TIDMMSI
RNS Number : 8150I
MS International PLC
07 December 2022
MS INTERNATIONAL plc
Unaudited Interim Condensed
Group Financial Statements
31st October, 2022
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'
'Forgings'
'Petrol Station Superstructures'
'Corporate Branding'
Chairman's Statement
Results
It is pleasing to report that the Group has continued to perform strongly, growing our international
businesses profitably in the face of these extremely challenging times.
For the half year ended 31(st) October 2022, profit before tax increased to GBP3.46m (2021
-GBP0.77m) on revenue of GBP42.03m (2021 - GBP33.16m).
Basic earnings per share were 17.4p (2021 - 3.4p).
The balance sheet is also significantly stronger with cash at GBP23.88m (2021 - GBP15.54m).
Orders received in the period, when added to those already in hand, maintains the Group in
a strong position for the future.
Prospects
'Defence'
We continue to market our expanding product portfolio around the world to what can only be
described as a somewhat 'more attentive audience'. There must be little doubt this reflects
the uneasy political state of the world, notwithstanding the fact that many countries' defence
budgets remain under severe fiscal pressure.
Our continued investment to support the development and long-term growth of the defence business
including relocating our production operations into our upgraded facilities in Norwich, did
however, mean that we carried substantial costs in the period.
Pleasingly, our participation in the United States Navy's multi- phased programme of 'weapon
approval procedures' with respect to our 30mm Naval Gun System, continues to progress through
their comprehensive testing procedures. We are encouraged with their observations to date.
A great prize, still for us to win! Our existing land and building facilities in South Carolina
can be further developed, to meet any resulting defence opportunities.
We continue to develop new military products and during the period launched our first land
based mobile gun system incorporating our unique 'counter-drone' capability. I am very encouraged
to report that this new gun system has already attracted considerable attention in the international
market.
'Forgings'
All three of our superb manufacturing facilities in the UK, the United States and Brazil continue
to operate at a high level of activity, servicing their national and international customers.
Managing the negative effects of rising energy costs for these steel forging businesses is
an undoubted challenge, but one that that is being successfully managed, in step with local
availability of supply.
'Petrol Station Superstructures'
This division has experienced a high level of quality activity in the period, resulting in
a strong business recovery from the pandemic disruption. Both our UK and Poland based operations
remain well placed and committed to serve our highly respected UK and European customer base.
'Corporate Branding'
We are making good progress with our Netherlands and German operations as the businesses recover
from the depressed level of activity within the sign installation and maintenance sector by
the many cross-border restrictions imposed on mainland travel during Covid. Meantime, our
fledgeling UK sign operation is benefitting from our commitment and investment in personnel,
contemporary manufacturing equipment and other facilities.
Outlook
We believe that we have progressed strongly and created considerable opportunities through
our commitment to being bold whilst building a substantial war chest to support our continuing
investment, particularly in defence. Notwithstanding, we remain vigilant, in order to react
to any changing circumstances.
I look forward with some confidence despite the difficult economic background.
All such matters considered, the Board has declared an increased interim dividend per share
of 2p (2021 1.75p), payable to shareholders on 13th January 2023.
