MS International – Net current asset value and financial stability

Share On Facebook
share on Linkedin
Print

MS International (LSE:MSI) has such a strong balance sheet – including £14m of cash and no debt – that it qualifies for my net current asset value portfolio as well as the Warren Buffett portfolio.  This works if I’m prepared to overlook the fact that its collection of freehold property is allocated not to the current asset part of the balance sheet, but classified as non-current assets. I’m also ignoring the pension deficit, which is probably pushing my luck, but then, I’m not actually buying this share as a NCAV investment but as a Buffett-style value investment.  Market capitalisation is currently 16.5m shares x 122p = £20.1m (it has fallen since I bought at 129.2p).

Net current asset value

£m   Half year Oct 2020   Yearend April 2020   April 2019   April 2018
Cash 14.0 16.1 22.9 15.9
Inventories 17.6 15.9 12.6 11.7
Receivables 7.0 4.6 7.0 14.6
Other current assets 3.0 2.5 1.8 1.2
Total current assets 41.5 39.1 44.4 43.4
Minus current liabilities -28.2 -25.2 -26.3 -28.7
Minus non-current liabilities (excl pension deficit & leases) -1.6 -1.6 -1.6 -1.6
Current assets minus all liabilities except pension deficit 11.7 12.3 16.5 13.1
Minus one-third of inventories -5.9 -5.3 -4.2 -3.9
Minus one-fifth of receivables -1.4 -0.9 -1.4 -2.9
Ben Graham NCAV (if we can ignore pension deficit) 4.4 6.1 10.9 6.3
Freehold property 17.7 17.7 17.0 17.2
NCAV plus property 22.1 23.8 27.9 23.5

Can we ignore the pension deficit?  Not really, at £9.1m. But that might be whittled away in a high-bond-yield-greater-inflation environment.

The pension scheme ceased being a defined benefit one in 1997 and is now a defined contribution scheme. The deficit could be wiped out should discount rate rise by two percentage points.

The cash

………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

 

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20210303 11:53:15