REG - MS International PLC - Half-year Report

MS InternationalAnnouncement

16/12/2020 07:01

RNS Number : 7615I
  
MS International PLC
  
16 December 2020
  
 





 




 




 




 




 




 




 




 




 




 




 




 




MS INTERNATIONAL plc




 




 




 




 




Unaudited Interim Condensed




 




Group Financial Statements




 




31st October, 2020




 




 




 
 




 




 




 




EXECUTIVE DIRECTORS




Michael Bell




Michael O'Connell




Nicholas Bell




 




 




 




 




NON-EXECUTIVE DIRECTORS




Roger Lane-Smith




David Hansell




 




 




 




 




COMPANY SECRETARY




David Kirkup




 




 




 




 




REGISTERED OFFICE




Balby Carr Bank




Doncaster




DN4 8DH




England




 




 




 




 




PRINCIPAL OPERATING DIVISIONS




 




 'Defence'




 'Forgings'




 'Petrol Station Superstructures'




 'Corporate Branding'




 




 




 
 
 




 




Chairman's Statement




 




 
Results
We entered our 2020/21 financial year confronted by a subdued general economy, growing 'Brexit' uncertainty and a rapidly spreading global pandemic which, collectively, were making for 'a perfect storm' that would inevitably negatively impact all our business activities.
 
Yet, with a strong balance sheet, a good order book, a growing international market presence across our increasingly diverse range of businesses and recently developed new products and services coming through, we were, at least, in a good starting position to face the rapidly intensifying external pressures.
 
We tightened our belts and gratefully welcomed the financial assistance generously provided by not only HM Government but also that of other countries where we have business operations.
 
The unavoidable disruption to our businesses has, nevertheless, been substantial. Of considerable detriment were the restrictions on international travel that prevented both our own staff, and those of our customers, travelling to conduct the many practical elements of our business operations. It certainly proved to be a far more testing and stressful experience for everyone than my earlier prediction, that the Group was approaching 'interesting times'!
 
Accordingly, Group revenue for the six months to October 2020 amounted to £26.34m (2019 - £33.32m), a reduction which resulted in a loss before tax of £1.08m (2019 - Loss £ 0.49m).
 
Nevertheless, cash remained very strong at £14.01m, which compares to the £16.12m reported at last year end.
 
 
Prospects
The recent announcement that vaccines are becoming available to counter the current global pandemic, will surely assist our businesses to move forward positively once more.
In anticipation of such an outcome, we have already made a number of strategic moves that we believe will assist all our businesses to prosper, in particular at this juncture, our 'Defence' and 'Corporate Branding' operations.
 
'Defence'
Whilst the domestic market remains disappointingly in the doldrums, our marketing commitment to the global arena is proving to be very rewarding. We are winning defence equipment orders from new customers and overseas sales are now by far the mainstay for this business. Pleasingly, various product trials and demonstrations in the United States have been well received and we are vigorously pursuing these opportunities. Furthermore, the US State Department has officially announced its intention to procure MSI-DS medium calibre gun weapon systems for one of their current Foreign Military Sales Programmes.
 
'Forgings'
Our forgings businesses, with operations in the UK, USA and Brazil, would undoubtably benefit from an economic upturn and a more stable global commercial environment. Major international customers are generally operating their manufacturing systems on a 'just-in-time' basis and so the ordering of components from us is naturally finely tuned. Our operations are geared accordingly and will comfortably accommodate the requirements of any economic recovery.
 
'Petrol Station Superstructures'
This division holds a strong market position in constructing fuelling stations, across many parts of Europe operating from bases in both the UK and Poland. We are noting a recent upturn in the number of new station developments around the market and, significantly, a growing number of complex and sophisticated constructions are becoming the norm. In addition to fuel supply, whether it be petroleum, electricity or hydrogen, these new sites incorporate larger shops, sophisticated car valeting services, undercover electric vehicle charging and restaurant and coffee house/snack facilities.  This is all good news for our design and build superstructures business.
 
 
 
'Corporate Branding'
When we acquired The Netherlands-based business, Petrol Sign, its prime focus was the branding of petrol stations, predominantly in the Benelux countries. Through some small, but strategic acquisitions, the business now also designs, manufactures and services branding for a much broader customer base that includes specialist airport 'way-finding' systems, plus the substantial hospitality and automotive markets. The division is successfully expanding these service operations into the UK, Germany, Poland and Italy.
 
Despite the various factors which have combined to undermine first half performance, I am pleased to report that the value of the Group order book has risen over the period.  This highlights the strength of our businesses.
 
