REG - MS International PLC - Half-year Report
07/12/2022 07:01
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RNS Number : 8150I MS International PLC 07 December 2022
MS INTERNATIONAL plc
Unaudited Interim Condensed
Group Financial Statements
31st October, 2022
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 pleasing to report that the Group has continued to perform strongly,
growing our international businesses profitably in the face of these extremely
challenging times.
For the half year ended 31(st) October 2022, profit before tax increased to
£3.46m (2021 -£0.77m) on revenue of £42.03m (2021 - £33.16m).
Basic earnings per share were 17.4p (2021 - 3.4p).
The balance sheet is also significantly stronger with cash at £23.88m (2021 -
£15.54m).
Orders received in the period, when added to those already in hand, maintains
the Group in a strong position for the future.
Prospects
'Defence'
We continue to market our expanding product portfolio around the world to what
can only be described as a somewhat 'more attentive audience'. There must be
little doubt this reflects the uneasy political state of the world,
notwithstanding the fact that many countries' defence budgets remain under
severe fiscal pressure.
Our continued investment to support the development and long-term growth of
the defence business including relocating our production operations into our
upgraded facilities in Norwich, did however, mean that we carried substantial
costs in the period.
Pleasingly, our participation in the United States Navy's multi- phased
programme of 'weapon approval procedures' with respect to our 30mm Naval Gun
System, continues to progress through their comprehensive testing procedures.
We are encouraged with their observations to date. A great prize, still for us
to win! Our existing land and building facilities in South Carolina can be
further developed, to meet any resulting defence opportunities.
We continue to develop new military products and during the period launched
our first land based mobile gun system incorporating our unique
'counter-drone' capability. I am very encouraged to report that this new gun
system has already attracted considerable attention in the international
market.
'Forgings'
All three of our superb manufacturing facilities in the UK, the United States
and Brazil continue to operate at a high level of activity, servicing their
national and international customers. Managing the negative effects of rising
energy costs for these steel forging businesses is an undoubted challenge, but
one that that is being successfully managed, in step with local availability
of supply.
'Petrol Station Superstructures'
This division has experienced a high level of quality activity in the period,
resulting in a strong business recovery from the pandemic disruption. Both our
UK and Poland based operations remain well placed and committed to serve our
highly respected UK and European customer base.
'Corporate Branding'
We are making good progress with our Netherlands and German operations as the
businesses recover from the depressed level of activity within the sign
installation and maintenance sector by the many cross-border restrictions
imposed on mainland travel during Covid. Meantime, our fledgeling UK sign
operation is benefitting from our commitment and investment in personnel,
contemporary manufacturing equipment and other facilities.
Outlook
We believe that we have progressed strongly and created considerable
opportunities through our commitment to being bold whilst building a
substantial war chest to support our continuing investment, particularly in
defence. Notwithstanding, we remain vigilant, in order to react to any
changing circumstances.
I look forward with some confidence despite the difficult economic background.
All such matters considered, the Board has declared an increased interim
dividend per share of 2p (2021 1.75p), payable to shareholders on 13th January
2023.
Michael
Bell
6(th)
December 2022
MS INTERNATIONAL plc
Michael Bell Tel: 01302 322133
Shore Capital (Nominated Adviser and Broker)
Patrick Castle Tel: 020 7408 4090
Daniel Bush
Independent auditor's review report on Interim Financial Information to MS
INTERNATIONAL Plc
Conclusion
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 2022 which comprises of 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.
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 2022 is not prepared, in
all material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting'.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) (ISRE (UK)) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" (ISRE (UK) 2410). A review
of interim financial information consists of making inquiries, 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.
As disclosed in note 2, the annual financial statements of the company are
prepared in accordance with UK adopted IFRSs. The condensed set of financial
statements included in this half yearly financial report has been prepared in
accordance with UK adopted International Accounting Standard 34, "Interim
Financial Reporting".
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.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE UK, however future events or conditions may cause the entity to
cease to continue as a going concern.
