REG - MS International PLC - Half-year Report <Origin Href="QuoteRef">MSTL.L</Origin> - Part 2
24/11/2016 07:11
- Part 2: For the preceding part double click ID:nRSX9844Pa
The Company's ordinary shares are traded on the AIM market of the London Stock
Exchange. The principal activities of the Company and its subsidiaries ("the Group")
are described in Note 4.
The interim condensed consolidated financial statement of the Group for the twenty
six weeks ended 29th October, 2016 were authorised for issue in accordance with a
resolution of the directors on 23rd November, 2016.
2 Basis of preparation and accounting policies
The annual consolidated financial statements of the Group are prepared in accordance
with IFRS as adopted by the European Union. The consolidated condensed set of
financial statements included in this half-yearly financial report which has not been
audited has been prepared in accordance with International Accounting Standard 34,
"Interim Financial Reporting," as adopted by the European Union. The accounting
policies are consistent with those applied in the Group Annual financial statements
for the 52 weeks ended 30th April, 2016.
The interim financial information has been reviewed by the Group's auditors, Ernst &
Young LLP, their report is included on page 4. These interim financial statements do
not constitute statutory financial statements within the meaning of section 435 of
the Companies Act 2006. The interim condensed consolidated financial statements do
not include all the information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's annual financial
statements as at 30th April, 2016.
There are no accounting standards or interpretations that have become effective in
the current reporting period which have had a material effect on the net assets,
results and disclosures of the Group. The Group has not early adopted any other
standard, interpretation or amendment that has been issued but is not yet effective.
As at the reporting date, the assets and liabilities of the overseas subsidiaries are
translated into the presentation currency of the Group at the rate of exchange ruling
at the balance sheet date and their income statements are translated at the weighted
average exchange rates for the year. The exchange differences arising on the
retranslation are taken directly to a separate component of equity.
The figures for the year ended 30th April, 2016 do not constitute the Group's
statutory accounts for the period but have been extracted from the statutory
accounts. The auditor's report on those accounts, which have been filed with the
Registrar of Companies, was unqualified and did not contain any statement under
section 498(2) or (3) of the Companies Act 2006.
3 Principal risks and uncertainties
The principal risk and uncertainties facing the Group relate to levels of customer
demand for the Group's products and services. Customer demand is driven mainly by
general economic conditions but also by pricing, product quality and delivery
performance of MS INTERNATIONAL plc and in comparison with our competitors. Sterling
exchange rates against other currencies can influence pricing.
The Group has considerable financial resources together with long term contracts with
a number of customers. As a consequence, the Directors believe that the Group is
well placed to manage its business risk successfully despite the current uncertain
economic outlook.
After making enquiries the Directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going concern basis in
preparing the annual report and accounts.
4 Segment information
(a) Primary reporting
format - divisional
segments
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. The
Petrol Station Branding
division is engaged in
the design and
installation of the
complete appearance of
petrol stations. The
Directors are of the
opinion that
seasonality does not
significantly affect
these results.
The following table
presents revenue and
profit information
about the Group's
divisions for the
periods ended 29th
October, 2016 and 31st
October, 2015.
Defence Forgings Petrol Station Petrol Station Total
Superstructures Branding
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
unaudited unaudited
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Revenue
External 10,180 9,228 5,936 6,062 6,956 5,679 1,923 3,012 24,995 23,981
Total revenue 10,180 9,228 5,936 6,062 6,956 5,679 1,923 3,012 24,995 23,981
Segment result 784 (104) (347) (283) 752 355 (466) 518 723 486
Net finance expense (113) (91)
Profit before taxation 610 395
Taxation (70) (6)
Profit for the period 540 389
Capital expenditure 159 145 2,221 807 159 173 145 61
Depreciation 109 116 159 177 156 126 50 20
The following table
presents segment assets
and liabilities of the
Group's divisions for
the periods ended 29th
October, 2016 and 31st
October, 2015.
Segmental assets 28,629 26,500 6,308 5,305 7,276 5,020 1,718 1,929 43,931 38,754
Unallocated assets 15,979 14,362
Total assets 59,910 53,116
Segmental liabilities 13,966 13,592 2,444 1,205 3,320 2,335 901 969 20,631 18,101
Unallocated liabilities 11,118 6,959
Total liabilities 31,749 25,060
Unallocated assets
includes certain fixed
assets, intangible
assets, current assets
and deferred tax
assets. Unallocated
liabilities includes
the defined benefit
pension scheme
liability and certain
current liabilities.
Following the
establishment of the
Petrol Station Branding
division, management
have revised the
allocation of certain
incomes and costs which
have led to a
restatement of the
prior period segment
result for the
divisions. The total
segment result for the
Group for the prior
period remains
unchanged.
5 Income tax
The major components of income tax expense in the consolidated income statement are:
26 weeks ended 29th Oct., 2016 26 weeks ended 31st Oct., 2015
unaudited unaudited
£'000 £'000
Current income tax charge 123 128
Current tax 123 128
Relating to origination and reversal of temporary differences (39) (98)
Impact of reduction in deferred tax rate ( 18% to 17%) (14) (24)
Deferred tax (53) (122)
Total income expense reported in the consolidated income statement 70 6
Deferred taxation has been provided at the applicable tax rate depending on when the underlying deferred tax is expected to unwind.
The Finance Bill 2016 provides that the rate of UK corporation tax will be reduced from 18% to 17% on 1st April, 2020.
The Bill was substantively enacted at the balance sheet date.
6 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 £540,000 (2015 - £389,000);
(b) 16,504,691 (2015 - 16,504,691) Ordinary shares, being the number of Ordinary shares in issue.
This represents 18,396,073 (2015 - 18,396,073) being the number of Ordinary shares in issue less 245,048 (2015 - 245,048) being the number of shares held within the ESOT and less 1,646,334 (2015 - 1,646,334) being the number of shares purchased by the Company.
7 Dividends paid and proposed
26 weeks ended 29th Oct., 2016 26 weeks ended 31st Oct., 2015
unaudited unaudited
£'000 £'000
Declared and paid during the six month period
Dividend on ordinary shares
Final dividend for 2016 - 6.50p (2015 - 6.50p) 1,073 1,073
Proposed for approval
Interim dividend for 2016 - 1.50p (2015 - 1.50p) 248 248
Dividend warrants will be posted on 22nd December, 2016 to those members registered on the books of the Company on 2nd December, 2016.
8 Property, plant and equipment
Acquisitions and disposals:
During the 26 weeks ended 29th October, 2016, the Group acquired assets with a cost of £2,684,000 (2015 - £1,210,000).
Retranslation of overseas subsidiaries property, plant and equipment cost and depreciation into pounds sterling at the balance sheet date resulted in exchange difference increases of £1,021,000 to costs and £313,000 to depreciation. These exchange differences were taken directly to currency translation reserve in Equity.
Assets with a net book value of £19,000 (2015 - £1,000) were disposed of by the Group for proceeds of £38,000 (2015 - £43,000) during the 26 weeks ended 29th October, 2016, resulting in a gain on disposal of £19,000 (2015 - £42,000).
9 Cash and cash equivalents
For the purpose of the interim consolidated cash flow statement, cash and cash equivalents are comprised of the following:
29th Oct., 2016 30th April, 2016
unaudited audited
£'000 £'000
Cash at bank and in hand 4,445 7,420
Short term deposits 5,318 5,338
9,763 12,758
10 Pension liability
The Company operates an employee pension scheme called the MS INTERNATIONAL plc Retirement and Death Benefits Scheme ("the Scheme"). IAS19 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.
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