Last checked at 28 Jun 2022 07:26
Chairman's statement
Results and Review
It is a pleasure to report that, for the year ended 30th April 2022, the Company attained considerable progress across the Group's divisions, resulting in a significantly improved pre-tax profit of £5.97m (2021-£1.59m) on increased revenue of £74.52m (2021-£61.54m).
Basic earnings per share amounted to 30.9p, (2021- 7.2p). The balance sheet was further strengthened with cash and cash equivalents rising to £18.1m (2021 - £17.4m).
The Group has made a strong recovery post the many constraints imposed by Covid. This, I believe, demonstrates the tangible benefits of operating an optimistic, long-term investment and support strategy, that we practice daily, to support and encourage the respective management teams that directly oversee the operations of our diverse businesses.
During the period under review, two common themes continued to feature across all divisions, namely the prolonged negative effects of the global pandemic and extended periods of limited availability of materials and components. Such issues required close and constant monitoring by our management teams to ensure sustained high-quality sales output. A job well done by everyone.
'Defence'
This was a remarkable year of great achievements for this division, highlighted by the phased manufacture and delivery of the first 7 of 8 No MSI-DS30mm naval weapon systems to the United States Navy. This was achieved in a timely manner to facilitate our customer's comprehensive test and certification programme of the MSI product. The anticipated successful prototype testing of the MSI weapon system, is the precursor to a highly prized sole source 'Follow-on Production Contract'. Presently, all trials are going to plan and positive progress is being made.
In the UK, our new 'state of the art' Norwich manufacturing facility is in the final phase of completion, whilst, in the United States of America, we are in the early stages of our programme to establish an appropriate product support resource for our weapon systems, along-side our contemporary forging facilities, in South Carolina. These projects are essential to support our perceived growing defence opportunities in the United States.
We also firmly believe that our 'state of the art' weapon system will significantly enhance the capability and protection of the Royal Navy, once a forward-looking decision is made to upgrade their existing historic, small calibre weapons systems. We stand ready, with our modern manufacturing facilities and proven international capabilities, to work with the UK MOD to meet such requirements.
'Forgings'
This division also performed extremely well, successfully navigating the disrupted, and constantly changing, international business environment. There is little doubt that having established contemporary automated 'local' production facilities - in the UK and both North and South America, - successfully enabled MSI to welcome and secure many customers that had previously procured product from China.
'Petrol Station Superstructures' - mobility hubs
Operations in both the UK and the Poland performed resiliently against a prevailing uncertain backdrop. Despite the challenges, the division continued to make great progress, pleasingly exceeding management's revenue forecasts. Many forecourt operators have continued to develop their sites to incorporate a substantial grocery store and catering facility and Global-MSI designed, manufactured and erected many such structures during the period.
As with all construction orientated businesses, the negative impact of the lack of readily available materials and their associated fluctuating costs, became a major factor in terms of managing day to day operations. Such disruptive circumstances necessitated some contracts to be re-negotiated to the mutual satisfaction of all parties.
'Corporate Branding'
This division traded at similar levels to the prior year, as commercial activity remained seriously constrained across mainland Europe's national borders. We took action to restructure the division's operations in both The Netherlands and Germany and much has been achieved as a result, leaving it better geared to the current needs of the market. Pleasingly, the UK based business has continued to prosper, gaining market share and expanding operational capabilities and facilities.
Outlook
'Defence'
Foremost, we look forward with confidence to a favourable report on our 30mm naval weapon system, presently on approval test by the US Navy.
Furthermore, recent events have served to focus attention on the need for appropriate national security to combat potential lethal land-based threats. We believe that, as our additional 'in-house' product developments come to fruition, there will be numerous opportunities across international markets to supply our, tested and proven, land-based defence equipment.
'Forgings'
Demand for our high quality, forged products is increasing, as customers seek assured and dependable security of supply. To that end, we will continue to invest in further automating our manufacturing facilities in the UK, the United States and South America.
'Petrol Station Superstructures'
The markets we serve are vigorously embracing change, not only in the development of providing and dispensing alternative fuel types but also in broadening their provision of services to include groceries and catering facilities. The development expertise and scale of the buildings required to dispense such services are most appropriate to the designs, manufacturing and erection skills of Global-MSI. We expect further growth opportunities for both our UK and Polish operations.
