TIDMMSI
RNS Number : 4063W
MS International PLC
12 December 2023
MS INTERNATIONAL plc
Unaudited Interim Condensed
Group Financial Statements
31st October, 2023
EXECUTIVE DIRECTORS
Michael Bell
Michael O'Connell
Nicholas Bell
NON-EXECUTIVE DIRECTORS
Roger Lane-Smith
David Hansell
COMPANY SECRETARY
Shelley Ashcroft
REGISTERED OFFICE
Balby Carr Bank
Doncaster
DN4 8DH
England
PRINCIPAL OPERATING DIVISIONS
'Defence and Security'
'Forgings'
'Petrol Station Superstructures'
'Corporate Branding'
Chairman's Statement
Introduction
In last June's annual Statement, I highlighted that we anticipated a significant upward step
change in the development of the business that would bring additional rewards and success.
I am now delighted to confirm we have been awarded the first production order contracts with
the US Navy to supply our 30mm naval gun. This significant development is complemented by
a further contract to maintain and support those systems.
I first reported on our efforts to break into the US Navy market in my Chairman's Statement
of 25th July 1988, when I stated, "The first unit built to suit the US Navy specific requirements
awaits ships trials in the United States". It has been a long haul, but vision; persistence;
determination and capability has resulted in success.
We have also delivered a significant contract relating to the first sales of our 'VSHORAD'
land-based mobile counter-drone weapon system. This was the contract where the customer's
delay in taking delivery - because of the war in Europe - negatively impacted last year's
results.
Results
For the half year ended 31st October 2023 profit before tax increased substantially to GBP7.72m
(2022 - GBP3.46m) on revenue of GBP57.02m (2022 - GBP42.03m).
Basic earnings per share were 35.9p (2022 - 17.4p).
The balance sheet is again much stronger with net cash at GBP50.05m (2022 - GBP23.88m), reflecting
the valuable upturn in activity in our 'Defence and Security' businesses.
Prospects
'Defence and security'
We believe that the strong start to 2023/4 looks set to continue, with deliveries gaining
pace against contracts to overseas customers, for both our naval gun and land-based counter-drone
defence systems.
Also, deliveries against our US Navy contracts will commence later in the new year.
Moreover, we are particularly pleased and encouraged by the level of military 'land market'
interest in 'VSHORAD' and the number of enquiries we are receiving from multiple sources as
to its availability and potential supply. Our existing production facilities are capable of
fulfilling our current firm orders. Additionally, the refurbishment and reorganisation of
parts of our, once under-utilised, production facilities in Norwich continues. This programme,
when complete, will better accommodate our prospective production requirements.
'Forgings'
The Forgings division remains a very efficient business and well positioned to continue serving
its broad international customer base. We remain committed to assisting our customers through
our multi continent contemporary fork-arm manufacturing facilities.
'Petrol Station Superstructures'
In September the UK Government announced a revised set of green policies including delaying
the ban on the sale of new petrol and diesel vehicles by five years to 2035. The news reinvigorated
many of our fuel dispensing UK customers, encouraging them to consider expanding and enhancing
the quality of their stations to ensure they remain competitive. In the meantime, we look
forward to an improvement in our eastern Europe market which is reviving after some hesitancy
caused by the region's continuing war.
'Corporate Branding'
We perceive that we remain well placed in our focused market of providing installation, repair
and maintenance within the specialist area of the branding for petrol stations.
Outlook
We believe that we have continued to enhance the performance of the Group's businesses and
with considerable confidence, we look forward to delivering further progress across the Group.
In the light of these positive developments and new commercial relationships, all matters
considered, the Board has declared an increased interim dividend per share of 3p (2022 - 2p)
payable on 19th January 2024 to those shareholders on the register at close of business on
22nd December 2023, with the ex-dividend date being 21st December 2023.
Michael Bell 11(th) December 2023
MS INTERNATIONAL plc
Michael Bell Tel: 01302 322133
Shore Capital (Nominated Adviser and Broker)
Patrick Castle/Daniel Bush/Lucy Bowden Tel: 020 7408 4090
Independent auditor's review report on Interim Financial Information to MS INTERNATIONAL
Plc
Conclusion
We have reviewed the condensed set of financial statements in the half-yearly financial report
MS INTERNATIONAL plc (the 'group') for the six months ended 31 October 2023 which comprises
of Interim condensed consolidated income statement, Interim condensed consolidated statement
of comprehensive income statement, Interim condensed consolidated statement of financial position,
Interim consolidated statement of changes in equity, Interim consolidated cash flow statement
and notes to the interim consolidated financial statements.
Based on our review, nothing has come to our attention that causes us to believe that the
condensed set of financial statements in the half-yearly financial report for the six months
ended 31 October 2023 is not prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'.
