Interim Results
MS International PLC
21 November 2001
Contacts: Michael Bell, Chairman, MS INTERNATIONAL plc
Tel: 01302 322133
Terry Garrett, Weber Shandwick Square Mile
Tel: 020 7601 1000
MS INTERNATIONAL plc
Interim Results to October 27th, 2001
- Pre-tax profits increased by 38% to £1.23m (2000: £0.89m*)
- EPS 33% higher at 4.0p (2000: 3.0p*)
- Interim dividend raised 15% to 0.38p (2000: 0.33p)
- Net cash at £1.92m
- Turnover ahead by 21% to £18.54m (2000: £15.36m*)
- All three divisions increased profits before tax
- Order book stands at £21.0m
* From continuing operations
Michael Bell, Chairman, commented:
'I am delighted to announce that the first half of the year has
lived up to our expectations with all three divisions producing
increased profits. On a like for like basis we are 38% ahead at
the pre-tax level.
'We have a strong balance sheet with net cash at £1.92m and a
solid order book to take us forward. Lower levels of economic
activity will create challenges but we are cautiously optimistic
that the business will continue to advance.'
Chairman's Statement
Introduction
It is very pleasing to once again report an improved set of
results. In my report last June, I stated that 'I perceived that
we had enhanced the opportunities for the Group to attain a more
rapid upgrade in both the amount and quality of earnings'. The
results for the first six months of this financial year have
matched those expectations.
For the period ended October 27th 2001, on a like for like
basis, the Group produced a 38% increase in profit before tax to
£1.23m (2000-£0.89m), on sales 21% higher at £18.54m (2000-
£15.36m). Earnings per share for the half year amount to 4p
(2000-3p).
The Group's consolidated net cash position remains strong at
£1.92m, though lower than the £2.79m reported at the last year-
end. The reduction reflects an unravelling of advance payments
as contracts move into work-in-progress, the purchase of MS
International plc shares by both the Company and the ESOT, and
capital expenditure on plant, equipment and development.
The operating divisions
The defence and the forgings divisions both increased sales and
profit before tax. The petrol station canopies business produced
a notably better return at the pre-tax level that derived from a
better mix of activity, even though the phasing of deliveries
resulted in a lower turnover.
The defence division has again opened the year strongly and,
whilst we remain primarily a supplier of naval equipment, our
rising reputation as a tactical shelter contractor has extended
our business into other parts of the armed services. Growing
activity in the development of this product line provided
additional impetus and sales for the division during the period.
The forgings division performed very well, confronting the
negative effects of the global economic slow-down and persistent
weakness in the United States. This was achieved by successfully
extending our marketing activities and attaining the planned
production improvements from occupying the refurbished
manufacturing facilities that became available at the start of
this calendar year.
Global-MSI, gained from a better mix of business, and after a
slow start, the order intake gathered momentum enabling us to
achieve a much improved performance.
Outlook
Whilst we do not anticipate any immediate gains for our defence
division from the military action taking place in Afghanistan,
the importance of national security for all nations of the world
must never be underestimated, ignored or unsupported. We believe
that we are well placed to take advantage of any improvements in
the pattern of global defence procurement.
The lower levels of economic activity around the world will
create further challenges for our commercial businesses. That
said, we have made good progress in the opening half-year and
with an order book of £21m, we are cautiously optimistic that we
can continue the advancement of the business.
Given the progress to date the Board has declared an increased
interim dividend of 0.38p per share (2000-0.33p).
Michael Bell
November 21st, 2001
MS INTERNATIONAL plc
Group Profit and Loss Account
These interim financial statements which have been prepared on the basis
of the accounting policies set out in the Company's 2001 statutory
accounts, as amended for the adoption of FRS 19 'Deferred Tax', do not
constitute statutory accounts within the meaning of section 254 of the
Companies Act 1985 and are unaudited. The abridged accounts for the
year ended April 28th, 2001 are an extract from the accounts for that
period on which the auditors gave an unqualified report and which have
been filed with the Registrar of Companies.
26 weeks 26 weeks 26 weeks
ended Oct. ended Oct. ended Oct.
