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RNS Number : 5145D MS International PLC 22 June 2023
Chairman's statement
Results and Review
It is pleasing to report that the year ended April 2023 was one of further,
considerable progress for the Company, even if this may not yet be immediately
apparent from the results.
A delay by a customer in taking delivery of a significant contract, relating
to the first sales of our 'VSHORAD' counter drone land-based weapon system,
because of the continuing war in Europe, meant that, although the equipment
was virtually complete and ready for despatch, it could not be delivered
before our year end. I am confident this will be fully resolved shortly, but
the timing issue negatively impacted the year's reported figures.
Accordingly, a pre-tax profit of £5.08m (2022-£5.97m) was achieved on
increased revenue of £83.96m (2022-£74.53m). Basic earnings per share
amounted to 25.6p (2022-30.9p).
More significantly, the value of the Group's order book has almost doubled
over the period to stand at a record £115 million at the year end (2022-£64
million) while the balance sheet remained strong with total cash of £15.52m
(2022-£19.25m).
'Defence'
Another year of record revenue for this division, complemented by the
successful launch of our first 'in-house', developed, land-based military
product namely 'VSHORAD'. This was designed and produced by us as an effective
counter to the many threats posed to strategic infrastructure by drone
warfare.
Following extensive and comprehensive performance proving trials, we were
delighted to have been awarded our first order for the supply of seven
'VSHORAD' systems to an overseas customer.
Meantime, our determined endeavours in the United States are being rewarded.
We continue to make positive headway towards our goal to gain appropriate US
military product approval for our MSI-DS 30mm naval gun system following
rigorous testing trials conducted on our weapon system.
'Forgings'
This was another good business performance from our manufacturing operations
based in the UK, the United States and Brazil, at a time when not only we, but
also our many international customers, were focused on seeking to realign raw
material and component availability to match current demand, following the
disruptions inflicted by the global pandemic.
'Petrol Station Superstructures'
High levels of business activity across the markets we serve and a dynamic
performance from our UK and Polish operations, resulted in both sales and
profitability exceeding expectations whilst delivering strong cash positions
at the year end.
With many years of experience in constructing petrol station superstructures,
not only in the UK but also in mainland Europe, we are extremely well placed
to address a changing marketplace that is reflecting the demands of an
ever-increasing number of electric vehicles. Forecourt operators are
intensifying their efforts to upgrade sites to become broader 're-fuelling -
hubs' that can facilitate a wide variety of liquid fuels, under-canopy
electric charging and vehicle valeting combined with increasing facilities for
retail shopping and roadside convenience food.
'Corporate Branding'
Our UK operations have continued to expand and prosper, providing our petrol
station forecourt customers with a quality service for both new projects and
the important maintenance and repair of existing site branding.
In contrast, we experienced a much slower recovery in business activity in our
Netherlands based mainland Europe operations which was disappointing and is
accordingly being addressed.
Outlook
'Defence'
I am pleased to report that we have recently received encouraging confirmation
that matters have been resolved relating to the delayed significant contract
caused by the continuing war in Europe. We expect to receive payment shortly
and then the equipment can be delivered.
Following the successful launch of our 'VSHORAD' counter drone land-based
weapon system with this first order, there continues to be considerable
international market interest and excitement that, we believe, should result
in a significant number of further sales opportunities. In this regard, we are
pleased to report that we have received a new order to supply a number of
these systems with a contract value of circa £54m.
Regarding the ongoing opportunities in the US, we cautiously believe that we
are well placed to be awarded a contract to supply our MSI-DS 30mm naval
weapon system to the US Navy. We have been invited to visit the US to continue
commercial negotiations.
In the meantime, we continue to invest in expanding the Defence business. The
ongoing refurbishment and reorganisation of our Norwich manufacturing and
weapon assembly facility is central to achieving that objective.
