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MS INTERNATIONAL plc |
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Unaudited Interim Condensed |
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Group Financial Statements |
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31st October, 2023 |
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EXECUTIVE DIRECTORS |
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Michael Bell |
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Michael O'Connell |
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Nicholas Bell |
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NON-EXECUTIVE DIRECTORS |
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Roger Lane-Smith |
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David Hansell |
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COMPANY SECRETARY |
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Shelley Ashcroft |
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REGISTERED OFFICE |
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Balby Carr Bank |
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Doncaster |
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DN4 8DH |
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England |
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PRINCIPAL OPERATING DIVISIONS |
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'Defence and Security' |
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'Forgings' |
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'Petrol Station Superstructures' |
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'Corporate Branding' |
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Chairman's Statement |
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Introduction
In last June's annual Statement, I highlighted that we anticipated a significant upward step change in the development of the business that would bring additional rewards and success.
I am now delighted to confirm we have been awarded the first production order contracts with the US Navy to supply our 30mm naval gun. This significant development is complemented by a further contract to maintain and support those systems.
I first reported on our efforts to break into the US Navy market in my Chairman's Statement of 25th July 1988, when I stated, "The first unit built to suit the US Navy specific requirements awaits ships trials in the United States". It has been a long haul, but vision; persistence; determination and capability has resulted in success.
We have also delivered a significant contract relating to the first sales of our 'VSHORAD' land-based mobile counter-drone weapon system. This was the contract where the customer's delay in taking delivery - because of the war in Europe - negatively impacted last year's results.
Results
For the half year ended 31st October 2023 profit before tax increased substantially to £7.72m (2022 - £3.46m) on revenue of £57.02m (2022 - £42.03m).
Basic earnings per share were 35.9p (2022 - 17.4p).
The balance sheet is again much stronger with net cash at £50.05m (2022 - £23.88m), reflecting the valuable upturn in activity in our 'Defence and Security' businesses.
Prospects
'Defence and security'
We believe that the strong start to 2023/4 looks set to continue, with deliveries gaining pace against contracts to overseas customers, for both our naval gun and land-based counter-drone defence systems.
Also, deliveries against our US Navy contracts will commence later in the new year.
Moreover, we are particularly pleased and encouraged by the level of military 'land market' interest in 'VSHORAD' and the number of enquiries we are receiving from multiple sources as to its availability and potential supply. Our existing production facilities are capable of fulfilling our current firm orders. Additionally, the refurbishment and reorganisation of parts of our, once under-utilised, production facilities in Norwich continues. This programme, when complete, will better accommodate our prospective production requirements.
'Forgings'
The Forgings division remains a very efficient business and well positioned to continue serving its broad international customer base. We remain committed to assisting our customers through our multi continent contemporary fork-arm manufacturing facilities.
'Petrol Station Superstructures'
In September the UK Government announced a revised set of green policies including delaying the ban on the sale of new petrol and diesel vehicles by five years to 2035. The news reinvigorated many of our fuel dispensing UK customers, encouraging them to consider expanding and enhancing the quality of their stations to ensure they remain competitive. In the meantime, we look forward to an improvement in our eastern Europe market which is reviving after some hesitancy caused by the region's continuing war.
'Corporate Branding'
We perceive that we remain well placed in our focused market of providing installation, repair and maintenance within the specialist area of the branding for petrol stations.
Outlook
We believe that we have continued to enhance the performance of the Group's businesses and with considerable confidence, we look forward to delivering further progress across the Group.
In the light of these positive developments and new commercial relationships, all matters considered, the Board has declared an increased interim dividend per share of 3p (2022 - 2p) payable on 19th January 2024 to those shareholders on the register at close of business on 22nd December 2023, with the ex-dividend date being 21st December 2023.
Michael Bell 11th December 2023 |
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MS INTERNATIONAL plc |
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Michael Bell |
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Tel: 01302 322133 |
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Shore Capital (Nominated Adviser and Broker) |
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Patrick Castle/Daniel Bush/Lucy Bowden |
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Tel: 020 7408 4090 |
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Independent auditor's review report on Interim Financial Information to MS INTERNATIONAL Plc |
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Conclusion |
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We have reviewed the condensed set of financial statements in the half-yearly financial report MS INTERNATIONAL plc (the 'group') for the six months ended 31 October 2023 which comprises of Interim condensed consolidated income statement, Interim condensed consolidated statement of comprehensive income statement, Interim condensed consolidated statement of financial position, Interim consolidated statement of changes in equity, Interim consolidated cash flow statement and notes to the interim consolidated financial statements. |
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Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2023 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting'. |
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Basis for conclusion |
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We conducted our review in accordance with International Standard on Review Engagements (UK) (ISRE (UK)) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" (ISRE (UK) 2410). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. |
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As disclosed in note 2, the annual financial statements of the group are prepared in accordance with UK adopted IFRSs. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting". |
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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. |
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Conclusions relating to going concern |
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Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed. |
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This conclusion is based on the review procedures performed in accordance with this ISRE UK, however future events or conditions may cause the entity to cease to continue as a going concern. |
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In our evaluation of the directors' conclusions, we considered the inherent risks associated with the group's business model including effects arising from macro-economic uncertainties such as high interest rates and the cost of living crisis, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the group's financial resources or ability to continue operations over the going concern period. |
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Directors' responsibilities |
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The half-yearly financial report is the responsibility of, and has been approved by, the directors. In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
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Auditor's Responsibilities for the review of the financial information |
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Our responsibility is to express a conclusion to the company on the condensed set of financial statements in the half-yearly financial report based on our review.