We, therefore, firmly perceive that the Company is in an outstandingly strong position to benefit considerably, not only from the moves that we are making in the business, but also from any economic recovery following global control of the pandemic.
 
All such matters considered, the Board has declared a maintained interim dividend per share of 1.75p (2019 - 1.75p) payable to shareholders on the 19th January 2021.
 
 
 
 
Michael Bell                                                                                                                                      15th December 2020
 
 
 
 




MS INTERNATIONAL plc 


 


 




Michael Bell


 


Tel: 01302 322133




 


 


 




Shore Capital (Nominated Adviser and Broker)


 


 




Patrick Castle


 


Tel: 020 7408 4090




Daniel Bush


 


 




 
 




Independent review report to MS INTERNATIONAL plc




 




Introduction




 




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 2020 which comprises the Interim condensed consolidated income statement, the Interim condensed consolidated statement of comprehensive income, the Interim condensed consolidated statement of financial position, the Interim consolidated statement of changes in equity, the Interim consolidated cash flow statement and the related notes. 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.




 




Directors' responsibilities




 




The half-yearly financial report is the responsibility of, and has been approved by, the directors. As disclosed in note 2, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.




 




Our responsibility




 




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.




 




Scope of review




 




We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making enquiries, 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.




 




The impact of uncertainties arising from the UK exiting the European Union and COVID-19 on our review




 




Our review of the condensed set of financial statements in the half-yearly financial report requires us to obtain an understanding of all relevant uncertainties, including those arising as a consequence of the effects of macro-economic uncertainties such as Covid-19 and Brexit. Such reviews assess and challenge the reasonableness of estimates made by the directors and the related disclosures and the appropriateness of the going concern basis of preparation of the financial statements. All of these depend on assessments of the future economic environment and the company's future prospects and performance.




 




COVID-19 and Brexit are amongst the most significant economic events currently faced by the UK, and at the date of this report their effects are subject to unprecedented levels of uncertainty, with the full range of possible outcomes and their impacts unknown. We applied a standardised firm-wide approach in response to these uncertainties when assessing the company's future prospects and performance. However, no review of interim financial information should be expected to predict the unknowable factors or all possible future implications for a company associated with these particular events.




 




Conclusion




 




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 2020 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.




 




Use of our report




 




This report is made solely to the company, as a body, in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. 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




15 December 2020




Interim condensed consolidated income statement


 


 


 


 




 


 


Half-year to 31st October, 2020


 


Half-year to 31st October, 2019




 


 


unaudited


 


unaudited




 


Notes


£'000


 


£'000




 


 


 


 


 




Products


 


19,727 


 


26,067 




Contracts


 


6,615 


 


7,250 




Revenue


5


26,342 


 


33,317 




 


 


 


 


 




Cost of sales


 


(19,831)


 


(24,910)




Gross profit


 


6,511 


 


8,407 




 


 


 


 


 




Distribution costs


 


(1,297)


 


(1,821)




Administrative expenses


 


(6,204)


 


(6,988)




Operating loss


5


(990)


 


(402)




 


 


 


 


 




Finance costs


 


(45)


 


(2)




Other finance costs - pension


 


(70)


 


(82)




Share of net profit of joint venture


 


25 


 


-   




Loss before taxation


 


(1,080)


 


(486)




 


 


 


 


 




Tax (expense)/income


6


(2)


 


66 




Loss for the period attributable to equity holders of the parent


 


(1,082)


 


(420)




Loss per share: basic and diluted


7


(6.6p)


 


(2.5p)




 


 


 


 


 




 


 


 


 


 




 


 


 


 


 




 


 


 


 


 




Interim condensed consolidated statement of comprehensive income 


 


 




 


 


Half-year to 31st October, 2020


 


Half-year to 31st October, 2019




 


 


unaudited


 


unaudited




 


 


£'000


 


£'000




 


 


 


 


 




Loss for the period attributable to equity holders of the parent


 


(1,082)


 


(420)




Exchange differences on retranslation of foreign operations


 


219 


 


44 




Net other comprehensive profit to be reclassified to profit or loss in subsequent periods


 


219 


 


44 




Remeasurement losses on defined benefit pension scheme


 


(642)


 


(849)




Deferred taxation on remeasurement of defined benefit pension scheme


 


122 


 


144 




Net other comprehensive loss not being reclassified to profit or loss in subsequent periods


 


(520)


 


(705)




Total comprehensive loss for the period attributable to equity holders of the parent


 


(1,383)


 


(1,081)




 




 


 


 


 