Michael Bell 6(th) December 2022
MS INTERNATIONAL plc
Michael Bell Tel: 01302 322133
Shore Capital (Nominated Adviser and Broker)
Patrick Castle Tel: 020 7408 4090
Daniel Bush
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
of MS INTERNATIONAL Plc (the 'company') for the six months ended 31 October 2022 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 2022 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 company 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,
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
6(th) December 2022
Interim condensed consolidated income
statement
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
Notes GBP'000 GBP'000
Revenue 5/6 42,025 33,155
Cost of sales (30,095) (24,646)
-------------------------------------------
Gross profit 11,930 8,509
Distribution costs (1,815) (1,768)
Administrative expenses (6,522) (5,865)
-------------------------------------------
Operating profit 6 3,593 876
Finance costs (70) (40)
Other finance costs - pension (63) (63)
------------------------------------------- ------------------------------- -------------------------------
Profit before taxation 3,460 773
Tax expense 7 (689) (236)
------------------------------------------- ------------------------------- -------------------------------
Profit for the period attributable to
equity holders of the parent 2,771 537
------------------------------------------- ------------------------------- -------------------------------
Basic earnings per share 8 17.4p 3.4p
Diluted earnings per share 8 16.8p 3.3p
------------------------------------------- ------------------------------- -------------------------------
Interim condensed consolidated statement of comprehensive income
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
GBP'000 GBP'000
Profit for the period attributable to
equity holders of the parent 2,771 537
------------------------------------------- ------------------------------- -------------------------------
Exchange differences on retranslation of
foreign operations 57 (242)
------------------------------------------- ------------------------------- -------------------------------
Net other comprehensive income/(loss) to be
reclassified to profit or loss in
subsequent
periods 57 (242)
------------------------------------------- ------------------------------- -------------------------------
Remeasurement (losses)/gains on defined
benefit pension scheme 13 (8) 217
Deferred taxation on remeasurement of
defined benefit pension scheme 2 258
Deferred taxation on revaluation surplus on
land and buildings - (331)
Net other comprehensive (loss)/income not
being reclassified to profit or loss in
subsequent
periods (6) 144
------------------------------------------- ------------------------------- -------------------------------
Total comprehensive income for the period
attributable to equity holders of the
parent 2,822 439
------------------------------------------- ------------------------------- -------------------------------
Interim condensed consolidated statement of financial position
Notes 31st 31st October, 2021 30th April, 2022
October,
2022
unaudited unaudited audited
ASSETS GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 10 25,076 20,015 24,537
Right-of-use assets 11 1,328 1,235 1,479
Intangible assets 2,896 3,122 3,002
Investment in joint venture 35 34 34
Deferred income tax asset 1,373 1,861 1,435
---------------------------------------- ------------- --------------------- -----------------
30,708 26,267 30,487
---------------------------------------- ------------- --------------------- -----------------
Current assets
Inventories 17,003 17,446 16,327
Trade and other receivables 9,422 11,075 11,396
Contract assets 1,450 1,747 1,773
Income tax receivable - 52 6
Prepayments 1,673 2,127 1,352
Cash and cash equivalents 12 23,363 14,067 18,092
Restricted cash held in Escrow 12 519 1,470 1,158
---------------------------------------- ------------- --------------------- -----------------
53,430 47,984 50,104
---------------------------------------- ------------- --------------------- -----------------
TOTAL ASSETS 84,138 74,251 80,591
---------------------------------------- ------------- --------------------- -----------------
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 6,055 9,923
Special reserve 1,629 1,629 1,629
Currency translation reserve (360) (56) (417)
Treasury shares (2,789) (2,789) (2,789)
Retained earnings 26,242 20,044 24,673
---------------------------------------- ------------- --------------------- -----------------
TOTAL EQUITY SHAREHOLDERS' FUNDS 40,201 30,439 38,575
---------------------------------------- ------------- --------------------- -----------------
Non-current liabilities
Defined benefit pension liability 13 4,341 6,491 4,720
Deferred income tax liability 2,547 1,938 2,578
Lease liabilities 1,003 975 1,158
---------------------------------------- ------------- --------------------- -----------------
7,891 9,404 8,456
---------------------------------------- ------------- --------------------- -----------------
Current liabilities
Trade and other payables 13,798 12,623 14,176
Contract liabilities 20,610 20,928 18,329
Income tax payable 1,272 574 702
Lease liabilities 366 283 353
---------------------------------------- ------------- --------------------- -----------------
36,046 34,408 33,560
---------------------------------------- ------------- --------------------- -----------------
TOTAL EQUITY AND LIABILITIES 84,138 74,251 80,591
---------------------------------------- ------------- --------------------- -----------------
The interim condensed consolidated financial statements of the Group for the six months ended
31st October, 2022 were authorised for issue in accordance with a resolution of the directors