In our evaluation of the directors' conclusions, we considered the inherent
risks associated with the group's business model including effects arising
from macro-economic uncertainties, we assessed and challenged the
reasonableness of estimates made by the directors and the related disclosures
and analysed how those risks might affect the group's financial resources or
ability to continue operations over the going concern period.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. In preparing the half-yearly financial report, the
directors are responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend
to liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the review of the financial information
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.
Our conclusion, including our Conclusions relating to going concern, are based
on procedures that are less extensive than audit procedures, as described in
the Basis for conclusion paragraph of this report.
Use of our report
This report is made solely to the company, as a body, in accordance with ISRE
(UK) 2410. 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
6(th) December 2022
Interim condensed consolidated income statement
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
Notes £'000 £'000
Revenue 5/6 42,025 33,155
Cost of sales (30,095) (24,646)
Gross profit 11,930 8,509
Distribution costs (1,815) (1,768)
Administrative expenses (6,522) (5,865)
Operating profit 6 3,593 876
Finance costs (70) (40)
Other finance costs - pension (63) (63)
Profit before taxation 3,460 773
Tax expense 7 (689) (236)
Profit for the period attributable to equity holders of the parent 2,771 537
Basic earnings per share 8 17.4p 3.4p
Diluted earnings per share 8 16.8p 3.3p
Interim condensed consolidated statement of comprehensive income
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
£'000 £'000
Profit for the period attributable to equity holders of the parent 2,771 537
Exchange differences on retranslation of foreign operations 57 (242)
Net other comprehensive income/(loss) to be reclassified to profit or loss in 57 (242)
subsequent periods
Remeasurement (losses)/gains on defined benefit pension scheme 13 (8) 217
Deferred taxation on remeasurement of defined benefit pension scheme 2 258
Deferred taxation on revaluation surplus on land and buildings - (331)
Net other comprehensive (loss)/income not being reclassified to profit or loss (6) 144
in subsequent periods
Total comprehensive income for the period attributable to equity holders of 2,822 439
the parent
Interim condensed consolidated statement of financial position
Notes 31st October, 2022 31st October, 2021 30th April, 2022
unaudited unaudited audited
ASSETS £'000 £'000 £'000
Non-current assets
Property, plant and equipment 10 25,076 20,015 24,537
Right-of-use assets 11 1,328 1,235 1,479
Intangible assets 2,896 3,122 3,002
Investment in joint venture 35 34 34
Deferred income tax asset 1,373 1,861 1,435
30,708 26,267 30,487
Current assets
Inventories 17,003 17,446 16,327
Trade and other receivables 9,422 11,075 11,396
Contract assets 1,450 1,747 1,773
Income tax receivable - 52 6
Prepayments 1,673 2,127 1,352
Cash and cash equivalents 12 23,363 14,067 18,092
Restricted cash held in Escrow 12 519 1,470 1,158
53,430 47,984 50,104
TOTAL ASSETS 84,138 74,251 80,591
EQUITY AND LIABILITIES
Equity
Share capital 1,784 1,784 1,784
Capital redemption reserve 957 957 957
Other reserve 2,815 2,815 2,815
Revaluation reserve 9,923 6,055 9,923
Special reserve 1,629 1,629 1,629
Currency translation reserve (360) (56) (417)
Treasury shares (2,789) (2,789) (2,789)
Retained earnings 26,242 20,044 24,673
TOTAL EQUITY SHAREHOLDERS' FUNDS 40,201 30,439 38,575
Non-current liabilities
Defined benefit pension liability 13 4,341 6,491 4,720
Deferred income tax liability 2,547 1,938 2,578
Lease liabilities 1,003 975 1,158
7,891 9,404 8,456
Current liabilities
Trade and other payables 13,798 12,623 14,176
Contract liabilities 20,610 20,928 18,329
Income tax payable 1,272 574 702
Lease liabilities 366 283 353
36,046 34,408 33,560
TOTAL EQUITY AND LIABILITIES 84,138 74,251 80,591
The interim condensed consolidated financial statements of the Group for the
six months ended 31st October, 2022 were authorised for issue in accordance