 




Interim condensed consolidated statement of financial position


 


 


 




 


 


 


 


 


 


 


 




 


Notes


31st October, 2020


 


31st October, 2019


 


30th April, 2020


 




 


 


unaudited


 


unaudited


 


audited


 




ASSETS


 


£'000


 


£'000


 


£'000


 




Non-current assets


 


 


 


 


 


 


 




Intangible assets


 


4,070 


 


4,303 


 


4,140 


 




Property, plant and equipment


9


19,484 


 


20,352 


 


20,111 


 




Right-of-use assets


10


682 


 


1,185 


 


1,214 


 




Investment in joint venture


 


34 


 


-   


 


-   


 




Deferred income tax asset


 


2,015 


 


1,264 


 


1,875 


 




 


 


26,285 


 


27,104 


 


27,340 


 




 


 


 


 


 


 


 


 




Current assets


 


 


 


 


 


 


 




Inventories


 


17,624 


 


14,689 


 


15,857 


 




Trade and other receivables


 


6,957 


 


9,335 


 


4,589 


 




Income tax receivable


 


555 


 


3 


 


719 


 




Prepayments


 


2,397 


 


1,708 


 


1,775 


 




Cash and cash equivalents


11


14,011 


 


19,370 


 


16,125 


 




 


 


41,544 


 


45,105 


 


39,065 


 




TOTAL ASSETS


 


67,829 


 


72,209 


 


66,405 


 




 


 


 


 


 


 


 


 




EQUITY AND LIABILITIES


 


 


 


 


 


 


 




Equity


 


 


 


 


 


 


 




Share capital


 


1,840 


 


1,840 


 


1,840 


 




Capital redemption reserve


 


901 


 


901 


 


901 


 




Other reserve


 


2,815 


 


2,815 


 


2,815 


 




Revaluation reserve


 


6,055 


 


6,055 


 


6,055 


 




Special reserve


 


1,629 


 


1,629 


 


1,629 


 




Currency translation reserve


 


443 


 


323 


 


224 


 




Treasury shares


 


(3,059)


 


(3,059)


 


(3,059)


 




Retained earnings


 


17,832 


 


23,140 


 


19,723 


 




TOTAL EQUITY SHAREHOLDERS' FUNDS


 


28,456 


 


33,644 


 


30,128 


 




 


 


 


 


 


 


 


 




Non-current liabilities


 


 


 


 


 


 


 




Defined benefit pension liability


12


9,075 


 


7,434 


 


8,563 


 




Deferred income tax liability


 


1,600 


 


1,386 


 


1,641 


 




Lease liabilities


 


465 


 


942 


 


893 


 




 


 


11,140 


 


9,762 


 


11,097 


 




 


 


 


 


 


 


 


 




Current liabilities


 


 


 


 


 


 


 




Trade and other payables


 


27,983 


 


27,747 


 


24,679 


 




Income tax payable


 


18 


 


806 


 


165 


 




Lease liabilities


 


232 


 


250 


 


336 


 




 


 


28,233 


 


28,803 


 


25,180 


 




TOTAL EQUITY AND LIABILITIES


 


67,829 


 


72,209 


 


66,405 


 




 


 


 


 


 


 


 


 




The interim condensed consolidated financial statements of the Group for the six months ended 31st October, 2020 were authorised for issue in accordance with a resolution of the directors on 15th December, 2020 and signed on their behalf. 


 




Michael O'Connell 


 


 


 


 


 


 


 




Finance Director


 


 


 


 


 


 


 



 
 
 
 
 
 
 
 
 
 
 
 



 
 
 




Interim consolidated statement of changes in equity


 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 


 


Share capital


 


Capital redemption reserve


 


Other reserve


 


Revaluation reserve


 


Special reserve


 


Currency translation reserve


 


Treasury shares


 


Retained earnings


 


Total unaudited




 


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




At 30th April, 2020


 


1,840 


 


901 


 


2,815 


 


6,055 


 


1,629 


 


224 


 


(3,059)


 


19,723 


 


30,128 




Loss for the period


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


(1,082)


 


(1,082)




Other comprehensive income/(loss)


 


-  


 


-  


 


-  


 


-  


 


-  


 


219 


 


-  


 


(520)


 


(301)




Dividend paid (note 8)


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


(289)


 


(289)




At 31st October, 2020


 


1,840 


 


901 


 


2,815 


 


6,055 


 


1,629 


 


443 


 


(3,059)


 


17,832 


 


28,456 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 


 


Share capital


 


Capital redemption reserve


 


Other reserve


 


