Half-year Report

RNS Number : 7615I
MS International PLC
16 December 2020
 

 

 

 

 

 

 

 

 

 

 

 

 

MS INTERNATIONAL plc

 

 

 

 

Unaudited Interim Condensed

 

Group Financial Statements

 

31st October, 2020

 

 

 

 

 

 

 

EXECUTIVE DIRECTORS

Michael Bell

Michael O'Connell

Nicholas Bell

 

 

 

 

NON-EXECUTIVE DIRECTORS

Roger Lane-Smith

David Hansell

 

 

 

 

COMPANY SECRETARY

David Kirkup

 

 

 

 

REGISTERED OFFICE

Balby Carr Bank

Doncaster

DN4 8DH

England

 

 

 

 

PRINCIPAL OPERATING DIVISIONS

 

 'Defence'

 'Forgings'

 'Petrol Station Superstructures'

 'Corporate Branding'

 

 

 

 

 

 

Chairman's Statement

 

 

Results

We entered our 2020/21 financial year confronted by a subdued general economy, growing 'Brexit' uncertainty and a rapidly spreading global pandemic which, collectively, were making for 'a perfect storm' that would inevitably negatively impact all our business activities.

 

Yet, with a strong balance sheet, a good order book, a growing international market presence across our increasingly diverse range of businesses and recently developed new products and services coming through, we were, at least, in a good starting position to face the rapidly intensifying external pressures.

 

We tightened our belts and gratefully welcomed the financial assistance generously provided by not only HM Government but also that of other countries where we have business operations.

 

The unavoidable disruption to our businesses has, nevertheless, been substantial. Of considerable detriment were the restrictions on international travel that prevented both our own staff, and those of our customers, travelling to conduct the many practical elements of our business operations. It certainly proved to be a far more testing and stressful experience for everyone than my earlier prediction, that the Group was approaching 'interesting times'!

 

Accordingly, Group revenue for the six months to October 2020 amounted to £26.34m (2019 - £33.32m), a reduction which resulted in a loss before tax of £1.08m (2019 - Loss £ 0.49m).

 

Nevertheless, cash remained very strong at £14.01m, which compares to the £16.12m reported at last year end.

 

 

Prospects

The recent announcement that vaccines are becoming available to counter the current global pandemic, will surely assist our businesses to move forward positively once more.

In anticipation of such an outcome, we have already made a number of strategic moves that we believe will assist all our businesses to prosper, in particular at this juncture, our 'Defence' and 'Corporate Branding' operations.

 

'Defence'

Whilst the domestic market remains disappointingly in the doldrums, our marketing commitment to the global arena is proving to be very rewarding. We are winning defence equipment orders from new customers and overseas sales are now by far the mainstay for this business. Pleasingly, various product trials and demonstrations in the United States have been well received and we are vigorously pursuing these opportunities. Furthermore, the US State Department has officially announced its intention to procure MSI-DS medium calibre gun weapon systems for one of their current Foreign Military Sales Programmes.

 

'Forgings'

Our forgings businesses, with operations in the UK, USA and Brazil, would undoubtably benefit from an economic upturn and a more stable global commercial environment. Major international customers are generally operating their manufacturing systems on a 'just-in-time' basis and so the ordering of components from us is naturally finely tuned. Our operations are geared accordingly and will comfortably accommodate the requirements of any economic recovery.

 

'Petrol Station Superstructures'

This division holds a strong market position in constructing fuelling stations, across many parts of Europe operating from bases in both the UK and Poland. We are noting a recent upturn in the number of new station developments around the market and, significantly, a growing number of complex and sophisticated constructions are becoming the norm. In addition to fuel supply, whether it be petroleum, electricity or hydrogen, these new sites incorporate larger shops, sophisticated car valeting services, undercover electric vehicle charging and restaurant and coffee house/snack facilities.  This is all good news for our design and build superstructures business.

 

 

 

'Corporate Branding'

When we acquired The Netherlands-based business, Petrol Sign, its prime focus was the branding of petrol stations, predominantly in the Benelux countries. Through some small, but strategic acquisitions, the business now also designs, manufactures and services branding for a much broader customer base that includes specialist airport 'way-finding' systems, plus the substantial hospitality and automotive markets. The division is successfully expanding these service operations into the UK, Germany, Poland and Italy.

 

Despite the various factors which have combined to undermine first half performance, I am pleased to report that the value of the Group order book has risen over the period.  This highlights the strength of our businesses.