'Forgings'
This division already holds a strong international market presence and
excellent reputation as an all-round, top-quality supplier of forged fork-arms
for the global materials handling industry.
We believe that, with the continuing planned investment in upgrading
facilities and manufacturing equipment across our plants, we shall continue to
perform at an outstanding and acceptable level.
'Petrol Station Superstructures'
Forecourt operators are adapting very positively to the rising number of
electric vehicles by increasing the number of roof covered charging points and
reorganising site layout to accommodate a complete range of motor vehicle
refuelling facilities. MSI, with a wealth of experience and detailed
construction records for thousands of petrol station sites, remains well
placed to provide an excellent and efficient service to the market.
'Corporate Branding'
Our UK operation will continue to consolidate and grow its current leading
position in the UK market.
Summary
We perceive that we are achieving a significant, upward step change in the
further development of the Company that will again bring additional rewards
and success for the business. I look to the future with confidence.
All matters considered the Board recommends the payment of a final dividend of
13p per share (2022-7.5p) making a total for the year of 15p (2022-9.25p).
The dividend is expected to be paid on the 18th of August 2023 to those
shareholders on the register at the close of business on the 6th July 2023.
Michael Bell
21(st) June 2023
MS INTERNATIONAL plc
Michael Bell Tel: 01302 322133
Shore Capital (Nominated Adviser and Broker)
Patrick Castle Tel: 020 7408 4090
Daniel Bush
Copies of this announcement are available from the Company's registered office
at MS INTERNATIONAL plc, Balby Carr Bank, Doncaster, DN4 8DH, England. The
Notice of AGM will be posted to shareholders on or before 17(th) July, 2023.
The full Annual Report and Accounts will be posted to shareholders in the week
commencing 17(th) July, 2023 at the latest. They will be made available on the
Company's website at www.msiplc.com and will be delivered to the Registrar of
Companies after it has been laid before the Company's members at the Annual
General Meeting to be held on 9(th) August, 2023 at The Holiday Inn,
Warmsworth, Doncaster.
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of the European
Union (Withdrawal) Act 2018.
Consolidated income statement
For the year ended 30th April, 2023
2023 2022
Continuing operations Total Total
£'000 £'000
Revenue 83,956 74,524
Cost of sales (60,556) (54,121)
Gross profit 23,400 20,403
Distribution costs (3,402) (3,304)
Administrative expenses (14,748) (12,097)
Other operating income - 1,185
(18,150) (14,216)
Group operating profit 5,250 6,187
Share of net loss of joint venture (36) -
Interest received 134 1
Interest paid (134) (95)
Other finance costs - pensions (136) (126)
(136) (220)
Profit before taxation 5,078 5,967
Taxation (963) (1,035)
Profit for the year attributable to equity holders of the parent 4,115 4,932
Basic earnings per share 25.6p 30.9p
Diluted earnings per share 24.2p 29.6p
Consolidated statement of comprehensive income
For the year ended 30th April, 2023
2023 2022
Total Total
£'000 £'000
Profit for the year attributable to equity holders of the parent 4,115 4,932
Exchange differences on retranslation of foreign operations 97 (603)
Net other comprehensive gain/(loss) to be reclassified to profit or loss in 97 (603)
subsequent years
Remeasurement (losses)/gains on defined benefit pension scheme (35) 1,601
Deferred tax on remeasurement on defined benefit pension scheme 9 (145)