Revaluation reserve


 


Special reserve


 


Currency translation reserve


 


Treasury shares


 


Retained earnings


 


Total unaudited




 


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




At 27th April, 2019


 


1,840 


 


901 


 


2,815 


 


6,055 


 


1,629 


 


279 


 


(3,059)


 


25,338 


 


35,798 




Loss for the period


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


(420)


 


(420)




Other comprehensive income/(loss)


 


-  


 


-  


 


-  


 


-  


 


-  


 


44 


 


-  


 


(705)


 


(661)




Dividend paid


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


(1,073)


 


(1,073)




At 31st October, 2019


 


1,840 


 


901 


 


2,815 


 


6,055 


 


1,629 


 


323 


 


(3,059)


 


23,140 


 


33,644 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 


 


Share capital


 


Capital redemption reserve


 


Other reserve


 


Revaluation reserve


 


Special reserve


 


Currency translation reserve


 


Treasury shares


 


Retained earnings


 


Total audited




 


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




At 27th April, 2019


 


1,840 


 


901 


 


2,815 


 


6,055 


 


1,629 


 


279 


 


(3,059)


 


25,338 


 


35,798 




Loss for the period


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


(2,491)


 


(2,491)




Other comprehensive loss


 


-  


 


-  


 


-  


 


-  


 


-  


 


(55)


 


-  


 


(1,762)


 


(1,817)




Dividends paid


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


-  


 


(1,362)


 


(1,362)




At 30th April, 2020


 


1,840 


 


901 


 


2,815 


 


6,055 


 


1,629 


 


224 


 


(3,059)


 


19,723 


 


30,128 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 
 
 




Interim consolidated cash flow statement


 


 


 


 




 


 


Half-year to 31st October, 2020


 


Half-year to 31st October, 2019




 


 


unaudited


 


unaudited




 


 


£'000


 


£'000




 


 


 


 


 




Loss before taxation 


 


(1,080)


 


(486)




Adjustments to reconcile loss before taxation to net cash outflow from operating activities:


 


 


 




Depreciation charge


 


866 


 


782 




Amortisation charge


 


125 


 


332 




Profit on disposal of fixed assets


 


(26)


 


(61)




Share of net profit of joint venture


 


(25)


 


  -  




Net finance costs


 


115 


 


84 




Termination of lease


 


(7)


 


  -  




Foreign exchange gains/(losses)


 


192 


 


(161)




Increase in inventories


 


(1,690)


 


(1,645)




Increase in receivables


 


(2,315)


 


(1,849)




(Increase)/decrease in prepayments


 


(620)


 


93 




Increase/(decrease) in payables


 


1,306 


 


(334)




Increase in progress payments


 


1,891 


 


2,105 




Pension fund deficit reduction payments


 


(200)


 


(300)




Cash invested in operating activities


 


(1,468)


 


(1,440)




Net interest (paid)/received


 


(25)


 


14 




Taxation paid


 


(39)


 


(126)




Net cash outflow from operating activities


 


(1,532)


 


(1,552)




 


 


 


 


 




Investing activities


 


 


 


 




Purchase of property, plant and equipment


 


(152)


 


(351)




Proceeds on disposal of property, plant and equipment


 


27 


 


72 




Payments for acquisitions, net of cash acquired


 


-  


 


(748)




Net cash outflow from investing activities


 


(125)


 


(1,027)




 


 


 


 


 




Financing activities


 


 


 


 




Lease payments


 


(191)


 


(100)




Dividend paid


 


(289)


 


(1,073)




Net cash outflow from financing activities


 


(480)


 


(1,173)




Decrease in cash and cash equivalents


 


(2,137)


 


(3,752)




Opening cash and cash equivalents


 


16,125 


 


22,886 




Exchange differences on cash and cash equivalents


 


23 


 


236 




Closing cash and cash equivalents


 


14,011 


 


19,370 




 


 


 


 


 




 
 
 




Notes to the interim consolidated 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 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.




 


 


 


 




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", as adopted by the European Union. They do not include all the information and disclosures required in annual financial statements in accordance with IFRS, and should therefore be read in conjunction with the Group's Annual Report for the year ended 30th April, 2020 and any public announcements made by MS INTERNATIONAL plc during the interim reporting period.




 


 


 


 




These interim financial statements do not constitute statutory financial statements within the meaning of section 435 of the Companies Act 2006. The figures for the year ended 30th April, 2020 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 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, 2020. The Group has not early adopted any 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.