 

We, therefore, firmly perceive that the Company is in an outstandingly strong position to benefit considerably, not only from the moves that we are making in the business, but also from any economic recovery following global control of the pandemic.

 

All such matters considered, the Board has declared a maintained interim dividend per share of 1.75p (2019 - 1.75p) payable to shareholders on the 19th January 2021.

 

 

 

 

Michael Bell     15th December 2020

 

 

 

 

MS INTERNATIONAL plc 

 

 

Michael Bell

 

Tel: 01302 322133

 

 

 

Shore Capital (Nominated Adviser and Broker)

 

 

Patrick Castle

 

Tel: 020 7408 4090

Daniel Bush

 

 

 

 

Independent review report to MS INTERNATIONAL plc

 

Introduction

 

We have reviewed the condensed set of financial statements in the half-yearly financial report of MS INTERNATIONAL plc (the 'company') for the six months ended 31 October 2020 which comprises the Interim condensed consolidated income statement, the Interim condensed consolidated statement of comprehensive income, the Interim condensed consolidated statement of financial position, the Interim consolidated statement of changes in equity, the Interim consolidated cash flow statement and the related notes. We have read the other information contained in the half-yearly financial report which comprises only the Chairman's Statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

Directors' responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. As disclosed in note 2, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

 

Our responsibility

 

Our responsibility is to express a conclusion to the company on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

The impact of uncertainties arising from the UK exiting the European Union and COVID-19 on our review

 

Our review of the condensed set of financial statements in the half-yearly financial report requires us to obtain an understanding of all relevant uncertainties, including those arising as a consequence of the effects of macro-economic uncertainties such as Covid-19 and Brexit. Such reviews assess and challenge the reasonableness of estimates made by the directors and the related disclosures and the appropriateness of the going concern basis of preparation of the financial statements. All of these depend on assessments of the future economic environment and the company's future prospects and performance.

 

COVID-19 and Brexit are amongst the most significant economic events currently faced by the UK, and at the date of this report their effects are subject to unprecedented levels of uncertainty, with the full range of possible outcomes and their impacts unknown. We applied a standardised firm-wide approach in response to these uncertainties when assessing the company's future prospects and performance. However, no review of interim financial information should be expected to predict the unknowable factors or all possible future implications for a company associated with these particular events.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2020 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

 

Use of our report

 

This report is made solely to the company, as a body, in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company as a body, for our review work, for this report, or for the conclusion we have formed.

 

Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Sheffield

15 December 2020

Interim condensed consolidated income statement

 

 

 

 

 

 

Half-year to 31st October, 2020

 

Half-year to 31st October, 2019

 

 

unaudited

 

unaudited

 

Notes

£'000

 

£'000

 

 

 

 

 

Products

 

19,727

 

26,067

Contracts

 

6,615

 

7,250

Revenue

5

26,342

 

33,317

 

 

 

 

 

Cost of sales

 

(19,831)

 

(24,910)

Gross profit

 

6,511

 

8,407

 

 

 

 

 

Distribution costs

 

(1,297)

 

(1,821)

Administrative expenses

 

(6,204)

 

(6,988)

Operating loss

5

(990)

 

(402)

 

 

 

 

 

Finance costs

 

(45)

 

(2)

Other finance costs - pension

 

(70)

 

(82)

Share of net profit of joint venture

 

25

 

Loss before taxation

 

(1,080)

 

(486)

 

 

 

 

 

Tax (expense)/income

6

(2)

 

66

Loss for the period attributable to equity holders of the parent

 

(1,082)

 

(420)

Loss per share: basic and diluted

7

(6.6p)

 

(2.5p)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interim condensed consolidated statement of comprehensive income

 

 

 

 

Half-year to 31st October, 2020

 

Half-year to 31st October, 2019

 

 

unaudited

 

unaudited

 

 

£'000

 

£'000

 

 

 

 

 

Loss for the period attributable to equity holders of the parent

 

(1,082)

 

(420)

Exchange differences on retranslation of foreign operations

 

219

 

44

Net other comprehensive profit to be reclassified to profit or loss in subsequent periods

 

219

 

44

Remeasurement losses on defined benefit pension scheme

 

(642)

 

(849)

Deferred taxation on remeasurement of defined benefit pension scheme

 

122

 

144

Net other comprehensive loss not being reclassified to profit or loss in subsequent periods

