TIDMMSI
RNS Number : 7615I
MS International PLC
16 December 2020
MS INTERNATIONAL plc
Unaudited Interim Condensed
Group Financial Statements
31st October, 2020
EXECUTIVE DIRECTORS
Michael Bell
Michael O'Connell
Nicholas Bell
NON-EXECUTIVE DIRECTORS
Roger Lane-Smith
David Hansell
COMPANY SECRETARY
David Kirkup
REGISTERED OFFICE
Balby Carr Bank
Doncaster
DN4 8DH
England
PRINCIPAL OPERATING DIVISIONS
'Defence'
'Forgings'
'Petrol Station Superstructures'
'Corporate Branding'
Chairman's Statement
Results
We entered our 2020/21 financial year confronted by a subdued
general economy, growing 'Brexit' uncertainty and a rapidly
spreading global pandemic which, collectively, were making for 'a
perfect storm' that would inevitably negatively impact all our
business activities.
Yet, with a strong balance sheet, a good order book, a growing
international market presence across our increasingly diverse range
of businesses and recently developed new products and services
coming through, we were, at least, in a good starting position to
face the rapidly intensifying external pressures.
We tightened our belts and gratefully welcomed the financial
assistance generously provided by not only HM Government but also
that of other countries where we have business operations.
The unavoidable disruption to our businesses has, nevertheless,
been substantial. Of considerable detriment were the restrictions
on international travel that prevented both our own staff, and
those of our customers, travelling to conduct the many practical
elements of our business operations. It certainly proved to be a
far more testing and stressful experience for everyone than my
earlier prediction, that the Group was approaching 'interesting
times'!
Accordingly, Group revenue for the six months to October 2020
amounted to GBP26.34m (2019 - GBP33.32m), a reduction which
resulted in a loss before tax of GBP1.08m (2019 - Loss GBP
0.49m).
Nevertheless, cash remained very strong at GBP14.01m, which
compares to the GBP16.12m reported at last year end.
Prospects
The recent announcement that vaccines are becoming available to
counter the current global pandemic, will surely assist our
businesses to move forward positively once more.
In anticipation of such an outcome, we have already made a
number of strategic moves that we believe will assist all our
businesses to prosper, in particular at this juncture, our
'Defence' and 'Corporate Branding' operations.
'Defence'
Whilst the domestic market remains disappointingly in the
doldrums, our marketing commitment to the global arena is proving
to be very rewarding. We are winning defence equipment orders from
new customers and overseas sales are now by far the mainstay for
this business. Pleasingly, various product trials and
demonstrations in the United States have been well received and we
are vigorously pursuing these opportunities. Furthermore, the US
State Department has officially announced its intention to procure
MSI-DS medium calibre gun weapon systems for one of their current
Foreign Military Sales Programmes.
'Forgings'
Our forgings businesses, with operations in the UK, USA and
Brazil, would undoubtably benefit from an economic upturn and a
more stable global commercial environment. Major international
customers are generally operating their manufacturing systems on a
'just-in-time' basis and so the ordering of components from us is
naturally finely tuned. Our operations are geared accordingly and
will comfortably accommodate the requirements of any economic
recovery.
'Petrol Station Superstructures'
This division holds a strong market position in constructing
fuelling stations, across many parts of Europe operating from bases
in both the UK and Poland. We are noting a recent upturn in the
number of new station developments around the market and,
significantly, a growing number of complex and sophisticated
constructions are becoming the norm. In addition to fuel supply,
whether it be petroleum, electricity or hydrogen, these new sites
incorporate larger shops, sophisticated car valeting services,
undercover electric vehicle charging and restaurant and coffee
house/snack facilities. This is all good news for our design and
build superstructures business.