 


 


 


 




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 7 of the Annual Report for the year ended 30th April, 2020 available from MS INTERNATIONAL plc's website: www.msiplc.com.




 


 


 


 




One of the Group's principal risk and uncertainties continues to be the level of customer demand for the Group's products and services. Customer demand is driven mainly by general economic conditions in addition to pricing, product quality, and delivery performance of the Group in comparison to our competitors. 




 


 


 


 




There continues to be considerable uncertainty in relation to the UK's future trading relationship with the EU. At the time of preparing these interim financial statements, the disclosure given in the Annual Report is still applicable and reflects the best understanding of how the withdrawal from the EU will impact the Group. The Board are monitoring the impact of how changes in the UK's trading relationship with the EU will affect the different parts of the Group and preparations have been made to take appropriate action if, and when, required. 




 


 


 


 




The current environment brought about by Covid-19 creates uncertainty over the phasing of demand from customers, the financial impact of any future lockdowns in the geographical areas in which the Group operates, and other possible difficulties in the general economic environment. 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 the current economic outlook. 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


 


 


 




 


 


 


 




In making the going concern assessment, as well as considering general risks and specifically the risks presented by Covid-19, the directors have considered the period to 12 months from the approval of the financial statements.




 




 5.     Segment information


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




(a)  Primary reporting format - divisional segments


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




The following table presents revenue and profit information about the Group's divisions for the half-year periods ended 31st October, 2020 and 31st October, 2019.




 


 


      'Defence'


 


    'Forgings'


 


   'Petrol Station   Superstructures'


  'Corporate            Branding'


    Total




 


 


 


 




 


 


2020


 


2019


 


2020


 


2019


 


2020


 


2019


 


2020


 


2019


 


2020


 


2019




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


unaudited


 


unaudited




 


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000


 


£'000




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




Revenue


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




From external customers


 


8,641 


 


12,054 


 


4,577 


 


7,263 


 


6,640 


 


7,277 


 


6,484 


 


6,723 


 


26,342 


 


33,317 




From other segments


 


-  


 


-  


 


-  


 


-  


 


51 


 


145 


 


66 


 


95 


 


117 


 


240 




Segment revenue


 


8,641 


 


12,054 


 


4,577 


 


7,263 


 


6,691 


 


7,422 


 


6,550 


 


6,818 


 


26,459 


 


33,557 




Segment result


 


(1,267)


 


42 


 


(279)


 


54 


 


835 


 


291 


 


(279)


 


(789)


 


(990)


 


(402)




Net finance expense


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


(115)


 


(84)




Share of net profit of joint venture


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


25 


 


-  




Loss before taxation


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


(1,080)


 


(486)




Tax (expense)/income


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


(2)


 


66 




Loss for the period


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


(1,082)


 


(420)




Capital expenditure


 


81 


 


12 


 


-  


 


-  


 


59 


 


171 


 


12 


 


168 


 


152 


 


351 




Depreciation


 


133 


 


112 


 


278 


 


327 


 


178 


 


171 


 


277 


 


172 


 


866 


 


782 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




The following table presents segment assets and liabilities of the Group's divisions for the half-year periods ended 31st October, 2020 and 31st October, 2019.




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




Segmental assets


 


27,984 


 


29,444 


 


3,497 


 


8,627 


 


10,154 


 


10,552 


 


9,919 


 


10,018 


 


51,554 


 


58,641 




Unallocated assets


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


16,275 


 


13,568 




Total assets


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


67,829 


 


72,209 




Segmental liabilities


 


18,747 


 


19,402 


 


1,774 


 


2,014 


 


3,349 


 


3,531 


 


4,062 


 


4,024 


 


27,932 


 


28,971 




Unallocated liabilities


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


11,441 


 


9,594 




Total liabilities


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


39,373 


 


38,565 




 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




Unallocated assets include certain fixed assets (including all UK properties), intangible assets, 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.




 
 
 
 




 
6.     Tax expense


 


 


 


 




 


 


 


 


 


 




The major components of the tax expense/(income) in the consolidated income statement are:


 


 




 


 


 


Half-year to 31st October, 2020


 


Half-year to 31st October, 2019




 


 


 


unaudited


 


unaudited




 


 


 


£'000


 


£'000




 


 


 


 


 


 




Current tax expense


 


67 


 


79 




Deferred tax income


 


(65)


 


(145)




Total tax expense/(income) reported in the consolidated income statement


 


2 


 


(66)




 


 


 


 


 


 




A change to the main UK corporation tax rate was enacted in a budget resolution on 17th March, 2020. From 1 April, 2020 the rate remains at 19%, cancelling the previously enacted rate reduction to 17%. Deferred income tax at 30th April, 2020 has therefore been provided at 19%. Deferred income tax in relation to intangibles recognised on the acquisition of 'MSI-Sign Group B.V.' has been provided at 25%, being the main corporation tax rate in The Netherlands.




