REG - MS International PLC - Half-year Report
08/12/2021 07:00
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RNS Number : 8844U MS International PLC 08 December 2021
MS INTERNATIONAL plc
Unaudited Interim Condensed
Group Financial Statements
31st October, 2021
EXECUTIVE DIRECTORS
Michael Bell
Michael O'Connell
Nicholas Bell
NON-EXECUTIVE DIRECTORS
Roger Lane-Smith
David Hansell
COMPANY SECRETARY
Shelley Ashcroft
REGISTERED OFFICE
Balby Carr Bank
Doncaster
DN4 8DH
England
PRINCIPAL OPERATING DIVISIONS
'Defence'
'Forgings'
'Petrol Station Superstructures'
'Corporate Branding'
Chairman's Statement
Results
It is a pleasure to report that the Company continued to perform well and
maintained profitable trading in the six months to 31st October 2021.
Revenue in the latest period increased significantly to £33.16m (2020 -
£26.34m) producing a profit of £0.77m (2020 - loss £1.08m).
Basic earnings per share 3.4p (2020 - loss 6.6p).
The balance sheet remains strong with cash at £15.54m (2020 - £14.01m).
Furthermore, orders received in the period, when added to those already 'in
hand', have placed the Group in a very advantageous position despite the
global pandemic which will, no doubt, continue to disrupt current and
prospective business activity across our operations.
Prospects
'Defence'
During the past few months we have, where possible, successfully trialled and
demonstrated several of our new naval and land-based products to overseas
customers. I am delighted to report, that all of these have been very well
received. This has provided additional confidence in our international sales
prospects.
The first batch of our 30mm naval guns for supply to the US Navy is in
production for delivery in the second part of this financial year, alongside
various other export sales items.
We anticipate commencing production in our magnificent, refurbished, and
enhanced production facilities early in the new year.
'Forgings'
This division, with operations in the UK and in both North and South America,
is benefiting from a gratifyingly high level of demand from the many
international manufacturers of mobile material handling equipment. This upturn
stems partly from the current major disruption of sea-going cargo traffic
travelling from low cost overseas suppliers to the worldwide materials
handling industry.
A shift to a 'buy local' policy has proved to be the industry's best remedy to
negate an otherwise highly vulnerable supply chain and further damage to the
environment. Without doubt, MSI has the proven capability and reliability to
meet the demands of both global and local industries from our three
international locations in which we continue to invest to ensure maximum
efficiencies.
'Petrol Station Superstructures'
Across the UK, development of new sites, together with the refurbishment and
further expansion of other service provisions on the filling station network,
are expected to continue at a satisfactory level throughout the remainder of
this financial year. By contrast, intercountry access controls and
restrictions, already imposed by many European states, may remain strictly
enforced and so hinder their station building projects.
'Corporate Branding'
Whilst those strict intercountry access controls remain in place, trading will
remain difficult for this division which operates across mainland Europe from
its bases in The Netherlands and, to a lesser extent, Germany. The majority of
our customers served by this Group are large international corporates, many of
which have enforced temporary cutbacks on branding expenditure in these
challenging times, instead focusing their available resources on maintenance
and repair.
Pleasingly, by comparison, our fledgling UK operation has a considerable
amount of work-in-hand, benefiting from the rebranding of petrol stations from
one oil company to another following an active period of station ownership
transfers.
Outlook
We remain firmly of the opinion that the Company is better placed than it has
been for some time, despite the current difficulties brought about by the
pandemic and its consequences.
All such matters considered, the Board has declared a maintained interim
dividend per share of 1.75p (2020 - 1.75p) payable to shareholders on the 14th
January 2022.
Michael
Bell
7(th)
December 2021
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 2021 which comprises Interim condensed consolidated income
statement, Interim condensed consolidated statement of comprehensive income
statement, Interim condensed consolidated statement of financial position,
Interim consolidated statement of changes in equity, Interim consolidated cash
flow statement and notes to the interim consolidated financial statements. 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
accounting standards in conformity with the requirements of the Companies Act
2006. 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'.
