REG - MS International PLC - Half-year Report
12/12/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231212:nRSL4063Wa&default-theme=true
RNS Number : 4063W MS International PLC 12 December 2023
MS INTERNATIONAL plc
Unaudited Interim Condensed
Group Financial Statements
31st October, 2023
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 and Security'
'Forgings'
'Petrol Station Superstructures'
'Corporate Branding'
Chairman's Statement
Introduction
In last June's annual Statement, I highlighted that we anticipated a
significant upward step change in the development of the business that would
bring additional rewards and success.
I am now delighted to confirm we have been awarded the first production order
contracts with the US Navy to supply our 30mm naval gun. This significant
development is complemented by a further contract to maintain and support
those systems.
I first reported on our efforts to break into the US Navy market in my
Chairman's Statement of 25th July 1988, when I stated, "The first unit built
to suit the US Navy specific requirements awaits ships trials in the United
States". It has been a long haul, but vision; persistence; determination and
capability has resulted in success.
We have also delivered a significant contract relating to the first sales of
our 'VSHORAD' land-based mobile counter-drone weapon system. This was the
contract where the customer's delay in taking delivery - because of the war in
Europe - negatively impacted last year's results.
Results
For the half year ended 31st October 2023 profit before tax increased
substantially to £7.72m (2022 - £3.46m) on revenue of £57.02m (2022 -
£42.03m).
Basic earnings per share were 35.9p (2022 - 17.4p).
The balance sheet is again much stronger with net cash at £50.05m (2022 -
£23.88m), reflecting the valuable upturn in activity in our 'Defence and
Security' businesses.
Prospects
'Defence and security'
We believe that the strong start to 2023/4 looks set to continue, with
deliveries gaining pace against contracts to overseas customers, for both our
naval gun and land-based counter-drone defence systems.
Also, deliveries against our US Navy contracts will commence later in the new
year.
Moreover, we are particularly pleased and encouraged by the level of military
'land market' interest in 'VSHORAD' and the number of enquiries we are
receiving from multiple sources as to its availability and potential supply.
Our existing production facilities are capable of fulfilling our current firm
orders. Additionally, the refurbishment and reorganisation of parts of our,
once under-utilised, production facilities in Norwich continues. This
programme, when complete, will better accommodate our prospective production
requirements.
'Forgings'
The Forgings division remains a very efficient business and well positioned to
continue serving its broad international customer base. We remain committed to
assisting our customers through our multi continent contemporary fork-arm
manufacturing facilities.
'Petrol Station Superstructures'
In September the UK Government announced a revised set of green policies
including delaying the ban on the sale of new petrol and diesel vehicles by
five years to 2035. The news reinvigorated many of our fuel dispensing UK
customers, encouraging them to consider expanding and enhancing the quality of
their stations to ensure they remain competitive. In the meantime, we look
forward to an improvement in our eastern Europe market which is reviving after
some hesitancy caused by the region's continuing war.
'Corporate Branding'
We perceive that we remain well placed in our focused market of providing
installation, repair and maintenance within the specialist area of the
branding for petrol stations.
Outlook
We believe that we have continued to enhance the performance of the Group's
businesses and with considerable confidence, we look forward to delivering
further progress across the Group.
In the light of these positive developments and new commercial relationships,
all matters considered, the Board has declared an increased interim dividend
per share of 3p (2022 - 2p) payable on 19th January 2024 to those shareholders
on the register at close of business on 22nd December 2023, with the
ex-dividend date being 21st December 2023.