 


 


 


 


 


 




7.     Earnings per share


 


 


 


 




 


 


 


 


 


 




The calculation of basic earnings per share is based on:


 


 


 


 




 


 


 


 


 


 




(a)


Loss for the period attributable to equity holders of the parent of £1,082,000 (2019 - £420,000 loss);


 


 




 


 


 


 


 


 




(b)


16,504,691 (2019 - 16,504,691) ordinary shares, being the weighted average number of ordinary shares in issue.


 




 


 


 


 


 


 




This represents 18,396,073 (2019 - 18,396,073), being the weighted average number of ordinary shares in issue less 245,048 (2019 - 245,048), being the number of shares held within the ESOT and less 1,646,334 (2019 - 1,646,334), being the number of shares purchased by the Company.




 


 


 


 


 


 




There are no dilutive instruments in place. 




 


 


 


 


 


 




8.     Dividends paid and proposed


 


 


 


 




 


 


 


Half-year to 31st October, 2020


 


Half-year to 31st October, 2019




 


 


 


unaudited


 


unaudited




 


 


 


£'000


 


£'000




Declared and paid during the six month period


 


 


 


 




Final dividend on ordinary shares for 2020 - 1.75p (2019 - 6.50p)


 


289 


 


1,073 




Proposed for approval 


 


 


 


 




Interim dividend on ordinary shares for 2021 - 1.75p (2020 - 1.75p)


 


289 


 


289 




 


 


 


 


 


 




Dividend warrants will be posted on 18th January, 2021 to those members registered on the books of the Company on 29th December, 2020.




 




9.    Property, plant and equipment


 


 


 


 


 


 




 


 


 


 


 


 


 




At 31st October, 2020


 


 


 


 


 


 




 


 


Freehold


 


Plant and


 


 




 


 


property


 


equipment


 


Total




 


 


£'000


 


£'000


 


£'000




Cost or valuation


 


 


 


 


 


 




At 30th April, 2020


 


17,746 


 


15,858 


 


33,604 




Additions


 


  -  


 


152 


 


152 




Disposals


 


  -  


 


(364)


 


(364)




Exchange differences


 


(98)


 


1 


 


(97)




At 31st October, 2020


 


17,648 


 


15,647 


 


33,295 




 


 


 


 


 


 


 




Accumulated depreciation


 


 


 


 


 


 




At 30th April, 2020


 


970 


 


12,523 


 


13,493 




Depreciation charge for the period


 


158 


 


530 


 


688 




Disposals


 


  -  


 


(363)


 


(363)




Exchange differences


 


(6)


 


(1)


 


(7)




At 31st October, 2020


 


1,122 


 


12,689 


 


13,811 




Net book value at 31st October, 2020


 


16,526 


 


2,958 


 


19,484 




 


 


 


 


 


 


 




Analysis of cost or valuation


 


 


 


 


 


 




At professional valuation 2018


 


12,300 


 


  -  


 


12,300 




At cost


 


5,348 


 


15,647 


 


20,995 




At 31st October, 2020


 


17,648 


 


15,647 


 


33,295 




 


 


 


 


 


 


 




At 31st October, 2019


 


 


 


 


 


 




 


 


Freehold


 


Plant and


 


 




 


 


property


 


equipment


 


Total




 


 


£'000


 


£'000


 


£'000




Cost or valuation


 


 


 


 


 


 




At 27th April, 2019


 


17,706 


 


15,585 


 


33,291 




Additions


 


  -  


 


351 


 


351 




Disposals


 


  -  


 


(437)


 


(437)




Acquisition


 


  -  


 


274 


 


274 




Exchange differences


 


3 


 


(10)


 


(7)




At 31st October, 2019


 


17,709 


 


15,763 


 


33,472 




 


 


 


 


 


 


 




Accumulated depreciation


 


 


 


 


 


 




At 27th April, 2019


 


662 


 


12,203 


 


12,865 




Depreciation charge for the period


 


160 


 


531 


 


691 




Disposals


 


  -  


 


(426)


 


(426)




Exchange differences


 


(1)


 


(9)


 


(10)




At 31st October, 2019


 


821 


 


12,299 


 


13,120 




Net book value at 31st October, 2019


 


16,888 


 


3,464 


 