Basis for conclusion
We conducted our review in accordance with International Standard on Review Engagements (UK)
(ISRE (UK)) 2410, "Review of Interim Financial Information Performed by the Independent Auditor
of the Entity" (ISRE (UK) 2410). A review of interim financial information consists of making
inquiries, primarily of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and consequently does
not enable us to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance
with UK adopted IFRSs. The condensed set of financial statements included in this half yearly
financial report has been prepared in accordance with UK adopted International Accounting
Standard 34, "Interim Financial Reporting".
We have read the other information contained in the half-yearly financial report which comprises
only the Chairman's Statement and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit
as described in the Basis of conclusion section of this report, nothing has come to our attention
to suggest that management have inappropriately adopted the going concern basis of accounting
or that management have identified material uncertainties relating to going concern that are
not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with this ISRE UK,
however future events or conditions may cause the entity to cease to continue as a going concern.
In our evaluation of the directors' conclusions, we considered the inherent risks associated
with the group's business model including effects arising from macro-economic uncertainties
such as high interest rates and the cost of living crisis, we assessed and challenged the
reasonableness of estimates made by the directors and the related disclosures and analysed
how those risks might affect the group's financial resources or ability to continue operations
over the going concern period.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors.
In preparing the half-yearly financial report, the directors are responsible for assessing
the company's ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the company or to cease operations, or have no realistic alternative but
to do so.
Auditor's Responsibilities for the review of the financial information
Our responsibility is to express a conclusion to the company on the condensed set of financial
statements in the half-yearly financial report based on our review.
Our conclusion, including our Conclusions relating to going concern, are based on procedures
that are less extensive than audit procedures, as described in the Basis for conclusion paragraph
of this report.
Use of our report
This report is made solely to the company, as a body, in accordance with ISRE (UK) 2410. Our
review work has been undertaken so that we might state to the company those matters we are
required to state to it in an independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the
company as a body, for our review work, for this report, or for the conclusion we have formed.
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Sheffield
11(th) December 2023
Interim condensed consolidated income
statement
Half-year to 31st October, 2023 Half-year to 31st October, 2022
unaudited unaudited
Notes GBP'000 GBP'000
Revenue 5/6 57,023 42,025
Cost of sales (38,943) (30,095)
-------------------------------------------
Gross profit 18,080 11,930
Distribution costs (2,303) (1,815)
Administrative expenses (7,441) (6,522)
Derivative losses 15 (731) -
-------------------------------------------
Operating profit 6 7,605 3,593
Finance income/(costs) 204 (70)
Other finance costs - pension (90) (63)
------------------------------------------- ------------------------------- -------------------------------
Profit before taxation 7,719 3,460
Tax expense 7 (1,917) (689)
------------------------------------------- ------------------------------- -------------------------------
Profit for the period attributable to
equity holders of the parent 5,802 2,771
------------------------------------------- ------------------------------- -------------------------------
Basic earnings per share 8 35.9p 17.4p
Diluted earnings per share 8 34.3p 16.8p
------------------------------------------- ------------------------------- -------------------------------
Interim condensed consolidated statement of comprehensive income
Half-year to 31st October, 2023 Half-year to 31st October, 2022
unaudited unaudited
Notes GBP'000 GBP'000
Profit for the period attributable to
equity holders of the parent 5,802 2,771
------------------------------------------- ------------------------------- -------------------------------
Exchange differences on retranslation of
foreign operations (43) 57
------------------------------------------- ------------------------------- -------------------------------
Net other comprehensive (loss)/income to be
reclassified to profit or loss in
subsequent
periods (43) 57
------------------------------------------- ------------------------------- -------------------------------
Remeasurement gains/(losses) on defined
benefit pension scheme 13 54 (8)
Deferred taxation on remeasurement of
defined benefit pension scheme (14) 2
Net other comprehensive income/(loss) not
being reclassified to profit or loss in
subsequent
periods 40 (6)
------------------------------------------- ------------------------------- -------------------------------
Total comprehensive income for the period
attributable to equity holders of the
parent 5,799 2,822
------------------------------------------- ------------------------------- -------------------------------
Interim condensed consolidated statement of financial position
Notes 31st 31st October, 2022 30th April, 2023
October,
2023
unaudited unaudited audited
ASSETS GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 10 25,415 25,076 24,886
Right-of-use assets 11 968 1,328 1,162
Intangible assets 2,365 2,896 2,396
Investment in joint venture - 35 -
Deferred income tax asset 1,716 1,373 1,677
---------------------------------------- ------------- --------------------- -----------------
30,464 30,708 30,121
---------------------------------------- ------------- --------------------- -----------------
Current assets
Inventories 16,940 17,003 24,764
Trade and other receivables 27,578 11,095 9,031
Contract assets 3,374 1,450 144
Cash and cash equivalents 12 42,627 23,363 12,336
Restricted cash held in Escrow 12 7,426 519 2,917
---------------------------------------- ------------- --------------------- -----------------
97,945 53,430 49,192
---------------------------------------- ------------- --------------------- -----------------
TOTAL ASSETS 128,409 84,138 79,313
---------------------------------------- ------------- --------------------- -----------------