'Corporate Branding'
When we acquired The Netherlands-based business, Petrol Sign,
its prime focus was the branding of petrol stations, predominantly
in the Benelux countries. Through some small, but strategic
acquisitions, the business now also designs, manufactures and
services branding for a much broader customer base that includes
specialist airport 'way-finding' systems, plus the substantial
hospitality and automotive markets. The division is successfully
expanding these service operations into the UK, Germany, Poland and
Italy.
Despite the various factors which have combined to undermine
first half performance, I am pleased to report that the value of
the Group order book has risen over the period. This highlights the
strength of our businesses.
We, therefore, firmly perceive that the Company is in an
outstandingly strong position to benefit considerably, not only
from the moves that we are making in the business, but also from
any economic recovery following global control of the pandemic.
All such matters considered, the Board has declared a maintained
interim dividend per share of 1.75p (2019 - 1.75p) payable to
shareholders on the 19th January 2021.
Michael Bell 15(th) December 2020
MS INTERNATIONAL plc
Michael Bell Tel: 01302 322133
Shore Capital (Nominated Adviser and Broker)
Patrick Castle Tel: 020 7408 4090
Daniel Bush
Independent review report to MS INTERNATIONAL plc
Introduction
We have reviewed the condensed set of financial statements in the half-yearly financial report
of MS INTERNATIONAL plc (the 'company') for the six months ended 31 October 2020 which comprises
the Interim condensed consolidated income statement, the Interim condensed consolidated statement
of comprehensive income, the Interim condensed consolidated statement of financial position,
the Interim consolidated statement of changes in equity, the Interim consolidated cash flow
statement and the related notes. 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.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance
with International Financial Reporting Standards as adopted by the European Union. The condensed
set of financial statements included in this half-yearly financial report has been prepared
in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union.
Our responsibility
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.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK
and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor
of the Entity'. A review of interim financial information consists of making enquiries, 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.
The impact of uncertainties arising from the UK exiting the European Union and COVID-19 on
our review
Our review of the condensed set of financial statements in the half-yearly financial report
requires us to obtain an understanding of all relevant uncertainties, including those arising
as a consequence of the effects of macro-economic uncertainties such as Covid-19 and Brexit.
Such reviews assess and challenge the reasonableness of estimates made by the directors and
the related disclosures and the appropriateness of the going concern basis of preparation
of the financial statements. All of these depend on assessments of the future economic environment
and the company's future prospects and performance.
COVID-19 and Brexit are amongst the most significant economic events currently faced by the
UK, and at the date of this report their effects are subject to unprecedented levels of uncertainty,
with the full range of possible outcomes and their impacts unknown. We applied a standardised
firm-wide approach in response to these uncertainties when assessing the company's future
prospects and performance. However, no review of interim financial information should be expected
to predict the unknowable factors or all possible future implications for a company associated
with these particular events.
Conclusion
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 2020 is not prepared, in all material respects, in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union .