with a resolution of the directors on 6th December, 2022 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/ audited
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
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 - - - - - - - (1,036) (1,036)
At 31st October, 2021 1,784 957 2,815 6,055 1,629 (56) (2,789) 20,044 30,439
Profit for the period - - - - - - - 4,395 4,395
Other comprehensive income/(loss) - - - 3,868 - (361) - 514 4,021
Dividend paid - - - - - - - (280) (280)
At 30th April, 2022 1,784 957 2,815 9,923 1,629 (417) (2,789) 24,673 38,575
Profit for the period - - - - - - - 2,771 2,771
Other comprehensive income/(loss) - - - - - 57 - (6) 51
Dividend paid (note 9) - - - - - - - (1,196) (1,196)
At 31st October, 2022 1,784 957 2,815 9,923 1,629 (360) (2,789) 26,242 40,201
Interim consolidated cash flow statement
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
£'000 £'000
Profit before taxation 3,460 773
Adjustments to reconcile profit before taxation to cash generated
from/(invested in) operating activates:
Depreciation charge of owned and right-of-use assets 968 868
Amortisation charge 119 111
Impairment of goodwill - 349
Profit on disposal of property, plant and equipment (37) (59)
Net finance costs 133 103
Foreign exchange losses (111) (44)
Increase in inventories (491) (5,119)
Decrease/(increase) in receivables 2,521 (1,433)
Increase in prepayments (302) (119)
(Decrease)/increase in payables (606) 246
Increase/(decrease) in contract liabilities 1,543 (310)
Pension fund deficit reduction payments (450) (450)
Cash generated from/(invested in) operating activities 6,747 (5,084)
Net interest paid (43) (15)
Taxation paid (78) (20)
Net cash inflow/(outflow) from operating activities 6,626 (5,119)
Investing activities
Purchase of property, plant and equipment (879) (1,618)
Purchase of intangible assets - (54)
Proceeds on disposal of property, plant and equipment 91 79
Decrease in restricted cash held in Escrow maturing in more than 90 days 639 4,695
Net cash (outflow)/inflow from investing activities (149) 3,102
Financing activities
Lease payments (207) (204)
Dividend paid (1,196) (1,036)
Net cash outflow from financing activities (1,403) (1,240)
Increase/(decrease) in cash and cash equivalents 5,074 (3,257)
Opening cash and cash equivalents 18,092 17,390
Exchange differences on cash and cash equivalents 197 (66)
Closing cash and cash equivalents 23,363 14,067
Notes to the interim consolidated financial statements
1. Corporate information
MS INTERNATIONAL plc is a public limited company incorporated and domiciled in
England and Wales. The Company's ordinary shares are traded on the Alternative
Investment Market (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 UK adopted International Accounting Standards,
and should therefore be read in conjunction with the Group's Annual Report for
the year ended 30th April, 2022 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, 2022. 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 translation 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 8 of the Annual Report
for the year ended 30th April, 2022, which is available from MS INTERNATIONAL
plc's website: www.msiplc.com.
One of the Group's principal risks and uncertainties continues to be the
impact of inflationary pressures upon both trading and profitability. Rising
raw material and energy prices have increased the cost base of all divisions.
Where possible cost increases are passed to the customer, however, in doing so
there is uncertainty with regards to any potential impact on the level of
customer demand.
In addition, despite the successful role out of global vaccination programmes,
there remains uncertainty around the potential emergence of Covid-19 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
The condensed interim financial statements included in this report have been
prepared on a going concern basis. Forecasts have been made for the 18 months
following the reporting date, which the Directors believe to be a reasonable
expectation based on the information available at the time of signing these
accounts. The forecasts have been assessed for the impact of potential
sensitivities, including a 10% fall in the forecasted Group revenue and a 10%
increase in materials prices. In all scenarios, the Group has sufficient
headroom to meet its liabilities as they fall due.