EQUITY AND LIABILITIES
Equity
Share capital 1,784 1,784 1,784
Capital redemption reserve 957 957 957
Other reserve 2,815 2,815 2,815
Revaluation reserve 9,923 9,923 9,923
Special reserve 1,629 1,629 1,629
Currency translation reserve (363) (360) (320)
Treasury shares (3,703) (2,789) (2,381)
Retained earnings 30,362 26,242 26,668
---------------------------------------- ------------- --------------------- -----------------
TOTAL EQUITY SHAREHOLDERS' FUNDS 43,404 40,201 41,075
---------------------------------------- ------------- --------------------- -----------------
Non-current liabilities
Defined benefit pension liability 13 3,577 4,341 4,216
Deferred income tax liability 2,941 2,547 2,943
Contract liabilities 19,148 - -
Derivative financial instruments 15 218 - -
Lease liabilities 630 1,003 829
---------------------------------------- ------------- --------------------- -----------------
26,514 7,891 7,988
---------------------------------------- ------------- --------------------- -----------------
Current liabilities
Trade and other payables 19,291 15,070 15,286
Contract liabilities 38,303 20,610 14,585
Derivative financial instruments 15 513 - -
Lease liabilities 384 366 379
---------------------------------------- ------------- --------------------- -----------------
58,491 36,046 30,250
---------------------------------------- ------------- --------------------- -----------------
TOTAL EQUITY AND LIABILITIES 128,409 84,138 79,313
---------------------------------------- ------------- --------------------- -----------------
The interim condensed consolidated financial statements of the Group for the six months ended
31st October, 2023 were authorised for issue in accordance with a resolution of the directors
on 11th December, 2023 and signed on their behalf by:
Michael O'Connell
Finance Director
Interim consolidated statement of changes in equity
Share Capital Other Revaluation Special Currency Treasury Retained Total
capital redemption reserve reserve reserve translation shares earnings unaudited/
reserve reserve audited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30th April,
2022 1,784 957 2,815 9,923 1,629 (417) (2,789) 24,673 38,575
Profit for the
period - - - - - - - 2,771 2,771
Other
comprehensive
income/(loss) - - - - - 57 - (6) 51
Dividend paid - - - - - - - (1,196) (1,196)
At 31st
October, 2022 1,784 957 2,815 9,923 1,629 (360) (2,789) 26,242 40,201
--------------- ------- ---------- ------- ------------ ------- ----------- -------- -------- ----------
Profit for the
period - - - - - - - 1,344 1,344
Other
comprehensive
income/(loss) - - - - - 40 - (272) (232)
Share option
expense - - - - - - - 86 86
Exercise of
share options - - - - - - 408 (408) -
Dividend paid - - - - - - - (324) (324)
At 30th April,
2023 1,784 957 2,815 9,923 1,629 (320) (2,381) 26,668 41,075
--------------- ------- ---------- ------- ------------ ------- ----------- -------- -------- ----------
Profit for the
period - - - - - - - 5,802 5,802
Other
comprehensive
(loss)/income - - - - - (43) - 40 (3)
Dividend paid
(note 9) - - - - - - - (2,123) (2,123)
Share option
expense - - - - - - - 19 19
Purchase of own
shares - - - - - - (1,676) - (1,676)
Exercise of
share options - - - - - - 354 (44) 310
At 31st
October, 2023 1,784 957 2,815 9,923 1,629 (363) (3,703) 30,362 43,404
------- ---------- ------- ------------ ------- ----------- -------- -------- ----------
Interim consolidated cash flow statement
Half-year to 31st October, 2023 Half-year to 31st October, 2022
unaudited unaudited
GBP'000 GBP'000
Profit before taxation 7,719 3,460
Adjustments to reconcile profit before
taxation to cash generated from operating
activates:
Depreciation charge of owned and right-of-use
assets 1,024 968
Amortisation charge 31 119
Profit on disposal of property, plant and
equipment (148) (37)
Net finance (income)/costs (114) 133
Share option expense 19 -
Foreign exchange gains/(losses) 202 (111)
Decrease/(increase) in inventories 7,853 (491)
(Increase)/decrease in receivables (21,598) 2,219
Increase/(decrease) in payables 4,257 (606)
Increase in derivatives 731 -
Increase in contract liabilities 42,255 1,543
Pension fund deficit reduction payments (675) (450)
---------------------------------------------- -------------------------------- --------------------------------
Cash generated from operating activities 41,556 6,747
Net interest received/(paid) 224 (43)
Taxation paid (2,279) (78)
---------------------------------------------- -------------------------------- --------------------------------
Net cash inflow from operating activities 39,501 6,626
---------------------------------------------- -------------------------------- --------------------------------
Investing activities
Purchase of property, plant and equipment (1,168) (879)
Proceeds on disposal of property, plant and
equipment 149 91
(Increase)/decrease in restricted cash held
in Escrow maturing in more than 90 days (4,509) 639
---------------------------------------------- -------------------------------- --------------------------------
Net cash outflow from investing activities (5,528) (149)
---------------------------------------------- -------------------------------- --------------------------------
Financing activities
Buy back of own shares (1,676) -
Proceeds from exercise of employee share 310 -
options
Lease payments (206) (207)
Dividend paid (2,123) (1,196)
---------------------------------------------- -------------------------------- --------------------------------
Net cash outflow from financing activities (3,695) (1,403)
---------------------------------------------- -------------------------------- --------------------------------
Increase in cash and cash equivalents 30,278 5,074
Opening cash and cash equivalents 12,336 18,092
Exchange differences on cash and cash
equivalents 13 197
---------------------------------------------- -------------------------------- --------------------------------
Closing cash and cash equivalents 42,627 23,363
---------------------------------------------- -------------------------------- --------------------------------
Notes to the interim consolidated financial statements
1. Corporate information
MS INTERNATIONAL plc is a public limited company incorporated and domiciled in England and
Wales. The Company's ordinary shares are traded on the Alternative Investment Market (AIM)
market of the London Stock Exchange. The principal activities of the Company and its subsidiaries
("the Group") are the design, manufacture, construction, and servicing of a range of engineering
products and structures. These activities are grouped into the following divisions:
'Defence and Security' - design, manufacture, and service of defence equipment.