 

(520)

 

Total comprehensive loss for the period attributable to equity holders of the parent

 

(1,383)

 

(1,081)

 

 

 

 

 

 

Interim condensed consolidated statement of financial position

 

 

 

 

 

 

 

 

 

 

 

 

Notes

31st October, 2020

 

31st October, 2019

 

30th April, 2020

 

 

 

unaudited

 

unaudited

 

audited

 

ASSETS

 

£'000

 

£'000

 

£'000

 

Non-current assets

 

 

 

 

 

 

 

Intangible assets

 

4,070

 

4,303

 

4,140

 

Property, plant and equipment

9

19,484

 

20,352

 

20,111

 

Right-of-use assets

10

682

 

1,185

 

1,214

 

Investment in joint venture

 

34

 

 

 

Deferred income tax asset

 

2,015

 

1,264

 

1,875

 

 

 

26,285

 

27,104

 

27,340

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Inventories

 

17,624

 

14,689

 

15,857

 

Trade and other receivables

 

6,957

 

9,335

 

4,589

 

Income tax receivable

 

555

 

3

 

719

 

Prepayments

 

2,397

 

1,708

 

1,775

 

Cash and cash equivalents

11

14,011

 

19,370

 

16,125

 

 

 

41,544

 

45,105

 

39,065

 

TOTAL ASSETS

 

67,829

 

72,209

 

66,405

 

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

 

1,840

 

1,840

 

1,840

 

Capital redemption reserve

 

901

 

901

 

901

 

Other reserve

 

2,815

 

2,815

 

2,815

 

Revaluation reserve

 

6,055

 

6,055

 

6,055

 

Special reserve

 

1,629

 

1,629

 

1,629

 

Currency translation reserve

 

443

 

323

 

224

 

Treasury shares

 

(3,059)

 

(3,059)

 

(3,059)

 

Retained earnings

 

17,832

 

23,140

 

19,723

 

TOTAL EQUITY SHAREHOLDERS' FUNDS

 

28,456

 

33,644

 

30,128

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Defined benefit pension liability

12

9,075

 

7,434

 

8,563

 

Deferred income tax liability

 

1,600

 

1,386

 

1,641

 

Lease liabilities

 

465

 

942

 

893

 

 

 

11,140

 

9,762

 

11,097

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

27,983

 

27,747

 

24,679

 

Income tax payable

 

18

 

806

 

165

 

Lease liabilities

 

232

 

250

 

336

 

 

 

28,233

 

28,803

 

25,180

 

TOTAL EQUITY AND LIABILITIES

 

67,829

 

72,209

 

66,405

 

 

 

 

 

 

 

 

 

The interim condensed consolidated financial statements of the Group for the six months ended 31st October, 2020 were authorised for issue in accordance with a resolution of the directors on 15th December, 2020 and signed on their behalf.

 

Michael O'Connell

 

 

 

 

 

 

 

Finance Director

 

 

 

 

 

 

 

            

 

 

 

Interim consolidated statement of changes in equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

Capital redemption reserve

 

Other reserve

 

Revaluation reserve

 

Special reserve

 

Currency translation reserve

 

Treasury shares

 

Retained earnings

 

Total unaudited

 

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 30th April, 2020

 

1,840

 

901

 

2,815

 

6,055

 

1,629

 

224

 

(3,059)

 

19,723

 

30,128

Loss for the period

 

 

 

 

 

 

 

 

(1,082)

 

(1,082)

Other comprehensive income/(loss)

 

 

 

 

 

 

219

 

 

(520)

 

(301)

Dividend paid (note 8)

 

 

 

 

 

 

 

 

(289)

 

(289)

At 31st October, 2020

 

1,840

 

901

 

2,815

 

6,055

 

1,629

 

443

 

(3,059)

 

17,832

 

28,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

Capital redemption reserve

 

Other reserve

 

Revaluation reserve

 

Special reserve

 

Currency translation reserve

 

Treasury shares

 

Retained earnings

 

Total unaudited

 

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 27th April, 2019

 

1,840

 

901

 

2,815

 

6,055

 

1,629

 

279

 

(3,059)

 

25,338

 

35,798

Loss for the period

 

 

 

 

 

 

 

 

(420)

 

(420)

Other comprehensive income/(loss)

 

 

 

 

 

 

44

 

 

(705)

 

(661)

Dividend paid

 

 

 

 

 

 

 

 

