Chairman's statement

 

 

 

Results and Review

 

It is pleasing to report that the year ended April 2023 was one of further, considerable progress for the Company, even if this may not yet be immediately apparent from the results.

           

A delay by a customer in taking delivery of a significant contract, relating to the first sales of our 'VSHORAD' counter drone land-based weapon system, because of the continuing war in Europe, meant that, although the equipment was virtually complete and ready for despatch, it could not be delivered before our year end. I am confident this will be fully resolved shortly, but the timing issue negatively impacted the year's reported figures.

 

Accordingly, a pre-tax profit of £5.08m (2022-£5.97m) was achieved on increased revenue of £83.96m (2022-£74.53m).  Basic earnings per share amounted to 25.6p (2022-30.9p).

 

More significantly, the value of the Group's order book has almost doubled over the period to stand at a record £115 million at the year end (2022-£64 million) while the balance sheet remained strong with total cash of £15.52m (2022-£19.25m).

 

'Defence'

 

Another year of record revenue for this division, complemented by the successful launch of our first 'in-house', developed, land-based military product namely 'VSHORAD'. This was designed and produced by us as an effective counter to the many threats posed to strategic infrastructure by drone warfare.

 

Following extensive and comprehensive performance proving trials, we were delighted to have been awarded our first order for the supply of seven 'VSHORAD' systems to an overseas customer.

 

Meantime, our determined endeavours in the United States are being rewarded. We continue to make positive headway towards our goal to gain appropriate US military product approval for our MSI-DS 30mm naval gun system following rigorous testing trials conducted on our weapon system.  

 

'Forgings'

 

This was another good business performance from our manufacturing operations based in the UK, the United States and Brazil, at a time when not only we, but also our many international customers, were focused on seeking to realign raw material and component availability to match current demand, following the disruptions inflicted by the global pandemic.

 

 'Petrol Station Superstructures'

 

High levels of business activity across the markets we serve and a dynamic performance from our UK and Polish operations, resulted in both sales and profitability exceeding expectations whilst delivering strong cash positions at the year end.

 

With many years of experience in constructing petrol station superstructures, not only in the UK but also in mainland Europe, we are extremely well placed to address a changing marketplace that is reflecting the demands of an ever-increasing number of electric vehicles. Forecourt operators are intensifying their efforts to upgrade sites to become broader 're-fuelling - hubs' that can facilitate a wide variety of liquid fuels, under-canopy electric charging and vehicle valeting combined with increasing facilities for retail shopping and roadside convenience food. 

 

'Corporate Branding'

 

Our UK operations have continued to expand and prosper, providing our petrol station forecourt customers with a quality service for both new projects and the important maintenance and repair of existing site branding.   

 

In contrast, we experienced a much slower recovery in business activity in our Netherlands based mainland Europe operations which was disappointing and is accordingly being addressed. 

 

 

Outlook

 

'Defence'

 

I am pleased to report that we have recently received encouraging confirmation that matters have been resolved relating to the delayed significant contract caused by the continuing war in Europe. We expect to receive payment shortly and then the equipment can be delivered.

 

Following the successful launch of our 'VSHORAD' counter drone land-based weapon system with this first order, there continues to be considerable international market interest and excitement that, we believe, should result in a significant number of further sales opportunities. In this regard, we are pleased to report that we have received a new order to supply a number of these systems with a contract value of circa £54m.

 

Regarding the ongoing opportunities in the US, we cautiously believe that we are well placed to be awarded a contract to supply our MSI-DS 30mm naval weapon system to the US Navy. We have been invited to visit the US to continue commercial negotiations.

 

In the meantime, we continue to invest in expanding the Defence business. The ongoing refurbishment and reorganisation of our Norwich manufacturing and weapon assembly facility is central to achieving that objective.

 

 

'Forgings'

 

This division already holds a strong international market presence and excellent reputation as an all-round, top-quality supplier of forged fork-arms for the global materials handling industry.

 

We believe that, with the continuing planned investment in upgrading facilities and manufacturing equipment across our plants, we shall continue to perform at an outstanding and acceptable level.

