Annual Financial Report

RNS Number : 3728Q

MS International PLC

28 June 2022

 

Chairman's statement

Results and Review

It is a pleasure to report that, for the year ended 30^th April 2022, the Company attained considerable progress across the Group's divisions, resulting in a significantly improved pre-tax profit of £5.97m (2021-£1.59m) on increased revenue of £74.52m (2021-£61.54m).

Basic earnings per share amounted to 30.9p, (2021- 7.2p). The balance sheet was further strengthened with cash and cash equivalents rising to £18.1m (2021 - £17.4m).

The Group has made a strong recovery post the many constraints imposed by Covid. This, I believe, demonstrates the tangible benefits of operating an optimistic, long-term investment and support strategy, that we practice daily, to support and encourage the respective management teams that directly oversee the operations of our diverse businesses.

During the period under review, two common themes continued to feature across all divisions, namely the prolonged negative effects of the global pandemic and extended periods of limited availability of materials and components. Such issues required close and constant monitoring by our management teams to ensure sustained high-quality sales output. A job well done by everyone.

'Defence'

This was a remarkable year of great achievements for this division, highlighted by the phased manufacture and delivery of the first 7 of 8 No MSI-DS30mm naval weapon systems to the United States Navy. This was achieved in a timely manner to facilitate our customer's comprehensive test and certification programme of the MSI product. The anticipated successful prototype testing of the MSI weapon system, is the precursor to a highly prized sole source 'Follow-on Production Contract'. Presently, all trials are going to plan and positive progress is being made.

In the UK, our new 'state of the art' Norwich manufacturing facility is in the final phase of completion, whilst, in the United States of America, we are in the early stages of our programme to establish an appropriate product support resource for our weapon systems, along-side our contemporary forging facilities, in South Carolina. These projects are essential to support our perceived growing defence opportunities in the United States.

We also firmly believe that our 'state of the art' weapon system will significantly enhance the capability and protection of the Royal Navy, once a forward-looking decision is made to upgrade their existing historic, small calibre weapons systems. We stand ready, with our modern manufacturing facilities and proven international capabilities, to work with the UK MOD to meet such requirements.

'Forgings'

This division also performed extremely well, successfully navigating the disrupted, and constantly changing, international business environment. There is little doubt that having established contemporary automated 'local' production facilities - in the UK and both North and South America, - successfully enabled MSI to welcome and secure many customers that had previously procured product from China.

 'Petrol Station Superstructures' - mobility hubs

Operations in both the UK and the Poland performed resiliently against a prevailing uncertain backdrop. Despite the challenges, the division continued to make great progress, pleasingly exceeding management's revenue forecasts.  Many forecourt operators have continued to develop their sites to incorporate a substantial grocery store and catering facility and Global-MSI designed, manufactured and erected many such structures during the period. 

As with all construction orientated businesses, the negative impact of the lack of readily available materials and their associated fluctuating costs, became a major factor in terms of managing day to day operations. Such disruptive circumstances necessitated some contracts to be re-negotiated to the mutual satisfaction of all parties.

'Corporate Branding'

This division traded at similar levels to the prior year, as commercial activity remained seriously constrained across mainland Europe's national borders. We took action to restructure the division's operations in both The Netherlands and Germany and much has been achieved as a result, leaving it better geared to the current needs of the market. Pleasingly, the UK based business has continued to prosper, gaining market share and expanding operational capabilities and facilities.

Outlook

'Defence'

Foremost, we look forward with confidence to a favourable report on our 30mm naval weapon system, presently on approval test by the US Navy.

Furthermore, recent events have served to focus attention on the need for appropriate national security to combat potential lethal land-based threats.  We believe that, as our additional 'in-house' product developments come to fruition, there will be numerous opportunities across international markets to supply our, tested and proven, land-based defence equipment.

'Forgings'

Demand for our high quality, forged products is increasing, as customers seek assured and dependable security of supply. To that end, we will continue to invest in further automating our manufacturing facilities in the UK, the United States and South America.