Use of our report
This report is made solely to the company, as a body, in accordance with International Standard
on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed
by the Independent Auditor of the Entity'. 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
15 December 2020
Interim condensed consolidated income
statement
Half-year to 31st October, 2020 Half-year to 31st October, 2019
unaudited unaudited
Notes GBP'000 GBP'000
Products 19,727 26,067
Contracts 6,615 7,250
-------------------------------------------
Revenue 5 26,342 33,317
Cost of sales (19,831) (24,910)
-------------------------------------------
Gross profit 6,511 8,407
Distribution costs (1,297) (1,821)
Administrative expenses (6,204) (6,988)
-------------------------------------------
Operating loss 5 (990) (402)
Finance costs (45) (2)
Other finance costs - pension (70) (82)
Share of net profit of joint venture 25 -
------------------------------------------- ------------------------------- -------------------------------
Loss before taxation (1,080) (486)
Tax (expense)/income 6 (2) 66
------------------------------------------- ------------------------------- -------------------------------
Loss for the period attributable to equity
holders of the parent (1,082) (420)
------------------------------------------- ------------------------------- -------------------------------
Loss per share: basic and diluted 7 (6.6p) (2.5p)
------------------------------------------- ------------------------------- -------------------------------
Interim condensed consolidated statement of comprehensive income
Half-year to 31st October, 2020 Half-year to 31st October, 2019
unaudited unaudited
GBP'000 GBP'000
Loss for the period attributable to equity
holders of the parent (1,082) (420)
------------------------------------------- ------------------------------- -------------------------------
Exchange differences on retranslation of
foreign operations 219 44
------------------------------------------- ------------------------------- -------------------------------
Net other comprehensive profit to be
reclassified to profit or loss in
subsequent periods 219 44
------------------------------------------- ------------------------------- -------------------------------
Remeasurement losses on defined benefit
pension scheme (642) (849)
Deferred taxation on remeasurement of
defined benefit pension scheme 122 144
Net other comprehensive loss not being
reclassified to profit or loss in
subsequent periods (520) (705)
------------------------------------------- ------------------------------- -------------------------------
Total comprehensive loss for the period
attributable to equity holders of the
parent (1,383) (1,081)
------------------------------------------- ------------------------------- -------------------------------
Interim condensed consolidated statement of financial position
Notes 31st October, 2020 31st October, 2019 30th April, 2020
unaudited unaudited audited
ASSETS GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 4,070 4,303 4,140
Property, plant and
equipment 9 19,484 20,352 20,111
Right-of-use assets 10 682 1,185 1,214
Investment in joint 34 - -
venture
Deferred income tax asset 2,015 1,264 1,875
-------------------------- ------------------------- -------------------- -----------------
26,285 27,104 27,340
-------------------------- ------------------------- -------------------- -----------------
Current assets
Inventories 17,624 14,689 15,857
Trade and other
receivables 6,957 9,335 4,589
Income tax receivable 555 3 719
Prepayments 2,397 1,708 1,775
Cash and cash equivalents 11 14,011 19,370 16,125
-------------------------- ------------------------- -------------------- -----------------
41,544 45,105 39,065
-------------------------- ------------------------- -------------------- -----------------
TOTAL ASSETS 67,829 72,209 66,405
-------------------------- ------------------------- -------------------- -----------------
EQUITY AND LIABILITIES
Equity
Share capital 1,840 1,840 1,840
Capital redemption
reserve 901 901 901
Other reserve 2,815 2,815 2,815
Revaluation reserve 6,055 6,055 6,055
Special reserve 1,629 1,629 1,629
Currency translation
reserve 443 323 224
Treasury shares (3,059) (3,059) (3,059)
Retained earnings 17,832 23,140 19,723
-------------------------- ------------------------- -------------------- -----------------
TOTAL EQUITY
SHAREHOLDERS' FUNDS 28,456 33,644 30,128
-------------------------- ------------------------- -------------------- -----------------
Non-current liabilities
Defined benefit pension
liability 12 9,075 7,434 8,563
Deferred income tax
liability 1,600 1,386 1,641
Lease liabilities 465 942 893
-------------------------- ------------------------- -------------------- -----------------
11,140 9,762 11,097
-------------------------- ------------------------- -------------------- -----------------
Current liabilities
Trade and other payables 27,983 27,747 24,679
Income tax payable 18 806 165
Lease liabilities 232 250 336
-------------------------- ------------------------- -------------------- -----------------
28,233 28,803 25,180
-------------------------- ------------------------- -------------------- -----------------
TOTAL EQUITY AND
LIABILITIES 67,829 72,209 66,405
-------------------------- ------------------------- -------------------- -----------------
The interim condensed consolidated financial statements of the Group for the six months ended
31st October, 2020 were authorised for issue in accordance with a resolution of the directors
on 15th December, 2020 and signed on their behalf.
