REG - MS International PLC - Final Results <Origin Href="QuoteRef">MSTL.L</Origin> - Part 1
RNS Number : 4901QMS International PLC18 June 2015MS INTERNATIONAL plc
Results for the 52 weeks ended 2nd May, 2015
Chairman's Statement
Results and review
I am pleased to announce that there has been a much improved performance by the Group during the second half of the year. Accordingly, for the 12 months to 2nd May 2015, profit before tax was 1.54m (2014 - 2.93m) on revenue of 45.50m (2014 - 47.13m). Earnings per share were 8.20p (2014 - 14.6p).
Net cash and short term deposits increased once again to a record high of 17.15m (2014 - 14.29m) at year-end.
The Group's current order book remains very strong. While marginally lower at year-end than that the 46m reported for 2014, it has since increased following the award of a follow-on two year contract by the UK MoD for the maintenance and support of MSI-DS 30mm naval gun systems and associated ancillary equipment in the RN fleet. Although the exact value of that contract is confidential, I can reveal that it is in excess of 12m.
'Defence' the global equipment markets of which remain constrained, despite the incredibly high number of conflicts and threats to international stability that are erupting, or intensifying, around the world. Restricted financial budgets, political instability and tensions, are critical factors that continue to disrupt military procurement plans and planning. As a consequence 'Defence' revenue was 15% lower than the previous year. This, combined with the essential investment committed to a number of major 'in-house' research and development programmes for new products - aimed at broadening our product range and extending our market opportunities - resulted in a full year loss, albeit considerably reduced from that reported at the interim stage.
'Forgings' achieved advances in both revenue and profit over the previous year. The UK and USA operations performed extremely well and ahead of our expectations, reaping the benefit of operational improvements, supported by plant and equipment upgrades. The South America operation, although highly efficient, had to contend with the negative impact of a weakening market and currency, owing to the region's current fiscal difficulties.
'Petrol Station Superstructures' overall revenue was similar to that of the previous year, with an increase from the UK operation as a result of strong growth in the number of forecourt convenience stores completed in the period. Conversely there was a distinct reduction in activity of the Poland based business that traditionally services many of the East European countries. Political uncertainty in the region discouraged many customers and potential developers to commit to their plans for new petrol station construction projects and station upgrades.
Outlook
'Defence', we are predicting an improvement in the level of activity for our business in the second half of the current year, even though markets remain constrained. A very positive result from our substantial new product development programme is the winning of the first order for our new MSI-DS 20mm naval gun system. The requirement for three systems - received from a European shipbuilder - will be delivered in the current year and installed on new ships for an overseas navy. This is an important breakthrough for the Group, and is part of our commitment to broaden the range of our product offering directed at the growing international market for small naval vessels. We look forward to completing the development of other new products that will become available to market in the course of the next twelve months.
'Forgings', should maintain a relatively stable position. The division's short lead-time order books are highly sensitive to variations in demand and the prevailing economic conditions in its individual global markets. Currently, we are planning to expand our capacity and capability in the United States to accommodate opportunities in that market. Throughout the division, we remain firmly committed to ensuring that we maintain and develop highly efficient production equipment and systems.
'Petrol Station Superstructures' markets continue to transform with the major oil companies leading the way in withdrawing from front line retailing by disposing of parts of their estates to independent dealers, dealer groups and operators. We perceive this to be an opportunity to expand our position in the market through providing an enhanced service to customers not only in terms of new build but also in relation to station maintenance and upgrades.
Post year-end event; Acquisition
I am pleased, also, to announce that the Company has acquired the entire issued share capital of Petrol Sign B.V., a company based in the Netherlands. The consideration for the acquisition is 3.4 million on a cash and debt free basis and includes "normalised" working capital. The consideration has been satisfied from the Company's existing cash resources.