Michael
Bell
11(th) December 2023
MS INTERNATIONAL plc
Michael Bell Tel: 01302 322133
Shore Capital (Nominated Adviser and Broker)
Patrick Castle/Daniel Bush/Lucy Bowden Tel: 020 7408 4090
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 MS INTERNATIONAL plc (the 'group') for the six months ended
31 October 2023 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 2023 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 group 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 such as high interest rates and the cost of
living crisis, 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
11(th) December 2023
Interim condensed consolidated income statement
Half-year to 31st October, 2023 Half-year to 31st October, 2022
unaudited unaudited
Notes £'000 £'000
Revenue 5/6 57,023 42,025
Cost of sales (38,943) (30,095)
Gross profit 18,080 11,930
Distribution costs (2,303) (1,815)
Administrative expenses (7,441) (6,522)
Derivative losses 15 (731) -
Operating profit 6 7,605 3,593
Finance income/(costs) 204 (70)
Other finance costs - pension (90) (63)
Profit before taxation 7,719 3,460
Tax expense 7 (1,917) (689)
Profit for the period attributable to equity holders of the parent 5,802 2,771
Basic earnings per share 8 35.9p 17.4p
Diluted earnings per share 8 34.3p 16.8p
Interim condensed consolidated statement of comprehensive income
Half-year to 31st October, 2023 Half-year to 31st October, 2022
unaudited unaudited
Notes £'000 £'000
Profit for the period attributable to equity holders of the parent 5,802 2,771
Exchange differences on retranslation of foreign operations (43) 57
Net other comprehensive (loss)/income to be reclassified to profit or loss in (43) 57
subsequent periods
Remeasurement gains/(losses) on defined benefit pension scheme 13 54 (8)
Deferred taxation on remeasurement of defined benefit pension scheme (14) 2
Net other comprehensive income/(loss) not being reclassified to profit or loss 40 (6)
in subsequent periods
Total comprehensive income for the period attributable to equity holders of 5,799 2,822
the parent
Interim condensed consolidated statement of financial position
Notes 31st October, 2023 31st October, 2022 30th April, 2023
unaudited unaudited audited
ASSETS £'000 £'000 £'000
Non-current assets
Property, plant and equipment 10 25,415 25,076 24,886
Right-of-use assets 11 968 1,328 1,162
Intangible assets 2,365 2,896 2,396
Investment in joint venture - 35 -
Deferred income tax asset 1,716 1,373 1,677
30,464 30,708 30,121
Current assets
Inventories 16,940 17,003 24,764
Trade and other receivables 27,578 11,095 9,031
Contract assets 3,374 1,450 144
Cash and cash equivalents 12 42,627 23,363 12,336
Restricted cash held in Escrow 12 7,426 519 2,917
97,945 53,430 49,192
TOTAL ASSETS 128,409 84,138 79,313
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 9,923 9,923
Special reserve 1,629 1,629 1,629
Currency translation reserve (363) (360) (320)
Treasury shares (3,703) (2,789) (2,381)
Retained earnings 30,362 26,242 26,668
TOTAL EQUITY SHAREHOLDERS' FUNDS 43,404 40,201 41,075
Non-current liabilities
Defined benefit pension liability 13 3,577 4,341 4,216
Deferred income tax liability 2,941 2,547 2,943
Contract liabilities 19,148 - -
Derivative financial instruments 15 218 - -
Lease liabilities 630 1,003 829
26,514 7,891 7,988
Current liabilities
Trade and other payables 19,291 15,070 15,286
Contract liabilities 38,303 20,610 14,585
Derivative financial instruments 15 513 - -
Lease liabilities 384 366 379
58,491 36,046 30,250
TOTAL EQUITY AND LIABILITIES 128,409 84,138 79,313
The interim condensed consolidated financial statements of the Group for the
six months ended 31st October, 2023 were authorised for issue in accordance
with a resolution of the directors on 11th December, 2023 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, 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 - - - - - - - (1,196) (1,196)
At 31st October, 2022 1,784 957 2,815 9,923 1,629 (360) (2,789) 26,242 40,201
Profit for the period - - - - - - - 1,344 1,344
Other comprehensive income/(loss) - - - - - 40 - (272) (232)
Share option expense - - - - - - - 86 86
Exercise of share options - - - - - - 408 (408) -
Dividend paid - - - - - - - (324) (324)
At 30th April, 2023 1,784 957 2,815 9,923 1,629 (320) (2,381) 26,668 41,075
Profit for the period - - - - - - - 5,802 5,802
Other comprehensive (loss)/income - - - - - (43) - 40 (3)
Dividend paid (note 9) - - - - - - - (2,123) (2,123)
Share option expense - - - - - - - 19 19
Purchase of own shares - - - - - - (1,676) - (1,676)
Exercise of share options - - - - - - 354 (44) 310
At 31st October, 2023 1,784 957 2,815 9,923 1,629 (363) (3,703) 30,362 43,404