'Corporate Branding'
We have completed restructuring in The Netherlands and Germany and expanded our UK operations. So, now that inter-country business activity across mainland Europe has been restored, we are cautiously optimistic that we will achieve a more profitable division this year.
Pleasingly, we have already received instructions from a number of major customers to speedily recommence projects, that they had put 'on hold', owing to the scale and duration of the pandemic.
Summary
We believe that we have placed each of our businesses in a strong and exciting position within the markets which we serve. Close monitoring of performance and further support in the development of new products and services will, no doubt, bring further rewards.
All matters considered the Board recommends the payment of a final dividend of 7.5p per share (2021 - 6.5p) making a total for the year of 9.25p (2021 - 8.25p).
The final dividend is expected to be paid on the 12th August 2022, to those shareholders on the register at the close of business on the 15th July 2022.
Michael Bell
27th June 2021
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 5th July, 2022. The full Annual Report and Accounts will be posted to shareholders in the week commencing 11th July, 2022. 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 28th July, 2022 at The Holiday Inn, Warmsworth, Doncaster.
Consolidated income statement |
| |||||
For the year ended 30th April, 2022 | ||||||
2022 |
| 2021 | ||||
Continuing operations | Total |
| Total | |||
£'000 |
| £'000 | ||||
Revenue | 74,524 |
| 61,539 | |||
Cost of sales | (54,121) |
| (44,218) | |||
Gross profit | 20,403 |
| 17,321 | |||
Distribution costs | (3,304) | (2,581) | ||||
Administrative expenses | (12,097) |
| (12,954) | |||
Other operating income | 1,185 |
| - | |||
(14,216) |
| (15,535) | ||||
Group operating profit | 6,187 |
| 1,786 | |||
Share of net profit of joint venture | - |
| 28 | |||
Interest received | 1 | 10 | ||||
Interest paid | (95) | (92) | ||||
Other finance costs - pensions | (126) |
| (140) | |||
(220) |
| (222) | ||||
Profit before taxation | 5,967 |
| 1,592 | |||
Taxation | (1,035) |
| (415) | |||
Profit for the year attributable to equity holders of the parent | 4,932 |
| 1,177 | |||
Basic earnings per share | 30.9p |
| 7.2p | |||
Diluted earnings per share | 29.6p |
| 7.0p | |||
Consolidated statement of comprehensive income |
| |||||
For the year ended 30th April, 2022 | ||||||
2022 |
| 2021 | ||||
Total |
| Total | ||||
£'000 |
| £'000 | ||||
Profit for the year attributable to equity holders of the parent |
| 4,932 |
| 1,177 | ||
Exchange differences on retranslation of foreign operations |
|
| (603) |
| (38) | |
Net other comprehensive loss to be reclassified to profit or loss in subsequent years |
| (603) |
| (38) | ||
Remeasurement gains on defined benefit pension scheme | 1,601 |
| 1,213 | |||
Deferred tax on remeasurement on defined benefit scheme | (145) |
| (230) | |||
Revaluation of land and buildings | 3,868 |
| - | |||
Deferred tax on revaluation surplus on land and buildings | (798) |
| - | |||
Net other comprehensive income not being reclassified to profit or loss in subsequent years |
| 4,526 |
| 983 | ||
Total comprehensive income for the year attributable to equity holders of the parent |
| 8,855 |
| 2,122 | ||