(1,073)

 

(1,073)

At 31st October, 2019

 

1,840

 

901

 

2,815

 

6,055

 

1,629

 

323

 

(3,059)

 

23,140

 

33,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

Capital redemption reserve

 

Other reserve

 

Revaluation reserve

 

Special reserve

 

Currency translation reserve

 

Treasury shares

 

Retained earnings

 

Total audited

 

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 27th April, 2019

 

1,840

 

901

 

2,815

 

6,055

 

1,629

 

279

 

(3,059)

 

25,338

 

35,798

Loss for the period

 

 

 

 

 

 

 

 

(2,491)

 

(2,491)

Other comprehensive loss

 

 

 

 

 

 

(55)

 

 

(1,762)

 

(1,817)

Dividends paid

 

 

 

 

 

 

 

 

(1,362)

 

(1,362)

At 30th April, 2020

 

1,840

 

901

 

2,815

 

6,055

 

1,629

 

224

 

(3,059)

 

19,723

 

30,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interim consolidated cash flow statement

 

 

 

 

 

 

Half-year to 31st October, 2020

 

Half-year to 31st October, 2019

 

 

unaudited

 

unaudited

 

 

£'000

 

£'000

 

 

 

 

 

Loss before taxation

 

(1,080)

 

(486)

Adjustments to reconcile loss before taxation to net cash outflow from operating activities:

 

 

 

Depreciation charge

 

866

 

782

Amortisation charge

 

125

 

332

Profit on disposal of fixed assets

 

(26)

 

(61)

Share of net profit of joint venture

 

(25)

 

  - 

Net finance costs

 

115

 

84

Termination of lease

 

(7)

 

  - 

Foreign exchange gains/(losses)

 

192

 

(161)

Increase in inventories

 

(1,690)

 

(1,645)

Increase in receivables

 

(2,315)

 

(1,849)

(Increase)/decrease in prepayments

 

(620)

 

93

Increase/(decrease) in payables

 

1,306

 

(334)

Increase in progress payments

 

1,891

 

2,105

Pension fund deficit reduction payments

 

(200)

 

(300)

Cash invested in operating activities

 

(1,468)

 

(1,440)

Net interest (paid)/received

 

(25)

 

14

Taxation paid

 

(39)

 

(126)

Net cash outflow from operating activities

 

(1,532)

 

(1,552)

 

 

 

 

 

Investing activities

 

 

 

 

Purchase of property, plant and equipment

 

(152)

 

(351)

Proceeds on disposal of property, plant and equipment

 

27

 

72

Payments for acquisitions, net of cash acquired

 

 

(748)

Net cash outflow from investing activities

 

(125)

 

(1,027)

 

 

 

 

 

Financing activities

 

 

 

 

Lease payments

 

(191)

 

(100)

Dividend paid

 

(289)

 

(1,073)

Net cash outflow from financing activities

 

(480)

 

(1,173)

Decrease in cash and cash equivalents

 

(2,137)

 

(3,752)

Opening cash and cash equivalents

 

16,125

 

22,886

Exchange differences on cash and cash equivalents

 

23

 

236

Closing cash and cash equivalents

 

14,011

 

19,370

 

 

 

 

 

 

 

 

Notes to the interim consolidated financial statements

 

 

 

 

 

 

1.  Corporate information

 

 

 

 

 

 

 

MS INTERNATIONAL plc is a public limited company incorporated in England and Wales. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange. The principal activities of the Company and its subsidiaries ("the Group") are the design, manufacture, construction, and servicing of a range of engineering products and structures. These activities are grouped into the following divisions:

 

 

 

 

'Defence' - design, manufacture, and service of defence equipment.

 

 

 

 

 

 

'Forging' - manufacture of fork-arms and open die forgings.

 

 

 

 

 

 

'Petrol Station Superstructures' - design, manufacture, construction, and maintenance of petrol station superstructures.

 

 

 

 

'Corporate Branding' - design, manufacture, installation, and service of corporate brandings.

 

 

 

 

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", as adopted by the European Union. They do not include all the information and disclosures required in annual financial statements in accordance with IFRS, and should therefore be read in conjunction with the Group's Annual Report for the year ended 30th April, 2020 and any public announcements made by MS INTERNATIONAL plc during the interim reporting period.

 

 

 

 

These interim financial statements do not constitute statutory financial statements within the meaning of section 435 of the Companies Act 2006. The figures for the year ended 30th April, 2020 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.