'Petrol Station Superstructures'

The markets we serve are vigorously embracing change, not only in the development of providing and dispensing alternative fuel types but also in broadening their provision of services to include groceries and catering facilities. The development expertise and scale of the buildings required to dispense such services are most appropriate to the designs, manufacturing and erection skills of Global-MSI. We expect further growth opportunities for both our UK and Polish operations.

'Corporate Branding'

We have completed restructuring in The Netherlands and Germany and expanded our UK operations. So, now that inter-country business activity across mainland Europe has been restored, we are cautiously optimistic that we will achieve a more profitable division this year.

Pleasingly, we have already received instructions from a number of major customers to speedily recommence projects, that they had put 'on hold', owing to the scale and duration of the pandemic.

Summary

We believe that we have placed each of our businesses in a strong and exciting position within the markets which we serve. Close monitoring of performance and further support in the development of new products and services will, no doubt, bring further rewards.

All matters considered the Board recommends the payment of a final dividend of 7.5p per share (2021 - 6.5p) making a total for the year of 9.25p (2021 - 8.25p).

The final dividend is expected to be paid on the 12th August 2022, to those shareholders on the register at the close of business on the 15th July 2022.

Michael Bell

27^th June 2021

MS INTERNATIONAL plc
Michael Bell		Tel: [phone]
Shore Capital (Nominated Adviser and Broker)
Patrick Castle		Tel: [phone]
Daniel Bush

Copies of this announcement are available from the Company's registered office at MS INTE RNATIONAL plc, Balby Carr Bank, Doncaster, DN4 8DH, England. The Notice of AGM will be posted to shareholders on 5^th July, 2022. The full Annual Report and Accounts will be posted to shareholders in the week commencing 11^th July, 2022. They will be made available on the Company's website at www.msiplc.com and will be delivered to the Registrar of Companies after it has been laid before the Company's members at the Annual General Meeting to be held on 28^th July, 2022 at The Holiday Inn, Warmsworth, Doncaster.

Consolidated income statement
For the year ended 30th April, 2022
				2022		2021
Continuing operations				Total		Total
				£'000		£'000
Revenue				74,524		61,539
Cost of sales				(54,121)		(44,218)
Gross profit				20,403		17,321
Distribution costs				(3,304)		(2,581)
Administrative expenses				(12,097)		(12,954)
O ther operating income				1,185		-
				(14,216)		(15,535)
Group operating profit				6,187		1,786
Share of net profit of joint venture				-		28
Interest received				1		10
Interest paid				(95)		(92)
Other finance costs - pensions				(126)		(140)
				(220)		(222)
Profit before taxation				5,967		1,592
Taxation				(1,035)		(415)
Profit for the year attributable to equity holders of the parent				4,932		1,177
Basic earnings per share				30.9p		7.2p
Diluted earnings per share				29.6p		7.0p
Consolidated statement of comprehensive income
For the year ended 30th April, 2022
				2022		2021
				Total		Total
				£'000		£'000
Profit for the year attributable to equity holders of the parent				4,932		1,177
Exchange differences on retranslation of foreign operations				(603)		(38)
Net other comprehensive loss to be reclassified to profit or loss in subsequent years				(603)		(38)
Remeasurement gains on defined benefit pension scheme				1,601		1,213
Deferred tax on remeasurement on defined benefit scheme				(145)		(230)
Revaluation of land and buildings				3,868		-
Deferred tax on revaluation surplus on land and buildings				(798)		-
Net other comprehensive income not being reclassified to profit or loss in subsequent years				4,526		983
Total comprehensive income for the year attributable to equity holders of the parent				8,855		2,122