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 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 result of COVID-19. 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 is one of the most significant economic events for the UK, and at the
date of this report its 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 a course of action such as COVID-19.
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 2021 is not prepared, in
all material respects, in accordance with International Accounting Standard
34, 'Interim Financial Reporting'.
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
7(th) December 2021
Interim condensed consolidated income statement
Half-year to 31st October, 2021 Half-year to 31st October, 2020
unaudited unaudited
Notes £'000 £'000
Revenue 5/6 33,155 26,342
Cost of sales (24,646) (19,831)
Gross profit 8,509 6,511
Distribution costs (1,768) (1,297)
Administrative expenses (5,865) (6,204)
Operating profit/(loss) 6 876 (990)
Finance costs (40) (45)
Other finance costs - pension (63) (70)
Share of net profit of joint venture - 25
Profit/(loss) before taxation 773 (1,080)
Tax expense 7 (236) (2)
Profit/(loss) for the period attributable to equity holders of the parent 537 (1,082)
Basic earnings/(loss) per share 8 3.4p (6.6p)
Diluted earnings/(loss) per share 8 3.3p (6.6p)
Interim condensed consolidated statement of comprehensive income
Half-year to 31st October, 2021 Half-year to 31st October, 2020
unaudited unaudited
£'000 £'000
Profit/(loss) for the period attributable to equity holders of the parent 537 (1,082)
Exchange differences on retranslation of foreign operations (242) 219
Net other comprehensive (loss)/profit to be reclassified to profit or loss in (242) 219
subsequent periods
Remeasurement losses on defined benefit pension scheme 13 217 (642)
Deferred taxation on remeasurement of defined benefit pension scheme 258 122
Deferred taxation on revaluation surplus on land and buildings (331) -
Net other comprehensive profit/(loss) not being reclassified to profit or loss 144 (520)
in subsequent periods
Total comprehensive profit/(loss) for the period attributable to equity 439 (1,383)
holders of the parent
Interim condensed consolidated statement of financial position
Notes 31st October, 2021 31st October, 2020 30th April, 2021
unaudited unaudited audited
ASSETS £'000 £'000 £'000
Non-current assets
Intangible assets 3,122 4,070 3,558
Property, plant, and equipment 10 20,015 19,484 19,113
Right-of-use assets 11 1,235 682 530
Investment in joint venture 34 34 36
Deferred income tax asset 1,861 2,015 1,606
26,267 26,285 24,843
Current assets
Inventories 17,446 17,624 12,423
Trade and other receivables 11,075 6,957 9,369
Contract assets 1,747 - 1,998
Income tax receivable 52 555 194
Prepayments 2,127 2,397 2,010
Cash and cash equivalents 12 14,067 7,457 17,390
Restricted cash held in Escrow 12 1,470 6,554 6,165
47,984 41,544 49,549
TOTAL ASSETS 74,251 67,829 74,392
EQUITY AND LIABILITIES
Equity
Share capital 1,784 1,840 1,784
Capital redemption reserve 957 901 957
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 (56) 443 186
Treasury shares (2,789) (3,059) (2,789)
Retained earnings 20,044 17,832 20,399
TOTAL EQUITY SHAREHOLDERS' FUNDS 30,439 28,456 31,036
Non-current liabilities
Defined benefit pension liability 13 6,491 9,075 7,095
Deferred income tax liability 1,938 1,600 1,553
Lease liabilities 975 465 380
9,404 11,140 9,028
Current liabilities
Trade and other payables 12,623 12,684 12,410
Contract liabilities 20,928 15,299 21,192
Income tax payable 574 18 561
Lease liabilities 283 232 165
34,408 28,233 34,328
TOTAL EQUITY AND LIABILITIES 74,251 67,829 74,392
The interim condensed consolidated financial statements of the Group for the
six months ended 31st October, 2021 were authorised for issue in accordance
with a resolution of the directors on 7th December, 2021 and signed on their
behalf by:
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 - - - - - - - (289) (289)
At 31st October, 2020 1,840 901 2,815 6,055 1,629 443 (3,059) 17,832 28,456
Profit for the period - - - - - - - 2,259 2,259
Other comprehensive (loss)/income - - - - - (257) - 1,503 1,246
Dividend paid - - - - - - - (289) (289)
Purchase of own shares - - - - - - (636) - (636)
Cancellation of shares (56) 56 - - - - 906 (906) -
At 30th April, 2021 1,784 957 2,815 6,055 1,629 186 (2,789) 20,399 31,036
Profit for the period - - - - - - - 537 537
Other comprehensive (loss)/income - - - - - (242) - 144 (98)