20,352 




 


 


 


 


 


 


 




Analysis of cost or valuation


 


 


 


 


 


 




At professional valuation 2018


 


12,300 


 


  -  


 


12,300 




At cost


 


5,409 


 


15,763 


 


21,172 




At 31st October, 2019


 


17,709 


 


15,763 


 


33,472 




 
 
 
 
 




 


 


 


 


 


 


 




At 30th April, 2020


 


 


 


 


 


 




 


 


Freehold


 


Plant and


 


 




 


 


property


 


equipment


 


Total




 


 


£'000


 


£'000


 


£'000




Cost or valuation


 


 


 


 


 


 




At 27th April, 2019


 


17,706 


 


15,585 


 


33,291 




Additions


 


  -  


 


721 


 


721 




Disposals


 


  -  


 


(736)


 


(736)




Acquisition


 


  -  


 


351 


 


351 




Exchange differences


 


40 


 


(63)


 


(23)




At 30th April, 2020


 


17,746 


 


15,858 


 


33,604 




 


 


 


 


 


 


 




Accumulated depreciation


 


 


 


 


 


 




At 27th April, 2019


 


662 


 


12,203 


 


12,865 




Depreciation charge for the period


 


316 


 


1,107 


 


1,423 




Disposals


 


  -  


 


(712)


 


(712)




Exchange differences


 


(8)


 


(75)


 


(83)




At 30th April, 2020


 


970 


 


12,523 


 


13,493 




Net book value at 30th April, 2020


 


16,776 


 


3,335 


 


20,111 




 


 


 


 


 


 


 




Analysis of cost or valuation


 


 


 


 


 


 




At professional valuation 2018


 


12,300 


 


  -  


 


12,300 




At cost


 


5,446 


 


15,858 


 


21,304 




At 30th April, 2020


 


17,746 


 


15,858 


 


33,604 




 


 


 


 


 


 


 




On 11th November, 2017, 26th July, 2017 and 28th March, 2018 the Group's land and buildings, which consist of manufacturing and office facilities in the UK, Poland and USA were valued by Dove Haigh Phillips (UK), KonSolid-Nieruchomosci (Poland) and Real Estate & Appraisal Services Inc (USA). 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 Polish property was valued based on the income approach, converting anticipated future benefits in the form of rental income into present value. Finally, the US property was valued on an income and market value basis. For all properties, there is no difference between current use and highest and best use.




 


 


 


 


 


 


 




The valuation of the properties in the UK has been processed in the financial statements. Both the Polish and the US property valuations were sufficiently close to their carrying value such that the valuations were not processed.




 
 
 
 




10.     Right-of-use assets


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 




At 31st October, 2020


 


 


 


 


 


Plant and


 


 




 


 


 


 


Property


 


equipment


 


Total




 


 


 


 


£'000


 


£'000


 


£'000




 


 


 


 


 


 


 


 


 




Cost or valuation


 


 


 


 


 


 


 


 




At 30th April, 2020


 


 


 


1,403 


 


50 


 


1,453 




Additions


 


 


 


  -  


 


  -  


 


  -  




Lease amendment


 


 


 


(390)


 


  -  


 


(390)




Exchange differences


 


 


 


38 


 


  -  


 


38 




At 31st October, 2020


 


 


 


1,051 


 


50 


 


1,101 




 


 


 


 


 


 


 


 


 




Accumulated depreciation


 


 


 


 


 


 


 


 




At 30th April, 2020


 


 


 


219 


 


20 


 


239 




Depreciation charge for the period


 


 


 


168 


 


10 


 


178 




Exchange differences


 


 


 


2 


 


  -  


 


2 




At 31st October, 2020


 


 


 


389 


 


30 


 


419 




Net book value at 31st October, 2020


 


 


 


662 


 


20 


 


682 




 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 




At 31st October, 2019


 


 


 


 


 


Plant and


 


 




 


 


 


 


Property


 


equipment


 


Total




 


 


 


 


£'000


 


£'000


 


£'000




 


 


 


 


 


 


 


 


 




Cost or valuation


 


 


 


 


 


 


 


 




At 27th April, 2019


 


 


 


  -  


 


  -  


 


  -  




IFRS 16 adjustment


 


 


 


755 


 


26 


 


781 




Acquisition of subsidiary


 


 


 


501 


 


  -  


 


501 




Exchange differences


 


 


 


(8)


 


  -  


 


(8)




At 31st October, 2019


 


 


 


1,248 


 


26 


 


1,274 




 


 


 


 


 


 


 


 


 