Petrol Sign designs, restyles, produces and installs the complete branding and signage appearance of petrol station superstructures and forecourts throughout many parts of Western Europe. The acquisition will enhance our ability to offer and include branding and signage services as an option to petrol station markets and customers and will become an integral part of the Groups 'Petrol Station Superstructures' division. The vendor and managing director of Petrol Sign will continue to be employed by the company as its managing director.
Further details relating to this acquisition are set out in a separate announcement.
All matters considered the Board recommends the payment of a maintained final dividend of 6.5p per share (2014 - 6.5p), making the total for the year of 8p (2014 - 8p). The final dividend is expected to be paid on 24th July 2015 to those shareholders on the register at the close of business on 26th June 2015.
Michael Bell
17th June 2015
Consolidated income statement
For the 52 weeks ended 2nd May, 2015
2015
2014
Total
Total
000
000
Revenue
45,503
47,130
Cost of sales
(34,763)
(34,266)
Gross profit
10,740
12,864
Distribution costs
(2,357)
(2,707)
Administrative expenses
(6,643)
(6,954)
(9,000)
(9,661)
Group operating profit
1,740
3,203
Finance revenue
70
48
Finance costs
(32)
(69)
Other finance costs - pensions
(237)
(254)
(199)
(275)
Profit before taxation
1,541
2,928
Taxation
(188)
(354)
Profit for the period attributable to equity holders of the parent
1,353
2,574
Earnings per share: basic and diluted
8.2p
14.6p
Consolidated and company statement of comprehensive income
For the 52 weeks ended 2nd May, 2015
Group
Company
2015
2014
2015
2014
Total
Total
Total
Total
000
000
000
000
Profit for the period attributable to equity holders of the parent
1,353
2,574
955
1,605
Exchange differences on retranslation of foreign operations
(106)
(244)
-
-
Net other comprehensive loss to be reclassified to profit or loss in subsequent periods
(106)
(244)
-
-
Remeasurement (losses)/gains on defined benefit pension scheme
(964)
952
(964)
952
Deferred taxation on remeasurement losses/gains on defined benefit scheme
193
(396)
193
(396)
Revaluation surplus on land and buildings
-
1,939
-
2,056
Deferred taxation on revaluation surplus on land and buildings
-
(446)
-
(473)
Net other comprehensive (loss)/ profit not being reclassified to profit or loss in subsequent periods
(771)
2,049
(771)
2,139
Total comprehensive income for the period attributable to equity holders of the parent
476
4,379
184
3,744
Consolidated and company statement of changes in equity
Issued capital
Capital redemption reserve
Other reserves
Revaluation reserve
Special reserve
Foreign exchange reserve
Treasury shares
Retained earnings
Total
'000
'000
'000
'000
'000
'000
'000
'000
'000
(a) Group
At 27th April, 2013
1,840
901
2,815
2,532
1,629
61
(100)
19,376
29,054
Profit for the period
-
-
-
-
-
-
-
2,574
2,574
Other comprehensive income/(loss)
-
-
-
1,493
-
(244)
-
556
1,805
Total comprehensive income/(loss)
-
-
-
1,493
-
(244)
-
3,130
4,379
Dividends paid
-
-
-
-
-
-
-
(1,452)
(1,452)
Purchase of own shares
-
-
-
-
-
-
(2,959)
-
(2,959)