on 6th December, 2022 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,
2021 1,784 957 2,815 6,055 1,629 186 (2,789) 20,399 31,036
Profit for the
period - - - - - - - 537 537
Other
comprehensive
(loss)/income - - - - - (242) - 144 (98)
Dividend paid - - - - - - - (1,036) (1,036)
At 31st
October, 2021 1,784 957 2,815 6,055 1,629 (56) (2,789) 20,044 30,439
--------------- ------- ---------- ------- ------------ ------- ----------- -------- -------- ----------
Profit for the
period - - - - - - - 4,395 4,395
Other
comprehensive
income/(loss) - - - 3,868 - (361) - 514 4,021
Dividend paid - - - - - - - (280) (280)
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
(note 9) - - - - - - - (1,196) (1,196)
At 31st
October, 2022 1,784 957 2,815 9,923 1,629 (360) (2,789) 26,242 40,201
------- ---------- ------- ------------ ------- ----------- -------- -------- ----------
Interim consolidated cash flow statement
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
GBP'000 GBP'000
Profit before taxation 3,460 773
Adjustments to reconcile profit before
taxation to cash generated from/(invested in)
operating
activates:
Depreciation charge of owned and right-of-use
assets 968 868
Amortisation charge 119 111
Impairment of goodwill - 349
Profit on disposal of property, plant and
equipment (37) (59)
Net finance costs 133 103
Foreign exchange losses (111) (44)
Increase in inventories (491) (5,119)
Decrease/(increase) in receivables 2,521 (1,433)
Increase in prepayments (302) (119)
(Decrease)/increase in payables (606) 246
Increase/(decrease) in contract liabilities 1,543 (310)
Pension fund deficit reduction payments (450) (450)
---------------------------------------------- -------------------------------- --------------------------------
Cash generated from/(invested in) operating
activities 6,747 (5,084)
Net interest paid (43) (15)
Taxation paid (78) (20)
---------------------------------------------- -------------------------------- --------------------------------
Net cash inflow/(outflow) from operating
activities 6,626 (5,119)
---------------------------------------------- -------------------------------- --------------------------------
Investing activities
Purchase of property, plant and equipment (879) (1,618)
Purchase of intangible assets - (54)
Proceeds on disposal of property, plant and
equipment 91 79
Decrease in restricted cash held in Escrow
maturing in more than 90 days 639 4,695
---------------------------------------------- -------------------------------- --------------------------------
Net cash (outflow)/inflow from investing
activities (149) 3,102
---------------------------------------------- -------------------------------- --------------------------------
Financing activities
Lease payments (207) (204)
Dividend paid (1,196) (1,036)
---------------------------------------------- -------------------------------- --------------------------------
Net cash outflow from financing activities (1,403) (1,240)
---------------------------------------------- -------------------------------- --------------------------------
Increase/(decrease) in cash and cash
equivalents 5,074 (3,257)
Opening cash and cash equivalents 18,092 17,390
Exchange differences on cash and cash
equivalents 197 (66)
---------------------------------------------- -------------------------------- --------------------------------
Closing cash and cash equivalents 23,363 14,067
---------------------------------------------- -------------------------------- --------------------------------
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' - 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, 2022 and any
public announcements made by MS INTERNATIONAL plc during the interim reporting period.
The interim financial information has been reviewed but not audited by the Group's auditor,
Grant Thornton UK LLP. Their 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, 2022. The Group has not early adopted any standard,
interpretation, or amendment that has been issued but is not yet effective.
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, 2022, 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.
In addition, despite the successful role out of global vaccination programmes, there remains
uncertainty around the potential emergence of Covid-19 variants that could lead to the imposition
of further lockdowns and/or travel restrictions. Given that the Group has plans in place to
manage foreseeable challenges of the Covid crisis, healthy financial resources, and a number
of long-term contracts with certain customers, the directors believe the Group is well placed
to manage its business risk successfully despite these challenges. Accordingly, the directors
continue to conclude that the adoption of the going concern basis of accounting remains appropriate
when preparing these interim financial statements.
4. Going concern
The condensed interim financial statements included in this report have been prepared on a
going concern basis. Forecasts have been made for the 18 months following the reporting date,
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.
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 18 months from the reporting
date. 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,
2022 2021
unaudited unaudited
GBP'000 GBP'000
Revenue recognised at a point in time 40,940 33,155
Revenue recognised over time 1,085 -
--------------------------------------- ------------------ ---------------
Total revenue 42,025 33,155
---------------------------------------- ------------------ ---------------
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,
2022 and 31st October, 2021. The reporting format is determined by the differences in manufacture
and services provided by the divisional segments within the Group.