Our conclusion, including our Conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report. |
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Use of our report |
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This report is made solely to the company, as a body, in accordance with ISRE (UK) 2410. Our review work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company as a body, for our review work, for this report, or for the conclusion we have formed. |
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||||
|
Grant Thornton UK LLP |
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Statutory Auditor, Chartered Accountants |
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Sheffield |
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|
11th December 2023 |
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|
||||
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Interim condensed consolidated income statement |
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|
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Half-year to 31st October, 2023 |
|
Half-year to 31st October, 2022 |
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|
|
unaudited |
|
unaudited |
|
|
Notes |
£'000 |
|
£'000 |
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|
|
|
|
|
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Revenue |
5/6 |
57,023 |
|
42,025 |
|
|
|
|
|
|
|
Cost of sales |
|
(38,943) |
|
(30,095) |
|
Gross profit |
|
18,080 |
|
11,930 |
|
|
|
|
|
|
|
Distribution costs |
|
(2,303) |
|
(1,815) |
|
Administrative expenses |
|
(7,441) |
|
(6,522) |
|
Derivative losses |
15 |
(731) |
|
- |
|
Operating profit |
6 |
7,605 |
|
3,593 |
|
|
|
|
|
|
|
Finance income/(costs) |
|
204 |
|
(70) |
|
Other finance costs - pension |
|
(90) |
|
(63) |
|
Profit before taxation |
|
7,719 |
|
3,460 |
|
|
|
|
|
|
|
Tax expense |
7 |
(1,917) |
|
(689) |
|
Profit for the period attributable to equity holders of the parent |
|
5,802 |
|
2,771 |
|
Basic earnings per share |
8 |
35.9p |
|
17.4p |
|
Diluted earnings per share |
8 |
34.3p |
|
16.8p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim condensed consolidated statement of comprehensive income |
|
|
||
|
|
|
Half-year to 31st October, 2023 |
|
Half-year to 31st October, 2022 |
|
|
|
unaudited |
|
unaudited |
|
|
Notes |
£'000 |
|
£'000 |
|
|
|
|
|
|
|
Profit for the period attributable to equity holders of the parent |
|
5,802 |
|
2,771 |
|
Exchange differences on retranslation of foreign operations |
|
(43) |
|
57 |
|
Net other comprehensive (loss)/income to be reclassified to profit or loss in subsequent periods |
|
(43) |
|
57 |
|
Remeasurement gains/(losses) on defined benefit pension scheme |
13 |
54 |
|
(8) |
|
Deferred taxation on remeasurement of defined benefit pension scheme |
|
(14) |
|
2 |
|
Net other comprehensive income/(loss) not being reclassified to profit or loss in subsequent periods |
|
40 |
|
(6) |
|
Total comprehensive income for the period attributable to equity holders of the parent |
|
5,799 |
|
2,822 |
|
|
|
|
|
|
|||||||
|
Interim condensed consolidated statement of financial position |
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
Notes |
31st October, 2023 |
|
31st October, 2022 |
|
30th April, 2023 |
|
||||
|
|
|
unaudited |
|
unaudited |
|
audited |
|
||||
|
ASSETS |
|
£'000 |
|
£'000 |
|
£'000 |
|
||||
|
Non-current assets |
|
|
|
|
|
|
|
||||
|
Property, plant and equipment |
10 |
25,415 |
|
25,076 |
|
24,886 |
|
||||
|
Right-of-use assets |
11 |
968 |
|
1,328 |
|
1,162 |
|
||||
|
Intangible assets |
|
2,365 |
|
2,896 |
|
2,396 |
|
||||
|
Investment in joint venture |
|
- |
|
35 |
|
- |
|
||||
|
Deferred income tax asset |
|
1,716 |
|
1,373 |
|
1,677 |
|
||||
|
|
|
30,464 |
|
30,708 |
|
30,121 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
Current assets |
|
|
|
|
|
|
|
||||
|
Inventories |
|
16,940 |
|
17,003 |
|
24,764 |
|
||||
|
Trade and other receivables |
|
27,578 |
|
11,095 |
|
9,031 |
|
||||
|
Contract assets |
|
3,374 |
|
1,450 |
|
144 |
|
||||
|
Cash and cash equivalents |
12 |
42,627 |
|
23,363 |
|
12,336 |
|
||||
|
Restricted cash held in Escrow |
12 |
7,426 |
|
519 |
|
2,917 |
|
||||
|
|
|
97,945 |
|
53,430 |
|
49,192 |
|
||||
|
TOTAL ASSETS |
|
128,409 |
|
84,138 |
|
79,313 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
EQUITY AND LIABILITIES |
|
|
|
|
|
|
|
||||
|
Equity |
|
|
|
|
|
|
|
||||
|
Share capital |
|
1,784 |
|
1,784 |
|
1,784 |
|
||||
|
Capital redemption reserve |
|
957 |
|
957 |
|
957 |
|
||||
|
Other reserve |
|
2,815 |
|
2,815 |
|
2,815 |
|
||||
|
Revaluation reserve |
|
9,923 |
|
9,923 |
|
9,923 |
|
||||
|
Special reserve |
|
1,629 |
|
1,629 |
|
1,629 |
|
||||
|
Currency translation reserve |
|
(363) |
|
(360) |
|
(320) |
|
||||
|
Treasury shares |
|