Consolidated and company statement of changes in equity | ||||||||||||||||||
For the year ended 30th April, 2022 | ||||||||||||||||||
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, 2020 | 1,840 | 901 | 2,815 | 6,055 | 1,629 | 224 | (3,059) | 19,723 | 30,128 | |||||||||
Profit for the year | - | - | - | - | - | - | - | 1,177 | 1,177 | |||||||||
Other comprehensive (loss)/income | - | - | - | - | - | (38) | - | 983 | 945 | |||||||||
Total comprehensive (loss)/income | - | - | - | - | - | (38) | - | 2,160 |
| 2,122 | ||||||||
Dividends paid | - | - | - | - | - | - | - | (578) | (578) | |||||||||
Purchase of own shares | - | - | - | - | - | - | (636) | - | (636) | |||||||||
Cancellation of shares | (56) | 56 | - | - | - | - | 906 | (906) | - | |||||||||
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 | |
(b) Company |
| |||||||||||||||||
At 30th April, 2020 | 1,840 | 901 | 7,620 | - | 1,629 | - | (3,059) | 15,618 | 24,549 | |||||||||
Profit for the year | - | - | - | - | - | - | - | 1,548 | 1,548 | |||||||||
Other comprehensive income | - | - | - | - | - | - | - | 899 | 899 | |||||||||
Total comprehensive income | - | - | - | - | - | - | - | 2,447 | 2,447 | |||||||||
Dividends paid (note 10) | - | - | - | - | - | - | - | (578) | (578) | |||||||||
Purchase of own shares (note 22) | - | - | - | - | - | - | (636) | - | (636) | |||||||||
Cancellation of shares | (56) | 56 | - | - | - | - | 906 | (906) | - | |||||||||
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 | |
Consolidated and company statements of financial position | ||||||||
At 30th April, 2022 | ||||||||
Group |
| Company | ||||||
| 2022 |
| 2021 | 2022 |
| 2021 | ||
£'000 |
| £'000 | £'000 |
| £'000 | |||
ASSETS |
| |||||||
Non-current assets |
| |||||||
Property, plant and equipment | 24,537 |
| 19,113 | 1,017 |
| 935 | ||
Right-of-use assets | 1,479 |
| 530 | 5,029 |
| 5,486 | ||
Intangible assets | 3,002 |
| 3,558 | - |
| - | ||
Investments in subsidiaries | - |
| - | 18,126 |
| 17,313 | ||
Investment in joint venture | 34 |
| 36 | - |
| - | ||
Deferred income tax asset | 1,435 |
| 1,606 | 1,374 |
| 1,600 | ||
30,487 |
| 24,843 | 25,546 |
| 25,334 | |||
Current assets |
| |||||||
Inventories | 16,327 |
| 12,423 | 2,592 |
| 1,498 | ||
Trade and other receivables | 11,396 |
| 9,369 | 15,394 |
| 16,135 | ||
Contract assets | 1,773 |
| 1,998 | - |
| - | ||
Income tax receivable | 6 |
| 194 | - |
| 141 | ||
Prepayments | 1,352 |
| 2,010 | 218 |
| 543 | ||
Cash and cash equivalents | 18,092 |
| 17,390 | 3,258 |
| 943 | ||
Restricted cash held in Escrow | 1,158 |
| 6,165 | - |
| - | ||
50,104 |
| 49,549 | 21,462 |
| 19,260 | |||
TOTAL ASSETS |
| 80,591 |
| 74,392 | 47,008 |
| 44,594 | |
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 |
| 6,055 | - |
| - | ||
Special reserve | 1,629 |
| 1,629 | 1,629 |
| 1,629 | ||
Currency translation reserve | (417) |
| 186 | - |
| - | ||
Treasury shares | (2,789) |
| (2,789) | (2,789) |
| (2,789) | ||
Retained earnings | 24,673 |
| 20,399 | 19,859 |
| 16,581 | ||
TOTAL EQUITY SHAREHOLDERS' FUNDS |
| 38,575 |
| 31,036 | 29,060 |
| 25,782 | |
Non-current liabilities |
| |||||||
Defined benefit pension liability | 4,720 |
| 7,095 | 4,720 |
| 7,095 | ||
Deferred income tax liability | 2,578 |
| 1,553 | - |
| - | ||
Lease liabilities | 1,158 |
| 380 | 4,807 |
| 5,214 | ||
8,456 |
| 9,028 | 9,527 |