Interim consolidated cash flow statement
Half-year to 31st October, 2023 Half-year to 31st October, 2022
unaudited unaudited
£'000 £'000
Profit before taxation 7,719 3,460
Adjustments to reconcile profit before taxation to cash generated from
operating activates:
Depreciation charge of owned and right-of-use assets 1,024 968
Amortisation charge 31 119
Profit on disposal of property, plant and equipment (148) (37)
Net finance (income)/costs (114) 133
Share option expense 19 -
Foreign exchange gains/(losses) 202 (111)
Decrease/(increase) in inventories 7,853 (491)
(Increase)/decrease in receivables (21,598) 2,219
Increase/(decrease) in payables 4,257 (606)
Increase in derivatives 731 -
Increase in contract liabilities 42,255 1,543
Pension fund deficit reduction payments (675) (450)
Cash generated from operating activities 41,556 6,747
Net interest received/(paid) 224 (43)
Taxation paid (2,279) (78)
Net cash inflow from operating activities 39,501 6,626
Investing activities
Purchase of property, plant and equipment (1,168) (879)
Proceeds on disposal of property, plant and equipment 149 91
(Increase)/decrease in restricted cash held in Escrow maturing in more than 90 (4,509) 639
days
Net cash outflow from investing activities (5,528) (149)
Financing activities
Buy back of own shares (1,676) -
Proceeds from exercise of employee share options 310 -
Lease payments (206) (207)
Dividend paid (2,123) (1,196)
Net cash outflow from financing activities (3,695) (1,403)
Increase in cash and cash equivalents 30,278 5,074
Opening cash and cash equivalents 12,336 18,092
Exchange differences on cash and cash equivalents 13 197
Closing cash and cash equivalents 42,627 23,363
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 and Security' - 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, 2023 and any public announcements made by MS
INTERNATIONAL plc during the interim reporting period. The financial
statements for the year ended 30th April, 2023 have been filed with the
Registrar of Companies. The auditor's report on these financial statements was
unmodified and did not contain statements under sections 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. The interim financial information does
not constitute full financial information within the meaning of section 434 of
the Companies Act 2006. The auditor's 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, 2023, with the
exception of a new policy for Derivative Financial Instruments, as detailed
below. The Group has not early adopted any standard, interpretation, or
amendment that has been issued but is not yet effective.
Derivative financial instruments are initially recognised at fair value on the
date the derivative contract is entered into and are subsequently remeasured
at their fair value including remeasurement at the reporting date. The Group
has decided not to apply hedge accounting with respect to forward exchange
contracts and as a result changes in the fair values are recognised
immediately within the Consolidated income statement within the Derivative
gains or losses line.
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, 2023, 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.
During the interim period, the risk that foreign exchange fluctuations will
impact the Group's performance has increased significantly. A number of
international contracts in the 'Defence and Security' division are denominated
in USD, which created a large unhedged currency exposure within the Group. As
a result, management have taken steps to mitigate this risk by taking out
various forward contracts (note 15).
4. Going concern
The condensed interim financial statements included in this report have been
prepared on a going concern basis. Forecasts have been made up to 31(st)
December, 2024, 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.
In addition, management have carried out reverse stress tests to 31st
December, 2024 under various scenarios, all of which are considered
implausible by management. In all tested scenarios, the Group would continue
as a going concern for at least 12 months from the date of signing.
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 to 31(st) December, 2024. 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, 2023 Half-year to 31st October, 2022
unaudited unaudited
£'000 £'000
Revenue recognised at a point in time 55,780 40,940
Revenue recognised over time 1,243 1,085
Total revenue 57,023 42,025
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, 2023 and 31st October, 2022. The
reporting format is determined by the differences in manufacture and services
provided by the divisional segments within the Group.