Michael O'Connell
Finance Director
Interim consolidated statement of changes in equity
Share Capital Other Revaluation Special Currency Treasury Retained Total
capital redemption reserve reserve reserve translation shares earnings unaudited
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30th April,
2020 1,840 901 2,815 6,055 1,629 224 (3,059) 19,723 30,128
Loss for the
period - - - - - - - (1,082) (1,082)
Other
comprehensive
income/(loss) - - - - - 219 - (520) (301)
Dividend paid
(note 8) - - - - - - - (289) (289)
At 31st
October, 2020 1,840 901 2,815 6,055 1,629 443 (3,059) 17,832 28,456
--------------- ------- ---------- ------- ------------ ------- ----------- -------- -------- ---------
Share Capital Other Revaluation Special Currency Treasury Retained Total
capital redemption reserve reserve reserve translation shares earnings unaudited
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 27th April,
2019 1,840 901 2,815 6,055 1,629 279 (3,059) 25,338 35,798
Loss for the
period - - - - - - - (420) (420)
Other
comprehensive
income/(loss) - - - - - 44 - (705) (661)
Dividend paid - - - - - - - (1,073) (1,073)
At 31st
October, 2019 1,840 901 2,815 6,055 1,629 323 (3,059) 23,140 33,644
--------------- ------- ---------- ------- ------------ ------- ----------- -------- -------- ---------
Share Capital Other Revaluation Special Currency Treasury Retained Total
capital redemption reserve reserve reserve translation shares earnings audited
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 27th April,
2019 1,840 901 2,815 6,055 1,629 279 (3,059) 25,338 35,798
Loss for the
period - - - - - - - (2,491) (2,491)
Other
comprehensive
loss - - - - - (55) - (1,762) (1,817)
Dividends paid - - - - - - - (1,362) (1,362)
At 30th April,
2020 1,840 901 2,815 6,055 1,629 224 (3,059) 19,723 30,128
------- ---------- ------- ------------ ------- ----------- -------- -------- ---------
Interim consolidated cash flow statement
Half-year to 31st October, 2020 Half-year to 31st October, 2019
unaudited unaudited
GBP'000 GBP'000
Loss before taxation (1,080) (486)
Adjustments to reconcile loss before taxation
to net cash outflow from operating
activities:
Depreciation charge 866 782
Amortisation charge 125 332
Profit on disposal of fixed assets (26) (61)
Share of net profit of joint venture (25) -
Net finance costs 115 84
Termination of lease (7) -
Foreign exchange gains/(losses) 192 (161)
Increase in inventories (1,690) (1,645)
Increase in receivables (2,315) (1,849)
(Increase)/decrease in prepayments (620) 93
Increase/(decrease) in payables 1,306 (334)
Increase in progress payments 1,891 2,105
Pension fund deficit reduction payments (200) (300)
---------------------------------------------- -------------------------------- --------------------------------
Cash invested in operating activities (1,468) (1,440)
Net interest (paid)/received (25) 14
Taxation paid (39) (126)
---------------------------------------------- -------------------------------- --------------------------------
Net cash outflow from operating activities (1,532) (1,552)
Investing activities
Purchase of property, plant and equipment (152) (351)
Proceeds on disposal of property, plant and
equipment 27 72
Payments for acquisitions, net of cash
acquired - (748)
Net cash outflow from investing activities (125) (1,027)
Financing activities
Lease payments (191) (100)
Dividend paid (289) (1,073)
Net cash outflow from financing activities (480) (1,173)
---------------------------------------------- -------------------------------- --------------------------------
Decrease in cash and cash equivalents (2,137) (3,752)
Opening cash and cash equivalents 16,125 22,886
Exchange differences on cash and cash
equivalents 23 236
---------------------------------------------- -------------------------------- --------------------------------
Closing cash and cash equivalents 14,011 19,370
---------------------------------------------- -------------------------------- --------------------------------
Notes to the interim consolidated financial statements
1. Corporate information
MS INTERNATIONAL plc is a public limited company incorporated in England and Wales. The Company's
ordinary shares are traded on the 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' - 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.