27th, 2001 28th, 2000 28th, 2000
Restated Restated
Note Total Continuing Discontinued
£'000 £'000 £'000
Turnover: Group and share
of joint venture 18,540 15,367 2,468
Less: Share of joint
venture turnover (2,609) (2,960) -
---------------------------- -------- -------- --------
Group turnover 15,931 12,407 2,468
---------------------------- -------- -------- --------
Operating profit/(loss) 1,010 784 (1,523)
Share of operating profit
of joint venture 209 83 -
-------- -------- --------
1,219 867 (1,523)
Exceptional items: 1
Group - 8 -
Joint venture - 1 -
(Loss) on sale/closure of
businesses:
Net assets less sale
proceeds/closure costs - - (220)
Goodwill previously written
off to reserves - - (218)
---------------------------- -------- -------- --------
Profit/(loss) on ordinary
activities before interest 1,219 876 (1,961)
Interest receivable:
Group 56 229 -
Joint venture 2 - -
Interest payable:
Group (47) (203) -
Joint venture - (9) -
---------------------------- -------- -------- --------
Profit/(loss) on ordinary
activities before taxation 1,230 893 (1,961)
Taxation on profit/(loss)
on ordinary activities 2/3 (369) (283) 523
---------------------------- -------- -------- --------
Profit/(loss) for the
financial period 861 610 (1,438)
-------- --------
Dividends --------
Interim payable (88)
Final payable -
Received by ESOT 4 14
Receivable by ESOT 9
--------
(65)
---------------------------- --------
Profit/(loss) for the
period 796
---------------------------- --------
Earnings/(loss) per share 4.0p 3.0p (7.0)p
---------------------------- -------- -------- --------
MS INTERNATIONAL plc
Group Profit and Loss Account (Cont)
26 weeks 52 weeks
ended Oct. ended April
28th, 2000 28th, 2001
Restated Restated
Note Total Total
£'000 £'000
Turnover: Group and share
of joint venture 17,835 35,860
Less: Share of joint
venture turnover (2,960) (5,648)
--------------------------- ------- ------
Group turnover 14,875 30,212
Operating profit/(loss) (739) (345)
Share of operating profit
of joint venture 83 197
------- ------
(656) (148)
Exceptional items: 1
Group 8 (9)
Joint venture 1 1
(Loss) on sale/closure of
businesses:
Net assets less sale
proceeds/closure costs (220) (305)
Goodwill previously written
off to reserves (218) (488)
--------------------------- ------- ------
Profit/(loss) on ordinary
activities before interest (1,085) (949)
Interest receivable:
Group 229 144
Joint venture - 1
Interest payable:
Group (203) (130)
Joint venture (9) -
--------------------------- ------- ------
Profit/(loss) on ordinary
activities before taxation (1,068) (934)
Taxation on profit/(loss)
on ordinary activities 2/3 240 68
Profit/(loss) for the
financial period (828) (866)
Dividends ------- ------
Interim payable (77) (77)
Final payable - (234)
Received by ESOT 4 - -
Receivable by ESOT 9 19
------- ------
(68) (292)
------- ------
Profit/(loss) for the
period (896) (1,158)
------- ------
Earnings/(loss) per share (4.0)p (4.2)p
------- ------
MS INTERNATIONAL plc
Group Statement of Recognised Gains and Losses
26 weeks
ended Oct.
27th, 2001
£'000
Profit for the financial period 861
Translation differences on foreign currency net investments 3
Prior year adjustment (note 2) (463)
------
Total gains recognised in the period 401
------
Notes:
26 26 26 26 52
weeks weeks weeks weeks weeks
ended ended ended ended ended
Oct. Oct. Oct. Oct. April
27th, 28th, 28th, 28th, 28th,
2001 2000 2000 2000 2001
Total Continuing Discontinued Total Total
£'000 £'000 £'000 £'000 £'000
1. Exceptional items
comprise:
Closure costs - - (220) (220) (305)
Profit/(loss) on sale of
tangible fixed assets - 9 - 9 (8)
Goodwill previously
written off to reserves - - (218) (218) (488)
------ ------ ------ ------ ------
- 9 (438) (429) (801)
------ ------ ------ ------ ------
2.The Group has changed its accounting policy on deferred tax
to comply with the requirements of FRS 19 'Deferred Tax'. The
change in accounting policy is reflected by way of a prior year
adjustment. The effect of the prior year adjustment is to
increase the tax charge for the 52 weeks ended April 28th, 2001
by £9,000 and the deferred tax provision at April 28th, 2001 by
£463,000 and at April 29th, 2000 by £454,000.
3.Tax on profit on ordinary activities has been calculated at
30% (2000 - 30%) on the group profit for the period as adjusted
for taxation purposes, and includes a charge of £67,000 (2000 -
£26,000) in respect of the joint venture.
4.On June 26th, 2001 1,400,000 ordinary shares were purchased
cum div by the ESOT. Consequently the company received a
dividend relating to these shares in the 26 weeks ended October
27th, 2001 of £14,000 (2000 - £nil), in respect of the final
dividend for the 52 weeks ended April 28th, 2001.
5.Dividend warrants will be posted on February 1st, 2002 to
members registered on the books of the Company at January 4th,
2002.