'Defence and Security' 'Forgings' 'Petrol Station Superstructures' 'Corporate Branding' Total
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
unaudited unaudited
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Segmental revenue
Segment revenue 33,508 13,956 9,454 12,516 8,555 9,057 5,584 6,835 57,101 42,364
Intercompany revenue from other segments - - - - (8) (275) (70) (64) (78) (339)
External revenue 33,508 13,956 9,454 12,516 8,547 8,782 5,514 6,771 57,023 42,025
Segment result
Operating profit/(loss) 5,741 (188) 681 2,759 1,285 1,339 (102) (317) 7,605 3,593
Net finance income/(expense) 114 (133)
Profit before taxation 7,719 3,460
Tax expense (1,917) (689)
Profit for the period 5,802 2,771
Segmental assets
Assets attributable to segments 79,724 33,088 7,357 8,186 12,586 11,226 5,261 7,941 104,928 60,441
Unallocated assets* 23,481 23,697
Total assets 128,409 84,138
Segmental liabilities
Liabilities attributable to segments 68,203 24,913 2,212 2,762 4,683 4,313 2,167 3,510 77,265 35,498
Unallocated liabilities* 7,740 8,439
Total liabilities 85,005 43,937
Other segmental information
Capital expenditure 780 452 194 116 131 109 63 202 1,168 879
Depreciation 210 141 317 319 370 368 127 140 1,024 968
Amortisation 9 9 - - 22 22 - 88 31 119
* 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, 2023 Half-year to 31st October, 2022
unaudited unaudited
£'000 £'000
Current tax expense 1,979 660
Deferred tax (income)/expense (62) 29
Total tax expense reported in the Interim condensed consolidated income 1,917 689
statement
Tax relating to items charged/(credited) to other comprehensive income:
Half-year to 31st October, 2023 Half-year to 31st October, 2022
unaudited unaudited
£'000 £'000
Deferred tax on measurement of defined benefit pension scheme 14 (2)
Deferred tax in the Interim condensed consolidated statement of comprehensive 14 (2)
income
8. Earnings per share
The calculation of basic earnings per share of 35.9p (2022 - 17.4p) is based
on the profit for the period attributable to equity holders of the parent of
£5,802,000 (2022 - £2,771,000) and on a weighted average number of ordinary
shares in issue of 16,141,981 (2022 - 15,949,691). At 31st October, 2023 there
were 1,072,693 (2022 - 1,055,000) potentially dilutive shares on option with a
weighted average effect of 789,551 (2022 - 587,217) giving a diluted earnings
per share of 34.3p (2022 - 16.8p).
Half-year to 31st October, 2023 Half-year to 31st October, 2022
unaudited unaudited
Weighted average number of shares in issue 17,841,073 17,841,073
Less weighted average number of shared held in the ESOT (231,387) (245,048)
Less weighted average number of shares purchased by the Company (1,467,705) (1,646,334)
Weighted average number of shares to be used in basic EPS calculation 16,141,981 15,949,691
Weighted average number of the 1,072,693 (2022 - 1,055,000) potentially 789,551 587,217
dilutive shares
Weighted average diluted shares 16,931,532 16,536,908
Profit for the period attributable to equity holders to the parent in £ 5,802,000 2,771,000
Basic earnings per share 35.9p 17.4p
Diluted earnings per share 34.3p 16.8p
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 2023 - 15p (2022 - 7.5p) 2,123 1,196
Proposed for approval
Interim dividend on ordinary shares for 2024 - 3p (2023 - 2p) 487 319
The interim dividend will be payable on 19th January, 2024 to those
shareholders on the register at the close of business on 22nd December, 2023,
with the ex-dividend date being 21(st) December, 2023.
8. Earnings per share
The calculation of basic earnings per share of 35.9p (2022 - 17.4p) is based
on the profit for the period attributable to equity holders of the parent of
£5,802,000 (2022 - £2,771,000) and on a weighted average number of ordinary
shares in issue of 16,141,981 (2022 - 15,949,691). At 31st October, 2023 there
were 1,072,693 (2022 - 1,055,000) potentially dilutive shares on option with a
weighted average effect of 789,551 (2022 - 587,217) giving a diluted earnings
per share of 34.3p (2022 - 16.8p).
Half-year to 31st October, 2023 Half-year to 31st October, 2022
unaudited unaudited
Weighted average number of shares in issue 17,841,073 17,841,073
Less weighted average number of shared held in the ESOT (231,387) (245,048)
Less weighted average number of shares purchased by the Company (1,467,705) (1,646,334)
Weighted average number of shares to be used in basic EPS calculation 16,141,981 15,949,691
Weighted average number of the 1,072,693 (2022 - 1,055,000) potentially 789,551 587,217
dilutive shares
Weighted average diluted shares 16,931,532 16,536,908
Profit for the period attributable to equity holders to the parent in £ 5,802,000 2,771,000
Basic earnings per share 35.9p 17.4p
Diluted earnings per share 34.3p 16.8p
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 2023 - 15p (2022 - 7.5p)
2,123
1,196
Proposed for approval
Interim dividend on ordinary shares for 2024 - 3p (2023 - 2p)
487
319
The interim dividend will be payable on 19th January, 2024 to those
shareholders on the register at the close of business on 22nd December, 2023,
with the ex-dividend date being 21(st) December, 2023.