Consolidated and company statement of changes in equity
For the year ended 30th April, 2022
			Share capital		Capital redemption reserve		Other reserves	Revaluation reserve		Special reserve		Currency translation reserve		Treasury shares		Retained earnings		Total shareholders' funds
			£'000		£'000		£'000	£'000		£'000		£'000		£'000		£'000		£'000
(a) Group
At 30th April, 2020			1,840		901		2,815	6,055		1,629		224		(3,059)		19,723		30,128
Profit for the year			-		-		-	-		-		-		-		1,177		1,177
Other comprehensive (loss)/income			-		-		-	-		-		(38)		-		983		945
Total comprehensive (loss)/income			-		-		-	-		-		(38)		-		2,160		2,122
Dividends paid			-		-		-	-		-		-		-		(578)		(578)
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 year			-		-		-	-		-		-		-		4,932		4,932
Other comprehensive income/(loss)			-		-		-	3,868		-		(603)		-		658		3,923
Total comprehensive income/(loss)			-		-		-	3,868		-		(603)		-		5,590		8,855
Dividends paid			-		-		-	-		-		-		-		(1,316)		(1,316)
At 30th April, 2022			1,784		957		2,815	9,923		1,629		(417)		(2,789)		24,673		38,575
(b) Company
At 30th April, 2020			1,840		901		7,620	-		1,629		-		(3,059)		15,618		24,549
Profit for the year			-		-		-	-		-		-		-		1,548		1,548
Other comprehensive income			-		-		-	-		-		-		-		899		899
Total comprehensive income			-		-		-	-		-		-		-		2,447		2,447
Dividends paid (note 10)			-		-		-	-		-		-		-		(578)		(578)
Purchase of own shares (note 22)			-		-		-	-		-		-		(636)		-		(636)
Cancellation of shares			(56)		56		-	-		-		-		906		(906)		-
At 30th April, 2021			1,784		957		7,620	-		1,629		-		(2,789)		16,581		25,782
Profit for the year			-		-		-	-		-		-		-		3,362		3,362
Other comprehensive income			-		-		-	-		-		-		-		1,232		1,232
Total comprehensive income			-		-		-	-		-		-		-		4,594		4,594
Dividends paid			-		-		-	-		-		-		-		(1,316)		(1,316)
At 30th April, 2022			1,784		957		7,620	-		1,629		-		(2,789)		19,859		29,060

Consolidated and company statements of financial position
At 30th April, 2022
		Group				Company
		2022		2021		2022		2021
		£'000		£'000		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment		24,537		19,113		1,017		935
Right-of-use assets		1,479		530		5,029		5,486
Intangible assets		3,002		3,558		-		-
Investments in subsidiaries		-		-		18,126		17,313
Investment in joint venture		34		36		-		-
Deferred income tax asset		1,435		1,606		1,374		1,600
		30,487		24,843		25,546		25,334
Current assets
Inventories		16,327		12,423		2,592		1,498
Trade and other receivables		11,396		9,369		15,394		16,135
Contract assets		1,773		1,998		-		-
Income tax receivable		6		194		-		141
Prepayments		1,352		2,010		218		543
Cash and cash equivalents		18,092		17,390		3,258		943
Restricted cash held in Escrow		1,158		6,165		-		-
		50,104		49,549		21,462		19,260
TOTAL ASSETS		80,591		74,392		47,008		44,594
EQUITY AND LIABILITIES
Equity
Share capital		1,784		1,784		1,784		1,784
Capital redemption reserve		957		957		957		957
Other reserves		2,815		2,815		7,620		7,620
Revaluation reserve		9,923		6,055		-		-
Special reserve		1,629		1,629		1,629		1,629
Currency translation reserve		(417)		186		-		-
Treasury shares		(2,789)		(2,789)		(2,789)		(2,789)
Retained earnings		24,673		20,399		19,859		16,581
TOTAL EQUITY SHAREHOLDERS' FUNDS		38,575		31,036		29,060		25,782
Non-current liabilities
Defined benefit pension liability		4,720		7,095		4,720		7,095
Deferred income tax liability		2,578		1,553		-		-
Lease liabilities		1,158		380		4,807		5,214
		8,456		9,028		9,527		12,309
Current liabilities
Trade and other payables		14,176		12,410		7,068		5,234
Contract liabilities		18,329		21,192		622		874
Income tax payable		702		561		324		-
Lease liabilities		353		165		407		395
		33,560		34,328		8,421		6,503
TOTAL EQUITY AND LIABILITIES		80,591		74,392		47,008		44,594