Revaluation of land and buildings - 3,868
Deferred tax on revaluation surplus on land and buildings (252) (798)
Net other comprehensive (loss)/income not being reclassified to profit or loss (278) 4,526
in subsequent years
Total comprehensive income for the year attributable to equity holders of the 3,934 8,885
parent
Consolidated and company statement of changes in equity
For the year ended 30th April, 2023
Share capital Capital redemption reserve Other reserves Revaluation reserve Special reserve Currency translation reserve Treasury shares Retained earnings Total shareholders' funds
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(a) Group
At 30th April, 2021 1,784 957 2,815 6,055 1,629 186 (2,789) 20,399 31,036
Profit for the year - - - - - - - 4,932 4,932
Other comprehensive income/(loss) - - - 3,868 - (603) - 658 3,923
Total comprehensive income/(loss) - - - 3,868 - (603) - 5,590 8,855
Dividends paid - - - - - - - (1,316) (1,316)
At 30th April, 2022 1,784 957 2,815 9,923 1,629 (417) (2,789) 24,673 38,575
Profit for the year - - - - - - - 4,115 4,115
Other comprehensive income/(loss) - - - - - 97 - (278) (181)
Total comprehensive income/(loss) - - - - - 97 - 3,837 3,934
Share option expense - - - - - - - 86 86
Exercise of share options - - - - - - 408 (408) -
Dividends paid - - - - - - - (1,520) (1,520)
At 30th April, 2023 1,784 957 2,815 9,923 1,629 (320) (2,381) 26,668 41,075
(b) Company
At 30th April, 2021 1,784 957 7,620 - 1,629 - (2,789) 16,581 25,782
Profit for the year - - - - - - - 3,362 3,362
Other comprehensive income - - - - - - - 1,232 1,232
Total comprehensive income - - - - - - - 4,594 4,594
Dividends paid - - - - - - - (1,316) (1,316)
At 30th April, 2022 1,784 957 7,620 - 1,629 - (2,789) 19,859 29,060
Profit for the year - - - - - - - 305 305
Other comprehensive loss - - - - - - - (1) (1)
Total comprehensive income - - - - - - - 304 304
Share option expense - - - - - - - 86 86
Exercise of share options - - - - - - 408 (408) -
Dividends paid - - - - - - - (1,520) (1,520)
At 30th April, 2023 1,784 957 7,620 - 1,629 - (2,381) 18,321 27,930
Consolidated and company statements of financial position
At 30th April, 2023
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 24,886 24,537 1,161 1,017
Right-of-use assets 1,162 1,479 4,571 5,029
Intangible assets 2,396 3,002 - -
Investments in subsidiaries - - 15,669 18,126
Investment in joint venture - 34 - -
Deferred income tax asset 1,677 1,435 1,216 1,374
30,121 30,487 22,617 25,546
Current assets
Inventories 24,764 16,327 2,765 2,592
Trade and other receivables 9,031 12,754 14,344 15,612
Contract assets 144 1,773 - -
Cash and cash equivalents 12,336 18,092 8,016 3,258
Restricted cash held in Escrow 2,917 1,158 - -
49,192 50,104 25,125 21,462
TOTAL ASSETS 79,313 80,591 47,742 47,008
EQUITY AND LIABILITIES
Equity
Share capital 1,784 1,784 1,784 1,784
Capital redemption reserve 957 957 957 957
Other reserves 2,815 2,815 7,620 7,620
Revaluation reserve 9,923 9,923 - -
Special reserve 1,629 1,629 1,629 1,629
Currency translation reserve (320) (417) - -
Treasury shares (2,381) (2,789) (2,381) (2,789)
Retained earnings 26,668 24,673 18,321 19,859
TOTAL EQUITY SHAREHOLDERS' FUNDS 41,075 38,575 27,930 29,060
Non-current liabilities
Defined benefit pension liability 4,216 4,720 4,216 4,720
Deferred income tax liability 2,943 2,578 - -
Lease liabilities 829 1,158 4,388 4,807
7,988 8,456 8,604 9,527
Current liabilities
Trade and other payables 15,286 14,878 9,933 7,392
Contract liabilities 14,585 18,329 856 622
Lease liabilities 379 353 419 407
30,250 33,560 11,208 8,421
TOTAL EQUITY AND LIABILITIES 79,313 80,591 47,742 47,008