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", as adopted by the European Union. They do not include all the information
and disclosures required in annual financial statements in accordance with IFRS, and should
therefore be read in conjunction with the Group's Annual Report for the year ended 30th April,
2020 and any public announcements made by MS INTERNATIONAL plc during the interim reporting
period.
These interim financial statements do not constitute statutory financial statements within
the meaning of section 435 of the Companies Act 2006. The figures for the year ended 30th
April, 2020 do not constitute the Group's statutory accounts for the period but have been
extracted from the statutory accounts. The auditor's report on those accounts, which have
been filed with the Registrar of Companies, was unqualified and did not contain any statement
under section 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. Their 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, 2020. The Group has not early adopted any standard,
interpretation, or amendment that has been issued but is not yet effective.
As at the reporting date, the assets and liabilities of the overseas subsidiaries are translated
into the presentation currency of the Group at the rate of exchange ruling at the balance
sheet date and their income statements are translated at the weighted average exchange rates
for the year. The exchange differences arising on the retranslation 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 7 of the Annual Report for the year ended 30th April, 2020 available
from MS INTERNATIONAL plc's website: www.msiplc.com.
One of the Group's principal risk and uncertainties continues to be the level of customer
demand for the Group's products and services. Customer demand is driven mainly by general
economic conditions in addition to pricing, product quality, and delivery performance of the
Group in comparison to our competitors.
There continues to be considerable uncertainty in relation to the UK's future trading relationship
with the EU. At the time of preparing these interim financial statements, the disclosure given
in the Annual Report is still applicable and reflects the best understanding of how the withdrawal
from the EU will impact the Group. The Board are monitoring the impact of how changes in the
UK's trading relationship with the EU will affect the different parts of the Group and preparations
have been made to take appropriate action if, and when, required.
The current environment brought about by Covid-19 creates uncertainty over the phasing of
demand from customers, the financial impact of any future lockdowns in the geographical areas
in which the Group operates, and other possible difficulties in the general economic environment.
Given that the Group has plans in place to manage foreseeable challenges of the Covid crisis,
healthy financial resources, and a number of long-term contracts with certain customers, the
directors believe the Group is well placed to manage its business risk successfully despite
the current economic outlook. Accordingly, the directors continue to conclude that the adoption
of the going concern basis of accounting remains appropriate when preparing these interim
financial statements.
4. Going concern
In making the going concern assessment, as well as considering general risks and specifically
the risks presented by Covid-19, the directors have considered the period to 12 months from
the approval of the financial statements.
5. Segment
information
(a) Primary reporting format -
divisional segments
The following table presents revenue and profit information about the Group's divisions for
the half-year periods ended 31st October, 2020 and 31st October, 2019.
'Defence' 'Forgings' 'Petrol Station 'Corporate Total
Superstructures' Branding'
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
unaudited unaudited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
From external
customers 8,641 12,054 4,577 7,263 6,640 7,277 6,484 6,723 26,342 33,317
From other
segments - - - - 51 145 66 95 117 240
------------------ ------- ------- ------- ------- -------- -------- ------- ------- --------- ---------
Segment revenue 8,641 12,054 4,577 7,263 6,691 7,422 6,550 6,818 26,459 33,557
------------------ ------- ------- ------- ------- -------- -------- ------- ------- --------- ---------
Segment result (1,267) 42 (279) 54 835 291 (279) (789) (990) (402)
Net finance
expense (115) (84)
Share of net
profit of joint
venture 25 -
------------------ --------- ---------
Loss before
taxation (1,080) (486)
Tax
(expense)/income (2) 66
------------------ --------- ---------
Loss for the
period (1,082) (420)
------------------ --------- ---------
Capital
expenditure 81 12 - - 59 171 12 168 152 351
Depreciation 133 112 278 327 178 171 277 172 866 782
------------------ ------- ------- ------- ------- -------- -------- ------- ------- --------- ---------
The following table presents segment assets and liabilities of the Group's divisions for the
half-year periods ended 31st October, 2020 and 31st October, 2019.
