ||||||||||
Net surplus/(deficit) | on | valuation of financial assets | 113 | (8) | (121) | ||||||||||
Finance income | 63 | 1 | 141 | ||||||||||||
Finance costs | (6) | (6) | (12) | ||||||||||||
Gain on measurement of subsidiary company | - | - | 28 | ||||||||||||
PROFIT BEFORE TAX | 260 | 6,334 | 8,192 | ||||||||||||
Taxation | 5 | (30) | (1,268) | (1,571) | |||||||||||
PROFIT ATTRIBUTABLE TO | 5,066 | 6,621 | |||||||||||||
EQUITY SHAREHOLDERS | 230 | ||||||||||||||
EARNINGS PER SHARE | 7 | ||||||||||||||
Basic and diluted | 0.56p | 12.12p | 15.90p | ||||||||||||
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J . SMART & CO . (CONTRACTORS) PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 Months | 6 Months | Year | |||||
ended | ended | ended | |||||
31.1.23 | 31.1.22 | 31.7.22 | |||||
(Unaudited) | (Unaudited) | (Audited) | |||||
£000 | £000 | £000 | |||||
PROFIT FOR THE PERIOD | 230 | 5,066 | 6,621 | ||||
OTHER COMPREHENSIVE INCOME | |||||||
Items that will not be subsequently reclassified to Income Statement: | |||||||
Remeasurement gains on defined benefit pension scheme | - | - | 7,219 | ||||
Deferred taxation on remeasurement gains on defined | |||||||
benefit pension scheme | - | - | (1,804) | ||||
TOTAL ITEMS THAT WILL NOT BE SUBSEQUENTLY | - | 5,415 | |||||
RECLASSIFIED TO INCOME STATEMENT | - | ||||||
TOTAL OTHER COMPREHENSIVE INCOME | - | - | 5,415 | ||||
TOTAL COMPREHENSIVE INCOME | 5,066 | 12,036 | |||||
FOR THE PERIOD, NET OF TAX | 230 | ||||||
ATTRIBUTABLE TO EQUITY SHAREHOLDERS | 230 | 5,066 | 12,036 |
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J. Smart & Co. (Contractors) plc published this content on 04 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 May 2023 08:39:08 UTC.