Consolidated and company cash flow statements
For the year ended 30th April, 2022
		Group				Company
		2022		2021		2022			2021
		£'000		£'000		£'000			£'000
Profit before taxation		5,967		1,592		2,509			92
Adjustments to reconcile profit before taxation to cash generated from operating activities:
Past service pension costs		-		205		-			205
Depreciation charge of owned assets and right-of-use assets		1,746		1,666		931			895
Amortisation charge		227		237		-			-
Impairment of goodwill		349		348		-			-
Write off of acquired goodwill		-		8		-			-
Profit on sale of fixed assets		(169)		(74)		(163)			(61)
Share of net profit of joint venture		-		(28)		-			-
Termination of lease		-		(7)		-			-
Finance costs		220		222		292			366
Foreign exchange (losses)/gains		(142)		516		-			-
(Increase)/decrease in inventories		(3,657)		3,377		(1,094)			44
(Increase)/decrease in receivables		(1,541)		(6,834)		19			37
Decrease/(increase) in prepayments		611		(237)		325			(246)
Increase in payables		1,340		1,162		1,518			1,296
(Decrease)/increase in progress payments		(3,660)		7,824		(252)			(163)
Pension fund payments		(900)		(600)		(900)			(600)
Cash generated from operating activities		391		9,377		3,185			1,865
Net interest paid		(43)		(52)		(1)			(49)
Taxation (paid)/received		(447)		460		151			-
Net cash (outflow)/inflow from operating activities		(99)		9,785		3,335			1,816
Investing activities
Payments for acquisitions, net of cash acquired		-		(89)		-			-
Dividends received from subsidiaries		-		-		1,249			1,498
Purchase of property, plant and equipment		(2,703)		(781)		(578)			(268)
Purchase of intangible assets		(54)		-		-			-
Proceeds on disposal of property, plant and equipment		227		97		185			62
Decrease/(increase) in cash held in the Escrow account maturing in more than 90 days		5,007		(6,165)		-			-
Net cash inflow/(outflow) from investing activities		2,477		(6,938)		856			1,292
Financing activities
Purchase of own shares		-		(636)		-			(636)
Lease payments		(405)		(327)		(560)			(560)
Dividends paid		(1,316)		(578)		(1,316)			(578)
Net cash outflow from financing activities		(1,721)		(1,541)		(1,876)			(1,774)
Increase in cash and cash equivalents		657		1,306		2,315			1,334
Opening cash and cash equivalents/(bank overdraft)		17,390		16,125		943			(391)
Exchange differences on cash and cash equivalents		45		(41)		-			-
Closing cash and cash equivalents		18,092		17,390		3,258			943

The financial information set out above does not constitute the Company's statutory accounts for the periods ended 30^th April, 2022 or 30th April, 2021 but is derived from those accounts. Statutory accounts for 2021 have been delivered to the Registrar of Companies and those for 2022 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

1.  Segment information

The following table presents revenue and profit and certain assets and liability information regarding the Group's divisions for the years ended 30th April, 2022 and 30th April, 2021. 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 Superstructures' division is engaged in the design, manufacture, construction, branding, maintenance, and restyling of petrol station superstructures. The 'Corporate Branding' division is engaged in the design, manufacture, installation, and service of corporate brandings.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Group financing (including finance costs and finance revenue) and income taxes are managed on a group basis and are therefore not allocated to operating segments.