Segmental assets 27,984 29,444 3,497 8,627 10,154 10,552 9,919 10,018 51,554 58,641
Unallocated assets 16,275 13,568
------------------ --------- ---------
Total assets 67,829 72,209
------------------ --------- ---------
Segmental
liabilities 18,747 19,402 1,774 2,014 3,349 3,531 4,062 4,024 27,932 28,971
Unallocated
liabilities 11,441 9,594
------------------ --------- ---------
Total liabilities 39,373 38,565
------------------ ------- ------- ------- ------- -------- -------- ------- ------- --------- ---------
Unallocated assets include certain fixed assets (including all UK properties), intangible
assets, 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.
6. Tax expense
The major components of the tax expense/(income) in the consolidated income
statement are:
Half-year to 31st October, 2020 Half-year to 31st October, 2019
unaudited unaudited
GBP'000 GBP'000
Current tax expense 67 79
Deferred tax income (65) (145)
--------------------------------------- ------------------------------------- -------------------------------
Total tax expense/(income) reported in
the consolidated income statement 2 (66)
--------------------------------------- ------------------------------------- -------------------------------
A change to the main UK corporation tax rate was enacted in a budget resolution on 17th March,
2020. From 1 April, 2020 the rate remains at 19%, cancelling the previously enacted rate reduction
to 17%. Deferred income tax at 30th April, 2020 has therefore been provided at 19%. Deferred
income tax in relation to intangibles recognised on the acquisition of 'MSI-Sign Group B.V.'
has been provided at 25%, being the main corporation tax rate in The Netherlands.
7. Earnings per share
The calculation of basic earnings per
share is based on:
Loss for the period attributable to
equity holders of the parent of
GBP1,082,000 (2019 - GBP420,000
(a) loss);
16,504,691 (2019 - 16,504,691) ordinary
shares, being the weighted average
number of ordinary
(b) shares in issue.
This represents 18,396,073 (2019 - 18,396,073), being the weighted average number of ordinary
shares in issue less 245,048 (2019 - 245,048), being the number of shares held within the
ESOT and less 1,646,334 (2019 - 1,646,334), being the number of shares purchased by the Company.
There are no dilutive instruments in place.
8. Dividends paid and proposed
Half-year to 31st October, 2020 Half-year to 31st October, 2019
unaudited unaudited
GBP'000 GBP'000
Declared and paid during the six month
period
Final dividend on ordinary shares for
2020 - 1.75p (2019 - 6.50p) 289 1,073
--------------------------------------- ------------------------------------- -------------------------------
Proposed for approval
Interim dividend on ordinary shares for
2021 - 1.75p (2020 - 1.75p) 289 289
--------------------------------------- ------------------------------------- -------------------------------
Dividend warrants will be posted on 18th January, 2021 to those members registered on the
books of the Company on 29th December, 2020.