10. Property, plant and equipment
At 31st October, 2023
Freehold Plant and
property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2023 21,930 17,298 39,228
Additions 517 651 1,168
Disposals - (316) (316)
Exchange differences 194 63 257
At 31st October, 2023 22,641 17,696 40,337
Accumulated depreciation
At 30th April, 2023 395 13,947 14,342
Depreciation charge for the period 202 636 838
Disposals - (315) (315)
Exchange differences 7 50 57
At 31st October, 2023 604 14,318 14,922
Net book value at 31st October, 2023 22,037 3,378 25,415
Analysis of cost or valuation
At professional valuation 21,681 - 21,681
At cost 960 17,696 18,656
At 31st October, 2023 22,641 17,696 40,337
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 30th April, 2023
Freehold Plant and
property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2022 21,368 16,106 37,474
Additions 421 1,550 1,971
Disposals - (488) (488)
Exchange differences 141 130 271
At 30th April, 2023 21,930 17,298 39,228
Accumulated depreciation
At 30th April, 2022 - 12,937 12,937
Depreciation charge for the year 400 1,268 1,668
Disposals - (358) (358)
Exchange differences (5) 100 95
At 30th April, 2023 395 13,947 14,342
Net book value at 30th April, 2023 21,535 3,351 24,886
Analysis of cost or valuation
At professional valuation 21,930 - 21,930
At cost - 17,298 17,298
At 30th April, 2023 21,930 17,298 39,228
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 Polish property was
valued based on the income approach, converting anticipated future benefits in
the form of rental income into present value. 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.
11. Right-of-use assets
At 31st October, 2023 Plant and
Property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2023 2,312 - 2,312
Exchange differences (12) - (12)
At 31st October, 2023 2,300 - 2,300
Accumulated depreciation
At 30th April, 2023 1,150 - 1,150
Depreciation charge for the period 186 - 186
Exchange differences (4) - (4)
At 31st October, 2023 1,332 - 1,332
Net book value at 31st October, 2023 968 - 968
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 30th April, 2023 Plant and
Property equipment Total
£'000 £'000 £'000
Cost or valuation
At 30th April, 2022 2,218 10 2,228
Disposals - (10) (10)
Exchange differences 94 - 94
At 30th April, 2023 2,312 - 2,312
Accumulated depreciation
At 30th April, 2022 741 8 749
Depreciation charge for the year 374 2 376
Disposals - (10) (10)
Exchange differences 35 - 35
At 30th April, 2023 1,150 - 1,150
Net book value at 30th April, 2023 1,162 - 1,162
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, 2023 31st October, 2022 30th April, 2023
unaudited unaudited audited
£'000 £'000 £'000
Cash and cash equivalents 42,627 23,363 12,336
Restricted cash held in Escrow - maturing in more than 90 days 7,426 519 2,917
Total cash 50,053 23,882 15,253
The restricted cash balance held in Escrow provides security to Lloyds Bank
plc in respect of certain guarantees, indemnities, and performance bonds 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 £221,000 (2022: £137,000).
· 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 £675,000 (2022 - £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. At 30th April, 2023 the present value of the
contracted future deficit reduction contributions was £3,577,000 (2022 -
£4,341,000), which was greater than the net scheme asset of £48,000 (2022 -
£2,337,000 liability). As the Company does not have an unconditional right to
the economic benefits arising from this surplus, an additional liability of
£3,625,000 (2022 - £2,004,000) has been recognised in the financial
statements in accordance with IFRIC 14.
· The pension scheme liability has reduced by £639,000 from
£4,216,000 at 30th April, 2023 to £3,577,000 at 31st October, 2023. A total
actuarial gain of £54,000 (2022 - £8,000 loss) has been recognised through
other comprehensive income. It comprises of a £671,000 remeasurement loss
(2022 - £3,493,000) compared to the interest income on the plan assets, a
£1,413,000 actuarial gain (2022 - £4,346,000 gain) due to changes in
financial assumptions and a loss relating to IFRIC 14 of £688,000 (2022 -
£861,000). The interest cost on the net defined benefit liability of £90,000
(2022 - £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 £675,000 (2022 - £450,000).
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
£7,416,000 at 31st October, 2023 (2022 - £1,566,000).
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.
15. Derivative financial instruments
During the period, the Group has entered into a number of forward currency
contracts in respect of USD denominated cash inflows in the 'Defence and
Security' division.
The Group has chosen not to adopt hedge accounting with respect to forward
exchange contracts and as a result the loss of £731,000 arising from the
change in the fair value during the period has been included within operating
profit.