(3,703) |
|
(2,789) |
|
(2,381) |
|
||||
|
Retained earnings |
|
30,362 |
|
26,242 |
|
26,668 |
|
||||
|
TOTAL EQUITY SHAREHOLDERS' FUNDS |
|
43,404 |
|
40,201 |
|
41,075 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
Non-current liabilities |
|
|
|
|
|
|
|
||||
|
Defined benefit pension liability |
13 |
3,577 |
|
4,341 |
|
4,216 |
|
||||
|
Deferred income tax liability |
|
2,941 |
|
2,547 |
|
2,943 |
|
||||
|
Contract liabilities |
|
19,148 |
|
- |
|
- |
|
||||
|
Derivative financial instruments |
15 |
218 |
|
- |
|
- |
|
||||
|
Lease liabilities |
|
630 |
|
1,003 |
|
829 |
|
||||
|
|
|
26,514 |
|
7,891 |
|
7,988 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
Current liabilities |
|
|
|
|
|
|
|
||||
|
Trade and other payables |
|
19,291 |
|
15,070 |
|
15,286 |
|
||||
|
Contract liabilities |
|
38,303 |
|
20,610 |
|
14,585 |
|
||||
|
Derivative financial instruments |
15 |
513 |
|
- |
|
- |
|
||||
|
Lease liabilities |
|
384 |
|
366 |
|
379 |
|
||||
|
|
|
58,491 |
|
36,046 |
|
30,250 |
|
||||
|
TOTAL EQUITY AND LIABILITIES |
|
128,409 |
|
84,138 |
|
79,313 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
The interim condensed consolidated financial statements of the Group for the six months ended 31st October, 2023 were authorised for issue in accordance with a resolution of the directors on 11th December, 2023 and signed on their behalf by: |
|
||||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
Michael O'Connell |
|
|
|
|
|
|
|
||||
|
Finance Director |
|
|
|
|
|
|
|
||||
|
Interim consolidated statement of changes in equity |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
|
Capital redemption reserve |
|
Other reserve |
|
Revaluation reserve |
|
Special reserve |
|
Currency translation reserve |
|
Treasury shares |
|
Retained earnings |
|
Total unaudited/ audited |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30th April, 2022 |
|
1,784 |
|
957 |
|
2,815 |
|
9,923 |
|
1,629 |
|
(417) |
|
(2,789) |
|
24,673 |
|
38,575 |
|
Profit for the period |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
2,771 |
|
2,771 |
|
Other comprehensive income/(loss) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
57 |
|
- |
|
(6) |
|
51 |
|
Dividend paid |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(1,196) |
|
(1,196) |
|
At 31st October, 2022 |
|
1,784 |
|
957 |
|
2,815 |
|
9,923 |
|
1,629 |
|
(360) |
|
(2,789) |
|
26,242 |
|
40,201 |
|
Profit for the period |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
1,344 |
|
1,344 |
|
Other comprehensive income/(loss) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
40 |
|
- |
|
(272) |
|
(232) |
|
Share option expense |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
86 |
|
86 |
|
Exercise of share options |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
408 |
|
(408) |
|
- |
|
Dividend paid |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(324) |
|
(324) |
|
At 30th April, 2023 |
|
1,784 |
|
957 |
|
2,815 |
|
9,923 |
|
1,629 |
|
(320) |
|
(2,381) |
|
26,668 |
|
41,075 |
|
Profit for the period |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
5,802 |
|
5,802 |
|
Other comprehensive (loss)/income |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(43) |
|
- |
|
40 |
|
(3) |
|
Dividend paid (note 9) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(2,123) |
|
(2,123) |
|
Share option expense |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
19 |
|
19 |
|
Purchase of own shares |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(1,676) |
|
- |
|
(1,676) |
|
Exercise of share options |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
354 |
|
(44) |
|
310 |
|
At 31st October, 2023 |
|
1,784 |
|
957 |
|
2,815 |
|
9,923 |
|
1,629 |
|
(363) |
|
(3,703) |
|
30,362 |
|
43,404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim consolidated cash flow statement |
|
|
|
|
|
|
|
Half-year to 31st October, 2023 |
|
Half-year to 31st October, 2022 |
|
|
|
unaudited |
|
unaudited |
|
|
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
Profit before taxation |
|
7,719 |
|
3,460 |
|
Adjustments to reconcile profit before taxation to cash generated from operating activates: |
|
|
|
|
|
Depreciation charge of owned and right-of-use assets |
|
1,024 |
|
968 |
|
Amortisation charge |
|
31 |
|
119 |
|
Profit on disposal of property, plant and equipment |
|
(148) |
|
(37) |
|
Net finance (income)/costs |
|
(114) |
|
133 |
|
Share option expense |
|
19 |
|
- |
|
Foreign exchange gains/(losses) |
|
202 |
|
(111) |
|
Decrease/(increase) in inventories |
|
7,853 |
|
(491) |
|
(Increase)/decrease in receivables |
|
(21,598) |
|
2,219 |
|
Increase/(decrease) in payables |
|
4,257 |
|
(606) |
|
Increase in derivatives |
|
731 |
|
- |
|
Increase in contract liabilities |
|
42,255 |
|
1,543 |
|
