J. Smart (Contractors) (LSE:SMJ) - Share price, News & Analysis

Q: What is the Fair Price of SMJ when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

SMJ (£1.61) is trading above our estimate of [[fair value]] (£0.53)

SMJ fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	0/6
Past Performance	4/6
Financial Health	5/6
Dividends	4/6

SMJ Stock Overview

Rewards

Price-To-Earnings ratio (4.3x) is below the UK market (14.3x)

Earnings grew by 267.4% over the past year

Risk Analysis

Dividend of 2.01% is not well covered by earnings

Large one-off items impacting financial results

Does not have a meaningful market cap (£66M)

J. Smart (Contractors) Competitors

TClarke

LSE:CTO

UK£64.7m

Nexus Infrastructure

AIM:NEXS

UK£77.5m

Van Elle Holdings

AIM:VANL

UK£44.3m

Billington Holdings

AIM:BILN

UK£25.6m

Price History & Performance

Summary of all time highs, changes and price drops for J. Smart (Contractors)
Historical stock prices
Current Share Price	UK£1.61
52 Week High	UK£1.65
52 Week Low	UK£1.22
Beta	0.053
1 Month Change	0%
3 Month Change	-0.62%
1 Year Change	27.89%
3 Year Change	40.79%
5 Year Change	45.25%
Change since IPO	340.94%

Recent News & Updates

May 28

Here's Why J. Smart (Contractors) (LON:SMJ) Can Manage Its Debt Responsibly

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

Shareholder Returns

	SMJ	GB Construction	GB Market
7D	0%	3.3%	1.8%
1Y	27.9%	-17.0%	-7.3%

Return vs Industry: SMJ exceeded the UK Construction industry which returned -17.6% over the past year.

Return vs Market: SMJ exceeded the UK Market which returned -8.6% over the past year.

Price Volatility

Is SMJ's price volatile compared to industry and market?
SMJ volatility
SMJ Average Weekly Movement	0.2%
Construction Industry Average Movement	4.0%
Market Average Movement	5.5%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.8%

Stable Share Price: SMJ is less volatile than 75% of UK stocks over the past 3 months, typically moving +/- 0% a week.

Volatility Over Time: SMJ's weekly volatility (0%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1947	165	David Smart	https://www.jsmart.co.uk

J. Smart & Co. (Contractors) PLC, together with its subsidiaries, engages in the contracting, developing, and constructing public works, shopping centers, offices, factories, warehouses, local authority, and landlords and private housing projects in the United Kingdom. It also contracts building and civil engineering projects; develops and sells residential properties; develops industrial and commercial properties for lease; provides serviced office spaces; carries out small to medium sized building and civil engineering works for various clients; and offers plumbing support services to the construction companies. J. Smart & Co. (Contractors) PLC was founded in 1947 and is headquartered in Edinburgh, the United Kingdom.

J. Smart (Contractors) Fundamentals Summary

How do J. Smart (Contractors)'s earnings and revenue compare to its market cap?
SMJ fundamental statistics
Market Cap	UK£65.68m
Earnings (TTM)	UK£15.39m
Revenue (TTM)	UK£9.81m

4.3x

P/E Ratio

6.7x

P/S Ratio

Is SMJ overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SMJ income statement (TTM)
Revenue	UK£9.81m
Cost of Revenue	UK£8.42m
Gross Profit	UK£1.39m
Other Expenses	-UK£13.99m
Earnings	UK£15.39m

Last Reported Earnings

Jan 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.38
Gross Margin	14.20%
Net Profit Margin	156.81%
Debt/Equity Ratio	9.6%

How did SMJ perform over the long term?

See historical performance and comparison

Dividends

2.0%

Current Dividend Yield

9%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is SMJ undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SMJ?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SMJ. This is calculated by dividing SMJ's market cap by their current preferred multiple.
What is SMJ's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£65.68m

SMJ key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.9x
Enterprise Value/EBITDA	18.9x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does SMJ's PE Ratio compare to its peers?