 

'Petrol Station Superstructures'

 

Forecourt operators are adapting very positively to the rising number of electric vehicles by increasing the number of roof covered charging points and reorganising site layout to accommodate a complete range of motor vehicle refuelling facilities. MSI, with a wealth of experience and detailed construction records for thousands of petrol station sites, remains well placed to provide an excellent and efficient service to the market.

 

'Corporate Branding'

 

Our UK operation will continue to consolidate and grow its current leading position in the UK market.

 

Summary

 

We perceive that we are achieving a significant, upward step change in the further development of the Company that will again bring additional rewards and success for the business. I look to the future with confidence.

 

All matters considered the Board recommends the payment of a final dividend of 13p per share (2022-7.5p) making a total for the year of 15p (2022-9.25p).

The dividend is expected to be paid on the 18th of August 2023 to those shareholders on the register at the close of business on the 6th July 2023.

 

 

 

Michael Bell

21^st June 2023

 

 

 

 

MS INTERNATIONAL plc
Michael Bell		Tel: 01302 322133
Shore Capital (Nominated Adviser and Broker)
Patrick Castle		Tel: 020 7408 4090
Daniel Bush

Copies of this announcement are available from the Company's registered office at MS INTERNATIONAL plc, Balby Carr Bank, Doncaster, DN4 8DH, England. The Notice of AGM will be posted to shareholders on or before 17^th July, 2023. The full Annual Report and Accounts will be posted to shareholders in the week commencing 17^th July, 2023 at the latest. They will be made available on the Company's website at www.msiplc.com and will be delivered to the Registrar of Companies after it has been laid before the Company's members at the Annual General Meeting to be held on 9^th August, 2023 at The Holiday Inn, Warmsworth, Doncaster.

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018.

 

Consolidated income statement
For the year ended 30th April, 2023
				2023		2022
Continuing operations				Total		Total
				£'000		£'000
Revenue				83,956		74,524
Cost of sales				(60,556)		(54,121)
Gross profit				23,400		20,403
Distribution costs				(3,402)		(3,304)
Administrative expenses				(14,748)		(12,097)
Other operating income				-		1,185
				(18,150)		(14,216)
Group operating profit				5,250		6,187
Share of net loss of joint venture				(36)		-
Interest received				134		1
Interest paid				(134)		(95)
Other finance costs - pensions				(136)		(126)
				(136)		(220)
Profit before taxation				5,078		5,967
Taxation				(963)		(1,035)
Profit for the year attributable to equity holders of the parent				4,115		4,932
Basic earnings per share				25.6p		30.9p
Diluted earnings per share				24.2p		29.6p
Consolidated statement of comprehensive income
For the year ended 30th April, 2023
				2023		2022
				Total		Total
				£'000		£'000
Profit for the year attributable to equity holders of the parent				4,115		4,932
Exchange differences on retranslation of foreign operations				97		(603)
Net other comprehensive gain/(loss) to be reclassified to profit or loss in subsequent years				97		(603)
Remeasurement (losses)/gains on defined benefit pension scheme				(35)		1,601
Deferred tax on remeasurement on defined benefit pension scheme				9		(145)
Revaluation of land and buildings				-		3,868
Deferred tax on revaluation surplus on land and buildings				(252)		(798)
Net other comprehensive (loss)/income not being reclassified to profit or loss in subsequent years				(278)		4,526
Total comprehensive income for the year attributable to equity holders of the parent				3,934		8,885

 

 