 

 

 

 

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, 2020. The Group has not early adopted any standard, interpretation, or amendment that has been issued but is not yet effective.

 

 

 

 

As at the reporting date, the assets and liabilities of the overseas subsidiaries are translated into the presentation currency of the Group at the rate of exchange ruling at the balance sheet date and their income statements are translated at the weighted average exchange rates for the year. The exchange differences arising on the retranslation are taken directly to a separate component of equity.

 

 

 

 

3.  Principal risks and uncertainties

 

 

 

 

 

 

 

The principal risks and uncertainties facing the Group for the remaining six months of the financial year are discussed below. Further details of the Group's risks and uncertainties can be found on page 7 of the Annual Report for the year ended 30th April, 2020 available from MS INTERNATIONAL plc's website: www.msiplc.com.

 

 

 

 

One of the Group's principal risk and uncertainties continues to be the level of customer demand for the Group's products and services. Customer demand is driven mainly by general economic conditions in addition to pricing, product quality, and delivery performance of the Group in comparison to our competitors.

 

 

 

 

There continues to be considerable uncertainty in relation to the UK's future trading relationship with the EU. At the time of preparing these interim financial statements, the disclosure given in the Annual Report is still applicable and reflects the best understanding of how the withdrawal from the EU will impact the Group. The Board are monitoring the impact of how changes in the UK's trading relationship with the EU will affect the different parts of the Group and preparations have been made to take appropriate action if, and when, required.

 

 

 

 

The current environment brought about by Covid-19 creates uncertainty over the phasing of demand from customers, the financial impact of any future lockdowns in the geographical areas in which the Group operates, and other possible difficulties in the general economic environment. 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 the current economic outlook. Accordingly, the directors continue to conclude that the adoption of the going concern basis of accounting remains appropriate when preparing these interim financial statements.

 

 

 

 

4.  Going concern

 

 

 

 

 

 

 

In making the going concern assessment, as well as considering general risks and specifically the risks presented by Covid-19, the directors have considered the period to 12 months from the approval of the financial statements.

 

 5.  Segment information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)  Primary reporting format - divisional segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table presents revenue and profit information about the Group's divisions for the half-year periods ended 31st October, 2020 and 31st October, 2019.

 

 

  'Defence'

 

  'Forgings'

 

  'Petrol Station  Superstructures'

  'Corporate  Branding'

  Total

 

 

 

 

 

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

unaudited

 

unaudited

 

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

From external customers

 

8,641

 

12,054

 

4,577

 

7,263

 

6,640

 

7,277

 

6,484

 

6,723

 

26,342

 

33,317

From other segments

 

 

 

 

 

51

 

145

 

66

 

95

 

117

 

240

Segment revenue

 

8,641

 

12,054

 

4,577

 

7,263

 

6,691

 

7,422

 

6,550

 

6,818

 

26,459

 

33,557

Segment result

 

(1,267)

 

42

 

(279)

 

54

 

835

 

291

 

(279)

 

(789)

 

(990)

 

(402)

Net finance expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(115)

 

(84)

Share of net profit of joint venture

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25

 

Loss before taxation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,080)

 

(486)

Tax (expense)/income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2)

 

66

Loss for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,082)

 

(420)

Capital expenditure

 

81

 

12

 

 

 

59

 

171

 

12

 

168

 

152

 

351

Depreciation

 

133

 

112

 

278

 

327

 

178

 

171

 

277

 

172

 

866

 

782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table presents segment assets and liabilities of the Group's divisions for the half-year periods ended 31st October, 2020 and 31st October, 2019.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segmental assets

 

27,984

 

29,444

 

3,497

 

8,627

 

10,154

 

10,552

 

9,919

 

10,018

 

51,554

 

58,641

Unallocated assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,275

 

13,568

Total assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

67,829

 

72,209

Segmental liabilities

 

18,747

 

19,402

 

1,774

 

2,014

 

3,349

 

3,531

 

4,062

 

4,024

 

27,932

 

28,971

Unallocated liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,441

 

9,594

Total liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

39,373

 

38,565

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated assets include certain fixed assets (including all UK properties), intangible assets, current assets, and deferred income tax assets. Unallocated liabilities include the defined benefit pension scheme liability, the deferred income tax liability, and certain current liabilities.