9. Property, plant and equipment
At 31st October, 2020
Freehold Plant and
property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2020 17,746 15,858 33,604
Additions - 152 152
Disposals - (364) (364)
Exchange differences (98) 1 (97)
--------------------------------------- --------- ---------- --------
At 31st October, 2020 17,648 15,647 33,295
--------------------------------------- --------- ---------- --------
Accumulated depreciation
At 30th April, 2020 970 12,523 13,493
Depreciation charge for the period 158 530 688
Disposals - (363) (363)
Exchange differences (6) (1) (7)
--------------------------------------- --------- ---------- --------
At 31st October, 2020 1,122 12,689 13,811
--------------------------------------- --------- ---------- --------
Net book value at 31st October, 2020 16,526 2,958 19,484
--------------------------------------- --------- ---------- --------
Analysis of cost or valuation
At professional valuation 2018 12,300 - 12,300
At cost 5,348 15,647 20,995
--------------------------------------- --------- ---------- --------
At 31st October, 2020 17,648 15,647 33,295
--------------------------------------- --------- ---------- --------
At 31st October, 2019
Freehold Plant and
property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 27th April, 2019 17,706 15,585 33,291
Additions - 351 351
Disposals - (437) (437)
Acquisition - 274 274
Exchange differences 3 (10) (7)
At 31st October, 2019 17,709 15,763 33,472
--------------------------------------- --------- ---------- --------
Accumulated depreciation
At 27th April, 2019 662 12,203 12,865
Depreciation charge for the period 160 531 691
Disposals - (426) (426)
Exchange differences (1) (9) (10)
--------------------------------------- --------- ---------- --------
At 31st October, 2019 821 12,299 13,120
--------- ---------- --------
Net book value at 31st October, 2019 16,888 3,464 20,352
--------------------------------------- --------- ---------- --------
Analysis of cost or valuation
At professional valuation 2018 12,300 - 12,300
At cost 5,409 15,763 21,172
--------------------------------------- --------- ---------- --------
At 31st October, 2019 17,709 15,763 33,472
--------------------------------------- --------- ---------- --------
At 30th April, 2020
Freehold Plant and
property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 27th April, 2019 17,706 15,585 33,291
Additions - 721 721
Disposals - (736) (736)
Acquisition - 351 351
Exchange differences 40 (63) (23)
------------------------------------------------------------ -------------- ---------------- -------------
At 30th April, 2020 17,746 15,858 33,604
------------------------------------------------------------ -------------- ---------------- -------------
Accumulated depreciation
At 27th April, 2019 662 12,203 12,865
Depreciation charge for the period 316 1,107 1,423
Disposals - (712) (712)
Exchange differences (8) (75) (83)
------------------------------------------------------------ -------------- ---------------- -------------
At 30th April, 2020 970 12,523 13,493
------------------------------------------------------------ -------------- ---------------- -------------
Net book value at 30th April, 2020 16,776 3,335 20,111
------------------------------------------------------------ -------------- ---------------- -------------
Analysis of cost or valuation
At professional valuation 2018 12,300 - 12,300
At cost 5,446 15,858 21,304
------------------------------------------------------------ -------------- ---------------- -------------
At 30th April, 2020 17,746 15,858 33,604
------------------------------------------------------------ -------------- ---------------- -------------
On 11th November, 2017, 26th July, 2017 and 28th March, 2018 the Group's land and buildings,
which consist of manufacturing and office facilities in the UK, Poland and USA were valued
by Dove Haigh Phillips (UK), KonSolid-Nieruchomosci (Poland) and Real Estate & Appraisal Services
Inc (USA). 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. Finally, 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.
The valuation of the properties in the UK has been processed in the financial statements.
Both the Polish and the US property valuations were sufficiently close to their carrying value
such that the valuations were not processed.