Consolidated and company statement of changes in equity
For the year ended 30th April, 2023
			Share capital		Capital redemption reserve		Other reserves	Revaluation reserve		Special reserve		Currency translation reserve		Treasury shares		Retained earnings		Total shareholders' funds
			£'000		£'000		£'000	£'000		£'000		£'000		£'000		£'000		£'000
(a) Group
At 30th April, 2021			1,784		957		2,815	6,055		1,629		186		(2,789)		20,399		31,036
Profit for the year			-		-		-	-		-		-		-		4,932		4,932
Other comprehensive income/(loss)			-		-		-	3,868		-		(603)		-		658		3,923
Total comprehensive income/(loss)			-		-		-	3,868		-		(603)		-		5,590		8,855
Dividends paid			-		-		-	-		-		-		-		(1,316)		(1,316)
At 30th April, 2022			1,784		957		2,815	9,923		1,629		(417)		(2,789)		24,673		38,575
Profit for the year			-		-		-	-		-		-		-		4,115		4,115
Other comprehensive income/(loss)			-		-		-	-		-		97		-		(278)		(181)
Total comprehensive income/(loss)			-		-		-	-		-		97		-		3,837		3,934
Share option expense			-		-		-	-		-		-		-		86		86
Exercise of share options			-		-		-	-		-		-		408		(408)		-
Dividends paid			-		-		-	-		-		-		-		(1,520)		(1,520)
At 30th April, 2023			1,784		957		2,815	9,923		1,629		(320)		(2,381)		26,668		41,075
(b) Company
At 30th April, 2021			1,784		957		7,620	-		1,629		-		(2,789)		16,581		25,782
Profit for the year			-		-		-	-		-		-		-		3,362		3,362
Other comprehensive income			-		-		-	-		-		-		-		1,232		1,232
Total comprehensive income			-		-		-	-		-		-		-		4,594		4,594
Dividends paid			-		-		-	-		-		-		-		(1,316)		(1,316)
At 30th April, 2022			1,784		957		7,620	-		1,629		-		(2,789)		19,859		29,060
Profit for the year			-		-		-	-		-		-		-		305		305
Other comprehensive loss			-		-		-	-		-		-		-		(1)		(1)
Total comprehensive income			-		-		-	-		-		-		-		304		304
Share option expense			-		-		-	-		-		-		-		86		86
Exercise of share options			-		-		-	-		-		-		408		(408)		-
Dividends paid			-		-		-	-		-		-		-		(1,520)		(1,520)
At 30th April, 2023			1,784		957		7,620	-		1,629		-		(2,381)		18,321		27,930

 

 

Consolidated and company statements of financial position
At 30th April, 2023
		Group				Company
		2023		2022		2023		2022
		£'000		£'000		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment		24,886		24,537		1,161		1,017
Right-of-use assets		1,162		1,479		4,571		5,029
Intangible assets		2,396		3,002		-		-
Investments in subsidiaries		-		-		15,669		18,126
Investment in joint venture		-		34		-		-
Deferred income tax asset		1,677		1,435		1,216		1,374
		30,121		30,487		22,617		25,546
Current assets
Inventories		24,764		16,327		2,765		2,592
Trade and other receivables		9,031		12,754		14,344		15,612
Contract assets		144		1,773		-		-
Cash and cash equivalents		12,336		18,092		8,016		3,258
Restricted cash held in Escrow		2,917		1,158		-		-
		49,192		50,104		25,125		21,462
TOTAL ASSETS		79,313		80,591		47,742		47,008
EQUITY AND LIABILITIES
Equity
Share capital		1,784		1,784		1,784		1,784
Capital redemption reserve		957		957		957		957
Other reserves		2,815		2,815		7,620		7,620
Revaluation reserve		9,923		9,923		-		-
Special reserve		1,629		1,629		1,629		1,629
Currency translation reserve		(320)		(417)		-		-
Treasury shares		(2,381)		(2,789)		(2,381)		(2,789)
Retained earnings		26,668		24,673		18,321		19,859
TOTAL EQUITY SHAREHOLDERS' FUNDS		41,075		38,575		27,930		29,060
Non-current liabilities
Defined benefit pension liability		4,216		4,720		4,216		4,720
Deferred income tax liability		2,943		2,578		-		-
Lease liabilities		829		1,158		4,388		4,807
		7,988		8,456		8,604		9,527
Current liabilities
Trade and other payables		15,286		14,878		9,933		7,392
Contract liabilities		14,585		18,329		856		622
Lease liabilities		379		353		419		407
		30,250		33,560		11,208		8,421
TOTAL EQUITY AND LIABILITIES		79,313		80,591		47,742		47,008

 