		'Defence'				'Forgings'				'Petrol Station				'Corporate				Total
										Superstructures'				Branding'
		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000
Segmental revenue
Total revenue		30,219		27,078		16,482		9,970		15,143		11,774		13,009		12,972		74,853		61,794
Revenue from other segments		-		-		-		-		(245)		(145)		(84)		(110)		(329)		(255)
Revenue from external customers		30,219		27,078		16,482		9,970		14,898		11,629		12,925		12,862		74,524		61,539
Segment result
Operating profit		4,123		2,570		2,245		425		1,074		448		(1,255)		(1,657)		6,187		1,786
Share of net profit of joint venture																		-		28
Net finance costs																		(220)		(222)
Profit before taxation																		5,967		1,592
Taxation																		(1,035)		(415)
Profit for the year																		4,932		1,177
Segmental assets
Assets attributable to segments		33,393		35,414		7,883		4,066		9,380		8,492		8,050		8,468		58,706		56,440
Unallocated assets*																		21,885		17,952
Total assets																		80,591		74,392
Segmental liabilities
Liabilities attributable to segments		23,643		24,795		3,547		2,445		3,109		2,970		3,591		3,510		33,890		33,720
Unallocated liabilities *																		8,126		9,636
Total liabilities																		42,016		43,356
Other segmental information
Capital expenditure		1,933		440		389		24		195		131		186		186		2,703		781
Depreciation		210		176		561		545		714		377		261		263		1,746		1,361
Amortisation		10		-		-		-		43		55		174		182		227		237
Impairment		-		-		-		-		-		-		349		348		349		348

* Unallocated assets include certain fixed assets (including all UK properties), current assets and deferred income tax assets. Unallocated liabilities include the defined pension benefit 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.
Geographical analysis
The following table presents revenue and expenditure and certain assets and liabilities information by geographical segment for the years ended 30th April, 2022 and 30th April, 2021. The Group's geographical segments are based on the location of the Group's assets.
				United Kingdom								Europe								USA							South America							Total
				2022				2021				2022				2021				2022				2021			2022			2021				2022				2021
				£'000				£'000				£'000				£'000				£'000				£'000			£'000			£'000				£'000				£'000
External revenue by origin				41,665				41,191				11,599				12,987				18,917				5,934			2,343			1,427				74,524				61,539
Non-current assets				20,160				17,373				4,327				3,706				5,913				3,751			87			13				30,487				24,843
Current assets				37,235				39,457				6,147				6,899				6,024				2,306			698			887				50,104				49,549
Liabilities				28,380				32,516				4,112				3,729				9,223				7,081			301			30				42,016				43,356
Capital expenditure				2,377				644				133				137				193				-			-			-				2,703				781
Revenue disaggregated by destination is shown as follows:
																											2022							2021
																											£'000			%				£'000				%
United Kingdom																											31,287			42%				22,259				36%
Europe																											17,103			23%				26,574				43%
USA																											19,406			26%				5,934				10%
South America																											2,421			3%				1,427				2%
Rest of World																											4,307			6%				5,345				9%
Total revenue																											74,524			100%				61,539				100%

The Group's largest customer, which is reported in the 'Defence' division, contributed 14.2% to the Group's revenue (2021: 14.9% in the 'Defence' division from a different customer). Only one other customer, also in the 'Defence' division, contributed more than 10% to the Group's revenue with a contribution of 11.4% (2021: 11.3% in the 'Defence' division).

2.  Other operating income
						2022		2021
						£'000		£'000
Settlement of contractual dispute						1,185		-
						1,185		-
During the year, the Group settled a protracted contractual dispute, the terms of which are confidential. The amount received has been recognised in other income. The Group has incurred £0.6m of legal costs in the current year in relation to this matter. These costs are included in administrative expenses.
2.  Employee information
The average number of employees, including executive directors, during the year was as follows:
		Group				Company
		2022		2021		2022		2021
		Number		Number		Number		Number
Production		252		243		74		73
Technical		71		72		23		24
Distribution		26		32		2		5
Administration		98		96		39		32
		447		443		138		134
(a)  Staff costs
Including executive directors, employment costs were as follows:
		Group				Company
		2022		2021		2022		2021
		£'000		£'000		£'000		£'000
Wages and salaries		18,942		17,420		7,139		6,123
Covid-19 job retention scheme income		(1,636)		(1,690)		-		(313)
Social security costs		3,233		3,263		722		647
Pension costs		570		557		352		344
Share options expense		29		29		29		29
		21,138		19,579		8,242		6,830
The Covid-19 job retention scheme income has been received in the following countries:
						2022		2021
						£'000		£'000
UK						-		313
The Netherlands						1,310		1,113
USA						251		254
Poland						75		10
						1,636		1,690
(b)  Directors' emoluments
						2022		2021`
						£'000		£'000
Aggregate directors' emoluments						1,810		1,570
Pension contributions						52		42
						1,862		1,612