 

 

 

 

 

6.  Tax expense

 

 

 

 

 

 

 

 

 

 

The major components of the tax expense/(income) in the consolidated income statement are:

 

 

 

 

 

Half-year to 31st October, 2020

 

Half-year to 31st October, 2019

 

 

 

unaudited

 

unaudited

 

 

 

£'000

 

£'000

 

 

 

 

 

 

Current tax expense

 

67

 

79

Deferred tax income

 

(65)

 

(145)

Total tax expense/(income) reported in the consolidated income statement

 

2

 

(66)

 

 

 

 

 

 

A change to the main UK corporation tax rate was enacted in a budget resolution on 17th March, 2020. From 1 April, 2020 the rate remains at 19%, cancelling the previously enacted rate reduction to 17%. Deferred income tax at 30th April, 2020 has therefore been provided at 19%. Deferred income tax in relation to intangibles recognised on the acquisition of 'MSI-Sign Group B.V.' has been provided at 25%, being the main corporation tax rate in The Netherlands.

 

 

 

 

 

 

7.  Earnings per share

 

 

 

 

 

 

 

 

 

 

The calculation of basic earnings per share is based on:

 

 

 

 

 

 

 

 

 

 

(a)

Loss for the period attributable to equity holders of the parent of £1,082,000 (2019 - £420,000 loss);

 

 

 

 

 

 

 

 

(b)

16,504,691 (2019 - 16,504,691) ordinary shares, being the weighted average number of ordinary shares in issue.

 

 

 

 

 

 

 

This represents 18,396,073 (2019 - 18,396,073), being the weighted average number of ordinary shares in issue less 245,048 (2019 - 245,048), being the number of shares held within the ESOT and less 1,646,334 (2019 - 1,646,334), being the number of shares purchased by the Company.

 

 

 

 

 

 

There are no dilutive instruments in place.

 

 

 

 

 

 

8.  Dividends paid and proposed

 

 

 

 

 

 

 

Half-year to 31st October, 2020

 

Half-year to 31st October, 2019

 

 

 

unaudited

 

unaudited

 

 

 

£'000

 

£'000

Declared and paid during the six month period

 

 

 

 

Final dividend on ordinary shares for 2020 - 1.75p (2019 - 6.50p)

 

289

 

1,073

Proposed for approval

 

 

 

 

Interim dividend on ordinary shares for 2021 - 1.75p (2020 - 1.75p)

 

289

 

289

 

 

 

 

 

 

Dividend warrants will be posted on 18th January, 2021 to those members registered on the books of the Company on 29th December, 2020.

 

9.  Property, plant and equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31st October, 2020

 

 

 

 

 

 

 

 

Freehold

 

Plant and

 

 

 

 

property

 

equipment

 

Total

 

 

£'000

 

£'000

 

£'000

Cost or valuation

 

 

 

 

 

 

At 30th April, 2020

 

17,746

 

15,858

 

33,604

Additions

 

  - 

 

152

 

152

Disposals

 

  - 

 

(364)

 

(364)

Exchange differences

 

(98)

 

1

 

(97)

At 31st October, 2020

 

17,648

 

15,647

 

33,295

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

At 30th April, 2020

 

970

 

12,523

 

13,493

Depreciation charge for the period

 

158

 

530

 

688

Disposals

 

  - 

 

(363)

 

(363)

Exchange differences

 

(6)

 

(1)

 

(7)

At 31st October, 2020

 

1,122

 

12,689

 

13,811

Net book value at 31st October, 2020

 

16,526

 

2,958

 

19,484

 

 

 

 

 

 

 

Analysis of cost or valuation

 

 

 

 

 

 

At professional valuation 2018

 

12,300

 

  - 

 

12,300

At cost

 

5,348

 

15,647

 

20,995

At 31st October, 2020

 

17,648

 

15,647

 

33,295

 

 

 

 

 

 

 

At 31st October, 2019

 

 

 

 

 

 

 

 

Freehold

 

Plant and

 

 

 

 

property

 

equipment

 

Total

 

 

£'000

 

£'000

 

£'000

Cost or valuation

 

 

 

 

 

 

At 27th April, 2019

 

17,706

 

15,585

 

33,291

Additions

 

  - 

 

351

 

351

Disposals

 

  - 

 

(437)

 

(437)

Acquisition

 

  - 

 

274

 

274

Exchange differences

 

3

 

(10)

 

(7)

At 31st October, 2019

 

17,709

 

15,763

 