Change in taxation rates
-
-
-
121
-
-
-
-
121
At 3rd May, 2014
1,840
901
2,815
4,146
1,629
(183)
(3,059)
21,054
29,143
Profit for the period
-
-
-
-
-
-
-
1,353
1,353
Other comprehensive loss
-
-
-
-
-
(106)
-
(771)
(877)
Total comprehensive (loss)/income
-
-
-
-
-
(106)
-
582
476
Dividends paid
-
-
-
-
-
-
-
(1,320)
(1,320)
At 2nd May, 2015
1,840
901
2,815
4,146
1,629
(289)
(3,059)
20,316
28,299
(b) Company
At 27th April, 2013
1,840
901
1,565
2,532
1,629
-
(100)
17,670
26,037
Profit for the period
-
-
-
-
-
-
1,605
1,605
Other comprehensive income
-
-
-
1,583
-
-
-
556
2,139
Total comprehensive income
-
-
-
1,583
-
-
-
2,161
3,744
Dividends paid
-
-
-
-
-
-
-
(1,452)
(1,452)
Dividend received from subsidiary
-
-
-
-
-
-
-
311
311
Purchase of own shares
-
-
-
-
-
-
(2,959)
-
(2,959)
Change in taxation rates
-
-
-
125
-
-
-
-
125
At 3rd May, 2014
1,840
901
1,565
4,240
1,629
-
(3,059)
18,690
25,806
Profit for the period
-
-
-
-
-
-
-
955
955
Other comprehensive loss
-
-
-
-
-
-
-
(771)
(771)
Total comprehensive income
-
-
-
-
-
-
-
184
184
Dividends paid
-
-
-
-
-
-
-
(1,320)
(1,320)
At 2nd May, 2015
1,840
901
1,565
4,240
1,629
-
(3,059)
17,554
24,670
Consolidated statements of financial position
At 2nd May, 2015
Group
Company
2015
2014
2015
2014
'000
'000
'000
'000
ASSETS
Non-current assets
Property, plant and equipment
14,563
15,127
12,608
12,955
Intangible assets
3,818
4,135
13
21
Investments in subsidiaries
-
-
11,741
11,829
Deferred income tax asset
93
-
392
167
18,474
19,262
24,754
24,972
Current assets
Inventories
8,464
8,162
7,393
7,250
Trade and other receivables
9,454
8,260
9,252
8,276
Income tax receivable
40
51
-
-
Prepayments
590
447
495
363
Cash and short-term deposits
17,148
14,286
16,199
13,241
35,696
31,206
33,339
29,130
TOTAL ASSETS
54,170
50,468
58,093
54,102
EQUITY AND LIABILITIES
Equity
Equity share capital
1,840
1,840
1,840
1,840
Capital redemption reserve
901
901
901
901
Other reserve
2,815
2,815
1,565
1,565
Revaluation reserve
4,146
4,146
4,240
4,240
Special reserve
1,629
1,629
1,629
1,629
Currency translation reserve
(289)
(183)
-
-
Treasury shares
(3,059)
(3,059)
(3,059)
(3,059)
Retained earnings
20,316
21,054
17,554
18,690
28,299
29,143
24,670
25,806
Non-current liabilities
Defined benefit pension liability
6,877
5,889
6,877
5,889
Deferred income tax liability
-
211
-
-
6,877
6,100
6,877
5,889
Current liabilities
Trade and other payables
18,994
15,225
26,454
22,294
Income tax payable
-
-
92
113
18,994
15,225
26,546
22,407
TOTAL EQUITY AND LIABILITIES
54,170
50,468
58,093
54,102
Cash flow statements
For the 52 weeks ended 2nd May, 2015
Group
Company
2015
2014
2015
2014
000
000
000
000
Profit before taxation
1,541
2,928
943
1,709
Adjustments to reconcile profit before taxation to net cash in flow from operating activities
Depreciation charge
1,117
1,227
931
1,028
Amortisation charge
317
316
8
9
Impairment in investment in subsidiary undertaking
-
-
88
40
Administration expenses-pension fund
316
350
316
350
Profit on sale of fixed assets
(78)
(124)
(75)
(130)
Finance costs
199
275
178
236
Foreign exchange gains/(losses)
65
(136)
-
-
Increase in inventories
(302)
(1,626)
(143)