Consolidated and company cash flow statements
For the year ended 30th April, 2023
		Group				Company
		2023		2022		2023			2022
		£'000		£'000		£'000			£'000
Profit/(loss) before taxation		5,078		5,967		(1,233)			2,509
Adjustments to reconcile profit/(loss) before taxation to cash generated from operating activities:
Depreciation charge of owned assets and right-of-use assets		2,044		1,746		965			931
Amortisation charge		239		227		-			-
Impairment of goodwill		390		349		-			-
Impairment of investment		-		-		2,457			-
Profit on disposal of property, plant and equipment		(107)		(169)		(66)			(163)
Share option expense		86		-		86			-
Share of net loss of joint venture		36		-		-			-
Finance costs		136		220		246			292
Foreign exchange losses		(369)		(142)		-			-
Increase in inventories		(8,326)		(3,657)		(173)			(1,094)
Decrease/(increase) in receivables		5,510		(930)		1,268			344
(Decrease)/increase in payables		(5)		1,340		2,194			1,518
(Decrease)/increase in progress payments		(3,726)		(3,660)		234			(252)
Pension fund deficit reduction payments		(675)		(900)		(675)			(900)
Cash generated from operating activities		311		391		5,303			3,185
Net interest (received)/paid		50		(43)		44			(1)
Taxation (paid)/received		(758)		(447)		(363)			151
Net cash (outflow)/inflow from operating activities		(397)		(99)		4,984			3,335
Investing activities
Dividends received from subsidiaries		-		-		2,439			1,249
Purchase of property, plant and equipment		(1,971)		(2,703)		(705)			(578)
Purchase of intangible assets		-		(54)		-			-
Proceeds on disposal of property, plant and equipment		237		227		120			185
(Increase)/decrease in cash held in the Escrow account maturing in more than 90 days		(1,759)		5,007		-			-
Net cash (outflow)/inflow from investing activities		(3,493)		2,477		1,854			856
Financing activities
Lease payments		(415)		(405)		(560)			(560)
Dividends paid		(1,520)		(1,316)		(1,520)			(1,316)
Net cash outflow from financing activities		(1,935)		(1,721)		(2,080)			(1,876)
(Decrease)/increase in cash and cash equivalents		(5,825)		657		4,758			2,315
Opening cash and cash equivalents		18,092		17,390		3,258			943
Exchange differences on cash and cash equivalents		69		45		-			-
Closing cash and cash equivalents		12,336		18,092		8,016			3,258

 

The financial information set out above does not constitute the Company's statutory accounts for the periods ended 30^th April, 2023 or 30th April, 2022 but is derived from those accounts. Statutory accounts for 2022 have been delivered to the Registrar of Companies and those for 2023 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

1.     Segment information

The following table presents revenue and profit and certain assets and liability information regarding the Group's divisions for the years ended 30th April, 2023 and 30th April, 2022. The reporting format is determined by the differences in manufacture and services provided by the Group. The 'Defence' division is engaged in the design, manufacture, and service of defence equipment. The 'Forgings' division is engaged in the manufacture of forgings. The 'Petrol Station Superstructures' division is engaged in the design, manufacture, construction, branding, maintenance, and restyling of petrol station superstructures. The 'Corporate Branding' division is engaged in the design, manufacture, installation, and service of corporate brandings.

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

 

		'Defence'				'Forgings'				'Petrol Station				'Corporate				Total
										Superstructures'				Branding'
		2023		2022		2023		2022		2023		2022		2023		2022		2023		2022
		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000
Segmental revenue
Total revenue		32,433		30,219		23,266		16,482		16,336		15,143		12,412		13,009		84,447		74,853
Revenue from other segments		-		-		-		-		(316)		(245)		(175)		(84)		(491)		(329)
Revenue from external customers		32,433		30,219		23,266		16,482		16,020		14,898		12,237		12,925		83,956		74,524
Segment result
Operating profit/(loss)		2,023		4,123		3,864		2,245		2,053		1,074		(2,690)		(1,255)		5,250		6,187
Share of net loss of joint venture																		(36)		-
Net finance costs																		(136)		(220)
Profit before taxation																		5,078		5,967
Taxation																		(963)		(1,035)
Profit for the year																		4,115		4,932
Segmental assets
Assets attributable to segments		28,145		33,393		9,394		7,883		10,732		9,380		6,744		8,050		55,015		58,706
Unallocated assets*																		24,298		21,885
Total assets																		79,313		80,591
Segmental liabilities
Liabilities attributable to segments		19,012		23,643		3,942		3,547		3,402		3,109		3,391		3,591		29,747		33,890
Unallocated liabilities*																		8,491		8,126
Total liabilities																		38,238		42,016
Other segmental information
Capital expenditure		1,065		1,933		213		389		353		195		340		186		1,971		2,703
Depreciation		322		210		644		561		728		714		350		261		2,044		1,746
Amortisation		18		10		-		-		43		43		178		174		239		227
Impairment		-		-		-		-		-		-		390		349		390		349