'Forging' - manufacture of fork-arms and open die forgings.
'Petrol Station Superstructures' - design, manufacture, construction, and maintenance of petrol
station superstructures.
'Corporate Branding' - design, manufacture, installation, and service of corporate brandings,
including media facades, way-
finding signage, public illumination, creative lighting solutions, and the complete appearance
of petrol station superstructures
and forecourts.
2. Basis of preparation and accounting policies
The consolidated condensed interim financial statements included in this half-yearly financial
report have been prepared in accordance with International Accounting Standard 34, "Interim
Financial Reporting" in conformity with the requirements of the Companies Act 2006. They do
not include all the information and disclosures required in annual financial statements in
accordance with UK adopted International Accounting Standards, and should therefore be read
in conjunction with the Group's Annual Report for the year ended 30th April, 2023 and any
public announcements made by MS INTERNATIONAL plc during the interim reporting period. The
financial statements for the year ended 30th April, 2023 have been filed with the Registrar
of Companies. The auditor's report on these financial statements was unmodified and did not
contain statements under sections 498 (2) or (3) of the Companies Act 2006.
The interim financial information has been reviewed but not audited by the Group's auditor,
Grant Thornton UK LLP. The interim financial information does not constitute full financial
information within the meaning of section 434 of the Companies Act 2006. The auditor's report
is included on page 4.
The accounting policies are consistent with those applied in the financial statements of the
Annual Report for year ended 30th April, 2023, with the exception of a new policy for Derivative
Financial Instruments, as detailed below. The Group has not early adopted any standard, interpretation,
or amendment that has been issued but is not yet effective.
Derivative financial instruments are initially recognised at fair value on the date the derivative
contract is entered into and are subsequently remeasured at their fair value including remeasurement
at the reporting date. The Group has decided not to apply hedge accounting with respect to
forward exchange contracts and as a result changes in the fair values are recognised immediately
within the Consolidated income statement within the Derivative gains or losses line.
The assets and liabilities of the overseas subsidiaries are translated into the presentational
currency of the Group at the rate of exchange ruling at the statement of financial position
date and their income statements are translated at the weighted average exchange rates for
the year. The exchange differences arising on the translation are taken directly to a separate
component of equity.
3. Principal risks and uncertainties
The principal risks and uncertainties facing the Group for the remaining six months of the
financial year are discussed below. Further details of the Group's risks and uncertainties
can be found on page 8 of the Annual Report for the year ended 30th April, 2023, which is
available from MS INTERNATIONAL plc's website: www.msiplc.com
One of the Group's principal risks and uncertainties continues to be the impact of inflationary
pressures upon both trading and profitability. Rising raw material and energy prices have
increased the cost base of all divisions. Where possible cost increases are passed to the
customer, however, in doing so there is uncertainty with regards to any potential impact on
the level of customer demand.
During the interim period, the risk that foreign exchange fluctuations will impact the Group's
performance has increased significantly. A number of international contracts in the 'Defence
and Security' division are denominated in USD, which created a large unhedged currency exposure
within the Group. As a result, management have taken steps to mitigate this risk by taking
out various forward contracts (note 15).
4. Going concern
The condensed interim financial statements included in this report have been prepared on a
going concern basis. Forecasts have been made up to 31(st) December, 2024, which the Directors
believe to be a reasonable expectation based on the information available at the time of signing
these accounts. The forecasts have been assessed for the impact of potential sensitivities,
including a 10% fall in the forecasted Group revenue and a 10% increase in materials prices.
In all scenarios, the Group has sufficient headroom to meet its liabilities as they fall due.
In addition, management have carried out reverse stress tests to 31st December, 2024 under
various scenarios, all of which are considered implausible by management. In all tested scenarios,
the Group would continue as a going concern for at least 12 months from the date of signing.