(1,594)
(Increase)/decrease in receivables
(1,194)
4,805
(976)
5,562
(Increase)/decrease in prepayments
(143)
73
(132)
56
Decrease in payables
(389)
(2,550)
(38)
(2,877)
Increase in progress payments
4,158
1,632
4,198
1,869
Pension fund payments
(529)
(529)
(529)
(529)
Cash generated from operating activities
5,078
6,641
4,769
5,729
Interest received/(paid)
38
(21)
59
18
Taxation paid
(288)
(708)
(41)
(257)
Net cash inflow from operating activities
4,828
5,912
4,787
5,490
Investing activities
Purchase of property, plant and equipment
(833)
(940)
(693)
(842)
Sale of property, plant and equipment
187
278
184
178
Net cash outflow from investing activities
(646)
(662)
(509)
(664)
Financing activities
Dividends paid
(1,320)
(1,452)
(1,320)
(1,452)
Dividend received from subsidiary
-
-
-
311
Purchase of own shares
-
(2,959)
-
(2,959)
Net cash outflow from financing activities
(1,320)
(4,411)
(1,320)
(4,100)
Increase in cash and cash equivalents
2,862
839
2,958
726
Opening cash and cash equivalents
14,286
13,447
13,241
12,515
Closing cash and cash equivalents
17,148
14,286
16,199
13,241
The financial information set out above does not constitute the Company's statutory accounts for the periods ended 2nd May, 2015 or 3rd May, 2014 but is derived from those accounts. Statutory accounts for 2014 have been delivered to the Registrar of Companies, and those for 2015 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 periods ended 2nd May, 2015 and 3rd May, 2014. 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 and construction of petrol station superstructures.
Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs and finance revenue) and income taxes are managed on a group basis and are not allocated to operating segments.
Defence
Forgings
Petrol Station
Total
Superstructures
2015
2014
2015
2014
2015
2014
2015
2014
000
000
000
000
000
000
000
000
Revenue
External
17,010
19,445
15,120
14,058
13,373
13,627
45,503
47,130
Total revenue
17,010
19,445
15,120
14,058
13,373
13,627
45,503
47,130
Segment result
(151)
926
1,036
591
855
1,686
1,740
3,203
Net finance costs
(199)
(275)
Profit before taxation
1,541
2,928
Taxation
(188)
(354)
Profit for the period
1,353
2,574
Segmental assets
28,460
24,619
6,299
6,658
5,209
6,341
39,968
37,618
Unallocated assets( see below)
14,202
12,850
Total assets
54,170
50,468
Segmental liabilities
14,407
10,234
1,609
2,763
2,045
3,778
18,061
16,775
Unallocated liabilities(see below)
7,810
4,550
Total liabilities
25,871
21,325
Capital expenditure
82
134
526
450
168
121
Depreciation
217
189
424
454
276
330
Unallocated assets includes certain fixed assets, intangible assets, current assets and deferred tax assets. Unallocated liabilities includes the defined pension benefit scheme liability and certain current liabilities.
Geographical analysis
The following table presents revenue and expenditure and certain assets and liabilities information by geographical segment for the periods ended 2nd May, 2015 and 3rd May, 2014. The Group's geographical segments are based on the location of the Group's assets. Revenue from external customers is based on the geographical location of its customers.