 

* Unallocated assets include certain fixed assets (including all UK properties), current assets and deferred income tax assets. Unallocated liabilities include the defined pension benefit scheme liability, the deferred income tax liability, and certain current liabilities.
Assets and liabilities attributable to segments comprise the assets and liabilities of each segment adjusted to reflect the elimination of the cost of investment in subsidiaries and the provision of financing loans provided by MS INTERNATIONAL plc.
Revenue between segments is determined on an arm's length basis. Segment results, assets, and liabilities include items directly attributable to the segment as well as those that can be allocated on a reasonable basis.
Geographical analysis
The following table presents revenue and expenditure and certain assets and liabilities information by geographical segment for the years ended 30th April, 2023 and 30th April, 2022. The Group's geographical segments are based on the location of the Group's assets.
				United Kingdom								Europe								USA							South America							Total
				2023				2022				2023				2022				2023				2022			2023			2022				2023				2022
				£'000				£'000				£'000				£'000				£'000				£'000			£'000			£'000				£'000				£'000
External revenue by origin				51,424				41,665				12,333				11,599				17,270				18,917			2,929			2,343				83,956				74,524
Non-current assets				20,529				20,160				3,365				4,327				6,107				5,913			120			87				30,121				30,487
Current assets				40,269				37,235				5,158				6,147				2,844				6,024			921			698				49,192				50,104
Liabilities				23,281				28,380				3,345				4,112				11,380				9,223			232			301				38,238				42,016
Capital expenditure				1,569				2,377				162				133				240				193			-			-				1,971				2,703
Revenue disaggregated by destination is shown as follows:
																											2023							2022
																											£'000			%				£'000				%
United Kingdom																											28,354			34%				31,287				42%
Europe																											21,158			25%				17,103				23%
USA																											17,270			21%				19,406				26%
South America																											3,036			3%				2,421				3%
Rest of World																											14,138			17%				4,307				6%
Total revenue																											83,956			100%				74,524				100%

The Group's largest customer, which is reported in the 'Defence' division, contributed 12.6% to the Group's revenue (2022 - 14.2% in the 'Defence' division from a different customer). There are no other customers which contributed more than 10% to the Group's revenue (2022 - 11.4% in the 'Defence' division).

 

During the year, the Group recognised £2.2m of profit in relation to a contract in the 'Defence' division that was terminated in April 2023.

 

 

2.     Other operating income
						2023		2022
						£'000		£'000
Settlement of contractual dispute						-		1,185
						-		1,185
In the prior year the Group settled a contractual dispute, the terms of which are confidential. The amount received was recognised in other income. The Group incurred £0.6m of legal costs in the prior year in relation to this matter. These costs were included in administrative expenses.
3.     Employee information
The average number of employees, including executive directors, during the year was as follows:
		Group				Company
		2023		2022		2023		2022
		Number		Number		Number		Number
Production		263		252		78		74
Technical		71		71		21		23
Distribution		26		26		2		2
Administration		94		98		39		39
		454		447		140		138
(a)   Staff costs
Including executive directors, employment costs were as follows:
		Group				Company
		2023		2022		2023		2022
		£'000		£'000		£'000		£'000
Wages and salaries		21,024		18,942		7,415		7,139
Covid-19 job retention scheme income		-		(1,636)		-		-
Social security costs		3,853		3,233		822		722
Pension costs		667		570		423		352
Share options expense		30		29		30		29
		25,574		21,138		8,690		8,242
The Covid-19 job retention scheme income has been received in the following countries:
						2023		2022
						£'000		£'000
The Netherlands						-		1,310
USA						-		251
Poland						-		75
						-		1,636
(b)   Directors' emoluments
						2023		2022
						£'000		£'000
Aggregate directors' emoluments						2,072		1,810
Pension contributions						65		52
Gain on exercise of share options						1,042		-
						3,179		1,862

 

On 8th December, 2022 two directors exercised LTIP share options totalling 250,000 at an exercise price of £0 per share. The gain on the exercise of these share options is the difference between market price at the date of exercise of £4.17 and the exercise price of £0 per share.