As a result, in making the going concern assessment the Directors believe there to be no material
uncertainties that could cast significant doubt on the Group's ability to continue operating
as a going concern. The Group has sufficient financial resources with a healthy orderbook
to continue operating for the foreseeable future, being at least to 31(st) December, 2024.
As a result, the Directors continue to adopt the going concern basis of accounting in preparation
of this report.
5. Revenue
The Group's revenue disaggregated by pattern of revenue recognition is as follows:
Half-year Half-year to
to 31st October, 31st October,
2023 2022
unaudited unaudited
GBP'000 GBP'000
Revenue recognised at a point in time 55,780 40,940
Revenue recognised over time 1,243 1,085
---------------------------------------- ------------------ ---------------
Total revenue 57,023 42,025
---------------------------------------- ------------------ ---------------
6. Segment
information
The following table presents segmental revenue and operating profit/(loss) as well as segmental
assets and liabilities of the Group's divisions for the half-year periods ended 31st October,
2023 and 31st October, 2022. The reporting format is determined by the differences in manufacture
and services provided by the divisional segments within the Group.
'Defence and 'Forgings' 'Petrol Station 'Corporate Total
Security' Superstructures' Branding'
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
unaudited unaudited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental revenue
Segment revenue 33,508 13,956 9,454 12,516 8,555 9,057 5,584 6,835 57,101 42,364
Intercompany
revenue from
other segments - - - - (8) (275) (70) (64) (78) (339)
------------------ ------- --------- ------- ------- -------- -------- ------- ------- --------- ---------
External revenue 33,508 13,956 9,454 12,516 8,547 8,782 5,514 6,771 57,023 42,025
------------------ ------- --------- ------- ------- -------- -------- ------- ------- --------- ---------
Segment result
Operating
profit/(loss) 5,741 (188) 681 2,759 1,285 1,339 (102) (317) 7,605 3,593
Net finance
income/(expense) 114 (133)
------------------ --------- ---------
Profit before
taxation 7,719 3,460
Tax expense (1,917) (689)
------------------ --------- ---------
Profit for the
period 5,802 2,771
------------------ --------- ---------
Segmental assets
Assets
attributable to
segments 79,724 33,088 7,357 8,186 12,586 11,226 5,261 7,941 104,928 60,441
Unallocated
assets* 23,481 23,697
------------------ --------- ---------
Total assets 128,409 84,138
------------------ --------- ---------
Segmental
liabilities
Liabilities
attributable to
segments 68,203 24,913 2,212 2,762 4,683 4,313 2,167 3,510 77,265 35,498
Unallocated
liabilities* 7,740 8,439
Total liabilities 85,005 43,937
Other segmental
information
Capital
expenditure 780 452 194 116 131 109 63 202 1,168 879
Depreciation 210 141 317 319 370 368 127 140 1,024 968
Amortisation 9 9 - - 22 22 - 88 31 119
------------------ ------- --------- ------- ------- -------- -------- ------- ------- --------- ---------
* Unallocated assets include certain fixed assets (including all UK properties), current assets,
and deferred income tax assets. Unallocated liabilities include the defined benefit pension
scheme liability, the deferred income tax liability, and certain current liabilities.
Assets and liabilities attributable to segments comprise the
assets and liabilities of each segment adjusted to reflect the
elimination of the cost of investment in subsidiaries and the
provision of financing loans provided by MS INTERNATIONAL plc.
Revenue between segments is determined on an arm's length basis.
Segment results, assets, and liabilities include items directly
attributable to the segment as well as those that can be allocated
on a reasonable basis.
7. Tax expense
The major components of the tax expense in the consolidated income statement are:
Half-year to
31st October, Half-year to 31st
2023 October, 2022
unaudited unaudited
GBP'000 GBP'000
Current tax expense 1,979 660
Deferred tax (income)/expense (62) 29
------------------------------------------------------------------------------ --------------- -----------------------
Total tax expense reported in the Interim condensed consolidated income
statement 1,917 689
------------------------------------------------------------------------------ --------------- -----------------------
Tax relating to items charged/(credited) to other comprehensive income:
Half-year Half-year
to 31st to 31st
October, October,
2023 2022
unaudited unaudited
GBP'000 GBP'000
Deferred tax on measurement of defined benefit pension
scheme 14 (2)
--------------------------------------------------------- ---------- ----------
Deferred tax in the Interim condensed consolidated
statement of comprehensive income 14 (2)
--------------------------------------------------------- ---------- ----------
8. Earnings per share
The calculation of basic earnings per share of 35.9p (2022 - 17.4p) is based on the profit
for the period attributable to equity holders of the parent of GBP5,802,000 (2022 - GBP2,771,000)
and on a weighted average number of ordinary shares in issue of 16,141,981 (2022 - 15,949,691).
At 31st October, 2023 there were 1,072,693 (2022 - 1,055,000) potentially dilutive shares
on option with a weighted average effect of 789,551 (2022 - 587,217) giving a diluted earnings
per share of 34.3p (2022 - 16.8p).