'Defence' 'Forgings' 'Petrol Station 'Corporate Total
Superstructures' Branding'
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
unaudited unaudited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental
revenue
From external
customers 13,956 10,947 12,516 7,418 8,782 7,942 6,771 6,848 42,025 33,155
From other
segments - - - - 275 140 64 50 339 190
--------------- ------- ------- ------- ------- -------- -------- ------- ------- --------- ---------
Segment revenue 13,956 10,947 12,516 7,418 9,057 8,082 6,835 6,898 42,364 33,345
--------------- ------- ------- ------- ------- -------- -------- ------- ------- --------- ---------
Segment result
Operating
(loss)/profit (188) (155) 2,759 784 1,339 725 (317) (478) 3,593 876
Net finance
expense (133) (103)
--------------- --------- ---------
Profit before
taxation 3,460 773
Tax expense (689) (236)
--------------- --------- ---------
Profit for the
period 2,771 537
--------------- --------- ---------
Segmental
assets
Assets
attributable
to segments 33,088 33,622 8,186 5,732 11,226 10,195 7,941 8,124 60,441 57,673
Unallocated
assets* 23,697 16,578
--------------- --------- ---------
Total assets 84,138 74,251
--------------- --------- ---------
Segmental
liabilities
Liabilities
attributable
to segments 24,913 23,888 2,762 2,704 4,313 4,227 3,510 3,684 35,498 34,503
Unallocated
assets* 8,439 9,309
Total assets 43,937 43,812
Other
segmental
information
Capital
expenditure 452 1,198 116 172 109 131 202 117 879 1,618
Depreciation 141 101 319 276 368 358 140 133 968 868
Amortisation 9 - - - 22 23 88 88 119 111
Impairment of
goodwill - - - - - - - 349 - 349
--------------- ------- ------- ------- ------- -------- -------- ------- ------- --------- ---------
* 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 Half-year to 31st
October, 2022 October, 2021
unaudited unaudited
GBP'000 GBP'000
Current tax expense 660 175
Deferred tax expense 29 61
------------------------------------------------------------ ---------------------- -------------------------
Total tax expense reported in the Interim condensed
consolidated income statement 689 236
------------------------------------------------------------ ---------------------- -------------------------
Tax relating to items (charged)/credited to other comprehensive income:
Half-year Half-year
to 31st to 31st
October, October,
2022 2021
unaudited unaudited
GBP'000 GBP'000
Deferred tax on measurement of defined benefit pension
scheme 2 258
Deferred tax on revaluation surplus on land and buildings - (331)
------------------------------------------------------------ ---------- ----------
Deferred tax in the Interim condensed consolidated
statement of comprehensive income 2 (73)
------------------------------------------------------------ ---------- ----------
Legislation has been enacted to increase the rate of UK corporation tax from 19% to 25% with
effect from 1st April, 2023. UK corporation taxation has been provided at 19.5%, which is
the effective rate of UK corporation tax for the Group's financial year ending 30(th) April,
2023. UK deferred tax has been provided at 25% or a blended rate depending on when the underlying
temporary timing difference are expected to unwind. Deferred income tax in relation to intangibles
recognised on the acquisition of 'MSI-Sign Group B.V.' has been provided at 25.8%, being the
main corporation tax rate in The Netherlands.
8. Earnings per share
The calculation of basic earnings per share of 17.4p (2021 - 3.4p) is based on the profit
for the period attributable to equity holders of the parent of GBP2,771,000 (2021 - GBP537,000)
and on a weighted average number of ordinary shares in issue of 15,949,691 (2021 - 15,949,691).
At 31st October, 2022 there were 1,055,000 (2021 - 1,055,000) potentially dilutive shares
on option with a weighted average effect of 587,217 (2021 - 391,005) giving a diluted earnings
per share of 16.8p (2021 - 3.3p).