 

4.     (a)   Taxation
The charge for taxation comprises:
		2023		2022
		£'000		£'000
Current tax
United Kingdom corporation tax		860		667
Foreign corporation tax		311		120
Adjustments in respect of previous years		(76)		(10)
Group current tax expense		1,095		777
Deferred tax
Origination and reversal of temporary differences		(122)		261
Adjustments in respect of previous years		(2)		(5)
Adjustments in respect of difference in applicable tax rate		(8)		2
Group deferred tax (credit)/expense		(132)		258
Total tax expense on profit		963		1,035
Tax relating to items charged to other comprehensive income:
		2023		2022
		£'000		£'000
Deferred tax charged through other comprehensive income
Deferred tax on measurement gains on pension scheme current year		(9)		145
Deferred tax on revaluation surplus on land and buildings		252		798
Deferred tax expense in the Consolidated statement of comprehensive income		243		943
(b)   Factors affecting the tax charge for the year

 

The tax charge assessed for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 19.5% (2022 - 19%). The differences are explained below:
				2023		2022
				£'000		£'000
Profit before tax				5,078		5,967
Profit multiplied by standard rate of corporation tax of 19.5% (2022 - 19%)				990		1,134
Effects of:
Expenses not deductible for tax purposes				35		29
Permanent timing differences				(293)		(276)
Adjustments in respect of overseas tax rates				125		132
Dual residency tax				232		29
Current tax adjustment in respect of previous years				(76)		(10)
UK deferred tax not previously recognised				(40)		-
Deferred tax adjustment in respect of previous years				(2)		(5)
Deferred tax adjustment in respect of different applicable rates				(8)		2
Total taxation expense for the year				963		1,035
(c)   Factors affecting future tax charge
On 1st April 2023 the rate of corporation tax in the UK increased from 19% to 25%. Therefore, deferred income tax has been provided at 25%.

 

5.     Earnings per share
The calculation of basic earnings per share of 25.6p (2022 - 30.9p) is based on the profit for the year attributable to equity holders of the parent of £4,115,000 (2022 - £4,932,000) and on a weighted average number of ordinary shares in issue of 16,045,581 (2022 - 15,949,691). At 30th April, 2023 there were 1,270,000 (2022 - 1,055,000) dilutive shares on option with a weighted average effect of 980,875 (2022 - 716,575) giving a diluted earnings per share of 24.2p (2022 - 29.6p).
		2023		2022
Number of ordinary shares in issue at start of the year		17,841,073		17,841,073
Cancellation of ordinary shares during the year		-		-
Number of ordinary shares in issue at the end of the year		17,841,073		17,841,073
Weighted average number of shares in issue		17,841,073		17,841,073
Less weighted average number of shared held in the ESOT		(245,048)		(245,048)
Less weighted average number of shares purchased by the Company		(1,550,444)		(1,646,334)
Weighted average number of shares to be used in basic EPS calculation		16,045,581		15,949,691
Weighted average number of the 1,270,000 (2022 - 1,055,000) dilutive shares		980,875		716,575
Weighted average diluted shares		17,026,456		16,666,266
Profit for the year attributable to equity holders of the parent in £		4,115,000		4,932,000
Basic earnings per share		25.6p		30.9p
Diluted earnings per share		24.2p		29.6p
6.    Dividends paid and proposed		2023		2022
		£'000		£'000
Declared and paid during the year:
Final dividend for 2022: 7.5p (2021 - 6.5p)		1,196		1,037
Interim dividend for 2023: 2p (2022 - 1.75p)		324		279
		1,520		1,316
Proposed for approval by shareholders at the AGM:
Final dividend for 2023: 13p (2022 - 7.5p)		2,106		1,196