Half-year
Half-year to 31st
to 31st October, October,
2023 2022
unaudited unaudited
Weighted average number of shares in issue 17,841,073 17,841,073
Less weighted average number of shared held in
the
ESOT (231,387) (245,048)
Less weighted average number of shares purchased
by the Company (1,467,705) (1,646,334)
-------------------------------------------------- ------------------ ------------
Weighted average number of shares to be used in
basic
EPS calculation 16,141,981 15,949,691
Weighted average number of the 1,072,693 (2022 -
1,055,000) potentially dilutive shares 789,551 587,217
-------------------------------------------------- ------------------ ------------
Weighted average diluted shares 16,931,532 16,536,908
-------------------------------------------------- ------------------ ------------
Profit for the period attributable to equity
holders
to the parent in GBP 5,802,000 2,771,000
Basic earnings per share 35.9p 17.4p
Diluted earnings per share 34.3p 16.8p
9. Dividends paid and proposed
Half-year to
31st October, Half-year to 31st
2022 October, 2021
unaudited unaudited
GBP'000 GBP'000
Declared and paid during the six month period
Final dividend on ordinary shares for 2023 - 15p (2022 - 7.5p) 2,123 1,196
------------------------------------------------------------------------------ --------------- -----------------------
Proposed for approval
Interim dividend on ordinary shares for 2024 - 3p (2023 - 2p) 487 319
------------------------------------------------------------------------------ --------------- -----------------------
The interim dividend will be payable on 19th January, 2024 to those shareholders on the register
at the close of business on 22nd December, 2023, with the ex-dividend date being 21(st) December,
2023.
10. Property, plant and equipment
At 31st October, 2023
Freehold Plant and
property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2023 21,930 17,298 39,228
Additions 517 651 1,168
Disposals - (316) (316)
Exchange differences 194 63 257
--------------------------------------- --------- ---------- --------
At 31st October, 2023 22,641 17,696 40,337
--------------------------------------- --------- ---------- --------
Accumulated depreciation
At 30th April, 2023 395 13,947 14,342
Depreciation charge for the period 202 636 838
Disposals - (315) (315)
Exchange differences 7 50 57
--------------------------------------- --------- ---------- --------
At 31st October, 2023 604 14,318 14,922
--------------------------------------- --------- ---------- --------
Net book value at 31st October, 2023 22,037 3,378 25,415
--------------------------------------- --------- ---------- --------
Analysis of cost or valuation
At professional valuation 21,681 - 21,681
At cost 960 17,696 18,656
--------------------------------------- --------- ---------- --------
At 31st October, 2023 22,641 17,696 40,337
--------------------------------------- --------- ---------- --------
At 31st October, 2022
Freehold Plant and
property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2022 21,368 16,106 37,474
Additions 185 694 879
Disposals - (182) (182)
Exchange differences 419 147 566
At 31st October, 2022 21,972 16,765 38,737
--------------------------------------- --------- ---------- --------
Accumulated depreciation
At 30th April, 2022 - 12,937 12,937
Depreciation charge for the period 198 582 780
Disposals - (128) (128)
Exchange differences 2 70 72
--------------------------------------- --------- ---------- --------
At 31st October, 2022 200 13,461 13,661
--------- ---------- --------
Net book value at 31st October, 2022 21,772 3,304 25,076
--------------------------------------- --------- ---------- --------
Analysis of cost or valuation
At professional valuation 21,787 - 21,787
At cost 185 16,765 16,950
--------------------------------------- --------- ---------- --------
At 31st October, 2022 21,972 16,765 38,737
--------------------------------------- --------- ---------- --------
At 30th April, 2023
Freehold Plant and
property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2022 21,368 16,106 37,474
Additions 421 1,550 1,971
Disposals - (488) (488)
Exchange differences 141 130 271
---------------------------------------------------------- --------------- ---------------- ------------
At 30th April, 2023 21,930 17,298 39,228
---------------------------------------------------------- --------------- ---------------- ------------
Accumulated depreciation
At 30th April, 2022 - 12,937 12,937
Depreciation charge for the year 400 1,268 1,668
Disposals - (358) (358)
Exchange differences (5) 100 95
---------------------------------------------------------- --------------- ---------------- ------------
At 30th April, 2023 395 13,947 14,342
---------------------------------------------------------- --------------- ---------------- ------------
Net book value at 30th April, 2023 21,535 3,351 24,886
---------------------------------------------------------- --------------- ---------------- ------------
Analysis of cost or valuation
At professional valuation 21,930 - 21,930
At cost - 17,298 17,298
---------------------------------------------------------- --------------- ---------------- ------------
At 30th April, 2023 21,930 17,298 39,228
---------------------------------------------------------- --------------- ---------------- ------------
At 30th April, 2022 the Group's land and buildings, which consist of manufacturing and office
facilities in the USA, Poland, and UK were valued by Real Estate & Appraisal Services Inc
(USA), KonSolid-Nieruchomosci (Poland) and Dove Haigh Phillips (UK). Management determined
that these constitute one class of asset under IFRS 13 (designated as level 3 fair value assets),
based on the nature, characteristics and risks of the properties.
