RNS Number : 5145D
MS International PLC
22 June 2023
 

 

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

21st 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 17th July, 2023. The full Annual Report and Accounts will be posted to shareholders in the week commencing 17th 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 9th 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 30th 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 



> 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

 













 

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