RNS Number : 4063W
MS International PLC
12 December 2023
 













MS INTERNATIONAL plc

 




Unaudited Interim Condensed

 

Group Financial Statements

 

31st October, 2023

 




 




EXECUTIVE DIRECTORS

Michael Bell

Michael O'Connell

Nicholas Bell





NON-EXECUTIVE DIRECTORS

Roger Lane-Smith

David Hansell





COMPANY SECRETARY

Shelley Ashcroft





REGISTERED OFFICE

Balby Carr Bank

Doncaster

DN4 8DH

England





PRINCIPAL OPERATING DIVISIONS

 

 'Defence and Security'

 'Forgings'

 'Petrol Station Superstructures'

 'Corporate Branding'



 



 


Chairman's Statement

 

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

 

 

 

 

 

 

MS INTERNATIONAL plc 

 

 

Michael Bell

 

Tel: 01302 322133


 


Shore Capital (Nominated Adviser and Broker)

 

 

Patrick Castle/Daniel Bush/Lucy Bowden

 

Tel: 020 7408 4090


 

 



 

Independent auditor's review report on Interim Financial Information to MS INTERNATIONAL Plc

 

Conclusion

 

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.


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'.


Basis for conclusion

 

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.


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".

 

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.



Conclusions relating to going concern

 

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.


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.


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.



Directors' responsibilities

 

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.


Auditor's Responsibilities for the review of the financial information

 

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.


Use of our report

 

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.





Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Sheffield

11th December 2023


Interim condensed consolidated income statement

 






Half-year to 31st October, 2023

 

Half-year to 31st October, 2022



unaudited

 

unaudited


Notes

£'000

 

£'000






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

 







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:





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







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







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





'Corporate Branding' - design, manufacture, installation, and service of corporate brandings, including media facades, way-

finding signage, public illumination, creative lighting solutions, and the complete appearance of petrol station superstructures

and forecourts.





2.     Basis of preparation and accounting policies

 







The consolidated condensed interim financial statements included in this half-yearly financial report have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" 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.





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.





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.





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.





3.     Principal risks and uncertainties

 







The principal risks and uncertainties facing the Group for the remaining six months of the financial year are discussed below. Further details of the Group's risks and uncertainties can be found on page 8 of the Annual Report for the year ended 30th April, 2023, which is available from MS INTERNATIONAL plc's website: www.msiplc.com





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.





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:

 



Half-year to 31st October, 2023


Half-year to 31st October, 2022



unaudited


unaudited



£'000


£'000




 


Revenue recognised at a point in time


55,780

 

40,940

Revenue recognised over time


1,243

 

1,085

Total revenue


57,023

 

42,025

 

 

 

 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:

 



Half-year to 31st October, 2023


Half-year to 31st October, 2022



unaudited


unaudited



£'000


£'000






Deferred tax on measurement of defined benefit pension scheme


14


(2)

Deferred tax in the Interim condensed consolidated statement of comprehensive income


14


(2)













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).

 









Half-year to 31st October, 2023


Half-year to 31st October, 2022



unaudited


unaudited






Weighted average number of shares in issue


17,841,073


17,841,073

Less weighted average number of shared held in the ESOT


(231,387)


(245,048)

Less weighted average number of shares purchased by the Company


(1,467,705)


(1,646,334)

Weighted average number of shares to be used in basic EPS calculation


16,141,981


15,949,691

Weighted average number of the 1,072,693 (2022 - 1,055,000) potentially dilutive shares


789,551


587,217

Weighted average diluted shares


16,931,532


16,536,908






Profit for the period attributable to equity holders to the parent in £


5,802,000


2,771,000

Basic earnings per share


35.9p


17.4p

Diluted earnings per share


34.3p


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







 

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

 















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).










In the opinion of the Directors, no material loss will arise in connection with the above matters.










The Group and certain of its subsidiary undertakings are parties to legal actions and claims which have arisen in the normal course of business. The results of actions and claims cannot be forecast with certainty, but the directors believe that they will be concluded without any material effect on the net assets of the Group.

 

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.

 



US Dollar
$'000

 

Sterling

£'000

 

Average forward rate

 

Change in Fair Value
£'000










Current derivative liability


41,500


33,615


1.2346


513

Non-current derivative liability


57,500


46,680


1.2318


218

Total


99,000


80,295


1.2330


731

 

 

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:

 

 



Long-term Incentive Plan

 

Company Share Option Plan

 

Total



Number

 

WAEP

 

Number

 

WAEP

 

Number

 

WAEP














Outstanding at 30th April, 2022


500,000 



1,000,000 


£1.41


1,500,000 


£0.94

Granted in year




20,000 


£3.00


20,000 


£3.00

Exercised in year


(250,000)





(250,000)


Outstanding at 30th April, 2023


250,000 



1,020,000 


£1.44


1,270,000 


£1.16

Granted in year




122,700 


£7.16


122,700 


£7.16

Exercised in year


(100,000)



(220,007)


£1.41


(320,007)


£0.97

Outstanding at 31st October, 2023


150,000 



922,693 


£2.21


1,072,693 


£1.90

 

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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