The properties in the UK were valued on the basis of an existing use value in accordance with
the Appraisal and Valuation Standards (5th Edition) published by the Royal Institution of
Chartered Surveyors. The Polish property was valued based on the income approach, converting
anticipated future benefits in the form of rental income into present value. The US property
was valued on an income and market value basis. For all properties, there is no difference
between current use and highest and best use.
11. Right-of-use assets
At 31st October, 2023 Plant and
Property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2023 2,312 - 2,312
Exchange differences (12) - (12)
----------------------------------------------- ------------------- ------------------- -----------------
At 31st October, 2023 2,300 - 2,300
----------------------------------------------- ------------------- ------------------- -----------------
Accumulated depreciation
At 30th April, 2023 1,150 - 1,150
Depreciation charge for the period 186 - 186
Exchange differences (4) - (4)
----------------------------------------------- ------------------- ------------------- -----------------
At 31st October, 2023 1,332 - 1,332
----------------------------------------------- ------------------- ------------------- -----------------
Net book value at 31st October, 2023 968 - 968
----------------------------------------------- ------------------- ------------------- -----------------
At 31st October, 2022 Plant and
Property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2022 2,218 10 2,228
Exchange differences 56 - 56
----------------------------------------------- ------------------- ------------------- -----------------
At 31st October, 2022 2,274 10 2,284
----------------------------------------------- ------------------- ------------------- -----------------
Accumulated depreciation
At 30th April, 2022 741 8 749
Depreciation charge for the period 186 2 188
Exchange differences 19 - 19
----------------------------------------------- ------------------- ------------------- -----------------
At 31st October, 2022 946 10 956
----------------------------------------------- ------------------- ------------------- -----------------
Net book value at 31st October, 2022 1,328 - 1,328
----------------------------------------------- ------------------- ------------------- -----------------
At 30th April, 2023 Plant and
Property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2022 2,218 10 2,228
Disposals - (10) (10)
Exchange differences 94 - 94
----------------------------------------------- ------------------- ------------------- -----------------
At 30th April, 2023 2,312 - 2,312
----------------------------------------------- ------------------- ------------------- -----------------
Accumulated depreciation
At 30th April, 2022 741 8 749
Depreciation charge for the year 374 2 376
Disposals - (10) (10)
Exchange differences 35 - 35
----------------------------------------------- ------------------- ------------------- -----------------
At 30th April, 2023 1,150 - 1,150
----------------------------------------------- ------------------- ------------------- -----------------
Net book value at 30th April, 2023 1,162 - 1,162
----------------------------------------------- ------------------- ------------------- -----------------
12. Cash and cash equivalents
For the purpose of the interim consolidated cash flow statement, cash and cash equivalents
are comprised of the following:
31st October, 2023 31st October, 2022 30th April, 2023
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Cash and cash equivalents 42,627 23,363 12,336
Restricted cash held in Escrow - maturing in
more than 90 days 7,426 519 2,917
Total cash 50,053 23,882 15,253
----------------------------------------------- ------------------- ------------------- -----------------
The restricted cash balance held in Escrow provides security to Lloyds Bank plc in respect
of certain guarantees, indemnities, and performance bonds given by the Group in the ordinary
course of business.
13. Pension liability
The Company operates an employee pension scheme called the MS INTERNATIONAL plc Retirement
and Death Benefits Scheme ("the Scheme"). IAS 19 requires disclosure of certain information
about the Scheme as follows:
* Until 5th April, 1997, the Scheme provided defined
benefits and these liabilities remain in respect of
service prior to 6th April, 1997. From 6th April,
1997 until 31st May, 2007 the Scheme provided future
service benefits on a defined contribution basis.
* The last formal valuation of the Scheme was performed
at 7th May, 2021 by a professionally qualified
actuary.
* From 6th April, 2016 the Company directly pays the
expenses of the Scheme. The total pension scheme
expenses incurred by the Company during the period
were GBP221,000 (2022: GBP137,000).
* Deficit reduction contributions paid into the Scheme
by the Company are GBP900,000 per annum. The deficit
reduction contributions are paid on a quarterly basis
with the first having been paid on or after 1st July,
2021 and the last being due for payment on or before
1st April, 2028. The total deficit reduction payments
made in the period were GBP675,000 (2022 -
GBP450,000).
* From 1st June, 2007 the Company has operated a
defined contribution scheme for its UK employees
which is administered by a UK pension provider.
Member contributions are paid in line with this
Scheme's documentation over the accounting period and
the Company has no further obligations once the
contributions have been made. At 30th April, 2023 the
present value of the contracted future deficit
reduction contributions was GBP3,577,000 (2022 -
GBP4,341,000), which was greater than the net scheme
asset of GBP48,000 (2022 - GBP2,337,000 liability).