| 12,309 | |||
Current liabilities |
| |||||||
Trade and other payables | 14,176 |
| 12,410 | 7,068 |
| 5,234 | ||
Contract liabilities | 18,329 |
| 21,192 | 622 |
| 874 | ||
Income tax payable | 702 |
| 561 | 324 |
| - | ||
Lease liabilities | 353 |
| 165 | 407 |
| 395 | ||
33,560 |
| 34,328 | 8,421 |
| 6,503 | |||
TOTAL EQUITY AND LIABILITIES |
| 80,591 |
| 74,392 | 47,008 |
| 44,594 | |
Consolidated and company cash flow statements |
|
| ||||||||
For the year ended 30th April, 2022 |
| |||||||||
Group |
| Company |
| |||||||
| 2022 |
| 2021 | 2022 |
| 2021 | ||||
£'000 |
| £'000 | £'000 |
| £'000 | |||||
Profit before taxation | 5,967 |
| 1,592 | 2,509 |
| 92 | ||||
Adjustments to reconcile profit before taxation to cash generated from operating activities: |
| |||||||||
Past service pension costs | - |
| 205 | - |
| 205 | ||||
Depreciation charge of owned assets and right-of-use assets | 1,746 |
| 1,666 | 931 |
| 895 | ||||
Amortisation charge | 227 |
| 237 | - |
| - | ||||
Impairment of goodwill | 349 |
| 348 | - |
| - | ||||
Write off of acquired goodwill | - |
| 8 | - |
| - | ||||
Profit on sale of fixed assets | (169) |
| (74) | (163) |
| (61) | ||||
Share of net profit of joint venture | - |
| (28) | - |
| - | ||||
Termination of lease | - |
| (7) | - |
| - | ||||
Finance costs | 220 |
| 222 | 292 |
| 366 | ||||
Foreign exchange (losses)/gains | (142) |
| 516 | - |
| - | ||||
(Increase)/decrease in inventories | (3,657) |
| 3,377 | (1,094) |
| 44 | ||||
(Increase)/decrease in receivables | (1,541) |
| (6,834) | 19 |
| 37 | ||||
Decrease/(increase) in prepayments | 611 |
| (237) | 325 |
| (246) | ||||
Increase in payables | 1,340 |
| 1,162 | 1,518 |
| 1,296 | ||||
(Decrease)/increase in progress payments | (3,660) |
| 7,824 | (252) |
| (163) | ||||
Pension fund payments | (900) |
| (600) | (900) |
| (600) | ||||
Cash generated from operating activities |
| 391 |
| 9,377 | 3,185 |
| 1,865 | |||
Net interest paid | (43) |
| (52) | (1) |
| (49) | ||||
Taxation (paid)/received | (447) |
| 460 | 151 |
| - | ||||
Net cash (outflow)/inflow from operating activities |
| (99) |
| 9,785 | 3,335 |
| 1,816 | |||
Investing activities |
| |||||||||
Payments for acquisitions, net of cash acquired | - |
| (89) | - |
| - | ||||
Dividends received from subsidiaries | - |
| - | 1,249 |
| 1,498 | ||||
Purchase of property, plant and equipment | (2,703) |
| (781) | (578) |
| (268) | ||||
Purchase of intangible assets | (54) |
| - | - |
| - | ||||
Proceeds on disposal of property, plant and equipment | 227 |
| 97 | 185 |
| 62 | ||||
Decrease/(increase) in cash held in the Escrow account maturing in more than 90 days | 5,007 |
| (6,165) | - |
| - | ||||
Net cash inflow/(outflow) from investing activities | 2,477 |
| (6,938) | 856 |
| 1,292 | ||||
Financing activities |
| |||||||||
Purchase of own shares | - |
| (636) | - |
| (636) | ||||
Lease payments | (405) |
| (327) | (560) |
| (560) | ||||
Dividends paid | (1,316) |
| (578) | (1,316) |
| (578) | ||||
Net cash outflow from financing activities |
| (1,721) |
| (1,541) | (1,876) |
| (1,774) | |||
Increase in cash and cash equivalents |
| 657 |
| 1,306 | 2,315 |
| 1,334 | |||
Opening cash and cash equivalents/(bank overdraft) | 17,390 |
| 16,125 | 943 |
| (391) | ||||
Exchange differences on cash and cash equivalents | 45 |
| (41) | - |
| - | ||||