Consolidated and company cash flow statements
For the year ended 30th April, 2023
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Profit/(loss) before taxation 5,078 5,967 (1,233) 2,509
Adjustments to reconcile profit/(loss) before taxation to cash generated from
operating activities:
Depreciation charge of owned assets and right-of-use assets 2,044 1,746 965 931
Amortisation charge 239 227 - -
Impairment of goodwill 390 349 - -
Impairment of investment - - 2,457 -
Profit on disposal of property, plant and equipment (107) (169) (66) (163)
Share option expense 86 - 86 -
Share of net loss of joint venture 36 - - -
Finance costs 136 220 246 292
Foreign exchange losses (369) (142) - -
Increase in inventories (8,326) (3,657) (173) (1,094)
Decrease/(increase) in receivables 5,510 (930) 1,268 344
(Decrease)/increase in payables (5) 1,340 2,194 1,518
(Decrease)/increase in progress payments (3,726) (3,660) 234 (252)
Pension fund deficit reduction payments (675) (900) (675) (900)
Cash generated from operating activities 311 391 5,303 3,185
Net interest (received)/paid 50 (43) 44 (1)
Taxation (paid)/received (758) (447) (363) 151
Net cash (outflow)/inflow from operating activities (397) (99) 4,984 3,335
Investing activities
Dividends received from subsidiaries - - 2,439 1,249
Purchase of property, plant and equipment (1,971) (2,703) (705) (578)
Purchase of intangible assets - (54) - -
Proceeds on disposal of property, plant and equipment 237 227 120 185
(Increase)/decrease in cash held in the Escrow account maturing in more than (1,759) 5,007 - -
90 days
Net cash (outflow)/inflow from investing activities (3,493) 2,477 1,854 856
Financing activities
Lease payments (415) (405) (560) (560)
Dividends paid (1,520) (1,316) (1,520) (1,316)
Net cash outflow from financing activities (1,935) (1,721) (2,080) (1,876)
(Decrease)/increase in cash and cash equivalents (5,825) 657 4,758 2,315
Opening cash and cash equivalents 18,092 17,390 3,258 943
Exchange differences on cash and cash equivalents 69 45 - -
Closing cash and cash equivalents 12,336 18,092 8,016 3,258
The financial information set out above does not constitute the Company's
statutory accounts for the periods ended 30(th) April, 2023 or 30th April,
2022 but is derived from those accounts. Statutory accounts for 2022 have been
delivered to the Registrar of Companies and those for 2023 will be delivered
following the Company's Annual General Meeting. The auditors have reported on
those accounts; their reports were unqualified and did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006.
1. Segment information
The following table presents revenue and profit and certain assets and
liability information regarding the Group's divisions for the years ended 30th
April, 2023 and 30th April, 2022. The reporting format is determined by the
differences in manufacture and services provided by the Group. The 'Defence'
division is engaged in the design, manufacture, and service of defence
equipment. The 'Forgings' division is engaged in the manufacture of forgings.
The 'Petrol Station Superstructures' division is engaged in the design,
manufacture, construction, branding, maintenance, and restyling of petrol
station superstructures. The 'Corporate Branding' division is engaged in the
design, manufacture, installation, and service of corporate brandings.
Management monitors the operating results of its business units separately for
the purpose of making decisions about resource allocation and performance
assessment. Group financing (including finance costs and finance revenue) and
income taxes are managed on a group basis and are therefore not allocated to
operating segments.