As a result, in making the going concern assessment the Directors believe
there to be no material uncertainties that could cast significant doubt on the
Group's ability to continue operating as a going concern. The Group has
sufficient financial resources with a healthy orderbook to continue operating
for the foreseeable future, being at least 18 months from the reporting date.
As a result, the Directors continue to adopt the going concern basis of
accounting in preparation of this report.
5. Revenue
The Group's revenue disaggregated by pattern of revenue recognition is as
follows:
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
£'000 £'000
Revenue recognised at a point in time 40,940 33,155
Revenue recognised over time 1,085 -
Total revenue 42,025 33,155
6. Segment information
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, 2022 and 31st October, 2021. The
reporting format is determined by the differences in manufacture and services
provided by the divisional segments within the Group.
'Defence' 'Forgings' 'Petrol Station Superstructures' 'Corporate Branding' Total
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
unaudited unaudited
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Segmental revenue
From external customers 13,956 10,947 12,516 7,418 8,782 7,942 6,771 6,848 42,025 33,155
From other segments - - - - 275 140 64 50 339 190
Segment revenue 13,956 10,947 12,516 7,418 9,057 8,082 6,835 6,898 42,364 33,345
Segment result
Operating (loss)/profit (188) (155) 2,759 784 1,339 725 (317) (478) 3,593 876
Net finance expense (133) (103)
Profit before taxation 3,460 773
Tax expense (689) (236)
Profit for the period 2,771 537
Segmental assets
Assets attributable to segments 33,088 33,622 8,186 5,732 11,226 10,195 7,941 8,124 60,441 57,673
Unallocated assets* 23,697 16,578
Total assets 84,138 74,251
Segmental liabilities
Liabilities attributable to segments 24,913 23,888 2,762 2,704 4,313 4,227 3,510 3,684 35,498 34,503
Unallocated assets* 8,439 9,309
Total assets 43,937 43,812
Other segmental information
Capital expenditure 452 1,198 116 172 109 131 202 117 879 1,618
Depreciation 141 101 319 276 368 358 140 133 968 868
Amortisation 9 - - - 22 23 88 88 119 111
Impairment of goodwill - - - - - - - 349 - 349
* Unallocated assets include certain fixed assets (including all UK
properties), 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, 2022 Half-year to 31st October, 2021
unaudited unaudited
£'000 £'000
Current tax expense 660 175
Deferred tax expense 29 61
Total tax expense reported in the Interim condensed consolidated income 689 236
statement
Tax relating to items (charged)/credited to other comprehensive income:
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
£'000 £'000
Deferred tax on measurement of defined benefit pension scheme 2 258
Deferred tax on revaluation surplus on land and buildings - (331)
Deferred tax in the Interim condensed consolidated statement of comprehensive 2 (73)
income
Legislation has been enacted to increase the rate of UK corporation tax from
19% to 25% with effect from 1st April, 2023. UK corporation taxation has been
provided at 19.5%, which is the effective rate of UK corporation tax for the
Group's financial year ending 30(th) April, 2023. UK deferred tax has been
provided at 25% or a blended rate depending on when the underlying temporary
timing difference 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 25.8%, being the main corporation tax rate in The Netherlands.
8. Earnings per share
The calculation of basic earnings per share of 17.4p (2021 - 3.4p) is based on
the profit for the period attributable to equity holders of the parent of
£2,771,000 (2021 - £537,000) and on a weighted average number of ordinary
shares in issue of 15,949,691 (2021 - 15,949,691). At 31st October, 2022 there
were 1,055,000 (2021 - 1,055,000) potentially dilutive shares on option with a
weighted average effect of 587,217 (2021 - 391,005) giving a diluted earnings
per share of 16.8p (2021 - 3.3p).