Europe
North America
Rest of the World
Total
2015
2014
2015
2014
2015
2014
2015
2014
000
000
000
000
000
000
000
000
Revenue
External
36,255
32,803
4,810
4,487
4,438
9,840
45,503
47,130
Non-current assets
18,174
19,026
192
61
108
175
18,474
19,262
Current assets
34,063
29,682
1,432
1,191
201
856
35,696
31,206
Liabilities
25,593
20,805
259
390
19
653
25,871
21,325
Capital expenditure
751
904
135
-
-
36
886
940
Information about major customers
2015
2014
Revenue from major customers arising from sales reported in the Defence segment:
000
000
Customer 1
10,715
Customer 1
10,796
(2)
Employee Information
2015
2014
Number
Number
The average number of employees, including executive directors, during the period was:
Production
210
199
Technical
65
62
Distribution
27
25
Administration
54
51
356
337
(a)
Staff costs
2015
2014
Their, including executive directors, employment costs were as follows:
000
000
Wages and salaries
11,967
11,162
Social Security costs
1,313
1,302
Other pension costs
506
408
13,786
12,872
2015
2014
(b)
Directors' emoluments
000
000
Aggregate directors' emoluments
1,141
1,112
(3)
Taxation
The charge for taxation comprises:
2015
2014
000
000
Current tax
United Kingdom corporation tax
19
236
Tax over provided in previous years
(5)
(32)
Foreign corporation tax
286
381
Group current tax
300
585
Deferred tax
Origination and reversal of temporary differences
(50)
(72)
Adjustments in respect of prior years
(62)
(67)
Impact of reduction in deferred tax rate to 20%
-
(92)
Group deferred tax
(112)
(231)
Tax on profit
188
354
Tax relating to items charged or credited to other comprehensive income
Deferred tax
Deferred tax on remeasurement gains/losses on pension scheme current year
(193)
219
Impact of reduction in deferred tax rate to 20%
-
177
Deferred taxation on revaluation surplus on land and buildings
-
446
Income tax in the statement of comprehensive income
(193)
842
(b)
Factors affecting the tax charge for the year
The tax assessed for the period differs to the standard rate of corporation tax in the UK (21%). The differences are explained below:
2015
2014
000
000
Profit before tax
1,541
2,928
Profit multiplied by standard rate of corporation tax of 21% (2014 - 23%)
324
673
Expenses not deductible for tax purposes
(62)
(128)
Adjustment in respect of prior periods
(74)
(99)
Impact of reduction in deferred tax rate to 20%
-
(92)
Total tax charge for the period
188
354
(4)
Earnings per share
The calculation of basic earnings per share is based on:
(a) Profit for the period attributable to equity holders of the parent of 1,353,000 (2014 - 2,574,000).
(b) 16,504,691 (2014 - 17,603,561) Ordinary shares, being the weighted average number of Ordinary shares in issue.
This represents 18,396,073 (2014 - 18,396,073) being the weighted average number of Ordinary shares in issue less 1,891,382 (2013 - less 792,512) being the weighted average number of shares both held within the ESOT 245,048 (2014 -245,048) and purchased by the Company 1,646,334 (2014 - 547,464).
(5)
Dividends paid and proposed
2015
2014
000
000
Declared and paid during the year
On Ordinary shares
Final dividend for 2014 : 6.50p (2013 - 6.50p)
1,073
1,180
Interim dividend for 2015 : 1.50p (2014 - 1.50p)
247
272
1,320
1,452
Proposed for approval by shareholders at the AGM
Final dividend for 2015: 6.50p (2014 - 6.50p)
1,073
1,073
(6)
Trade and other receivables
Group
Company
2015
2014
2015
2014
000
000
000
000
Trade receivables
7,772
5,572
6,646
4,326
Retentions on contracts
1,681
2,644
1,681
2,644
Amounts owed by subsidiary undertakings
-
-
924
1,264
Other receivables
1
44
1
42
9,454
8,260
9,252
8,276
Gross amounts due from customers for contract work - included above
491
821
224
200
The aggregate amount of costs incurred and recognised profits to date on contracts is 13,280,000 (2014 - 13,881,000).
(a) Trade receivables are denominated in the following currencies
Group
Company
2015
2014
2015
2014
000
000
000
000
Sterling
6,545
4,105
6,545
4,105
Euro
236
510
101
221
US dollar
643
245
-
-
Other currencies
348
712
-
-
7,772
5,572
6,646
4,326
Trade receivables are non-interest bearing and are generally on 30 days terms and are shown net of provision for impairment. The aged analysis of trade receivables not impaired is as follows:
Group
Total
Not past due
< 30 days
30-60 days
60-90 days
> 90 days
000
000
000
000
000
000
2015
7,772
6,328
1,224
98
105
17
2014
5,572
3,686
1,058
159
49
620
As at 2nd May, 2015 trade receivables at a nominal value of 52,000 (2014 - 184,000) were impaired and fully provided. Bad debts of 151,000 (2014 - 165,000) were recovered and bad debts of 42,000 (2014 - 21,000) were incurred.