Closing cash and cash equivalents |
| 18,092 |
| 17,390 | 3,258 |
| 943 | |||
The financial information set out above does not constitute the Company's statutory accounts for the periods ended 30th April, 2022 or 30th April, 2021 but is derived from those accounts. Statutory accounts for 2021 have been delivered to the Registrar of Companies and those for 2022 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, 2022 and 30th April, 2021. 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' | |||||||||||||||||||
2022 |
| 2021 | 2022 |
| 2021 | 2022 |
| 2021 | 2022 |
| 2021 | 2022 |
| 2021 | ||||||
£'000 |
| £'000 | £'000 |
| £'000 | £'000 |
| £'000 | £'000 |
| £'000 | £'000 |
| £'000 | ||||||
Segmental revenue |
| |||||||||||||||||||
Total revenue | 30,219 |
| 27,078 | 16,482 |
| 9,970 | 15,143 |
| 11,774 | 13,009 |
| 12,972 | 74,853 |
| 61,794 | |||||
Revenue from other segments | - |
| - | - |
| - | (245) |
| (145) | (84) |
| (110) | (329) |
| (255) | |||||
Revenue from external customers | 30,219 |
| 27,078 | 16,482 |
| 9,970 | 14,898 |
| 11,629 | 12,925 |
| 12,862 | 74,524 |
| 61,539 | |||||
Segment result |
| |||||||||||||||||||
Operating profit | 4,123 |
| 2,570 | 2,245 |
| 425 | 1,074 |
| 448 | (1,255) |
| (1,657) | 6,187 |
| 1,786 | |||||
Share of net profit of joint venture | - |
| 28 | |||||||||||||||||
Net finance costs | (220) |
| (222) | |||||||||||||||||
Profit before taxation | 5,967 |
| 1,592 | |||||||||||||||||
Taxation | (1,035) |
| (415) | |||||||||||||||||
Profit for the year |
| 4,932 |
| 1,177 | ||||||||||||||||
Segmental assets |
| |||||||||||||||||||
Assets attributable to segments | 33,393 |
| 35,414 | 7,883 |
| 4,066 | 9,380 |
| 8,492 | 8,050 |
| 8,468 | 58,706 |
| 56,440 | |||||
Unallocated assets* | 21,885 |
| 17,952 | |||||||||||||||||
Total assets | 80,591 |
| 74,392 | |||||||||||||||||
Segmental liabilities |
| |||||||||||||||||||
Liabilities attributable to segments | 23,643 |
| 24,795 | 3,547 |
| 2,445 | 3,109 |
| 2,970 | 3,591 |
| 3,510 | 33,890 |
| 33,720 | |||||
Unallocated liabilities* | 8,126 |
| 9,636 | |||||||||||||||||
Total liabilities | 42,016 |
| 43,356 | |||||||||||||||||
Other segmental information |
| |||||||||||||||||||
Capital expenditure | 1,933 |
| 440 | 389 |
| 24 | 195 |
| 131 | 186 |
| 186 | 2,703 |
| 781 | |||||
Depreciation | 210 |
| 176 | 561 |
| 545 | 714 |
| 377 | 261 |
| 263 | 1,746 |
| 1,361 | |||||
Amortisation | 10 |
| - | - |
| - | 43 |
| 55 | 174 |
| 182 | 227 |
| 237 | |||||
Impairment | - |
| - | - |
| - | - |
| - | 349 |
| 348 | 349 |
| 348 | |||||
* 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, 2022 and 30th April, 2021. The Group's geographical segments are based on the location of the Group's assets. | |||||||||||||||||||||||||||||||||||||||
United Kingdom | Europe | USA | South America | Total | |||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 |
| 2021 | 2022 |
| 2021 | 2022 |
| 2021 | 2022 |
| 2021 | ||||||||||||||||||||||||||
£'000 | £'000 | £'000 |
| £'000 | £'000 |
| £'000 | £'000 |
| £'000 | £'000 |
| £'000 | ||||||||||||||||||||||||||
External revenue by origin | 41,665 | 41,191 | 11,599 |
| 12,987 | 18,917 |
| 5,934 | 2,343 |
| 1,427 | 74,524 |
| 61,539 | |||||||||||||||||||||||||
Non-current assets | 20,160 | 17,373 | 4,327 |
| 3,706 | 5,913 |
| 3,751 | 87 |
| 13 | 30,487 |
| 24,843 | |||||||||||||||||||||||||
