- Part 2: For the preceding part double click ID:nRSd9076Xa
Closing cash and cash equivalents 14,535 9,763
Notes to the interim Group financial statements
1 Corporate information
MS INTERNATIONAL plc is a public limited company incorporated in England and Wales.
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 28th October, 2017 were authorised for issue in accordance with a
resolution of the directors on 29th November, 2017.
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 29th April, 2017.
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 29th April, 2017.
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 29th April, 2017 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.
The implementation of IFRS 9 is not expected to have any impact upon trade
receivables, trade payables and cash. The implementation of IFRS 15 on the company's
revenue recognition policies and processes are currently being reviewed.
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.
Additionally the prosperity of the Group is underpinned by the intellectual property
rights of the products which have been developed in house and funded by the Group at
considerable cost. Challenges to the ownership of our intellectual property rights
have increasingly become a risk. Such threats are monitored and vigorously
confronted and defended as they arise.
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 28th
October, 2017 and 29th
October, 2016.
Defence Forgings Petrol Station Petrol Station Total
Superstructures Branding
2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
unaudited unaudited
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Restated Restated Restated Restated
Revenue
External 9,133 10,180 7,029 5,936 6,500 6,956 11,967 1,923 34,629 24,995
Total revenue 9,133 10,180 7,029 5,936 6,500 6,956 11,967 1,923 34,629 24,995
Segment result 289 1,202 (512) (443) 109 578 1,888 (614) 1,774 723
Net finance expense (134) (113)
Profit before taxation 1,640 610
Taxation (356) (70)
Profit for the period 1,284 540
Capital expenditure - 159 479 2,221 59 159 129 145
Depreciation 79 109 240 159 161 156 80 50
The following table
presents segment assets
and liabilities of the
Group's divisions for
the periods ended 28th
October, 2017 and 29th
October, 2016.
Segmental assets 28,366 28,629 4,374 6,308 10,052 7,276 7,692 1,718 50,484 43,931
Unallocated assets 12,930 15,979
Total assets 63,414 59,910
Segmental liabilities 16,476 13,966 1,658 2,444 2,849 3,320 3,142 901 24,125 20,631
Unallocated liabilities 8,770 11,118
Total liabilities 32,895 31,749
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
which primarily relate
to operations of Group
functions.
Management have revised
the allocation of
certain Group costs
which has 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 28th Oct., 2017 26 weeks ended 29th Oct., 2016
unaudited unaudited
£'000 £'000
Current income tax charge 481 123
Current tax 481 123
Relating to origination and reversal of temporary (125) (39)
differences
Impact of reduction in deferred tax rate ( 18% to - (14)
17%)
Deferred tax (125) (53)
Total income expense reported in the consolidated 356 70
income statement
The main rate of corporation tax in the UK reduced
to 19% with effect from 1st April, 2017. The rate
will be reduced to 17% from 1st April, 2020. Both
of these lower rates have been substantively
enacted by the balance sheet date. As the majority
of the temporary difference will reverse when the
rate is 17%, this rate has been applied to the
deferred tax assets and liabilities arising at the
balance sheet date.
Deferred taxation has been provided at the rate
enacted at the balance sheet date of 17% except for
the deferred taxation relating to the amortised
intangibles arising on the acquisition of Petrol
Sign bv which has been provided at 25%.
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 £1,284,000 (2016 - £540,000);
(b) 16,504,691 (2016 - 16,504,691) Ordinary shares, being the number of Ordinary shares in issue.
This represents 18,396,073 (2016 - 18,396,073)
being the number of Ordinary shares in issue less
245,048 (2016 - 245,048) being the number of shares
held within the ESOT and less 1,646,334 (2016 -
1,646,334) being the number of shares purchased by
the Company.
7 Dividends paid and proposed
26 weeks ended 28th Oct., 2017 26 weeks ended 29th Oct., 2016
unaudited unaudited
£'000 £'000
Declared and paid during the six month period
Dividend on ordinary shares
Final dividend for 2017 - 6.50p (2016 - 6.50p) 1,073 1,073
Proposed for approval
Interim dividend for 2018 - 1.75p (2017 - 1.50p) 289 248
Dividend warrants will be posted on 28th December,
2017 to those members registered on the books of
the Company on 8th December, 2017.
8 Property, plant and equipment
Acquisitions and disposals:
During the 26 weeks ended 28th October, 2017, the
Group acquired assets with a cost of £829,000 (2016
- £2,684,000).
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 £88,000 to
costs and £45,000 to depreciation. These exchange
differences were taken directly to currency
translation reserve in Equity.
Assets with a net book value of £40,000 (2016 -
£19,000) were disposed of by the Group for proceeds
of £115,000 (2016 - £38,000) during the 26 weeks
ended 28th October, 2017, resulting in a gain on
disposal of £75,000 (2016 - £19,000).
9 Cash and cash equivalents
For the purpose of the interim consolidated cash flow statement, cash and cash equivalents are comprised of the following:
28th Oct, 2017 29th April, 2017
unaudited audited
£'000 £'000
Cash at bank and in hand 9,196 9,880
Short term deposits 5,339 5,330
14,535 15,210
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.
- The last formal valuation of the Scheme was
performed at 5th April, 2014 by a professionally
qualified actuary.
- From April 2016 the Company directly pays the
expenses of the Scheme. With effect from April
2015 until April 2023 the deficit reduction
payments paid into the Scheme by the Company have
been increased to £300,000 per annum, increasing
each year during the period at 3% per annum.
- From 1st June, 2007 the Company has operated a
defined contributions 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.
- During the period, the Scheme liability has reduced
by £1,336,000. A re-measurement gain of £1,268,000
(2016 - loss of £871,000) has been recognised
through other comprehensive income and comprises
of a £896,000 return on plan assets in excess of
net interest and a £372,000 actuarial gain due to
changes in financial assumptions. The actuarial
gain reflects the higher discount rate in the
period which decreased the value placed on the
Scheme's liabilities at the period end. The
interest cost on the net defined benefit liability
of £91,000 has been recognised through the income
statement. The liability is reduced by pension fund
- More to follow, for following part double click ID:nRSd9076Xc