SMJ PE Ratio vs Peers

The above table shows the PE ratio for SMJ vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	121.2x
CTO TClarke	10.3x	n/a	UK£64.7m
NEXS Nexus Infrastructure	29.4x	n/a	UK£77.5m
VANL Van Elle Holdings	69.2x	48.1%	UK£44.3m
BILN Billington Holdings	376.1x	53.2%	UK£25.6m
SMJ J. Smart (Contractors)	4.3x	n/a	UK£65.7m

Forward PE

Price-To-Earnings vs Peers: SMJ is good value based on its Price-To-Earnings Ratio (4.3x) compared to the peer average (121.2x).

Price to Earnings Ratio vs Industry

How does SMJ's PE Ratio compare vs other companies in the European Construction Industry?

Price-To-Earnings vs Industry: SMJ is good value based on its Price-To-Earnings Ratio (4.3x) compared to the UK Construction industry average (12.5x)

Price to Earnings Ratio vs Fair Ratio

What is SMJ's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SMJ PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	4.3x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate SMJ's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of SMJ when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SMJ (£1.61) is trading above our estimate of fair value (£0.53)

Significantly Below Fair Value: SMJ is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SMJ's PEG Ratio to determine if it is good value.

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Future Growth

How is J. Smart (Contractors) forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

13.8%

Forecasted Capital Goods industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as J. Smart (Contractors) has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

Discover growth companies

Check out J. Smart (Contractors)'s track record over time to understand how much the company has returned to shareholders and its earnings growth rate in the past.
J. Smart (Contractors) competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has J. Smart (Contractors) performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

25.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SMJ has a large one-off gain of £18.3M impacting its January 31 2022 financial results.

Growing Profit Margin: SMJ's current net profit margins are higher than last year (31.5%).

Past Earnings Growth Analysis

Earnings Trend: SMJ's earnings have grown significantly by 25.4% per year over the past 5 years.

Accelerating Growth: SMJ's earnings growth over the past year (267.4%) exceeds its 5-year average (25.4% per year).

Earnings vs Industry: SMJ earnings growth over the past year (267.4%) exceeded the Construction industry 48.2%.

Return on Equity

High ROE: SMJ's Return on Equity (13.1%) is considered low.

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Financial Health

How is J. Smart (Contractors)'s financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SMJ's short term assets (£49.9M) exceed its short term liabilities (£15.1M).

Long Term Liabilities: SMJ's short term assets (£49.9M) exceed its long term liabilities (£5.4M).

Debt to Equity History and Analysis

Debt Level: SMJ has more cash than its total debt.

Reducing Debt: SMJ's debt to equity ratio has reduced from 14.1% to 9.6% over the past 5 years.

Debt Coverage: SMJ's debt is not well covered by operating cash flow (3.9%).

Interest Coverage: SMJ earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is J. Smart (Contractors) current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.01%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SMJ's dividend (2.01%) is higher than the bottom 25% of dividend payers in the UK market (1.88%).

High Dividend: SMJ's dividend (2.01%) is low compared to the top 25% of dividend payers in the UK market (5.18%).

Stability and Growth of Payments

Stable Dividend: SMJ's dividends per share have been stable in the past 10 years.

Growing Dividend: SMJ's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (8.8%), SMJ's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (11014.7%), SMJ's dividend payments are not well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.2yrs

Average management tenure

CEO

David Smart (48 yo)

5.17yrs

Tenure

UK£144,000

Compensation

Mr. David William Smart has been Joint Managing Director & Chairman at J. Smart & Co. (Contractors) PLC (also known as Smart J & Co Contractors PLC) since April 27, 2017 and its Director since December 20,...

CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD177.17K) is below average for companies of similar size in the UK market ($USD335.53K).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: SMJ's management team is seasoned and experienced (5.2 years average tenure).

Board Members

Experienced Board: SMJ's board of directors are considered experienced (9.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/01/31
Annual Earnings	2021/07/31