'Defence' 'Forgings' 'Petrol Station 'Corporate Total
Superstructures' Branding'
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Segmental revenue
Total revenue 32,433 30,219 23,266 16,482 16,336 15,143 12,412 13,009 84,447 74,853
Revenue from other segments - - - - (316) (245) (175) (84) (491) (329)
Revenue from external customers 32,433 30,219 23,266 16,482 16,020 14,898 12,237 12,925 83,956 74,524
Segment result
Operating profit/(loss) 2,023 4,123 3,864 2,245 2,053 1,074 (2,690) (1,255) 5,250 6,187
Share of net loss of joint venture (36) -
Net finance costs (136) (220)
Profit before taxation 5,078 5,967
Taxation (963) (1,035)
Profit for the year 4,115 4,932
Segmental assets
Assets attributable to segments 28,145 33,393 9,394 7,883 10,732 9,380 6,744 8,050 55,015 58,706
Unallocated assets* 24,298 21,885
Total assets 79,313 80,591
Segmental liabilities
Liabilities attributable to segments 19,012 23,643 3,942 3,547 3,402 3,109 3,391 3,591 29,747 33,890
Unallocated liabilities* 8,491 8,126
Total liabilities 38,238 42,016
Other segmental information
Capital expenditure 1,065 1,933 213 389 353 195 340 186 1,971 2,703
Depreciation 322 210 644 561 728 714 350 261 2,044 1,746
Amortisation 18 10 - - 43 43 178 174 239 227
Impairment - - - - - - 390 349 390 349
* Unallocated assets include certain fixed assets (including all UK
properties), current assets and deferred income tax assets. Unallocated
liabilities include the defined pension benefit 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.
Geographical analysis
The following table presents revenue and expenditure and certain assets and
liabilities information by geographical segment for the years ended 30th
April, 2023 and 30th April, 2022. The Group's geographical segments are based
on the location of the Group's assets.
United Kingdom Europe USA South America Total
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
External revenue by origin 51,424 41,665 12,333 11,599 17,270 18,917 2,929 2,343 83,956 74,524
Non-current assets 20,529 20,160 3,365 4,327 6,107 5,913 120 87 30,121 30,487
Current assets 40,269 37,235 5,158 6,147 2,844 6,024 921 698 49,192 50,104
Liabilities 23,281 28,380 3,345 4,112 11,380 9,223 232 301 38,238 42,016
Capital expenditure 1,569 2,377 162 133 240 193 - - 1,971 2,703
Revenue disaggregated by destination is shown as follows:
2023 2022
£'000 % £'000 %
United Kingdom 28,354 34% 31,287 42%
Europe 21,158 25% 17,103 23%
USA 17,270 21% 19,406 26%
South America 3,036 3% 2,421 3%
Rest of World 14,138 17% 4,307 6%
Total revenue 83,956 100% 74,524 100%
The Group's largest customer, which is reported in the 'Defence' division,
contributed 12.6% to the Group's revenue (2022 - 14.2% in the 'Defence'
division from a different customer). There are no other customers which
contributed more than 10% to the Group's revenue (2022 - 11.4% in the
'Defence' division).
During the year, the Group recognised £2.2m of profit in relation to a
contract in the 'Defence' division that was terminated in April 2023.
2. Other operating income
2023 2022
£'000 £'000
Settlement of contractual dispute - 1,185
- 1,185
In the prior year the Group settled a contractual dispute, the terms of which
are confidential. The amount received was recognised in other income. The
Group incurred £0.6m of legal costs in the prior year in relation to this
matter. These costs were included in administrative expenses.
3. Employee information
The average number of employees, including executive directors, during the
year was as follows:
Group Company
2023 2022 2023 2022
Number Number Number Number
Production 263 252 78 74
Technical 71 71 21 23
Distribution 26 26 2 2
Administration 94 98 39 39
454 447 140 138
(a) Staff costs
Including executive directors, employment costs were as follows:
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Wages and salaries 21,024 18,942 7,415 7,139
Covid-19 job retention scheme income - (1,636) - -
Social security costs 3,853 3,233 822 722
Pension costs 667 570 423 352
Share options expense 30 29 30 29
25,574 21,138 8,690 8,242
The Covid-19 job retention scheme income has been received in the following
countries:
2023 2022
£'000 £'000
The Netherlands - 1,310
USA - 251
Poland - 75
- 1,636
(b) Directors' emoluments
2023 2022
£'000 £'000
Aggregate directors' emoluments 2,072 1,810
Pension contributions 65 52
Gain on exercise of share options 1,042 -
3,179 1,862
On 8th December, 2022 two directors exercised LTIP share options totalling
250,000 at an exercise price of £0 per share. The gain on the exercise of
these share options is the difference between market price at the date of
exercise of £4.17 and the exercise price of £0 per share.