Current assets | 37,235 | 39,457 | 6,147 |
| 6,899 | 6,024 |
| 2,306 | 698 |
| 887 | 50,104 |
| 49,549 | |||||||||||||||||||||||||
Liabilities | 28,380 | 32,516 | 4,112 |
| 3,729 | 9,223 |
| 7,081 | 301 |
| 30 | 42,016 |
| 43,356 | |||||||||||||||||||||||||
Capital expenditure | 2,377 | 644 | 133 |
| 137 | 193 |
| - | - |
| - | 2,703 |
| 781 | |||||||||||||||||||||||||
Revenue disaggregated by destination is shown as follows: | |||||||||||||||||||||||||||||||||||||||
2022 |
| 2021 | |||||||||||||||||||||||||||||||||||||
£'000 |
| % |
| £'000 | % | ||||||||||||||||||||||||||||||||||
United Kingdom | 31,287 |
| 42% |
| 22,259 | 36% | |||||||||||||||||||||||||||||||||
Europe | 17,103 |
| 23% |
| 26,574 | 43% | |||||||||||||||||||||||||||||||||
USA | 19,406 |
| 26% |
| 5,934 | 10% | |||||||||||||||||||||||||||||||||
South America | 2,421 |
| 3% |
| 1,427 | 2% | |||||||||||||||||||||||||||||||||
Rest of World | 4,307 |
| 6% |
| 5,345 | 9% | |||||||||||||||||||||||||||||||||
Total revenue | 74,524 |
| 100% |
| 61,539 | 100% | |||||||||||||||||||||||||||||||||
The Group's largest customer, which is reported in the 'Defence' division, contributed 14.2% to the Group's revenue (2021: 14.9% in the 'Defence' division from a different customer). Only one other customer, also in the 'Defence' division, contributed more than 10% to the Group's revenue with a contribution of 11.4% (2021: 11.3% in the 'Defence' division).
2. Other operating income |
|
|
|
|
| |||
|
|
|
|
|
| 2022 | 2021 | |
|
|
|
|
|
| £'000 | £'000 | |
|
|
|
|
|
|
| ||
Settlement of contractual dispute |
|
|
|
|
| 1,185 | - | |
|
|
|
|
|
| 1,185 | - | |
|
|
|
|
|
|
| ||
During the year, the Group settled a protracted contractual dispute, the terms of which are confidential. The amount received has been recognised in other income. The Group has incurred £0.6m of legal costs in the current year in relation to this matter. These costs are included in administrative expenses. | ||||||||
|
|
|
|
|
| |||
2. Employee information |
|
|
|
|
| |||
The average number of employees, including executive directors, during the year was as follows: | ||||||||
| Group |
| Company | |||||
| 2022 | 2021 | 2022 |
| 2021 | |||
| Number | Number | Number |
| Number | |||
Production |
| 252 | 243 | 74 |
| 73 | ||
Technical |
| 71 | 72 | 23 |
| 24 | ||
Distribution |
| 26 | 32 | 2 |
| 5 | ||
Administration |
| 98 | 96 | 39 |
| 32 | ||
| 447 | 443 | 138 |
| 134 | |||
(a) Staff costs | ||||||||
Including executive directors, employment costs were as follows: | ||||||||
Group |
| Company | ||||||
2022 | 2021 | 2022 |
| 2021 | ||||
£'000 | £'000 | £'000 |
| £'000 | ||||
Wages and salaries | 18,942 | 17,420 | 7,139 |
| 6,123 | |||
Covid-19 job retention scheme income | (1,636) | (1,690) | - |
| (313) | |||
Social security costs | 3,233 | 3,263 | 722 |
| 647 | |||
Pension costs | 570 | 557 | 352 |
| 344 | |||
Share options expense | 29 | 29 | 29 |
| 29 | |||
21,138 | 19,579 | 8,242 |
| 6,830 | ||||
The Covid-19 job retention scheme income has been received in the following countries: | ||||||||
2022 |
| 2021 | ||||||
£'000 |
| £'000 | ||||||
UK | - |
| 313 | |||||
The Netherlands | 1,310 |
| 1,113 | |||||
USA | 251 |
| 254 | |||||
Poland | 75 |
| 10 | |||||
1,636 |
| 1,690 | ||||||
| ||||||||
(b) Directors' emoluments | ||||||||
2022 |
| 2021` | ||||||
£'000 |
