(Alliance News) - J Smart & Co (Contractors) PLC on Tuesday reported a sharp drop in interim profit as the company warned of a continued slowing of contract work.
In the six months to January 31, the construction contractor recorded a pretax profit of GBP265,000, sharply lower than the GBP1.1 million seen in the same period the year before.
Construction activities generated GBP10.4 million in revenue, more than double the GBP4.5 million seen the year before.
The company has declared a 0.95 pence interim dividend, unchanged year-on-year.
J Smart said the "lull" in contracting work and new private housing work has continued as predicted.
"This has resulted in an erosion of profit due to lack of recovery of overhead costs and poor margins on contracting," the company added.
Looking ahead, J Smart said: "We have substantially less work in hand in contracting than the same time last year. Margins remain no better than last year. It is by no means certain that new contracting work will be secured this financial year."
The company said it is difficult to make predictions on forward guidance, but expects a headline loss due to the downward pressure on commercial property values.
J Smart added: "As we do not know when the lockdown will lift it is not possible to accurately predict what impact it will have on all facets of the business, such as inter alia current build contracts, potential new build contracts, commercial property valuation levels, commercial property rental payments, private housing sales and the extent of the potential decrease in value of the company pension fund on the balance sheet."
Shares in J Smart were untraded in London on Tuesday but last closed at 111.70 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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Smart (J) & Co (SMJ)