As the Company does not have an unconditional right
to the economic benefits arising from this surplus,
an additional liability of GBP3,625,000 (2022 -
GBP2,004,000) has been recognised in the financial
statements in accordance with IFRIC 14.
* The pension scheme liability has reduced by
GBP639,000 from GBP4,216,000 at 30th April, 2023 to
GBP3,577,000 at 31st October, 2023. A total actuarial
gain of GBP54,000 (2022 - GBP8,000 loss) has been
recognised through other comprehensive income. It
comprises of a GBP671,000 remeasurement loss (2022 -
GBP3,493,000) compared to the interest income on the
plan assets, a GBP1,413,000 actuarial gain (2022 -
GBP4,346,000 gain) due to changes in financial
assumptions and a loss relating to IFRIC 14 of
GBP688,000 (2022 - GBP861,000). The interest cost on
the net defined benefit liability of GBP90,000 (2022
- GBP63,000) has been recognised through the income
statement. The Scheme's liabilities have been reduced
by pension fund deficit payments in the period of
GBP675,000 (2022 - GBP450,000).
14. Commitments and contingencies
The Company is contingently liable in respect of guarantees, indemnities and performance bonds
given in the ordinary course of business amounting to GBP7,416,000 at 31st October, 2023 (2022
- GBP1,566,000).
In the opinion of the Directors, no material loss will arise in connection with the above
matters.
The Group and certain of its subsidiary undertakings are parties to legal actions and claims
which have arisen in the normal course of business. The results of actions and claims cannot
be forecast with certainty, but the directors believe that they will be concluded without
any material effect on the net assets of the Group.
15. Derivative financial instruments
During the period, the Group has entered into a number of forward currency contracts in respect
of USD denominated cash inflows in the 'Defence and Security' division.
The Group has chosen not to adopt hedge accounting with respect to forward exchange contracts
and as a result the loss of GBP731,000 arising from the change in the fair value during the
period has been included within operating profit.
Change in
US Dollar Sterling Average Fair Value
$'000 GBP'000 forward rate GBP'000
Current derivative
liability 41,500 33,615 1.2346 513
Non-current derivative
liability 57,500 46,680 1.2318 218
--------------------------- ---------- --------- -------------- ------------
Total 99,000 80,295 1.2330 731
--------------------------- ---------- --------- -------------- ------------
16. Share-based payments
During the period, a total of 122,700 share options have been granted to executive directors,
non-executive directors, and employees under the MS INTERNATIONAL plc Company Share Option
Plan. These options are exercisable in three equal amounts at three, four and five years after
the date of grant and are not subject to any share price performance conditions. Of the options,
4,800 have been granted at an exercise price of GBP6.24 and the remaining 117,900 have been
granted at an exercise price of GBP7.20 per share.
Share options totalling 320,007 have been exercised during the period. This includes 100,000
options exercised under the MS INTERNATIONAL plc Long Term Incentive Plan at an exercise price
of GBP0 per share, and a further 220,007 options exercised under the MS INTERNATIONAL Plc
Company Share Option Scheme at an exercise price of GBP1.41 per share.
170,007 of the options were satisfied by transferring shares from treasury and the remaining
150,000 options were satisfied by transferring shares from The Employee Share Ownership Trust
("ESOT").
The following tables illustrate the number and weighted average exercise prices (WAEP) of
share options during the year:
Long-term Company Share Total
Incentive Option Plan
Plan
Number WAEP Number WAEP Number WAEP
Outstanding
at 30th
April, 2022 500,000 - 1,000,000 GBP1.41 1,500,000 GBP0.94
Granted in
year - - 20,000 GBP3.00 20,000 GBP3.00
Exercised in
year (250,000) - - - (250,000) -
-------------- ---------- ------ ---------- -------- ---------- --------
Outstanding
at 30th
April, 2023 250,000 - 1,020,000 GBP1.44 1,270,000 GBP1.16
Granted in
year - - 122,700 GBP7.16 122,700 GBP7.16
Exercised in
year (100,000) - (220,007) GBP1.41 (320,007) GBP0.97
-------------- ---------- ------ ---------- -------- ---------- --------
Outstanding
at 31st
October,
2023 150,000 - 922,693 GBP2.21 1,072,693 GBP1.90
--------------
The Group recognised a total charge during the period of GBP19,000 (2022 - GBP15,000) in relation
to equity-settled share-based payment transactions. At 31st October, 2023 there were 150,000
(2022 - nil) and 113,337 (2022 - nil) share options exercisable in the LTIP and CSOP share
option schemes respectively.
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END
IR BCBDDSUBDGXB
(END) Dow Jones Newswires
December 12, 2023 02:00 ET (07:00 GMT)
Grafico Azioni Ms (LSE:MSI)
Storico
Da Ott 2024 a Nov 2024
Grafico Azioni Ms (LSE:MSI)
Storico
Da Nov 2023 a Nov 2024