Accumulated depreciation


 


 


 


 


 


 


 


 




At 27th April, 2019


 


 


 


  -  


 


  -  


 


  -  




Depreciation charge for the period


 


 


 


84 


 


7 


 


91 




Exchange differences


 


 


 


(2)


 


  -  


 


(2)




At 31st October, 2019


 


 


 


82 


 


7 


 


89 




Net book value at 31st October, 2019


 


 


 


1,166 


 


19 


 


1,185 




 


 


 


 


 


 


 


 


 




At 30th April, 2020


 


 


 


 


 


Plant and


 


 




 


 


 


 


Property


 


equipment


 


Total




 


 


 


 


£'000


 


£'000


 


£'000




 


 


 


 


 


 


 


 


 




Cost or valuation


 


 


 


 


 


 


 


 




At 27th April, 2019


 


 


 


  -  


 


  -  


 


  -  




IFRS 16 adjustment


 


 


 


755 


 


26 


 


781 




Additions


 


 


 


162 


 


24 


 


186 




Acquisition of subsidiary


 


 


 


501 


 


  -  


 


501 




Exchange differences


 


 


 


(15)


 


  -  


 


(15)




At 30th April, 2020


 


 


 


1,403 


 


50 


 


1,453 




 


 


 


 


 


 


 


 


 




 
 


 


 


 


 


 


 


 


 




Accumulated depreciation


 


 


 


 


 


 


 


 




At 27th April, 2019


 


 


 


  -  


 


  -  


 


  -  




Depreciation charge for the period


 


 


 


228 


 


20 


 


248 




Exchange differences


 


 


 


(9)


 


  -  


 


(9)




At 30th April, 2020


 


 


 


219 


 


20 


 


239 




Net book value at 30th April, 2020


 


 


 


1,184 


 


30 


 


1,214 




 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 




11.     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, 2020


 


31st October, 2019


 


20th April, 2020




 


 


 


 


unaudited


 


unaudited


 


audited




 


 


 


 


£'000


 


£'000


 


£'000




Cash at bank and in hand


 


 


 


7,457 


 


13,955 


 


16,125 




Escrow account


 


 


 


6,554 


 


-  


 


-  




Short term deposits


 


 


 


-  


 


5,415 


 


-  




 


 


 


 


14,011 


 


19,370 


 


16,125 




 


 


 


 


 


 


 


 


 




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. 




 




12.    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 5th April, 2017 by a professionally qualified actuary.




 


 


 


 


 


 


 


 


 




-


 


From 6th April, 2016 the Company directly pays the expenses of the Scheme. With effect from April, 2018 the deficit reduction payments paid into the Scheme by the Company increased to £600,000 per annum. The deficit reduction contributions are paid on a quarterly basis with the first paid on 3rd April, 2018 and the last due for payment on or before 5th January, 2027. On 23rd April, 2020 it was agreed that contributions be made on a monthly basis from July 2020 to December 2020, after which contributions will revert to a quarterly basis. 




 


 


 


 


 


 


 


 


 




-


 


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.




 


 


 


 


 


 


 


 


 




-


 


During the period, the Scheme liability has increased by £512,000. A re-measurement loss of £642,000 (2019 - £849,000 loss) has been recognised through other comprehensive income. It comprises of a £484,000 remeasurement gain compared to the interest income on the plan assets and a £1,126,000 actuarial loss due to changes in financial assumptions. The actuarial loss of £1,126,000 is primarily a result of an increase in CPI/RPI inflation as well as a lower discount rate at the period end, both of which increased the Scheme's liabilities at 31st October, 2020. The interest cost on the net defined benefit liability of £70,000 has been recognised through the income statement. The Scheme's liabilities have been reduced by pension fund deficit payments in the period of £200,000 (2019 - £300,000).




 


 


 


 


 


 


 


 


 




-


 


A £1,198,000 liability for unrecognised past service cost relating to GMP equalisation cost was recognised in the Consolidated income statement for the 52 weeks ended 27th April, 2019. This liability has been remeasured and is included in the Scheme's liabilities at 31st October, 2020.




 


 


 


 


 


 


 


 


 




-


 


It may be some time before an agreed method for GMP calculations is approved. However, now that the estimated past service cost has been recognised in the Consolidated income statement for the year ended 27th April, 2019, further future changes to the estimate will be recognised in the Consolidated statement of comprehensive income.




 


 


 


 


 


 


 


 


 




13.    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 £6,976,530 at 31st October, 2020 (2019 - £4,637,538).




 


 


 


 


 


 


 


 


 




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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