3.  (a)  Taxation
The charge for taxation comprises:
		2022		2021
		£'000		£'000
Current tax
United Kingdom corporation tax		667		410
Adjustments in respect of previous years		(10)		25
Foreign corporation tax		120		30
Group current tax expense		777		465
Deferred tax
Origination and reversal of temporary differences		261		(40)
Adjustments in respect of previous years		(5)		(10)
Adjustments in respect of difference in applicable tax rate		2		-
Group deferred tax expense/(credit)		258		(50)
Total tax expense on profit		1,035		415
Tax relating to items charged to other comprehensive income:
		2022		2021
		£'000		£'000
Deferred tax charged through other comprehensive income
Deferred tax on measurement gains on pension scheme current year		(145)		(230)
Deferred tax on revaluation surplus on land and buildings		(798)		-
Deferred tax in the Consolidated statement of comprehensive income		(943)		(230)
(b)  Factors affecting the tax charge for the year

The tax charge assessed for the year is lower than (2021: higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:
						2022			2021
						£'000			£'000
Profit before tax						5,967			1,592
Profit multiplied by standard rate of corporation tax of 19% (2021 - 19%)						1,134			302
Effects of:
Expenses not deductible for tax purposes						(247)			(164)
Adjustments in respect of overseas tax rates						161			262
Current tax adjustment in respect of previous years						(10)			25
Deferred tax adjustment in respect of previous years						(5)			(10)
Deferred tax adjustment in respect of different applicable rates						2			-
Total taxation expense for the year						1,035			415
(c)  Factors affecting future tax charge
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 30th April, 2022, deferred income tax has been provided at 25% or a blended rate depending upon when the underlying temporary timing differences are expected to unwind.
Deferred 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.

4.  Earnings per share
The calculation of basic earnings per share of 30.9p (2021 - 7.2p) is based on the profit for the year attributable to equity holders of the parent of £4,932,000 (2021 - £1,177,000) and on a weighted average number of ordinary shares in issue of 15,949,691 (2021 - 16,342,816). At 30th April, 2022 there were 1,055,000 (2021 - 380,000) dilutive shares on option with a weighted average effect of 716,575 (2021 - 391,667) giving a diluted earnings per share of 29.6p (2021 - 7.0p).
		2022		2021
Number of ordinary shares in issue at start of the year		17,841,073		18,396,073
Cancellation of ordinary shares during the year		-		(555,000)
Number of ordinary shares in issue at the end of the year		17,841,073		17,841,073
Weighted average number of shares in issue		17,841,073		18,234,198
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		16,342,816
Weighted average number of the 1,055,000 (2021 - 380,000) dilutive shares		716,575		391,667
Weighted average diluted shares		16,666,266		16,734,483
Profit for the year attributable to equity holders to the parent in £		4,932,000		1,177,000
Basic earnings per share		30.9p		7.2p
Diluted earnings per share		29.6p		7.0p
5.  Dividends paid and proposed		2022		2021
		£'000		£'000
Declared and paid during the year
Final dividend for 2021: 6.50p (2020 - 1.75p)		1,037		289
Interim dividend for 2022: 1.75p (2021 - 1.75p)		279		289
		1,316		578
Proposed for approval by shareholders at the AGM
Final dividend for 2022: 7.5p (2021- 6.5p)		1,196		1,037