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
£'000 £'000
Weighted average number of shares in issue 17,841,073 17,841,073
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 15,949,691
Weighted average number of the 1,055,000 (2021 - 1,055,000) potentially 587,217 391,005
dilutive shares
Weighted average diluted shares 16,536,908 16,340,696
Profit for the period attributable to equity holders to the parent in £ 2,771,000 537,000
Basic earnings per share 17.4p 3.4p
Diluted earnings per share 16.8p 3.3p
9. Dividends paid and proposed
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
£'000 £'000
Declared and paid during the six month period
Final dividend on ordinary shares for 2022 - 7.5p (2021 - 6.5p) 1,196 1,036
Proposed for approval
Interim dividend on ordinary shares for 2023 - 2p (2022 - 1.75p) 319 279
The interim dividend will be payable on 13th January, 2023 to those members
registered on the books of the Company on 16th December, 2022.
Legislation has been enacted to increase the rate of UK corporation tax from
19% to 25% with effect from 1st April, 2023. UK corporation taxation has been
provided at 19.5%, which is the effective rate of UK corporation tax for the
Group's financial year ending 30(th) April, 2023. UK deferred tax has been
provided at 25% or a blended rate depending on when the underlying temporary
timing difference 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 25.8%, being the main corporation tax rate in The Netherlands.
8. Earnings per share
The calculation of basic earnings per share of 17.4p (2021 - 3.4p) is based on
the profit for the period attributable to equity holders of the parent of
£2,771,000 (2021 - £537,000) and on a weighted average number of ordinary
shares in issue of 15,949,691 (2021 - 15,949,691). At 31st October, 2022 there
were 1,055,000 (2021 - 1,055,000) potentially dilutive shares on option with a
weighted average effect of 587,217 (2021 - 391,005) giving a diluted earnings
per share of 16.8p (2021 - 3.3p).
Half-year to 31st October, 2022 Half-year to 31st October, 2021
unaudited unaudited
£'000 £'000
Weighted average number of shares in issue 17,841,073 17,841,073
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 15,949,691
Weighted average number of the 1,055,000 (2021 - 1,055,000) potentially 587,217 391,005
dilutive shares
Weighted average diluted shares 16,536,908 16,340,696
Profit for the period attributable to equity holders to the parent in £ 2,771,000 537,000
Basic earnings per share 17.4p 3.4p
Diluted earnings per share 16.8p 3.3p
9. Dividends paid and proposed
Half-year to 31st October, 2022
Half-year to 31st October, 2021
unaudited
unaudited
£'000
£'000
Declared and paid during the six month period
Final dividend on ordinary shares for 2022 - 7.5p (2021 - 6.5p)
1,196
1,036
Proposed for approval
Interim dividend on ordinary shares for 2023 - 2p (2022 - 1.75p)
319
279
The interim dividend will be payable on 13th January, 2023 to those members
registered on the books of the Company on 16th December, 2022.
10. Property, plant and equipment
At 31st October, 2022
Freehold Plant and
property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2022 21,368 16,106 37,474
Additions 185 694 879
Disposals - (182) (182)
Exchange differences 419 147 566
At 31st October, 2022 21,972 16,765 38,737
Accumulated depreciation
At 30th April, 2022 - 12,937 12,937
Depreciation charge for the period 198 582 780
Disposals - (128) (128)
Exchange differences 2 70 72
At 31st October, 2022 200 13,461 13,661
Net book value at 31st October, 2022 21,772 3,304 25,076
Analysis of cost or valuation
At professional valuation 21,787 - 21,787
At cost 185 16,765 16,950
At 31st October, 2022 21,972 16,765 38,737
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 30th April, 2022
Freehold Plant and
property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2021 17,591 15,506 33,097
Additions 1,205 1,498 2,703
Disposals - (978) (978)
Revaluation 2,296 - 2,296
Exchange differences 276 80 356
At 30th April, 2022 21,368 16,106 37,474
Accumulated depreciation
At 30th April, 2021 1,242 12,742 13,984
Depreciation charge for the year 303 1,072 1,375
Disposals - (920) (920)
Revaluation (1,572) - (1,572)
Exchange differences 27 43 70
At 30th April, 2022 - 12,937 12,937
Net book value at 30th April, 2022 21,368 3,169 24,537
Analysis of cost or valuation
At professional valuation 21,368 - 21,368
At cost - 16,106 16,106
At 30th April, 2022 21,368 16,106 37,474
At 30th April, 2022 the Group's land and buildings, which consist of
manufacturing and office facilities in the USA, Poland, and UK were valued by
Real Estate & Appraisal Services Inc (USA), KonSolid-Nieruchomosci
(Poland) and Dove Haigh Phillips (UK). 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 property in Poland was
valued based on the income approach, converting anticipated future benefits in
the form of rental income into present value. Finally, the property in the US
was valued on an income and market value basis. For all properties, there is
no difference between current use and highest and best use.