Pension fund deficit reduction payments |
|
(675) |
|
(450) |
|
Cash generated from operating activities |
|
41,556 |
|
6,747 |
|
Net interest received/(paid) |
|
224 |
|
(43) |
|
Taxation paid |
|
(2,279) |
|
(78) |
|
Net cash inflow from operating activities |
|
39,501 |
|
6,626 |
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Purchase of property, plant and equipment |
|
(1,168) |
|
(879) |
|
Proceeds on disposal of property, plant and equipment |
|
149 |
|
91 |
|
(Increase)/decrease in restricted cash held in Escrow maturing in more than 90 days |
|
(4,509) |
|
639 |
|
Net cash outflow from investing activities |
|
(5,528) |
|
(149) |
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Buy back of own shares |
|
(1,676) |
|
- |
|
Proceeds from exercise of employee share options |
|
310 |
|
- |
|
Lease payments |
|
(206) |
|
(207) |
|
Dividend paid |
|
(2,123) |
|
(1,196) |
|
Net cash outflow from financing activities |
|
(3,695) |
|
(1,403) |
|
Increase in cash and cash equivalents |
|
30,278 |
|
5,074 |
|
Opening cash and cash equivalents |
|
12,336 |
|
18,092 |
|
Exchange differences on cash and cash equivalents |
|
13 |
|
197 |
|
Closing cash and cash equivalents |
|
42,627 |
|
23,363 |
|
|
|
|
|
|
|
Notes to the interim consolidated financial statements |
|
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
1. Corporate information |
|
|
|
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|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
MS INTERNATIONAL plc is a public limited company incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on the Alternative Investment Market (AIM) market of the London Stock Exchange. The principal activities of the Company and its subsidiaries ("the Group") are the design, manufacture, construction, and servicing of a range of engineering products and structures. These activities are grouped into the following divisions: |
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|||||||||||||||||||||||||||||||||||
|
'Defence and Security' - design, manufacture, and service of defence equipment. |
|
|
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|
|
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|
'Forging' - manufacture of fork-arms and open die forgings. |
|
|
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|
|
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|
'Petrol Station Superstructures' - design, manufacture, construction, and maintenance of petrol station superstructures. |
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|
|
|
|||||||||||||||||||||||||||||||||||
|
'Corporate Branding' - design, manufacture, installation, and service of corporate brandings, including media facades, way- finding signage, public illumination, creative lighting solutions, and the complete appearance of petrol station superstructures and forecourts. |
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|||||||||||||||||||||||||||||||||||
|
2. Basis of preparation and accounting policies |
|
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|||||||||||||||||||||||||||||||||||
|
The consolidated condensed interim financial statements included in this half-yearly financial report have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" in conformity with the requirements of the Companies Act 2006. They do not include all the information and disclosures required in annual financial statements in accordance with UK adopted International Accounting Standards, and should therefore be read in conjunction with the Group's Annual Report for the year ended 30th April, 2023 and any public announcements made by MS INTERNATIONAL plc during the interim reporting period. The financial statements for the year ended 30th April, 2023 have been filed with the Registrar of Companies. The auditor's report on these financial statements was unmodified and did not contain statements under sections 498 (2) or (3) of the Companies Act 2006. |
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|||||||||||||||||||||||||||||||||||
|
The interim financial information has been reviewed but not audited by the Group's auditor, Grant Thornton UK LLP. The interim financial information does not constitute full financial information within the meaning of section 434 of the Companies Act 2006. The auditor's report is included on page 4. |
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|
|
|
|||||||||||||||||||||||||||||||||||
|
The accounting policies are consistent with those applied in the financial statements of the Annual Report for year ended 30th April, 2023, with the exception of a new policy for Derivative Financial Instruments, as detailed below. The Group has not early adopted any standard, interpretation, or amendment that has been issued but is not yet effective.
Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured at their fair value including remeasurement at the reporting date. The Group has decided not to apply hedge accounting with respect to forward exchange contracts and as a result changes in the fair values are recognised immediately within the Consolidated income statement within the Derivative gains or losses line. |
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|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
The assets and liabilities of the overseas subsidiaries are translated into the presentational currency of the Group at the rate of exchange ruling at the statement of financial position date and their income statements are translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are taken directly to a separate component of equity. |
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|||||||||||||||||||||||||||||||||||
|
3. Principal risks and uncertainties |
|
|
|
|||||||||||||||||||||||||||||||||||
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|
|
|
|||||||||||||||||||||||||||||||||||
|
The principal risks and uncertainties facing the Group for the remaining six months of the financial year are discussed below. Further details of the Group's risks and uncertainties can be found on page 8 of the Annual Report for the year ended 30th April, 2023, which is available from MS INTERNATIONAL plc's website: www.msiplc.com |
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|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
One of the Group's principal risks and uncertainties continues to be the impact of inflationary pressures upon both trading and profitability. Rising raw material and energy prices have increased the cost base of all divisions. Where possible cost increases are passed to the customer, however, in doing so there is uncertainty with regards to any potential impact on the level of customer demand. |
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|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
During the interim period, the risk that foreign exchange fluctuations will impact the Group's performance has increased significantly. A number of international contracts in the 'Defence and Security' division are denominated in USD, which created a large unhedged currency exposure within the Group. As a result, management have taken steps to mitigate this risk by taking out various forward contracts (note 15). |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
4. Going concern |
|
|
|
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
The condensed interim financial statements included in this report have been prepared on a going concern basis. Forecasts have been made up to 31st December, 2024, which the Directors believe to be a reasonable expectation based on the information available at the time of signing these accounts. The forecasts have been assessed for the impact of potential sensitivities, including a 10% fall in the forecasted Group revenue and a 10% increase in materials prices. In all scenarios, the Group has sufficient headroom to meet its liabilities as they fall due.
In addition, management have carried out reverse stress tests to 31st December, 2024 under various scenarios, all of which are considered implausible by management. In all tested scenarios, the Group would continue as a going concern for at least 12 months from the date of signing.
As a result, in making the going concern assessment the Directors believe there to be no material uncertainties that could cast significant doubt on the Group's ability to continue operating as a going concern. The Group has sufficient financial resources with a healthy orderbook to continue operating for the foreseeable future, being at least to 31st December, 2024. As a result, the Directors continue to adopt the going concern basis of accounting in preparation of this report.
5. Revenue
The Group's revenue disaggregated by pattern of revenue recognition is as follows:
|
||||||||||||||||||||||||||||||||||||||
|
6. Segment information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents segmental revenue and operating profit/(loss) as well as segmental assets and liabilities of the Group's divisions for the half-year periods ended 31st October, 2023 and 31st October, 2022. The reporting format is determined by the differences in manufacture and services provided by the divisional segments within the Group. |
||||||||||||||||||||
|
|
||||||||||||||||||||
|
|
|
'Defence and Security' |
|
'Forgings' |
|
'Petrol Station Superstructures' |
'Corporate Branding' |
Total |
||||||||||||
|
|
|
|
|
|||||||||||||||||
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
unaudited |
|
unaudited |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
Segmental revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenue |
|
33,508 |
|
13,956 |
|
9,454 |
|
12,516 |
|
8,555 |
|
9,057 |
|
5,584 |
|
6,835 |
|
57,101 |
|
42,364 |
|
Intercompany revenue from other segments |
|
- |
|
- |
|
- |
|
- |
|
(8) |
|
(275) |
|
(70) |
|
(64) |
|
(78) |
|
(339) |
|
External revenue |
|
33,508 |
|
13,956 |
|
9,454 |
|
12,516 |
|
8,547 |
|
8,782 |
|
5,514 |
|
6,771 |
|
57,023 |
|
42,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment result |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) |
|
5,741 |
|
(188) |
|
681 |
|
2,759 |
|
1,285 |
|
1,339 |
|
(102) |
|
(317) |
|
7,605 |
|
3,593 |
|
Net finance income/(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114 |
|
(133) |
|
Profit before taxation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,719 |
|
3,460 |
|
Tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,917) |
|
(689) |
|
Profit for the period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,802 |
|
2,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segmental assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets attributable to segments |
|
79,724 |
|
33,088 |
|
7,357 |
|
8,186 |
|
12,586 |
|
11,226 |
|
5,261 |
|
7,941 |
|
104,928 |
|
60,441 |
|
Unallocated assets* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,481 |
|
23,697 |
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128,409 |
|
84,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segmental liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities attributable to segments |
|
68,203 |
|
24,913 |
|
2,212 |
|
2,762 |
|
4,683 |
|
4,313 |
|
2,167 |
|
3,510 |
|
77,265 |
|
35,498 |
|
Unallocated liabilities* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,740 |
|
8,439 |
|
Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85,005 |
|
43,937 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other segmental information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure |
|
780 |
|
452 |
|
194 |
|
116 |
|
131 |
|
109 |
|
63 |
|
202 |
|
1,168 |
|
879 |
|
Depreciation |
|
210 |
|
141 |
|
317 |
|
319 |
|
370 |
|
368 |
|
127 |
|
140 |
|
1,024 |
|
968 |
|
Amortisation |
|
9 |
|
9 |
|
- |
|
- |
|
22 |
|
22 |
|
- |
|
88 |
|
31 |
|
119 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Unallocated assets include certain fixed assets (including all UK properties), current assets, and deferred income tax assets. Unallocated liabilities include the defined benefit pension scheme liability, the deferred income tax liability, and certain current liabilities. |
||||||||||||||||||||
Assets and liabilities attributable to segments comprise the assets and liabilities of each segment adjusted to reflect the elimination of the cost of investment in subsidiaries and the provision of financing loans provided by MS INTERNATIONAL plc.