6.  Trade and other receivables
						Group				Company
						2022		2021		2022		2021
						£'000		£'000		£'000		£'000
Trade receivables (net of allowance for expected credit losses)						10,167		8,764		2,366		2,184
Amounts owed by subsidiary undertakings						-		-		13,024		13,872
Amounts owed by joint venture						228		130		-		-
Other receivables						1,001		475		4		79
						11,396		9,369		15,394		16,135
(a)  Trade receivables
Trade receivables are denominated in the following currencies:
						Group				Company
						2022		2021		2022		2021
						£'000		£'000		£'000		£'000
Sterling						5,554		6,112		1,576		1,675
Euro						1,786		1,692		790		509
US dollar						2,406		695		-		-
Other currencies						421		265		-		-
						10,167		8,764		2,366		2,184
Trade receivables are non-interest bearing, generally have 30 day terms, and are shown net of provision for expected credit losses. The aged analysis of trade receivables after provision for expected credit losses is as follows:
						Group				Company
						2022		2021		2022		2021
						£'000		£'000		£'000		£'000
Not past due						7,234		7,268		2,316		2,033
< 30 days						2,062		1,381		24		122
30-60 days						64		102		19		28
60-90 days						11		28		8		-
> 90 days						796		(15)		(1)		1
Total						10,167		8,764		2,366		2,184
In the Group, trade receivables with a nominal value of £52,000 (2021 - £43,000) were impaired and fully provided as at 30th April, 2022. During the year, bad debts of £20,000 (2021 - £81,000) were recovered and bad debts of £29,000 (2021 - £16,000) were incurred.
In the Company, trade receivables with a nominal value of £33,000 (2021 - £11,000) were impaired and fully provided as at 30th April, 2022. During the year, bad debts of £7,000 (2021 - £69,000) were recovered and bad debts of £29,000 (2021 - £7,000) were incurred.
(b)  Amounts owed by joint venture
Amounts owed by joint venture are non-interest bearing and have 30 day terms. The aged analysis of amounts owed by joint venture net of provision for expected credit losses as follows:
										Group
										2022		2021
										£'000		£'000
Not past due										135		50
< 30 days										47		33
30-60 days										34		41
60-90 days										12		6
Total										228		130
At 30th April, 2022 there was no provision for expected credit losses relating to amounts owed by joint venture (2021 - nil).
(c)  Intercompany receivables
All amounts due from Group companies are repayable on demand and are not charged interest. The majority of intercompany balances are to group entities with liquid assets and are capable of being repaid on demand. There has been no impairment recognised on intercompany receivables (2021 - nil).
There are loans to 'MS INTERNATIONAL Estates Limited', which although repayable on demand, are supported by properties, which will not be immediately realisable. The directors have assessed the likelihood of default and the loss in the event of default as well as the balance at the reporting date and conclude that there is no material impairment of the receivable.
The amounts receivable at the reporting date can be categorised as:
										Company
										2022		2021
										£'000		£'000
Amounts due from companies backed by liquid assets										7,099		7,587
Amounts due from 'MS INTERNATIONAL Estates Limited'										5,925		6,285
										13,024		13,872