| £'000 | ||||||
Aggregate directors' emoluments | 1,810 |
| 1,570 | |||||
Pension contributions | 52 |
| 42 | |||||
1,862 |
| 1,612 | ||||||
3. (a) Taxation |
| |||
The charge for taxation comprises: | ||||
2022 |
| 2021 | ||
£'000 |
| £'000 | ||
Current tax |
| |||
United Kingdom corporation tax | 667 |
| 410 | |
Adjustments in respect of previous years | (10) |
| 25 | |
Foreign corporation tax | 120 |
| 30 | |
Group current tax expense | 777 |
| 465 | |
Deferred tax |
| |||
Origination and reversal of temporary differences | 261 |
| (40) | |
Adjustments in respect of previous years | (5) |
| (10) | |
Adjustments in respect of difference in applicable tax rate | 2 |
| - | |
Group deferred tax expense/(credit) | 258 |
| (50) | |
Total tax expense on profit |
| 1,035 |
| 415 |
Tax relating to items charged to other comprehensive income: | ||||
2022 | 2021 | |||
£'000 | £'000 | |||
Deferred tax charged through other comprehensive income |
| |||
Deferred tax on measurement gains on pension scheme current year | (145) |
| (230) | |
Deferred tax on revaluation surplus on land and buildings | (798) |
| - | |
Deferred tax in the Consolidated statement of comprehensive income | (943) |
| (230) | |
(b) Factors affecting the tax charge for the year |
|
The tax charge assessed for the year is lower than (2021: higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below: | ||||||||||||
| ||||||||||||
2022 |
| 2021 |
| |||||||||
£'000 |
| £'000 |
| |||||||||
| ||||||||||||
Profit before tax | 5,967 |
| 1,592 |
| ||||||||
Profit multiplied by standard rate of corporation tax of 19% (2021 - 19%) | 1,134 |
| 302 |
| ||||||||
|
| |||||||||||
Effects of: |
| |||||||||||
Expenses not deductible for tax purposes | (247) |
| (164) |
| ||||||||
Adjustments in respect of overseas tax rates | 161 |
| 262 |
| ||||||||
Current tax adjustment in respect of previous years | (10) |
| 25 |
| ||||||||
Deferred tax adjustment in respect of previous years | (5) |
| (10) |
| ||||||||
Deferred tax adjustment in respect of different applicable rates | 2 |
| - |
| ||||||||
Total taxation expense for the year | 1,035 |
| 415 |
| ||||||||
|
| |||||||||||
(c) Factors affecting future tax charge |
|
| ||||||||||
The rate of corporation tax in the UK will remain at 19% until April 2023 when it will increase to 25%. As the changes have been enacted as at 30th April, 2022, deferred income tax has been provided at 25% or a blended rate depending upon when the underlying temporary timing differences are expected to unwind. |
| |||||||||||
Deferred tax in relation to intangibles recognised on the acquisition of 'MSI-Sign Group B.V.' has been provided at 25.8%, being the main corporation tax rate in The Netherlands. |
| |||||||||||
4. Earnings per share |
| |||
The calculation of basic earnings per share of 30.9p (2021 - 7.2p) is based on the profit for the year attributable to equity holders of the parent of £4,932,000 (2021 - £1,177,000) and on a weighted average number of ordinary shares in issue of 15,949,691 (2021 - 16,342,816). At 30th April, 2022 there were 1,055,000 (2021 - 380,000) dilutive shares on option with a weighted average effect of 716,575 (2021 - 391,667) giving a diluted earnings per share of 29.6p (2021 - 7.0p). | ||||
2022 |
| 2021 | ||
Number of ordinary shares in issue at start of the year | 17,841,073 |
| 18,396,073 | |