 

7.   Trade and other receivables
						Group				Company
						2023		2022		2023		2022
						£'000		£'000		£'000		£'000
Trade receivables (net of allowance for expected credit losses)						6,931		10,167		2,756		2,366
Amounts owed by subsidiary undertakings						-		-		11,356		13,024
Amounts owed by joint venture						-		228		-		-
Prepayments						1,027		1,352		228		218
Other receivables						1,071		1,001		4		4
Income tax receivable						2		6		-		-
						9,031		12,754		14,344		15,612
(a)   Trade receivables
Trade receivables are denominated in the following currencies:
						Group				Company
						2023		2022		2023		2022
						£'000		£'000		£'000		£'000
Sterling						3,946		5,554		1,739		1,576
Euro						1,973		1,786		1,017		790
US dollar						736		2,406		-		-
Other currencies						276		421		-		-
						6,931		10,167		2,756		2,366
Trade receivables are non-interest bearing, generally have 30 day terms, and are shown net of provision for expected credit losses. The aged analysis of trade receivables after provision for expected credit losses is as follows:
						Group				Company
						2023		2022		2023		2022
						£'000		£'000		£'000		£'000
Not past due						5,059		7,234		2,282		2,316
< 30 days						1,745		2,062		482		24
30-60 days						90		64		18		19
60-90 days						37		11		-		8
> 90 days						-		796		(26)		(1)
Total						6,931		10,167		2,756		2,366
In the Group, trade receivables with a nominal value of £36,000 (2022 - £52,000) were impaired and fully provided as at 30th April, 2023. During the year, expected credit losses of £42,000 (2022 - £20,000) were recovered and expected credit losses of £26,000 (2022 - £29,000) were incurred.
In the Company, trade receivables with a nominal value of £16,000 (2022 - £33,000) were impaired and fully provided as at 30th April, 2023. During the year, expected credit losses of £30,000 (2022 - £7,000) were recovered and expected credit losses of £13,000 (2022 - £29,000) were incurred.
(b)   Amounts owed by joint venture
Amounts owed by joint venture are non-interest bearing and have 30 day terms. The aged analysis of amounts owed by joint venture net of provision for expected credit losses as follows:
										Group
										2023		2022
										£'000		£'000
Not past due										-		135
< 30 days										-		47
30-60 days										-		34
60-90 days										-		12
Total						-				-		228
At 30th April, 2023 there was no provision for expected credit losses relating to amounts owed by joint venture (2022 - nil).
(c)   Intercompany receivables
All amounts due from Group companies are repayable on demand and are not charged interest. The majority of intercompany balances are to group entities with liquid assets and are capable of being repaid on demand. An impairment charge of £1,470,000 relating to 'MSI-Sign Group BV' and 'MSI-Sign Group GmbH' has been recognised on intercompany receivables in the company (2022 - nil).
There are loans to 'MS INTERNATIONAL Estates Limited' and 'MS INTERNATIONAL Estates LLC', which although repayable on demand, are supported by properties, which will not be immediately realisable. The directors have assessed the likelihood of default and the loss in the event of default as well as the balance at the reporting date and conclude that there is no material impairment of the receivable.
The amounts receivable at the reporting date can be categorised as:
										Company
										2023		2022
										£'000		£'000
Amounts due from companies backed by liquid assets										3,607		3,880
Amounts due from 'MS INTERNATIONAL Estates Limited'										5,461		5,925
Amounts due from 'MS INTERNATIONAL Estates LLC'										2,288		3,219
										11,356		13,024

 