Revenue between segments is determined on an arm's length basis. Segment results, assets, and liabilities include items directly attributable to the segment as well as those that can be allocated on a reasonable basis.
|
7. Tax expense |
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The major components of the tax expense in the consolidated income statement are: |
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
Half-year to 31st October, 2023 |
|
Half-year to 31st October, 2022 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
unaudited |
|
unaudited |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
£'000 |
|
£'000 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Current tax expense |
|
1,979 |
|
660 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Deferred tax (income)/expense |
|
(62) |
|
29 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Total tax expense reported in the Interim condensed consolidated income statement |
|
1,917 |
|
689 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Tax relating to items charged/(credited) to other comprehensive income:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
8. Earnings per share |
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The calculation of basic earnings per share of 35.9p (2022 - 17.4p) is based on the profit for the period attributable to equity holders of the parent of £5,802,000 (2022 - £2,771,000) and on a weighted average number of ordinary shares in issue of 16,141,981 (2022 - 15,949,691). At 31st October, 2023 there were 1,072,693 (2022 - 1,055,000) potentially dilutive shares on option with a weighted average effect of 789,551 (2022 - 587,217) giving a diluted earnings per share of 34.3p (2022 - 16.8p). |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
9. Dividends paid and proposed |
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
Half-year to 31st October, 2022 |
|
Half-year to 31st October, 2021 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
unaudited |
|
unaudited |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
£'000 |
|
£'000 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Declared and paid during the six month period |
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Final dividend on ordinary shares for 2023 - 15p (2022 - 7.5p) |
|
2,123
|
|
1,196 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Proposed for approval |
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Interim dividend on ordinary shares for 2024 - 3p (2023 - 2p) |
|
487 |
|
319 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The interim dividend will be payable on 19th January, 2024 to those shareholders on the register at the close of business on 22nd December, 2023, with the ex-dividend date being 21st December, 2023. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
10. Property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31st October, 2023 |
|
|
|
|
|
|
|
|
|
Freehold |
|
Plant and |
|
|
|
|
|
property |
|
equipment |
|
Total |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
Cost or valuation |
|
|
|
|
|
|
|
At 30th April, 2023 |
|
21,930 |
|
17,298 |
|
39,228 |
|
Additions |
|
517 |
|
651 |
|
1,168 |
|
Disposals |
|
- |
|
(316) |
|
(316) |
|
Exchange differences |
|
194 |
|
63 |
|
257 |
|
At 31st October, 2023 |
|
22,641 |
|
17,696 |
|
40,337 |
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
At 30th April, 2023 |
|
395 |
|
13,947 |
|
14,342 |
|
Depreciation charge for the period |
|
202 |
|
636 |
|
838 |
|
Disposals |
|
- |
|
(315) |
|
(315) |
|
Exchange differences |
|
7 |
|
50 |
|
57 |
|
At 31st October, 2023 |
|
604 |
|
14,318 |
|
14,922 |
|
Net book value at 31st October, 2023 |
|
22,037 |
|
3,378 |
|
25,415 |
|
|
|
|
|
|
|
|
|
Analysis of cost or valuation |
|
|
|
|
|
|
|
At professional valuation |
|
21,681 |
|
- |
|
21,681 |
|
At cost |
|
960 |
|
17,696 |
|
18,656 |
|
At 31st October, 2023 |
|
22,641 |
|
17,696 |
|
40,337 |
|
|
|
|
|
|
|
|
|
At 31st October, 2022 |
|
|
|
|
|
|
|
|
|
Freehold |
|
Plant and |
|
|
|
|
|
property |
|
equipment |
|
Total |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
Cost or valuation |
|
|
|
|
|
|
|
At 30th April, 2022 |
|
21,368 |
|
16,106 |
|
37,474 |
|
Additions |
|
185 |
|
694 |
|
879 |
|
Disposals |
|
- |
|
(182) |
|
(182) |
|
Exchange differences |
|
419 |
|
147 |
|
566 |
|
At 31st October, 2022 |
|
21,972 |
|
16,765 |
|
38,737 |
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
At 30th April, 2022 |
|
- |
|
12,937 |
|
12,937 |
|
Depreciation charge for the period |
|
198 |
|
582 |
|
780 |
|
Disposals |
|
- |
|
(128) |
|
(128) |
|
Exchange differences |
|
2 |
|
70 |
|
72 |
|
At 31st October, 2022 |
|
200 |
|
13,461 |
|
13,661 |
|
Net book value at 31st October, 2022 |
|
21,772 |
|
3,304 |
|
25,076 |
|
|
|
|
|
|
|
|
|
Analysis of cost or valuation |
|
|
|
|
|
|
|
At professional valuation |
|
21,787 |
|
- |
|
21,787 |
|
At cost |
|
185 |
|
16,765 |
|
16,950 |
|
At 31st October, 2022 |
|
21,972 |
|
16,765 |
|
38,737 |
|
|
|
|
|
|
|
|
|
|
At 30th April, 2023 |
|
|
|
|
|
|
|
|
|
|
Freehold |
|
Plant and |
|
|
|
|
|
|
property |
|
equipment |
|
Total |
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
Cost or valuation |
|
|
|
|
|
|
|
|
At 30th April, 2022 |
|
21,368 |
|
16,106 |
|
37,474 |
|
|
Additions |
|
421 |
|
1,550 |
|
1,971 |
|
|
Disposals |
|
- |
|
(488) |
|
(488) |
|
|
Exchange differences |