33,472

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

At 27th April, 2019

 

662

 

12,203

 

12,865

Depreciation charge for the period

 

160

 

531

 

691

Disposals

 

  - 

 

(426)

 

(426)

Exchange differences

 

(1)

 

(9)

 

(10)

At 31st October, 2019

 

821

 

12,299

 

13,120

Net book value at 31st October, 2019

 

16,888

 

3,464

 

20,352

 

 

 

 

 

 

 

Analysis of cost or valuation

 

 

 

 

 

 

At professional valuation 2018

 

12,300

 

  - 

 

12,300

At cost

 

5,409

 

15,763

 

21,172

At 31st October, 2019

 

17,709

 

15,763

 

33,472

 

 

 

 

 

 

 

 

 

 

 

 

At 30th April, 2020

 

 

 

 

 

 

 

 

Freehold

 

Plant and

 

 

 

 

property

 

equipment

 

Total

 

 

£'000

 

£'000

 

£'000

Cost or valuation

 

 

 

 

 

 

At 27th April, 2019

 

17,706

 

15,585

 

33,291

Additions

 

  - 

 

721

 

721

Disposals

 

  - 

 

(736)

 

(736)

Acquisition

 

  - 

 

351

 

351

Exchange differences

 

40

 

(63)

 

(23)

At 30th April, 2020

 

17,746

 

15,858

 

33,604

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

At 27th April, 2019

 

662

 

12,203

 

12,865

Depreciation charge for the period

 

316

 

1,107

 

1,423

Disposals

 

  - 

 

(712)

 

(712)

Exchange differences

 

(8)

 

(75)

 

(83)

At 30th April, 2020

 

970

 

12,523

 

13,493

Net book value at 30th April, 2020

 

16,776

 

3,335

 

20,111

 

 

 

 

 

 

 

Analysis of cost or valuation

 

 

 

 

 

 

At professional valuation 2018

 

12,300

 

  - 

 

12,300

At cost

 

5,446

 

15,858

 

21,304

At 30th April, 2020

 

17,746

 

15,858

 

33,604

 

 

 

 

 

 

 

On 11th November, 2017, 26th July, 2017 and 28th March, 2018 the Group's land and buildings, which consist of manufacturing and office facilities in the UK, Poland and USA were valued by Dove Haigh Phillips (UK), KonSolid-Nieruchomosci (Poland) and Real Estate & Appraisal Services Inc (USA). Management determined that these constitute one class of asset under IFRS 13 (designated as level 3 fair value assets), based on the nature, characteristics and risks of the properties.

 

 

 

 

 

 

 

The properties in the UK were valued on the basis of an existing use value in accordance with the Appraisal and Valuation Standards (5th Edition) published by the Royal Institution of Chartered Surveyors. The Polish property was valued based on the income approach, converting anticipated future benefits in the form of rental income into present value. Finally, the US property was valued on an income and market value basis. For all properties, there is no difference between current use and highest and best use.

 

 

 

 

 

 

 

The valuation of the properties in the UK has been processed in the financial statements. Both the Polish and the US property valuations were sufficiently close to their carrying value such that the valuations were not processed.

 

 

 

 

10.  Right-of-use assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31st October, 2020

 

 

 

 

 

Plant and

 

 

 

 

 

 

Property

 

equipment

 

Total

 

 

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

Cost or valuation

 

 

 

 

 

 

 

 

At 30th April, 2020

 

 

 

1,403

 

50

 

1,453

Additions

 

 

 

  - 

 

  - 

 

  - 

Lease amendment

 

 

 

(390)

 

  - 

 

(390)

Exchange differences

 

 

 

38

 

  - 

 

38

At 31st October, 2020

 

 

 

1,051

 

50

 

1,101

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

At 30th April, 2020

 

 

 

219

 

20

 

239

Depreciation charge for the period

 

 

 

168

 

10

 

178

Exchange differences

 

 

 

2

 

  - 

 

2

At 31st October, 2020

 

 

 

389

 

30

 

419

Net book value at 31st October, 2020

 

 

 

662

 

20

 

682

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31st October, 2019

 

 

 

 

 

Plant and

 

 

 

 

 

 

Property

 

equipment

 

Total

 

 

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

Cost or valuation

 

 

 

 

 

 

 

 

At 27th April, 2019

 

 

 

  - 

 

  - 

 

  - 

IFRS 16 adjustment

 

 

 

755

 

26

 