Company
2015
6,646
5,604
905
57
80
-
2014
4,326
2,666
922
96
28
614
As at 2nd May, 2015 trade receivables at a nominal value of 39,000 (2014 - 168,000) were impaired and fully provided. Bad debts of 143,000 (2014 - 165,000) were recovered and bad debts of 15,000 (2014 - 5,000) were incurred.
(b) Retentions on contracts are denominated in the following currencies
Group
Company
2015
2014
2015
2014
000
000
000
000
Sterling
1,681
2,644
1,681
2,644
Euro
-
-
-
-
US dollar
-
-
-
-
Other currencies
-
-
-
-
1,681
2,644
1,681
2,644
Retentions on contracts are non interest bearing and represent amounts contractually retained by customers on completion of contracts for specific time periods as follows:
Group
Total
Up to 6 months
6 - 12 months
12 - 18 months
18 - 24 months
000
000
000
000
000
2015
1,681
1,681
-
-
-
2014
2,644
2,644
-
-
-
Company
2015
1,681
1,681
-
-
-
2014
2,644
2,644
-
-
-
(7)
Cash
Group
Company
2015
2014
2015
2014
000
000
000
000
Cash at bank and in hand
9,884
4,786
8,935
3,741
Short term deposits
7,264
9,500
7,264
9,500
17,148
14,286
16,19
13,241
(8)
Reserves
Share Capital
The balance classified as share capital includes the nominal value on issue of the Company's equity share capital, comprising 10p Ordinary shares.
Capital redemption reserve
The balance classified as capital redemption reserve represents the nominal value of issued share capital of the Company, repurchased.
Other reserve
This is the revaluation reserve previously arising under UK GAAP which is now part of non-distributable retained reserves.
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. This also includes the impact of the change in related deferred tax due to the change in corporation tax (21% to 20%).
Special reserve
The balance classified as special reserve represents the share premium on the issue of the Company's equity share capital.
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
2015
2014
000
000
Employee Share Ownership Trust
100
100
Shares in treasury (see below)
2,959
2,959
3,059
3,059
During 1991 the Company established an Employee Share Ownership Trust ("ESOT"). The trustee of the ESOT is Appleby Trust (Jersey) Ltd, an independent company registered in Jersey. The 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 trust has purchased an aggregate 245,048 (2014 - 245,048) Ordinary shares, which represents 1.3% (2014 - 1.3%) of the issued share capital of the Company at an aggregate cost of 100,006. The market value of the shares at 2nd May, 2015 was 346,000 (2014 - 508,000). The Company has made payments of Nil (2014 - Nil) into the ESOT bank accounts during the period. No options over shares (2014 - Nil) have been granted during the period. 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 period amounts to 4,000 (2014 - 4,000). During the period no options on shares were exercised (2014 - Nil) and no shares were purchased (2014 - Nil).
The Company made the following purchases of its own 10p Ordinary shares to be held in Treasury:
000
11th December, 2013 1,000,000 shares from the Group's pension scheme.
1,722
30th January, 2014 646,334 shares
1,237
2,959
The preliminary announcement is prepared on the same basis as set out in the previous year's accounts.
The Directors confirm to the best of their knowledge that:(a) the financial statements, prepared in accordance with International Financial Reporting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the group and the undertakings included in the consolidation taken as a whole; and
(b) the Chairman's Statement includes a fair review of the development and performance of the business and the position of the group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
The preliminary announcement was approved by the Board on 17th June, 2015 and the above responsibility statement was signed on its behalf by Michael Bell, Executive Chairman and Michael O'Connell, Group Finance Director.
Copies of this announcement are available from the Company's registered office at MS INTERNATIONAL plc, Balby Carr Bank, Doncaster, DN4 8DH, England. The full Annual Report and Accounts will be posted to shareholders shortly and will be delivered to the Registrar of Companies after it has been laid before the Company in general meeting.
This information is provided by RNSThe company news service from the London Stock ExchangeENDFR SFIFMWFISEEM
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