10. Right-of-use assets
At 31st October, 2020 Plant and
Property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 30th April, 2020 1,403 50 1,453
Additions - - -
Lease amendment (390) - (390)
Exchange differences 38 - 38
------------------------------------------ -------------------- ------------------- -----------------
At 31st October, 2020 1,051 50 1,101
------------------------------------------ -------------------- ------------------- -----------------
Accumulated depreciation
At 30th April, 2020 219 20 239
Depreciation charge for the period 168 10 178
Exchange differences 2 - 2
------------------------------------------ -------------------- ------------------- -----------------
At 31st October, 2020 389 30 419
------------------------------------------ -------------------- ------------------- -----------------
Net book value at 31st October, 2020 662 20 682
------------------------------------------ -------------------- ------------------- -----------------
At 31st October, 2019 Plant and
Property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 27th April, 2019 - - -
IFRS 16 adjustment 755 26 781
Acquisition of subsidiary 501 - 501
Exchange differences (8) - (8)
------------------------------------------ -------------------- ------------------- -----------------
At 31st October, 2019 1,248 26 1,274
------------------------------------------ -------------------- ------------------- -----------------
Accumulated depreciation
At 27th April, 2019 - - -
Depreciation charge for the period 84 7 91
Exchange differences (2) - (2)
------------------------------------------ -------------------- ------------------- -----------------
At 31st October, 2019 82 7 89
------------------------------------------ -------------------- ------------------- -----------------
Net book value at 31st October, 2019 1,166 19 1,185
------------------------------------------ -------------------- ------------------- -----------------
At 30th April, 2020 Plant and
Property equipment Total
GBP'000 GBP'000 GBP'000
Cost or valuation
At 27th April, 2019 - - -
IFRS 16 adjustment 755 26 781
Additions 162 24 186
Acquisition of subsidiary 501 - 501
Exchange differences (15) - (15)
------------------------------------------ -------------------- ------------------- -----------------
At 30th April, 2020 1,403 50 1,453
------------------------------------------ -------------------- ------------------- -----------------
Accumulated depreciation
At 27th April, 2019 - - -
Depreciation charge for the period 228 20 248
Exchange differences (9) - (9)
------------------------------------------ -------------------- ------------------- -----------------
At 30th April, 2020 219 20 239
------------------------------------------ -------------------- ------------------- -----------------
Net book value at 30th April, 2020 1,184 30 1,214
------------------------------------------ -------------------- ------------------- -----------------
11. 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, 2020 31st October, 2019 20th April, 2020
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Cash at bank and in hand 7,457 13,955 16,125
Escrow account 6,554 - -
Short term deposits - 5,415 -
14,011 19,370 16,125
-------------------- ------------------- -----------------
The balance held in Escrow provides security to Lloyds Bank plc in respect of any guarantees,
indemnities, and bond guarantees given by the group in the ordinary course of business.
12. 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 5th
April, 2017 by a professionally
qualified actuary.
- From 6th April, 2016 the Company directly pays the expenses of
the Scheme. With effect from
April, 2018 the deficit reduction payments paid into the
Scheme by the Company increased to
GBP600,000 per annum. The deficit reduction contributions are
paid on a quarterly basis with
the first paid on 3rd April, 2018 and the last due for payment
on or before 5th January, 2027.
On 23rd April, 2020 it was agreed that contributions be made
on a monthly basis from July
2020 to December 2020, after which contributions will revert
to a quarterly basis.
- 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.
- During the period, the Scheme liability has increased by
GBP512,000. A re-measurement loss
of GBP642,000 (2019 - GBP849,000 loss) has been recognised
through other comprehensive income.
It comprises of a GBP484,000 remeasurement gain compared to
the interest income on the plan
assets and a GBP1,126,000 actuarial loss due to changes in
financial assumptions. The actuarial
loss of GBP1,126,000 is primarily a result of an increase in
CPI/RPI inflation as well as
a lower discount rate at the period end, both of which
increased the Scheme's liabilities
at 31st October, 2020. The interest cost on the net defined
benefit liability of GBP70,000
has been recognised through the income statement. The Scheme's
liabilities have been reduced
by pension fund deficit payments in the period of GBP200,000
(2019 - GBP300,000).
- A GBP1,198,000 liability for unrecognised past service cost
relating to GMP equalisation cost
was recognised in the Consolidated income statement for the 52
weeks ended 27th April, 2019.
This liability has been remeasured and is included in the
Scheme's liabilities at 31st October,
2020.
- It may be some time before an agreed method for GMP
calculations is approved. However, now
that the estimated past service cost has been recognised in
the Consolidated income statement
for the year ended 27th April, 2019, further future changes to
the estimate will be recognised
in the Consolidated statement of comprehensive income.
13. 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 GBP6,976,530 at 31st October, 2020 (2019
- GBP4,637,538).
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.
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IR BLBDDBXBDGGU
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