Half-year
Half-year to 31st
to 31st October, October,
2022 2021
unaudited unaudited
GBP'000 GBP'000
Weighted average number of shares in issue 17,841,073 17,841,073
Less weighted average number of shared held in
the
ESOT (245,048) (245,048)
Less weighted average number of shares purchased
by the Company (1,646,334) (1,646,334)
-------------------------------------------------- ------------------ ------------
Weighted average number of shares to be used in
basic
EPS calculation 15,949,691 15,949,691
Weighted average number of the 1,055,000 (2021 -
1,055,000) potentially dilutive shares 587,217 391,005
-------------------------------------------------- ------------------ ------------
Weighted average diluted shares 16,536,908 16,340,696
-------------------------------------------------- ------------------ ------------
Profit for the period attributable to equity
holders
to the parent in GBP 2,771,000 537,000
Basic earnings per share 17.4p 3.4p
Diluted earnings per share 16.8p 3.3p
9. Dividends paid and proposed
Half-year to 31st Half-year to 31st
October, 2022 October, 2021
unaudited unaudited
GBP'000 GBP'000
Declared and paid during the six month period
Final dividend on ordinary shares for 2022 - 7.5p (2021 -
6.5p) 1,196 1,036
------------------------------------------------------------ ---------------------- -------------------------
Proposed for approval
Interim dividend on ordinary shares for 2023 - 2p (2022 -
1.75p) 319 279
------------------------------------------------------------ ---------------------- -------------------------
The interim dividend will be payable on 13th January, 2023 to those members registered on
the books of the Company on 16th December, 2022.
10. Property, plant and equipment
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 31st October, 2021
Freehold Plant and
property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2021 17,591 15,506 33,097
Additions 1,041 577 1,618
Disposals - (563) (563)
Exchange differences (7) (67) (74)
At 31st October, 2021 18,625 15,453 34,078
--------------------------------------- --------- ---------- --------
Accumulated depreciation
At 30th April, 2021 1,242 12,742 13,984
Depreciation charge for the period 153 527 680
Disposals - (542) (542)
Exchange differences (8) (51) (59)
--------------------------------------- --------- ---------- --------
At 31st October, 2021 1,387 12,676 14,063
--------- ---------- --------
Net book value at 31st October, 2021 17,238 2,777 20,015
--------------------------------------- --------- ---------- --------
Analysis of cost or valuation
At professional valuation 12,300 - 12,300
At cost 6,325 15,453 21,778
--------------------------------------- --------- ---------- --------
At 31st October, 2021 18,625 15,453 34,078
--------------------------------------- --------- ---------- --------
At 30th April, 2022
Freehold Plant and
property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2021 17,591 15,506 33,097
Additions 1,205 1,498 2,703
Disposals - (978) (978)
Revaluation 2,296 - 2,296
Exchange differences 276 80 356
---------------------------------------------------------- --------------- ---------------- ------------
At 30th April, 2022 21,368 16,106 37,474
---------------------------------------------------------- --------------- ---------------- ------------
Accumulated depreciation
At 30th April, 2021 1,242 12,742 13,984
Depreciation charge for the year 303 1,072 1,375
Disposals - (920) (920)
Revaluation (1,572) - (1,572)
Exchange differences 27 43 70
---------------------------------------------------------- --------------- ---------------- ------------
At 30th April, 2022 - 12,937 12,937
---------------------------------------------------------- --------------- ---------------- ------------
Net book value at 30th April, 2022 21,368 3,169 24,537
---------------------------------------------------------- --------------- ---------------- ------------
Analysis of cost or valuation
At professional valuation 21,368 - 21,368
At cost - 16,106 16,106
---------------------------------------------------------- --------------- ---------------- ------------
At 30th April, 2022 21,368 16,106 37,474
---------------------------------------------------------- --------------- ---------------- ------------
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 property in Poland was valued based on the income approach, converting
anticipated future benefits in the form of rental income into present value. Finally, the
property in the US 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, 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 31st October, 2021 Plant and
Property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2021 895 21 916
Additions 765 - 765
Lease amendment 160 - 160
Exchange differences (46) - (46)
----------------------------------------------- ------------------- ------------------- -----------------
At 31st October, 2021 1,774 21 1,795
----------------------------------------------- ------------------- ------------------- -----------------