Dividend paid (note 9) - - - - - - - (1,036) (1,036)
At 31st October, 2021 1,784 957 2,815 6,055 1,629 (56) (2,789) 20,044 30,439
Interim consolidated cash flow statement
Half-year to 31st October, 2021 Half-year to 31st October, 2020
unaudited unaudited
£'000 £'000
Profit/(loss) before taxation 773 (1,080)
Adjustments to reconcile profit/(loss) before taxation to net cash outflow
from operating activities:
Depreciation charge of owned and right-of-use assets 868 866
Amortisation charge 111 125
Impairment of goodwill 349 -
Profit on disposal of fixed assets (59) (26)
Share of net profit of joint venture - (25)
Net finance costs 103 115
Termination of lease - (7)
Foreign exchange (losses)/gains (44) 192
Increase in inventories (5,119) (1,690)
Increase in receivables (1,433) (2,315)
Increase in prepayments (119) (620)
Increase in payables 246 1,306
(Decrease)/increase in contract liabilities (310) 1,891
Pension fund deficit reduction payments (450) (200)
Cash invested in operating activities (5,084) (1,468)
Net interest paid (15) (25)
Taxation paid (20) (39)
Net cash outflow from operating activities (5,119) (1,532)
Investing activities
Purchase of property, plant, and equipment (1,618) (152)
Purchase of intangible assets (54) -
Proceeds on disposal of property, plant, and equipment 79 27
Decrease/(increase) in restricted cash held in Escrow 4,695 (6,554)
Net cash inflow/(outflow) from investing activities 3,102 (6,679)
Financing activities
Lease payments (204) (191)
Dividend paid (1,036) (289)
Net cash outflow from financing activities (1,240) (480)
Decrease in cash and cash equivalents (3,257) (8,691)
Opening cash and cash equivalents 17,390 16,125
Exchange differences on cash and cash equivalents (66) 23
Closing cash and cash equivalents 14,067 7,457
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, including media facades, way-
finding signage, public illumination, creative lighting solutions, and the
complete appearance of petrol station superstructures
and forecourts.
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" in
conformity with the requirements of the Companies Act 2006. 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, 2021
and any public announcements made by MS INTERNATIONAL plc during the interim
reporting period.
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" in
conformity with the requirements of the Companies Act 2006. 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, 2021
and any public announcements made by MS INTERNATIONAL plc during the interim
reporting period.
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, 2021. The Group has
not early adopted any standard, interpretation, or amendment that has been
issued but is not yet effective.
The assets and liabilities of the overseas subsidiaries are translated into
the presentational currency of the Group at the rate of exchange ruling at the
statement of financial position 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 9 of the Annual Report
for the year ended 30th April, 2021 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.
In addition, the current economic environment brought about by the Covid-19
pandemic, along with the impact of lockdowns and travel related restrictions,
has created uncertainty for the Group in terms of timing of revenue
recognition and the phasing of demand from customers. There is also a risk to
both the health and safety of staff, and to the global supply chain in terms
of the flow of goods and raw materials.
Despite the successful role out of global vaccination programmes, there
remains uncertainty around the potential emergence of variants that could lead
to the imposition of further lockdowns and/or travel restrictions. 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 these challenges. 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 a period of 12 months from the approval of the financial
statements.
5. Revenue
The Group's revenue disaggregated by pattern of revenue recognition is as
follows:
Half-year to 31st October, 2021 Half-year to 31st October, 2020
unaudited unaudited
£'000 £'000
Revenue recognised at a point in time 33,155 26,342
Total revenue 33,155 26,342
6. Segment information
Primary reporting format - divisional segments
The following table presents segmental revenue and operating profit/(loss) as
well as segmental assets and liabilities of the Group's divisions for the
half-year periods ended 31st October, 2021 and 31st October, 2020.