4. (a) Taxation
The charge for taxation comprises:
2023 2022
£'000 £'000
Current tax
United Kingdom corporation tax 860 667
Foreign corporation tax 311 120
Adjustments in respect of previous years (76) (10)
Group current tax expense 1,095 777
Deferred tax
Origination and reversal of temporary differences (122) 261
Adjustments in respect of previous years (2) (5)
Adjustments in respect of difference in applicable tax rate (8) 2
Group deferred tax (credit)/expense (132) 258
Total tax expense on profit 963 1,035
Tax relating to items charged to other comprehensive income:
2023 2022
£'000 £'000
Deferred tax charged through other comprehensive income
Deferred tax on measurement gains on pension scheme current year (9) 145
Deferred tax on revaluation surplus on land and buildings 252 798
Deferred tax expense in the Consolidated statement of comprehensive income 243 943
(b) Factors affecting the tax charge for the year
The tax charge assessed for the year is lower than (2022: lower than) the
standard rate of corporation tax in the UK of 19.5% (2022 - 19%). The
differences are explained below:
2023 2022
£'000 £'000
Profit before tax 5,078 5,967
Profit multiplied by standard rate of corporation tax of 19.5% (2022 - 19%) 990 1,134
Effects of:
Expenses not deductible for tax purposes 35 29
Permanent timing differences (293) (276)
Adjustments in respect of overseas tax rates 125 132
Dual residency tax 232 29
Current tax adjustment in respect of previous years (76) (10)
UK deferred tax not previously recognised (40) -
Deferred tax adjustment in respect of previous years (2) (5)
Deferred tax adjustment in respect of different applicable rates (8) 2
Total taxation expense for the year 963 1,035
(c) Factors affecting future tax charge
On 1st April 2023 the rate of corporation tax in the UK increased from 19% to
25%. Therefore, deferred income tax has been provided at 25%.
5. Earnings per share
The calculation of basic earnings per share of 25.6p (2022 - 30.9p) is based
on the profit for the year attributable to equity holders of the parent of
£4,115,000 (2022 - £4,932,000) and on a weighted average number of ordinary
shares in issue of 16,045,581 (2022 - 15,949,691). At 30th April, 2023 there
were 1,270,000 (2022 - 1,055,000) dilutive shares on option with a weighted
average effect of 980,875 (2022 - 716,575) giving a diluted earnings per share
of 24.2p (2022 - 29.6p).
