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not constitute statutory financial statements within the meaning of section 435 of
the Companies Act 2006. The interim condensed consolidated financial statements do
not include all the information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's annual financial
statements as at 2nd May, 2015.
There are no accounting standards or interpretations that have become effective in
the current reporting period which have had a material effect on the net assets,
results and disclosures of the Group. The Group has not early adopted any other
standard, interpretation or amendment that has been issued but is not yet effective.
The figures for the year ended 2nd May, 2015 do not constitute the Group's statutory
accounts for the period but have been extracted from the statutory accounts. The
auditor's report on those accounts, which have been filed with the Registrar of
Companies, was unqualified and did not contain any statement under section 498(2) or
(3) of the Companies Act 2006.
3 Principal risks and uncertainties
The principal risk and uncertainties facing the Group relate to levels of customer
demand for the Group's products and services. Customer demand is driven mainly by
general economic conditions but also by pricing, product quality and delivery
performance of MS INTERNATIONAL plc and in comparison with our competitors. Sterling
exchange rates against other currencies can influence pricing.
The Group has considerable financial resources together with long term contracts with
a number of customers. As a consequence, the Directors believe that the Group is
well placed to manage its business risk successfully despite the current uncertain
economic outlook.
After making enquiries the Directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going concern basis in
preparing the annual report and accounts.
4 Segment information
(a) Primary reporting format -
divisional segments
The reporting format is
determined by the
differences in manufacture
and services provided by
the Group. The Defence
division is engaged in the
design, manufacture and
service of defence
equipment. The Forgings
division is engaged in the
manufacture of forgings.
The Petrol Station
Forecourt Structures
division is engaged in the
design and construction of
petrol station forecourt
structures. The Directors
are of the opinion that
seasonality does not
significantly affect these
results.
The following table
presents revenue and
profit information about
the Group's divisions for
the periods ended 31st
October, 2015 and 1st
November, 2014.
Defence Forgings Petrol Station Total
Superstructures
2015 2014 2015 2014 2015 2014 2015 2014
unaudited unaudited
£000 £000 £000 £000 £000 £000 £000 £000
Revenue
External 9,228 6,811 6,062 7,744 8,691 7,182 23,981 21,737
Total revenue 9,228 6,811 6,062 7,744 8,691 7,182 23,981 21,737
Segment result (163) (1,112) (321) 628 970 679 486 195
Net finance expense (91) (124)
Profit before taxation 395 71
Taxation (6) 24
Profit for the period 389 95
Capital expenditure 145 80 807 280 234 53
Depreciation 116 108 177 214 146 141
The following table
presents segment assets
and liabilities of the
Group's divisions for the
periods ended 31st
October, 2015 and 1st
November, 2014.
Segmental assets 26,500 25,203 5,305 6,495 6,949 6,929 38,754 38,627
Unallocated assets 14,362 14,711
Total assets 53,116 53,338
Segmental liabilities 13,592 11,687 1,205 2,146 3,304 3,874 18,101 17,707
Unallocated liabilities 6,959 8,648
Total liabilities 25,060 26,355
5 Income tax
The major components of income tax expense in the consolidated income statement are:
26 weeks ended 31st Oct., 2015 26 weeks ended 1st Nov., 2014
unaudited unaudited
£'000 £'000
Current income tax charge 128 69
Current tax 128 69
Relating to origination and reversal of temporary differences (98) (93)
Impact of reduction in deferred tax rate ( 20% to 18%) (24) -
Deferred tax (122) (93)
Total income expense/(credit) reported in the consolidated income statement 6 (24)
Deferred taxation has been provided at 18%.
The Finance (No 2) Bill 2015 provides that the rate of UK corporation tax will be reduced to 19% from 1st April, 2017 with a further 1% reduction to 18% on 1st April, 2020.
The Bill was substantively enacted at the balance sheet date.
6 Earnings per share
The calculation of basic earnings per share is based on:
(a) Profit for the period attributable to equity holders of the parent of £389,000 (2014 - £95,000);
(b) 16,504,691 (2014 - 16,504,691) Ordinary shares, being the number of Ordinary shares in issue.
This represents 18,396,073 (2014 - 18,396,073) being the number of Ordinary shares in issue less 245,048 (2014 - 245,048) being the number of shares held within the ESOT and less 1,646,334 (2014 - 1,646,334) being the number of shares purchased by the Company.
7 Dividends paid and proposed
26 weeks ended 31st Oct., 2105 26 weeks ended 1st Nov., 2014
unaudited unaudited
£'000 £'000
Declared and paid during the six month period
Dividend on ordinary shares
Final dividend for 2015 - 6.50p (2014 - 6.50p) 1,073 1,073
Proposed for approval
Interim dividend for 2016 - 1.50p (2015 - 1.50p) 248 248
Dividend warrants will be posted on 31st December, 2015 to those members registered on the books of the Company on 11th December, 2015.
8 Property, plant and equipment
Acquisitions and disposals:
During the 26 weeks ended 31st October, 2015, the Group acquired assets with a cost of £1,210,000 (2014 - £487,000).
Assets with a net book value of £1,000 (2014 - £108,000) were disposed of by the Group for proceeds of £43,000 (2014 - £137,000) during the 26 weeks ended 31st October, 2015, resulting in a gain on disposal of £42,000 (2014 - £29,000).
9 Cash and cash equivalents
For the purpose of the interim consolidated cash flow statement, cash and cash equivalents are comprised of the following:
31st Oct., 2015 2nd May, 2015
unaudited audited
£'000 £'000
Cash at bank and in hand 6,168 9,884
Short term deposits 5,281 7,264
11,449 17,148
10 Pension liability
The Company operates an employee pension scheme called the MS INTERNATIONAL plc Retirement and Death Benefits Scheme ("the Scheme"). IAS19 requires disclosure of certain information about the Scheme as follows:
- Until 5th April, 1997, the Scheme provided defined benefits and
these liabilities remain in respect of service prior to 6th
April, 1997. From 6th April, 1997 until 31st May 2007 the
Scheme provided future service benefits on a defined
contribution basis.
- The last formal valuation of the Scheme was performed at 5th
April, 2014 by a professionally qualified actuary.
- The Company has paid contributions into the Scheme for life
assurance premiums and other Scheme expenses. In addition, from
April 2013, the Company has paid £229,000 per annum of deficit
reduction payments into the defined benefit section of the
scheme. With effect from April 2015, the deficit reduction
payments paid into the scheme by the Company have been increased
to £300,000 per annum, increasing thereafter at 3% per annum.
- From 1st June, 2007 the Company has operated a defined
contributions scheme for its UK employees which is administered
by a UK pension provider. Member contributions are paid in line
with this scheme's documentation over the accounting period and
the Company has no further obligations once the contributions
have been made.
11 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 £7,013,513 at 31st October, 2015 (2014 - £5,768,071).
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.
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.
12 Acquisitions
On the 17th June, 2015, the Company acquired the entire issued share
capital of Petrol Sign BV, a company based in the Netherlands.
The consideration for the acquisition was 3,400,000 Euros and was paid in
cash on completion.
Petrol Sign BV designs, restyles, produces and installs the complete
appearance of Petrol Station Superstructures and Forecourts.
The provisional fair values of the identifiable assets and liabilities of
Petrol Sign BV as at the date of acquisition were
£'000
Plant and equipment 169
Inventories 958
Receivables 376
Payables (707)
Taxation (57)
Bank overdraft (171)
Intangible assets 1,869
Consideration and net assets acquired 2,437
Add back bank overdraft 171
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