'Defence' 'Forgings' 'Petrol Station Superstructures' 'Corporate Branding' Total
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
unaudited unaudited
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Segmental revenue
From external customers 10,947 8,641 7,418 4,577 7,942 6,640 6,848 6,484 33,155 26,342
From other segments - - - - 140 51 50 66 190 117
Segment revenue 10,947 8,641 7,418 4,577 8,082 6,691 6,898 6,550 33,345 26,459
Segment result
Operating profit/(loss) (155) (1,267) 784 (279) 725 835 (478) (279) 876 (990)
Net finance expense (103) (115)
Share of net profit of joint venture - 25
Profit/(loss) before taxation 773 (1,080)
Tax expense (236) (2)
Profit/(loss) for the period 537 (1,082)
Segmental assets
Assets attributable to segments 33,622 27,984 5,732 3,497 10,195 10,154 8,124 9,919 57,673 51,554
Unallocated assets* 16,578 16,275
Total assets 74,251 67,829
Segmental liabilities
Liabilities attributable to segments 23,888 18,747 2,704 1,774 4,227 3,349 3,684 4,062 34,503 27,932
Unallocated assets* 9,309 11,441
Total assets 43,812 39,373
Other segmental information
Capital expenditure 1,198 81 172 - 131 59 117 12 1,618 152
Depreciation 101 133 276 278 358 178 133 277 868 866
Amortisation - - - - 23 33 88 92 111 125
Impairment of goodwill - - - - - - 349 - 349 -
* 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.
Assets and liabilities attributable to segments comprise the assets and
liabilities of each segment adjusted to reflect the elimination of the cost of
investment in subsidiaries and the provision of financing loans provided by MS
INTERNATIONAL plc.
Revenue between segments is determined on an arm's length basis. Segment
results, assets, and liabilities include items directly attributable to the
segment as well as those that can be allocated on a reasonable basis.
7. Tax expense
The major components of the tax expense in the consolidated income statement
are:
Half-year to 31st October, 2021 Half-year to 31st October, 2020
unaudited unaudited
£'000 £'000
Current tax expense 175 67
Deferred tax expense/(income) 61 (65)
Total tax expense reported in the Interim condensed consolidated income 236 2
statement
Tax relating to items (charged)/credited to other comprehensive income:
Half-year to 31st October, 2021 Half-year to 31st October, 2020
unaudited unaudited
£'000 £'000
Deferred tax on measurement gains on pension scheme current year 217 (642)
Deferred tax on revaluation surplus on land and buildings 258 122
Deferred taxation on revaluation surplus on land and buildings (331) -
Deferred tax in the Interim condensed consolidated statement of comprehensive 144 (520)
income
The rate of corporation tax in the UK will remain at 19% until April 2023 when
it will increase to 25%. As the changes have been enacted as at 31st October,
2021, deferred income tax has therefore been provided at 25% or a blended rate
depending upon when the underlying temporary timing differences are expected
to unwind. 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.
8. Earnings per share
The calculation of basic earnings per share of 3.4p (2020 - loss per share of
6.6p) is based on the profit for the period attributable to equity holders of
the parent of £537,000 (2020 - loss of £1,082,000) and on a weighted average
number of ordinary shares in issue of 15,949,691 (2020 - 16,504,491). At 31st
October, 2021 there were 1,055,000 (2020 - 400,000) potentially dilutive
shares on option with a weighted average effect of 391,005 (2020 - 400,000)
giving a diluted earnings per share of 3.3p (2020 - loss per share of 6.6p).