|
141 |
|
130 |
|
271 |
|
|
At 30th April, 2023 |
|
21,930 |
|
17,298 |
|
39,228 |
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
At 30th April, 2022 |
|
- |
|
12,937 |
|
12,937 |
|
|
Depreciation charge for the year |
|
400 |
|
1,268 |
|
1,668 |
|
|
Disposals |
|
- |
|
(358) |
|
(358) |
|
|
Exchange differences |
|
(5) |
|
100 |
|
95 |
|
|
At 30th April, 2023 |
|
395 |
|
13,947 |
|
14,342 |
|
|
Net book value at 30th April, 2023 |
|
21,535 |
|
3,351 |
|
24,886 |
|
|
|
|
|
|
|
|
|
|
|
Analysis of cost or valuation |
|
|
|
|
|
|
|
|
At professional valuation |
|
21,930 |
|
- |
|
21,930 |
|
|
At cost |
|
- |
|
17,298 |
|
17,298 |
|
|
At 30th April, 2023 |
|
21,930 |
|
17,298 |
|
39,228 |
|
|
|
|
|
|
|
|
|
|
|
At 30th April, 2022 the Group's land and buildings, which consist of manufacturing and office facilities in the USA, Poland, and UK were valued by Real Estate & Appraisal Services Inc (USA), KonSolid-Nieruchomosci (Poland) and Dove Haigh Phillips (UK). Management determined that these constitute one class of asset under IFRS 13 (designated as level 3 fair value assets), based on the nature, characteristics and risks of the properties. |
|
||||||
|
|
|
|
|
|
|
|
|
|
The properties in the UK were valued on the basis of an existing use value in accordance with the Appraisal and Valuation Standards (5th Edition) published by the Royal Institution of Chartered Surveyors. The Polish property was valued based on the income approach, converting anticipated future benefits in the form of rental income into present value. The US property was valued on an income and market value basis. For all properties, there is no difference between current use and highest and best use. |
|
||||||
|
11. Right-of-use assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31st October, 2023 |
|
|
|
|
|
Plant and |
|
|
|
|
|
|
|
Property |
|
equipment |
|
Total |
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
Cost or valuation |
|
|
|
|
|
|
|
|
|
At 30th April, 2023 |
|
|
|
2,312 |
|
- |
|
2,312 |
|
Exchange differences |
|
|
|
(12) |
|
- |
|
(12) |
|
At 31st October, 2023 |
|
|
|
2,300 |
|
- |
|
2,300 |
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
At 30th April, 2023 |
|
|
|
1,150 |
|
- |
|
1,150 |
|
Depreciation charge for the period |
|
|
|
186 |
|
- |
|
186 |
|
Exchange differences |
|
|
|
(4) |
|
- |
|
(4) |
|
At 31st October, 2023 |
|
|
|
1,332 |
|
- |
|
1,332 |
|
Net book value at 31st October, 2023 |
|
|
|
968 |
|
- |
|
968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31st October, 2022
|
|
|
|
|
|
Plant and |
|
|
|
|
|
|
|
Property |
|
equipment |
|
Total |
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
Cost or valuation |
|
|
|
|
|
|
|
|
|
At 30th April, 2022 |
|
|
|
2,218 |
|
10 |
|
2,228 |
|
Exchange differences |
|
|
|
56 |
|
- |
|
56 |
|
At 31st October, 2022 |
|
|
|
2,274 |
|
10 |
|
2,284 |
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
At 30th April, 2022 |
|
|
|
741 |
|
8 |
|
749 |
|
Depreciation charge for the period |
|
|
|
186 |
|
2 |
|
188 |
|
Exchange differences |
|
|
|
19 |
|
- |
|
19 |
|
At 31st October, 2022 |
|
|
|
946 |
|
10 |
|
956 |
|
Net book value at 31st October, 2022 |
|
|
|
1,328 |
|
- |
|
1,328 |
|
|
|
|
|
|
|
|
|
|
|
At 30th April, 2023 |
|
|
|
|
|
Plant and |
|
|
|
|
|
|
|
Property |
|
equipment |
|
Total |
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
Cost or valuation |
|
|
|
|
|
|
|
|
|
At 30th April, 2022 |
|
|
|
2,218 |
|
10 |
|
2,228 |
|
Disposals |
|
|
|
- |
|
(10) |
|
(10) |
|
Exchange differences |
|
|
|
94 |
|
- |
|
94 |
|
At 30th April, 2023 |
|
|
|
2,312 |
|
- |
|
2,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
At 30th April, 2022 |
|
|
|
741 |
|
8 |
|
749 |
|
Depreciation charge for the year |
|
|
|
374 |
|
2 |
|
376 |
|
Disposals |
|
|
|
- |
|
(10) |
|
(10) |
|
Exchange differences |
|
|
|
35 |
|
- |
|
35 |
|
At 30th April, 2023 |
|
|
|
1,150 |
|
- |
|
1,150 |
|
Net book value at 30th April, 2023 |
|
|
|
1,162 |
|
- |
|
1,162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12. Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the purpose of the interim consolidated cash flow statement, cash and cash equivalents are comprised of the following: |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31st October, 2023 |
|
31st October, 2022 |
|
30th April, 2023 |
|
|
|
|
|
unaudited |
|
unaudited |
|
audited |
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
42,627 |
|
23,363 |
|
12,336 |
|
Restricted cash held in Escrow - maturing in more than 90 days |
|
|
|
7,426 |
|
519 |
|
2,917 |
|
Total cash |
|
|
|
50,053 |
|
23,882 |
|
15,253 |
|
|
|
|
|
|
|
|
|
|
|
The restricted cash balance held in Escrow provides security to Lloyds Bank plc in respect of certain guarantees, indemnities, and performance bonds given by the Group in the ordinary course of business. |
||||||||
|
13. Pension liability |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The Company operates an employee pension scheme called the MS INTERNATIONAL plc Retirement and Death Benefits Scheme ("the Scheme"). IAS 19 requires disclosure of certain information about the Scheme as follows:
· Until 5th April, 1997, the Scheme provided defined benefits and these liabilities remain in respect of service prior to 6th April, 1997. From 6th April, 1997 until 31st May, 2007 the Scheme provided future service benefits on a defined contribution basis.