7.  Cash and cash equivalents
						Group				Company
						2022		2021		2022		2021
						£'000		£'000		£'000		£'000
Cash at bank and in hand						18,092		17,390		3,258		943
Restricted cash held in Escrow - maturing in more than 90 days						1,158		6,165		-		-
Total cash						19,250		23,555		3,258		943
The balance held in Escrow provides security to Lloyds Bank plc in respect of any guarantees, indemnities, and performance bonds given by the Group in the ordinary course of business.
8.  Net funds
Analysis of net funds						Group				Company
						2022		2021		2022		2021
						£'000		£'000		£'000		£'000
Cash and cash equivalents						18,092		17,390		3,258		943
Restricted cash held in Escrow						1,158		6,165		-		-
Lease liabilities						(1,511)		(545)		(5,214)		(5,609)
						17,739		23,010		(1,956)		(4,666)
Group movement in net funds
						Cash and cash equivalent		Restricted cash held in Escrow		Lease liabilities		Total
At 30th April, 2020						16,125		-		(1,229)		14,896
Cash flows						1,306		6,165		327		7,798
Foreign exchange adjustments						(41)		-		(16)		(57)
Leases on acquisition						-		-		402		402
Other changes						-		-		(29)		(29)
At 30th April, 2021						17,390		6,165		(545)		23,010
Cash flows						657		(5,007)		405		(3,945)
Foreign exchange adjustments						45		-		7		52
New leases						-		-		(1,327)		(1,327)
Other changes						-		-		(51)		(51)
At 30th April, 2022						18,092		1,158		(1,511)		17,739
Company movement in net funds
								Cash and cash equivalents		Lease liabilities		Total
At 30th April, 2020								(391)		(5,992)		(6,383)
Cash flows								1,334		560		1,894
Other changes								-		(177)		(177)
At 30th April, 2021								943		(5,609)		(4,666)
Cash flows								2,315		560		2,875
Other changes								-		(165)		(165)
At 30th April, 2022								3,258		(5,214)		(1,956)

9.  Reserves

Share capital

The balance classified as share capital includes the nominal value on issue of the Company's equity share capital, comprising 10p ordinary shares.

Capital redemption reserve

The balance classified as capital redemption reserve represents the nominal value of issued share capital of the Company, repurchased.

Other reserves

Following the transfer of assets held at valuation by the Company to a subsidiary company, a reserve has been created which is non-distributable. This is equal to the revaluation reserve previously arising.

Additionally, it includes the non-distributable retained reserve for the revaluation reserve previously showing in the Company for properties now transferred to other members of the Group.

Revaluation reserve

The asset revaluation reserve is used to record increases in the fair value of land and buildings and decreases to the extent that such decrease relates to an increase on the same assets previously recognised in equity.

Special reserve

The special reserve is a distributable reserve created following the cancellation of a share premium account by way of court order in March 1993.

Currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. It is also used to record the effect of hedging net investments in foreign operations.

Treasury shares

The treasury share reserve is detailed as follows:

2022

2021

£'000

£'000

Employee Share Ownership Trust

100

100

Shares in treasury (see below)

2,689

2,959

2,789

3,059

The Employee Share Ownership Trust ("ESOT") provides for the issue of options over ordinary shares in the Company to Group employees, including executive directors, at the discretion of the Remuneration Committee. The trustee of the ESOT is Appleby Trust (Jersey) Ltd, an independent company registered in Jersey.

The trust has purchased an aggregate 245,048 (2021 - 245,048) ordinary shares, which represents 1.5% (2021 - 1.5%) of the issued share capital of the Company at an aggregate cost of £100,006. The market value of the shares at 30th April, 2022 was £728,000 (2021 - £380,000). The Company has not made any payments (2021 - nil) into the ESOT bank accounts during the year. Details of the outstanding share options for directors are included in the Directors' remuneration report.

The assets, liabilities, income, and costs of the ESOT have been incorporated into the Company's financial statements. Total ESOT costs charged to the income statement in the year amounts to £1,000 (2021 - £3,000). During the year, no options have been granted over shares (2021 - nil), no options on shares were exercised (2021 - nil) and no shares were purchased (2021 - nil).

The Company made the following purchases and cancellations of its own 10p ordinary shares to be held in Treasury:

Number

£'000

Purchase of 1,000,000 shares from the Group's pension scheme on 11th December, 2013

1,000,000

1,722

Purchase of 646,334 shares on 30th January, 2014

646,334

1,237

Purchase of 555,000 shares on 15th January, 2021

555,000

636

Consideration paid for purchase of own shares

2,201,334

3,595

Cancellation of 555,000 shares at weighted average rate

(555,000)

(906)

Net value of treasury shares

1,646,334

2,689

 

END

 

 

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