Half-year to 31st October, 2021 Half-year to 31st October, 2020
unaudited unaudited
£'000 £'000
Weighted average number of shares in issue 17,841,073 18,396,073
Less weighted average number of shared held in the ESOT (245,048) (245,048)
Less weighted average number of shares purchased by the Company (1,646,334) (1,646,334)
Weighted average number of shares to be used in basic EPS calculation 15,949,691 16,504,691
Weighted average number of the 1,055,000 (2020 - 400,000) potentially dilutive 391,005 400,000
shares
Weighted average diluted shares 16,340,696 16,904,691
Profit/(loss) for the year attributable to equity holders to the parent in £ 537,000 (1,082,000)
Basic earnings/(loss) per share 3.4p (6.6p)
Diluted earnings/(loss) per share 3.3p (6.6p)
The prior year diluted loss per share is the same as the basic loss per share
as the impact of potential dilutive shares is anti-dilutive and therefore not
recognised.
9. Dividends paid and proposed
Half-year to 31st October, 2021 Half-year to 31st October, 2020
unaudited unaudited
£'000 £'000
Declared and paid during the six month period
Final dividend on ordinary shares for 2021 - 6.5p (2020 - 1.75p) 1,036 289
Proposed for approval
Interim dividend on ordinary shares for 2022 - 1.75p (2021 - 1.75p) 279 289
The interim dividend will be payable on 14th January, 2022 to those members
registered on the books of the Company on 17th December, 2021.
The rate of corporation tax in the UK will remain at 19% until April 2023 when
it will increase to 25%. As the changes have been enacted as at 31st October,
2021, deferred income tax has therefore been provided at 25% or a blended rate
depending upon when the underlying temporary timing differences are expected
to unwind. 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.
8. Earnings per share
The calculation of basic earnings per share of 3.4p (2020 - loss per share of
6.6p) is based on the profit for the period attributable to equity holders of
the parent of £537,000 (2020 - loss of £1,082,000) and on a weighted average
number of ordinary shares in issue of 15,949,691 (2020 - 16,504,491). At 31st
October, 2021 there were 1,055,000 (2020 - 400,000) potentially dilutive
shares on option with a weighted average effect of 391,005 (2020 - 400,000)
giving a diluted earnings per share of 3.3p (2020 - loss per share of 6.6p).
Half-year to 31st October, 2021 Half-year to 31st October, 2020
unaudited unaudited
£'000 £'000
Weighted average number of shares in issue 17,841,073 18,396,073
Less weighted average number of shared held in the ESOT (245,048) (245,048)
Less weighted average number of shares purchased by the Company (1,646,334) (1,646,334)
Weighted average number of shares to be used in basic EPS calculation 15,949,691 16,504,691
Weighted average number of the 1,055,000 (2020 - 400,000) potentially dilutive 391,005 400,000
shares
Weighted average diluted shares 16,340,696 16,904,691
Profit/(loss) for the year attributable to equity holders to the parent in £ 537,000 (1,082,000)
Basic earnings/(loss) per share 3.4p (6.6p)
Diluted earnings/(loss) per share 3.3p (6.6p)
The prior year diluted loss per share is the same as the basic loss per share
as the impact of potential dilutive shares is anti-dilutive and therefore not
recognised.
9. Dividends paid and proposed
Half-year to 31st October, 2021
Half-year to 31st October, 2020
unaudited
unaudited
£'000
£'000
Declared and paid during the six month period
Final dividend on ordinary shares for 2021 - 6.5p (2020 - 1.75p)
1,036
289
Proposed for approval
Interim dividend on ordinary shares for 2022 - 1.75p (2021 - 1.75p)
279
289
The interim dividend will be payable on 14th January, 2022 to those members
registered on the books of the Company on 17th December, 2021.