11. Right-of-use assets
At 31st October, 2022 Plant and
Property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2022 2,218 10 2,228
Exchange differences 56 - 56
At 31st October, 2022 2,274 10 2,284
Accumulated depreciation
At 30th April, 2022 741 8 749
Depreciation charge for the period 186 2 188
Exchange differences 19 - 19
At 31st October, 2022 946 10 956
Net book value at 31st October, 2022 1,328 - 1,328
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 30th April, 2022 Plant and
Property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2021 895 21 916
Additions 1,327 - 1,327
Disposals - (11) (11)
Exchange differences (4) - (4)
At 30th April, 2022 2,218 10 2,228
Accumulated depreciation
At 30th April, 2021 373 13 386
Depreciation charge for the year 365 6 371
Disposals - (11) (11)
Exchange differences 3 - 3
At 30th April, 2022 741 8 749
Net book value at 30th April, 2022 1,477 2 1,479
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, 2022 31st October, 2021 30th April, 2022
unaudited unaudited audited
£'000 £'000 £'000
Cash and cash equivalents 23,363 14,067 18,092
Restricted cash held in Escrow - maturing in more than 90 days 519 1,470 1,158
Total cash 23,882 15,537 19,250
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
£137,000 (2021: £105,000).
Deficit reduction contributions paid into the Scheme by the Company are
£900,000 per annum. The deficit reduction contributions are paid on a
quarterly basis with the first having been paid on or after 1st July, 2021 and
the last being due for payment on or before 1st April, 2028. The total deficit
reduction payments made in the period were £450,000 (2021 - £450,000).
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.
The IAS 19 scheme deficit has reduced by £1,257,000 from £3,594,000 at 30th
April, 2022 to £2,337,000 at 31st October, 2022. A total actuarial gain of
£853,000 (2021 - £217,000 gain) has been recognised through other
comprehensive income. It comprises of a £3,493,000 remeasurement loss (2021 -
£848,000 gain) compared to the interest income on the plan assets and a
£4,346,000 actuarial gain (2021 - £631,000 loss) due to changes in financial
assumptions. The actuarial gain of £4,346,000 is primarily due to the
increase in the discount rate assumptions, as well as the decrease in the RPI
inflation and related inflation-linked measures, all of which decreased the
Scheme's liabilities at 31st October, 2022. The interest cost on the net
defined benefit liability of £63,000 (2021 - £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 (2021 - £450,000).
The Company is committed to paying deficit reduction contributions to the
Scheme of £900,000 per annum until April 2028 under the current Pension
Scheme Recovery Plan. According to the Scheme rules, the Company does not have
an unconditional right to the economic benefits arising from any surplus of
funds paid into the Scheme in excess of its liabilities. Consequently, the
provisions of IFRIC 14 apply and the liability recognised in the statement of
financial position is the higher of the present value of the future contracted
deficit reduction contributions and the deficit estimated under the provisions
of IAS 19.
At 31st October, 2022 the present value of the future contracted deficit
reduction contributions was £4,341,000 and higher than the estimated deficit
of £2,337,000 calculated under the provisions of IAS 19. Therefore, in
accordance with IFRIC 14 the liability recognised in the statement of
financial position at 31st October 2022 is £4,341,000. A loss of £861,000
(2021 - £0) has been recognised through other comprehensive income in
relation to IFRIC 14.
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, 2022.
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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