US Dollar Sterling Average forward rate Change in Fair Value
$'000
£'000
£'000
Current derivative liability 41,500 33,615 1.2346 513
Non-current derivative liability 57,500 46,680 1.2318 218
Total 99,000 80,295 1.2330 731
16. Share-based payments
During the period, a total of 122,700 share options have been granted to
executive directors, non-executive directors, and employees under the MS
INTERNATIONAL plc Company Share Option Plan. These options are exercisable in
three equal amounts at three, four and five years after the date of grant and
are not subject to any share price performance conditions. Of the options,
4,800 have been granted at an exercise price of £6.24 and the remaining
117,900 have been granted at an exercise price of £7.20 per share.
Share options totalling 320,007 have been exercised during the period. This
includes 100,000 options exercised under the MS INTERNATIONAL plc Long Term
Incentive Plan at an exercise price of £0 per share, and a further 220,007
options exercised under the MS INTERNATIONAL Plc Company Share Option Scheme
at an exercise price of £1.41 per share.
170,007 of the options were satisfied by transferring shares from treasury and
the remaining 150,000 options were satisfied by transferring shares from The
Employee Share Ownership Trust ("ESOT").
The following tables illustrate the number and weighted average exercise
prices (WAEP) of share options during the year:
Long-term Incentive Plan Company Share Option Plan Total
Number WAEP Number WAEP Number WAEP
Outstanding at 30th April, 2022 500,000 - 1,000,000 £1.41 1,500,000 £0.94
Granted in year - - 20,000 £3.00 20,000 £3.00
Exercised in year (250,000) - - - (250,000) -
Outstanding at 30th April, 2023 250,000 - 1,020,000 £1.44 1,270,000 £1.16
Granted in year - - 122,700 £7.16 122,700 £7.16
Exercised in year (100,000) - (220,007) £1.41 (320,007) £0.97
Outstanding at 31st October, 2023 150,000 - 922,693 £2.21 1,072,693 £1.90
The Group recognised a total charge during the period of £19,000 (2022 -
£15,000) in relation to equity-settled share-based payment transactions. At
31st October, 2023 there were 150,000 (2022 - nil) and 113,337 (2022 - nil)
share options exercisable in the LTIP and CSOP share option schemes
respectively.
16. Share-based payments
During the period, a total of 122,700 share options have been granted to
executive directors, non-executive directors, and employees under the MS
INTERNATIONAL plc Company Share Option Plan. These options are exercisable in
three equal amounts at three, four and five years after the date of grant and
are not subject to any share price performance conditions. Of the options,
4,800 have been granted at an exercise price of £6.24 and the remaining
117,900 have been granted at an exercise price of £7.20 per share.
Share options totalling 320,007 have been exercised during the period. This
includes 100,000 options exercised under the MS INTERNATIONAL plc Long Term
Incentive Plan at an exercise price of £0 per share, and a further 220,007
options exercised under the MS INTERNATIONAL Plc Company Share Option Scheme
at an exercise price of £1.41 per share.
170,007 of the options were satisfied by transferring shares from treasury and
the remaining 150,000 options were satisfied by transferring shares from The
Employee Share Ownership Trust ("ESOT").
The following tables illustrate the number and weighted average exercise
prices (WAEP) of share options during the year:
Long-term Incentive Plan Company Share Option Plan Total
Number WAEP Number WAEP Number WAEP
Outstanding at 30th April, 2022 500,000 - 1,000,000 £1.41 1,500,000 £0.94
Granted in year - - 20,000 £3.00 20,000 £3.00
Exercised in year (250,000) - - - (250,000) -
Outstanding at 30th April, 2023 250,000 - 1,020,000 £1.44 1,270,000 £1.16
Granted in year - - 122,700 £7.16 122,700 £7.16
Exercised in year (100,000) - (220,007) £1.41 (320,007) £0.97
Outstanding at 31st October, 2023 150,000 - 922,693 £2.21 1,072,693 £1.90
The Group recognised a total charge during the period of £19,000 (2022 -
£15,000) in relation to equity-settled share-based payment transactions. At
31st October, 2023 there were 150,000 (2022 - nil) and 113,337 (2022 - nil)
share options exercisable in the LTIP and CSOP share option schemes
respectively.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BCBDDSUBDGXBRecent news on MS International
See all newsREG - MS International PLC - Director/PDMR Shareholding
AnnouncementREG - MS International PLC - Holding(s) in Company
AnnouncementREG - MS International PLC - Half-year Report
AnnouncementREG - MS International PLC - Director/PDMR Shareholding
AnnouncementREG - MS International PLC - Grant of Awards and Director/PDMR Shareholding
Announcement