10. Property, plant, and equipment
At 31st October, 2021
Freehold Plant and
property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2021 17,591 15,506 33,097
Additions 1,041 577 1,618
Disposals - (563) (563)
Exchange differences (7) (67) (74)
At 31st October, 2021 18,625 15,453 34,078
Accumulated depreciation
At 30th April, 2021 1,242 12,742 13,984
Depreciation charge for the period 153 527 680
Disposals - (542) (542)
Exchange differences (8) (51) (59)
At 31st October, 2021 1,387 12,676 14,063
Net book value at 31st October, 2021 17,238 2,777 20,015
Analysis of cost or valuation
At professional valuation 12,300 - 12,300
At cost 6,325 15,453 21,778
At 31st October, 2021 18,625 15,453 34,078
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 12,300 - 12,300
At cost 5,348 15,647 20,995
At 31st October, 2020 17,648 15,647 33,295
At 30th April, 2021
Freehold Plant and
property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2020 17,746 15,858 33,604
Additions 234 547 781
Disposals - (756) (756)
Acquisition - 30 30
Exchange differences (389) (173) (562)
At 30th April, 2021 17,591 15,506 33,097
Accumulated depreciation
At 30th April, 2020 970 12,523 13,493
Depreciation charge for the year 311 1,050 1,361
Disposals - (733) (733)
Exchange differences (39) (98) (137)
At 30th April, 2021 1,242 12,742 13,984
Net book value at 30th April, 2021 16,349 2,764 19,113
Analysis of cost or valuation
At professional valuation 12,300 - 12,300
At cost 5,291 15,506 20,797
At 30th April, 2021 17,591 15,506 33,097
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.
11. Right-of-use assets
At 31st October, 2021 Plant and
Property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2021 895 21 916
Additions 765 - 765
Lease amendment 160 - 160
Exchange differences (46) - (46)
At 31st October, 2021 1,774 21 1,795
Accumulated depreciation
At 30th April, 2021 373 13 386
Depreciation charge for the period 184 4 188
Exchange differences (14) - (14)
At 31st October, 2021 543 17 560
Net book value at 31st October, 2021 1,231 4 1,235
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 - - -
Disposals (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 30th April, 2021 Plant and
Property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2020 1,403 50 1,453
Disposals (517) (29) (546)
Exchange differences 9 - 9
At 30th April, 2021 895 21 916
Accumulated depreciation
At 30th April, 2020 219 20 239
Depreciation charge for the period 288 17 305
Disposals (127) (24) (151)
Exchange differences (7) - (7)
At 30th April, 2021 373 13 386
Net book value at 30th April, 2021 522 8 530
12. 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, 2021 31st October, 2020 30th April, 2021
unaudited unaudited audited
£'000 £'000 £'000
Cash at bank and in hand 14,067 7,457 17,390
Cash and cash equivalents 14,067 7,457 17,390
Restricted cash held in Escrow - maturing in more than 90 days 1,470 6,554 6,165
Total cash 15,537 14,011 23,555
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.
13. 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 7th May, 2021 by a
professionally qualified actuary.
- From 6th April, 2016 the Company directly pays the expenses of the Scheme. The
total pension scheme expenses incurred by the Company during the period were
£105,000 (2020: £113,000).
- With effect from May 2021 the deficit reduction contributions paid into the
Scheme by the Company have been increased to £900,000 per annum. The deficit
reduction contributions will be paid on a quarterly basis with the first being
paid on or after 1st July, 2021 and the last being due for payment on or
before 1st April, 2028.
- 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.
- As at 31st October, 2021 the scheme liability was £6,491,000 (2020 -
£9,075,000).
- During the period, the Scheme liability has decreased by £604,000 (2020 -
£512,000 increase). A remeasurement gain of £217,000 (2020 - £642,000 loss)
has been recognised through other comprehensive income. It comprises of a
£848,000 remeasurement gain compared to the interest income on the plan
assets and a £631,000 actuarial loss due to changes in financial assumptions.
The actuarial loss of £631,000 is primarily due to the increase in
inflationary and salary increase assumptions, both of which increased the
Scheme's liabilities at 31st October, 2021. There has been no change to the
discount rate or any changes to demographic assumptions. The interest cost on
the net defined benefit liability of £63,000 has been recognised through the
income statement. The Scheme's liabilities have been reduced by pension fund
deficit payments in the period of £450,000 (2020 - £200,000).
- A £1,198,000 liability for unrecognised past service cost relating to GMP
equalisation was recognised in the Consolidated income statement for the 52
weeks ended 27th April, 2019. A further £205,000 of previously unrecognised
past service costs were recognised in the Consolidated income statement for
the year ended 30th April, 2021. This liability has been remeasured and is
included in the Scheme's liabilities at 31st October, 2021.
14. 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
£1,556,000 at 31st October, 2021 (2020 - £6,977,000).
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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