2023 2022
Number of ordinary shares in issue at start of the year 17,841,073 17,841,073
Cancellation of ordinary shares during the year - -
Number of ordinary shares in issue at the end of the year 17,841,073 17,841,073
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 (1,550,444) (1,646,334)
Weighted average number of shares to be used in basic EPS calculation 16,045,581 15,949,691
Weighted average number of the 1,270,000 (2022 - 1,055,000) dilutive shares 980,875 716,575
Weighted average diluted shares 17,026,456 16,666,266
Profit for the year attributable to equity holders of the parent in £ 4,115,000 4,932,000
Basic earnings per share 25.6p 30.9p
Diluted earnings per share 24.2p 29.6p
6. Dividends paid and proposed 2023 2022
£'000 £'000
Declared and paid during the year:
Final dividend for 2022: 7.5p (2021 - 6.5p) 1,196 1,037
Interim dividend for 2023: 2p (2022 - 1.75p) 324 279
1,520 1,316
Proposed for approval by shareholders at the AGM:
Final dividend for 2023: 13p (2022 - 7.5p) 2,106 1,196
7. Trade and other receivables
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Trade receivables (net of allowance for expected credit losses) 6,931 10,167 2,756 2,366
Amounts owed by subsidiary undertakings - - 11,356 13,024
Amounts owed by joint venture - 228 - -
Prepayments 1,027 1,352 228 218
Other receivables 1,071 1,001 4 4
Income tax receivable 2 6 - -
9,031 12,754 14,344 15,612
(a) Trade receivables
Trade receivables are denominated in the following currencies:
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Sterling 3,946 5,554 1,739 1,576
Euro 1,973 1,786 1,017 790
US dollar 736 2,406 - -
Other currencies 276 421 - -
6,931 10,167 2,756 2,366
Trade receivables are non-interest bearing, generally have 30 day terms, and
are shown net of provision for expected credit losses. The aged analysis of
trade receivables after provision for expected credit losses is as follows:
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Not past due 5,059 7,234 2,282 2,316
< 30 days 1,745 2,062 482 24
30-60 days 90 64 18 19
60-90 days 37 11 - 8
> 90 days - 796 (26) (1)
Total 6,931 10,167 2,756 2,366
In the Group, trade receivables with a nominal value of £36,000 (2022 -
£52,000) were impaired and fully provided as at 30th April, 2023. During the
year, expected credit losses of £42,000 (2022 - £20,000) were recovered and
expected credit losses of £26,000 (2022 - £29,000) were incurred.
In the Company, trade receivables with a nominal value of £16,000 (2022 -
£33,000) were impaired and fully provided as at 30th April, 2023. During the
year, expected credit losses of £30,000 (2022 - £7,000) were recovered and
expected credit losses of £13,000 (2022 - £29,000) were incurred.
(b) Amounts owed by joint venture
Amounts owed by joint venture are non-interest bearing and have 30 day terms.
The aged analysis of amounts owed by joint venture net of provision for
expected credit losses as follows:
Group
2023 2022
£'000 £'000
Not past due - 135
< 30 days - 47
30-60 days - 34
60-90 days - 12
Total - - 228
At 30th April, 2023 there was no provision for expected credit losses relating
to amounts owed by joint venture (2022 - nil).
(c) Intercompany receivables
All amounts due from Group companies are repayable on demand and are not
charged interest. The majority of intercompany balances are to group entities
with liquid assets and are capable of being repaid on demand. An impairment
charge of £1,470,000 relating to 'MSI-Sign Group BV' and 'MSI-Sign Group
GmbH' has been recognised on intercompany receivables in the company (2022 -
nil).
There are loans to 'MS INTERNATIONAL Estates Limited' and 'MS INTERNATIONAL
Estates LLC', which although repayable on demand, are supported by properties,
which will not be immediately realisable. The directors have assessed the
likelihood of default and the loss in the event of default as well as the
balance at the reporting date and conclude that there is no material
impairment of the receivable.
The amounts receivable at the reporting date can be categorised as:
Company
2023 2022
£'000 £'000
Amounts due from companies backed by liquid assets 3,607 3,880
Amounts due from 'MS INTERNATIONAL Estates Limited' 5,461 5,925
Amounts due from 'MS INTERNATIONAL Estates LLC' 2,288 3,219
11,356 13,024
8. Cash and cash equivalents
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Cash at bank and in hand 12,336 18,092 8,016 3,258
Restricted cash held in Escrow - maturing in more than 90 days 2,917 1,158 - -
Total cash 15,253 19,250 8,016 3,258
The balance held in Escrow provides security to Lloyds Bank plc in respect of
specific guarantees, indemnities, and performance bonds given by the Group in
the ordinary course of business.