· The last formal valuation of the Scheme was performed at 7th May, 2021 by a professionally qualified actuary.
· From 6th April, 2016 the Company directly pays the expenses of the Scheme. The total pension scheme expenses incurred by the Company during the period were £221,000 (2022: £137,000).
· Deficit reduction contributions paid into the Scheme by the Company are £900,000 per annum. The deficit reduction contributions are paid on a quarterly basis with the first having been paid on or after 1st July, 2021 and the last being due for payment on or before 1st April, 2028. The total deficit reduction payments made in the period were £675,000 (2022 - £450,000).
· From 1st June, 2007 the Company has operated a defined contribution scheme for its UK employees which is administered by a UK pension provider. Member contributions are paid in line with this Scheme's documentation over the accounting period and the Company has no further obligations once the contributions have been made. At 30th April, 2023 the present value of the contracted future deficit reduction contributions was £3,577,000 (2022 - £4,341,000), which was greater than the net scheme asset of £48,000 (2022 - £2,337,000 liability). As the Company does not have an unconditional right to the economic benefits arising from this surplus, an additional liability of £3,625,000 (2022 - £2,004,000) has been recognised in the financial statements in accordance with IFRIC 14.
· The pension scheme liability has reduced by £639,000 from £4,216,000 at 30th April, 2023 to £3,577,000 at 31st October, 2023. A total actuarial gain of £54,000 (2022 - £8,000 loss) has been recognised through other comprehensive income. It comprises of a £671,000 remeasurement loss (2022 - £3,493,000) compared to the interest income on the plan assets, a £1,413,000 actuarial gain (2022 - £4,346,000 gain) due to changes in financial assumptions and a loss relating to IFRIC 14 of £688,000 (2022 - £861,000). The interest cost on the net defined benefit liability of £90,000 (2022 - £63,000) has been recognised through the income statement. The Scheme's liabilities have been reduced by pension fund deficit payments in the period of £675,000 (2022 - £450,000).
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
14. Commitments and contingencies |
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The Company is contingently liable in respect of guarantees, indemnities and performance bonds given in the ordinary course of business amounting to £7,416,000 at 31st October, 2023 (2022 - £1,566,000). |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
In the opinion of the Directors, no material loss will arise in connection with the above matters. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The Group and certain of its subsidiary undertakings are parties to legal actions and claims which have arisen in the normal course of business. The results of actions and claims cannot be forecast with certainty, but the directors believe that they will be concluded without any material effect on the net assets of the Group.
15. Derivative financial instruments
During the period, the Group has entered into a number of forward currency contracts in respect of USD denominated cash inflows in the 'Defence and Security' division.
The Group has chosen not to adopt hedge accounting with respect to forward exchange contracts and as a result the loss of £731,000 arising from the change in the fair value during the period has been included within operating profit.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
16. Share-based payments
During the period, a total of 122,700 share options have been granted to executive directors, non-executive directors, and employees under the MS INTERNATIONAL plc Company Share Option Plan. These options are exercisable in three equal amounts at three, four and five years after the date of grant and are not subject to any share price performance conditions. Of the options, 4,800 have been granted at an exercise price of £6.24 and the remaining 117,900 have been granted at an exercise price of £7.20 per share.
Share options totalling 320,007 have been exercised during the period. This includes 100,000 options exercised under the MS INTERNATIONAL plc Long Term Incentive Plan at an exercise price of £0 per share, and a further 220,007 options exercised under the MS INTERNATIONAL Plc Company Share Option Scheme at an exercise price of £1.41 per share.
170,007 of the options were satisfied by transferring shares from treasury and the remaining 150,000 options were satisfied by transferring shares from The Employee Share Ownership Trust ("ESOT").
The following tables illustrate the number and weighted average exercise prices (WAEP) of share options during the year:
The Group recognised a total charge during the period of £19,000 (2022 - £15,000) in relation to equity-settled share-based payment transactions. At 31st October, 2023 there were 150,000 (2022 - nil) and 113,337 (2022 - nil) share options exercisable in the LTIP and CSOP share option schemes respectively.
|
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