Accumulated depreciation
At 30th April, 2021 373 13 386
Depreciation charge for the period 184 4 188
Exchange differences (14) - (14)
----------------------------------------------- ------------------- ------------------- -----------------
At 31st October, 2021 543 17 560
----------------------------------------------- ------------------- ------------------- -----------------
Net book value at 31st October, 2021 1,231 4 1,235
----------------------------------------------- ------------------- ------------------- -----------------
At 30th April, 2022 Plant and
Property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2021 895 21 916
Additions 1,327 - 1,327
Disposals - (11) (11)
Exchange differences (4) - (4)
----------------------------------------------- ------------------- ------------------- -----------------
At 30th April, 2022 2,218 10 2,228
----------------------------------------------- ------------------- ------------------- -----------------
Accumulated depreciation
At 30th April, 2021 373 13 386
Depreciation charge for the year 365 6 371
Disposals - (11) (11)
Exchange differences 3 - 3
----------------------------------------------- ------------------- ------------------- -----------------
At 30th April, 2022 741 8 749
----------------------------------------------- ------------------- ------------------- -----------------
Net book value at 30th April, 2022 1,477 2 1,479
----------------------------------------------- ------------------- ------------------- -----------------
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, 2022 31st October, 2021 30th April, 2022
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Cash and cash equivalents 23,363 14,067 18,092
Restricted cash held in Escrow - maturing in
more than 90 days 519 1,470 1,158
Total cash 23,882 15,537 19,250
----------------------------------------------- ------------------- ------------------- -----------------
The balance held in Escrow provides security to Lloyds Bank plc in respect of any guarantees,
indemnities, and bond guarantees 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 GBP137,000 (2021: GBP105,000).
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 GBP450,000 (2021 - 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.
The IAS 19 scheme deficit has reduced by GBP1,257,000 from GBP3,594,000 at 30th April, 2022
to GBP2,337,000 at 31st October, 2022. A total actuarial gain of GBP853,000 (2021 - GBP217,000
gain) has been recognised through other comprehensive income. It comprises of a GBP3,493,000
remeasurement loss (2021 - GBP848,000 gain) compared to the interest income on the plan assets
and a GBP4,346,000 actuarial gain (2021 - GBP631,000 loss) due to changes in financial assumptions.
The actuarial gain of GBP4,346,000 is primarily due to the increase in the discount rate assumptions,
as well as the decrease in the RPI inflation and related inflation-linked measures, all of
which decreased the Scheme's liabilities at 31st October, 2022. The interest cost on the net
defined benefit liability of GBP63,000 (2021 - 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 GBP450,000 (2021 - GBP450,000).
The Company is committed to paying deficit reduction contributions to the Scheme of GBP900,000
per annum until April 2028 under the current Pension Scheme Recovery Plan. According to the
Scheme rules, the Company does not have an unconditional right to the economic benefits arising
from any surplus of funds paid into the Scheme in excess of its liabilities. Consequently,
the provisions of IFRIC 14 apply and the liability recognised in the statement of financial
position is the higher of the present value of the future contracted deficit reduction contributions
and the deficit estimated under the provisions of IAS 19.
At 31st October, 2022 the present value of the future contracted deficit reduction contributions
was GBP4,341,000 and higher than the estimated deficit of GBP2,337,000 calculated under the
provisions of IAS 19. Therefore, in accordance with IFRIC 14 the liability recognised in the
statement of financial position at 31st October 2022 is GBP4,341,000. A loss of GBP861,000
(2021 - GBP0) has been recognised through other comprehensive income in relation to IFRIC
14.
A GBP1,198,000 liability for unrecognised past service cost relating to GMP equalisation was
recognised in the Consolidated income statement for the 52 weeks ended 27th April, 2019. A
further GBP205,000 of previously unrecognised past service costs were recognised in the Consolidated
income statement for the year ended 30th April, 2021. This liability has been remeasured and
is included in the Scheme's liabilities at 31st October, 2022.
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 GBP1,556,000 at 31st October, 2021 (2020
- GBP6,977,000).
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.
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END
IR BRBDDRBGDGDL
(END) Dow Jones Newswires
December 07, 2022 02:00 ET (07:00 GMT)
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