9. Net funds
(a) Analysis of net funds
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Cash and cash equivalents 12,336 18,092 8,016 3,258
Restricted cash held in Escrow 2,917 1,158 - -
Lease liabilities (1,208) (1,511) (4,807) (5,214)
14,045 17,739 3,209 (1,956)
(b) Group movement in net funds
Cash and cash equivalent Restricted cash held in Escrow Lease liabilities Total
At 30th April, 2021 17,390 6,165 (545) 23,010
Cash flows 657 (5,007) 405 (3,945)
Foreign exchange adjustments 45 - 7 52
New leases - - (1,327) (1,327)
Other changes - - (51) (51)
At 30th April, 2022 18,092 1,158 (1,511) 17,739
Cash flows (5,825) 1,759 415 (3,651)
Foreign exchange adjustments 69 - (61) 8
Other changes - - (51) (51)
At 30th April, 2023 12,336 2,917 (1,208) 14,045
(c) Company movement in net funds
Cash and cash equivalents Lease liabilities Total
At 30th April, 2021 943 (5,609) (4,666)
Cash flows 2,315 560 2,875
Other changes - (165) (165)
At 30th April, 2022 3,258 (5,214) (1,956)
Cash flows 4,758 560 5,318
Other changes - (153) (153)
At 30th April, 2023 8,016 (4,807) 3,209
9. Reserves
Capital redemption reserve
The balance classified as capital redemption reserve represents the nominal
value of issued share capital of the Company, repurchased.
Other reserves
Following the transfer of assets held at valuation by the Company to a
subsidiary company, a reserve has been created which is non-distributable.
This is equal to the revaluation reserve previously arising.
Additionally, it includes the non-distributable retained reserve for the
revaluation reserve previously showing in the Company for properties now
transferred to other members of the Group.
Revaluation reserve
The asset revaluation reserve is used to record increases in the fair value of
land and buildings and decreases to the extent that such decrease relates to
an increase on the same assets previously recognised in equity.
Special reserve
The special reserve is a distributable reserve created following the
cancellation of a share premium account by way of court order in March 1993.
Currency translation reserve
The foreign currency translation reserve is used to record exchange
differences arising from the translation of the financial statements of
foreign subsidiaries. It is also used to record the effect of hedging net
investments in foreign operations.
Treasury shares
The treasury share reserve is detailed as follows:
2022 2021
£'000 £'000
Employee Share Ownership Trust (a) 100 100
Shares in treasury (b) 2,689 2,959
2,789 3,059
(a) The Employee Share Ownership Trust ("ESOT") provides for the issue of
options over ordinary shares in the Company to Group employees, including
executive directors, at the discretion of the Remuneration Committee. The
trustee of the ESOT is Ocorian Ltd, an independent company registered in
Jersey.
The trust has purchased an aggregate 245,048 (2022 - 245,048) ordinary shares,
which represents 1.49% (2022 - 1.51%) of the issued share capital of the
Company excluding treasury shares at an aggregate cost of £100,006. The
market value of the shares at 30th April, 2023 was £1,250,000 (2022 -
£728,000). The Company has not made any payments (2022 - nil) into the ESOT
bank accounts during the year. Details of the outstanding share options for
directors are included in the Directors' remuneration report.
The assets, liabilities, income, and costs of the ESOT have been incorporated
into the Company's financial statements. Total ESOT costs charged to the
income statement in the year amounts to £8,000 (2022 - £1,000). During the
year, 20,000 options have been granted over shares (2022 - nil) and 250,000
options on shares were exercised (2022 - nil).
(b) The Company made the following purchases and cancellations of its own 10p
ordinary shares to be held in Treasury:
Number £'000
Purchase of 1,000,000 shares from the Group's pension scheme on 11th December, 1,000,000 1,722
2013
Purchase of 646,334 shares on 30th January, 2014 646,334 1,237
Purchase of 555,000 shares on 15th January, 2021 555,000 636
Consideration paid for purchase of own shares 2,201,334 3,595
Cancellation of 555,000 shares at weighted average rate (555,000) (906)
Exercise of LTIP share options (250,000) (408)
Net value of treasury shares 1,396,334 2,281
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