8.   Cash and cash equivalents
						Group				Company
						2023		2022		2023		2022
						£'000		£'000		£'000		£'000
Cash at bank and in hand						12,336		18,092		8,016		3,258
Restricted cash held in Escrow - maturing in more than 90 days						2,917		1,158		-		-
Total cash						15,253		19,250		8,016		3,258
The balance held in Escrow provides security to Lloyds Bank plc in respect of specific guarantees, indemnities, and performance bonds given by the Group in the ordinary course of business.
9.   Net funds
(a) Analysis of net funds
						Group				Company
						2023		2022		2023		2022
						£'000		£'000		£'000		£'000
Cash and cash equivalents						12,336		18,092		8,016		3,258
Restricted cash held in Escrow						2,917		1,158		-		-
Lease liabilities						(1,208)		(1,511)		(4,807)		(5,214)
						14,045		17,739		3,209		(1,956)
(b) Group movement in net funds
						Cash and cash equivalent		Restricted cash held in Escrow		Lease liabilities		Total
At 30th April, 2021						17,390		6,165		(545)		23,010
Cash flows						657		(5,007)		405		(3,945)
Foreign exchange adjustments						45		-		7		52
New leases						-		-		(1,327)		(1,327)
Other changes						-		-		(51)		(51)
At 30th April, 2022						18,092		1,158		(1,511)		17,739
Cash flows						(5,825)		1,759		415		(3,651)
Foreign exchange adjustments						69		-		(61)		8
Other changes						-		-		(51)		(51)
At 30th April, 2023						12,336		2,917		(1,208)		14,045
(c) Company movement in net funds
								Cash and cash equivalents		Lease liabilities		Total
At 30th April, 2021								943		(5,609)		(4,666)
Cash flows								2,315		560		2,875
Other changes								-		(165)		(165)
At 30th April, 2022								3,258		(5,214)		(1,956)
Cash flows								4,758		560		5,318
Other changes								-		(153)		(153)
At 30th April, 2023								8,016		(4,807)		3,209

 

9.   Reserves
Capital redemption reserve
The balance classified as capital redemption reserve represents the nominal value of issued share capital of the Company, repurchased.
Other reserves
Following the transfer of assets held at valuation by the Company to a subsidiary company, a reserve has been created which is non-distributable. This is equal to the revaluation reserve previously arising.
Additionally, it includes the non-distributable retained reserve for the revaluation reserve previously showing in the Company for properties now transferred to other members of the Group.
Revaluation reserve
The asset revaluation reserve is used to record increases in the fair value of land and buildings and decreases to the extent that such decrease relates to an increase on the same assets previously recognised in equity.
Special reserve
The special reserve is a distributable reserve created following the cancellation of a share premium account by way of court order in March 1993.
Currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. It is also used to record the effect of hedging net investments in foreign operations.
Treasury shares
The treasury share reserve is detailed as follows:
										2022		2021
										£'000		£'000
Employee Share Ownership Trust (a)										100		100
Shares in treasury (b)										2,689		2,959
										2,789		3,059
(a) The Employee Share Ownership Trust ("ESOT") provides for the issue of options over ordinary shares in the Company to Group employees, including executive directors, at the discretion of the Remuneration Committee. The trustee of the ESOT is Ocorian Ltd, an independent company registered in Jersey.
The trust has purchased an aggregate 245,048 (2022 - 245,048) ordinary shares, which represents 1.49% (2022 - 1.51%) of the issued share capital of the Company excluding treasury shares at an aggregate cost of £100,006. The market value of the shares at 30th April, 2023 was £1,250,000 (2022 - £728,000). The Company has not made any payments (2022 - nil) into the ESOT bank accounts during the year. Details of the outstanding share options for directors are included in the Directors' remuneration report.
The assets, liabilities, income, and costs of the ESOT have been incorporated into the Company's financial statements. Total ESOT costs charged to the income statement in the year amounts to £8,000 (2022 - £1,000). During the year, 20,000 options have been granted over shares (2022 - nil) and 250,000 options on shares were exercised (2022 - nil).
(b) The Company made the following purchases and cancellations of its own 10p ordinary shares to be held in Treasury:
										Number		£'000
Purchase of 1,000,000 shares from the Group's pension scheme on 11th December, 2013										1,000,000		1,722
Purchase of 646,334 shares on 30th January, 2014										646,334		1,237
Purchase of 555,000 shares on 15th January, 2021										555,000		636
Consideration paid for purchase of own shares										2,201,334		3,595
Cancellation of 555,000 shares at weighted average rate										(555,000)		(906)
Exercise of LTIP share options										(250,000)		(408)
Net value of treasury shares										1,396,334		2,281