MS INTERNATIONAL plc
Group Balance Sheet
At Oct. At Oct. At April
27th, 2001 28th, 2000 28th, 2001
Restated Restated
£'000 £'000 £'000
Assets employed
Fixed assets 6,671 6,234 6,222
Investment in joint venture:
Share of gross assets 2,079 2,419 1,621
Share of gross liabilities (1,595) (1,967) (1,284)
Investment in own shares 784 598 266
-------------------------------- ------- ------- -------
7,939 7,284 6,825
-------------------------------- ------- ------- -------
Current assets
Stocks 2,922 3,163 2,666
Debtors 6,260 6,120 7,041
Group pension scheme prepayment - due
after more than one year 6,938 6,990 6,938
Cash at bank and in hand 1,915 1,453 2,789
-------------------------------- ------- ------- -------
18,035 17,726 19,434
Creditors - amounts falling due within one
year 8,824 8,808 9,944
-------------------------------- ------- ------- -------
Net current assets 9,211 8,918 9,490
-------------------------------- ------- ------- -------
Total assets less current liabilities 17,150 16,202 16,315
-------------------------------- ------- ------- -------
Creditors - amounts falling due after more
than one year 309 80 217
Provisions for liabilities and charges 3,107 3,071 3,107
-------------------------------- ------- ------- -------
Total assets less liabilities 13,734 13,051 12,991
-------------------------------- ------- ------- -------
Capital and Reserves
Called up share capital 2,328 2,343 2,343
Capital redemption reserve 413 398 398
Revaluation reserve 1,853 2,368 1,853
Other reserves 4,655 4,720 4,652
Special reserve 1,487 1,487 1,487
Profit and loss account 2,998 1,735 2,258
-------------------------------- ------- ------- -------
Equity shareholders' funds 13,734 13,051 12,991
-------------------------------- ------- ------- -------
Notes:
£'000
(1) Movement in profit and loss account is as follows:
At October 28th, 2000 2,194
Prior year adjustment (459)
-------
As restated 1,735
Transfer from Revaluation reserve 515
Loss attributable to members 26 weeks ended April 28th,
2001 (38)
Goodwill adjustment 270
Dividends (224)
-------
At April 28th, 2001 2,258
Purchase of own shares (56)
Profit attributable to members 26 weeks ended October
27th, 2001 861
Dividends (65)
-------
At October 27th, 2001 2,998
-------
(2) During the period the company redeemed 150,000 ordinary
shares at a market price of 37.0p
MS INTERNATIONAL plc
Group Cash Flow Statement
26 weeks 26 weeks 52 weeks
ended Oct. ended Oct ended April
27th, 2001 28th, 2000 28th, 2001
£'000 £'000 £'000
Operating profit/(loss) 1,010 (739) (345)
Closure costs - - (305)
Depreciation charge 294 288 625
Foreign exchange gains/(losses) - 1 (33)
RSA grant release (19) (18) (37)
(Increase)/decrease in stocks (198) 277 1,320
Decrease/(increase) in debtors 675 (398) (1,187)
Increase in creditors 10 547 550
(Decrease) in progress payments (1,339) (638) (25)
Increase in provisions - - 117
Provision utilised - - (65)
------------------------------------ ------- ------- -------
Cash flow from operating activities 433 (680) 615
Dividends received from joint venture 17 - 50
Interest (paid)/received (6) 9 (8)
Taxation - (47) (236)
------- ------- -------
Purchase of tangible fixed assets (743) (176) (556)
Sale of tangible fixed assets - 20 58
Shares purchased by ESOT (518) - (160)
Loan repaid by joint venture - - 75
------- ------- -------
Capital expenditure and financial
investment (1,261) (156) (583)
Dividends paid (211) (186) (254)
------------------------------------ ------- ------- -------
Cash flow before financing (1,028) (1,060) (416)
Financing
Purchase of own shares (56) - -
Long term bank loans repaid - (111) -
New finance leases undertaken 295 65 322
Repayments of capital element of finance
leases and hire purchase contracts (85) (26) (83)
Share options exercised - - 492
------------------------------------ ------- ------- -------
154 (72) 731
------------------------------------ ------- ------- -------
(Decrease)/increase in cash (874) (1,132) 315
------------------------------------ ------- ------- -------
Reconciliation of Net Cash Flow to Movement
in Net Funds
(Decrease)/increase in cash (874) (1,132) 315
Cash outflow from decrease in loans - 111 -
Repayment of capital element of finance
leases and hire purchase contracts 85 26 83
------------------------------------ ------- ------- -------
Changes in net funds resulting from cash
flow (789) (995) 398
New finance leases and hire purchase
contracts (295) (65) (322)
------------------------------------ ------- ------- -------
Movement in net funds (1,084) (1,060) 76
Net funds at April 28th, 2001 2,441 2,365 2,365
------------------------------------ ------- ------- -------
Net funds at October 27th, 2001 1,357 1,305 2,441
------------------------------------ ------- ------- -------
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