781

Acquisition of subsidiary

 

 

 

501

 

  - 

 

501

Exchange differences

 

 

 

(8)

 

  - 

 

(8)

At 31st October, 2019

 

 

 

1,248

 

26

 

1,274

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

At 27th April, 2019

 

 

 

  - 

 

  - 

 

  - 

Depreciation charge for the period

 

 

 

84

 

7

 

91

Exchange differences

 

 

 

(2)

 

  - 

 

(2)

At 31st October, 2019

 

 

 

82

 

7

 

89

Net book value at 31st October, 2019

 

 

 

1,166

 

19

 

1,185

 

 

 

 

 

 

 

 

 

At 30th April, 2020

 

 

 

 

 

Plant and

 

 

 

 

 

 

Property

 

equipment

 

Total

 

 

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

Cost or valuation

 

 

 

 

 

 

 

 

At 27th April, 2019

 

 

 

  - 

 

  - 

 

  - 

IFRS 16 adjustment

 

 

 

755

 

26

 

781

Additions

 

 

 

162

 

24

 

186

Acquisition of subsidiary

 

 

 

501

 

  - 

 

501

Exchange differences

 

 

 

(15)

 

  - 

 

(15)

At 30th April, 2020

 

 

 

1,403

 

50

 

1,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

At 27th April, 2019

 

 

 

  - 

 

  - 

 

  - 

Depreciation charge for the period

 

 

 

228

 

20

 

248

Exchange differences

 

 

 

(9)

 

  - 

 

(9)

At 30th April, 2020

 

 

 

219

 

20

 

239

Net book value at 30th April, 2020

 

 

 

1,184

 

30

 

1,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11.  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, 2020

 

31st October, 2019

 

20th April, 2020

 

 

 

 

unaudited

 

unaudited

 

audited

 

 

 

 

£'000

 

£'000

 

£'000

Cash at bank and in hand

 

 

 

7,457

 

13,955

 

16,125

Escrow account

 

 

 

6,554

 

 

Short term deposits

 

 

 

 

5,415

 

 

 

 

 

14,011

 

19,370

 

16,125

 

 

 

 

 

 

 

 

 

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.

 

12.  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 5th April, 2017 by a professionally qualified actuary.

 

 

 

 

 

 

 

 

 

-

 

From 6th April, 2016 the Company directly pays the expenses of the Scheme. With effect from April, 2018 the deficit reduction payments paid into the Scheme by the Company increased to £600,000 per annum. The deficit reduction contributions are paid on a quarterly basis with the first paid on 3rd April, 2018 and the last due for payment on or before 5th January, 2027. On 23rd April, 2020 it was agreed that contributions be made on a monthly basis from July 2020 to December 2020, after which contributions will revert to a quarterly basis.

 

 

 

 

 

 

 

 

 

-

 

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.

 

 

 

 

 

 

 

 

 

-

 

During the period, the Scheme liability has increased by £512,000. A re-measurement loss of £642,000 (2019 - £849,000 loss) has been recognised through other comprehensive income. It comprises of a £484,000 remeasurement gain compared to the interest income on the plan assets and a £1,126,000 actuarial loss due to changes in financial assumptions. The actuarial loss of £1,126,000 is primarily a result of an increase in CPI/RPI inflation as well as a lower discount rate at the period end, both of which increased the Scheme's liabilities at 31st October, 2020. The interest cost on the net defined benefit liability of £70,000 has been recognised through the income statement. The Scheme's liabilities have been reduced by pension fund deficit payments in the period of £200,000 (2019 - £300,000).

 

 

 

 

 

 

 

 

 

-

 

A £1,198,000 liability for unrecognised past service cost relating to GMP equalisation cost was recognised in the Consolidated income statement for the 52 weeks ended 27th April, 2019. This liability has been remeasured and is included in the Scheme's liabilities at 31st October, 2020.

 

 

 

 

 

 

 

 

 

-

 

It may be some time before an agreed method for GMP calculations is approved. However, now that the estimated past service cost has been recognised in the Consolidated income statement for the year ended 27th April, 2019, further future changes to the estimate will be recognised in the Consolidated statement of comprehensive income.

 

 

 

 

 

 

 

 

 

13.  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 £6,976,530 at 31st October, 2020 (2019 - £4,637,538).

 

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

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 or visit 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.
 
END
 
 
IR BLBDDBXBDGGU
UK 100

Latest directors dealings