Cancellation of ordinary shares during the year | - |
| (555,000) | |
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 |
| 18,234,198 | |
Less weighted average number of shared held in the ESOT | (245,048) |
| (245,048) | |
Less weighted average number of shares purchased by the Company | (1,646,334) |
| (1,646,334) | |
Weighted average number of shares to be used in basic EPS calculation | 15,949,691 |
| 16,342,816 | |
Weighted average number of the 1,055,000 (2021 - 380,000) dilutive shares | 716,575 |
| 391,667 | |
Weighted average diluted shares | 16,666,266 |
| 16,734,483 | |
Profit for the year attributable to equity holders to the parent in £ | 4,932,000 |
| 1,177,000 | |
Basic earnings per share | 30.9p |
| 7.2p | |
Diluted earnings per share | 29.6p |
| 7.0p | |
5. Dividends paid and proposed |
| 2022 |
| 2021 |
£'000 |
| £'000 | ||
Declared and paid during the year | ||||
Final dividend for 2021: 6.50p (2020 - 1.75p) | 1,037 |
| 289 | |
Interim dividend for 2022: 1.75p (2021 - 1.75p) | 279 |
| 289 | |
1,316 |
| 578 | ||
|
| |||
Proposed for approval by shareholders at the AGM |
|
| ||
Final dividend for 2022: 7.5p (2021- 6.5p) | 1,196 |
| 1,037 | |
6. Trade and other receivables | ||||||||||||
Group |
| Company | ||||||||||
| 2022 |
| 2021 | 2022 |
| 2021 | ||||||
£'000 |
| £'000 | £'000 |
| £'000 | |||||||
Trade receivables (net of allowance for expected credit losses) | 10,167 |
| 8,764 | 2,366 |
| 2,184 | ||||||
Amounts owed by subsidiary undertakings | - |
| - | 13,024 |
| 13,872 | ||||||
Amounts owed by joint venture | 228 |
| 130 | - |
| - | ||||||
Other receivables | 1,001 |
| 475 | 4 |
| 79 | ||||||
11,396 |
| 9,369 | 15,394 |
| 16,135 | |||||||
(a) Trade receivables | ||||||||||||
Trade receivables are denominated in the following currencies: | ||||||||||||
Group |
| Company | ||||||||||
| 2022 |
| 2021 | 2022 |
| 2021 | ||||||
£'000 |
| £'000 | £'000 | £'000 | ||||||||
Sterling | 5,554 |
| 6,112 | 1,576 |
| 1,675 | ||||||
Euro | 1,786 |
| 1,692 | 790 |
| 509 | ||||||
US dollar | 2,406 |
| 695 | - |
| - | ||||||
Other currencies | 421 |
| 265 | - |
| - | ||||||
10,167 |
| 8,764 | 2,366 |
| 2,184 | |||||||
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 | ||||||||
2022 | 2021 | 2022 | 2021 | |||||||||
|
|
|
|
|
| £'000 |
| £'000 |
| £'000 |
| £'000 |
Not past due | 7,234 | 7,268 | 2,316 | 2,033 | ||||||||
< 30 days | 2,062 | 1,381 | 24 | 122 | ||||||||
30-60 days | 64 | 102 | 19 | 28 | ||||||||
60-90 days | 11 | 28 | 8 | - | ||||||||
> 90 days | 796 | (15) | (1) | 1 | ||||||||
Total | 10,167 | 8,764 | 2,366 | 2,184 | ||||||||
In the Group, trade receivables with a nominal value of £52,000 (2021 - £43,000) were impaired and fully provided as at 30th April, 2022. During the year, bad debts of £20,000 (2021 - £81,000) were recovered and bad debts of £29,000 (2021 - £16,000) were incurred. | ||||||||||||
In the Company, trade receivables with a nominal value of £33,000 (2021 - £11,000) were impaired and fully provided as at 30th April, 2022. During the year, bad debts of £7,000 (2021 - £69,000) were recovered and bad debts of £29,000 (2021 - £7,000) 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 | ||||||||||
2022 | 2021 | |||||||||||
£'000 | £'000 | |||||||||||
Not past due | 135 | 50 | ||||||||||
< 30 days | 47 | 33 | ||||||||||
30-60 days | 34 | 41 | ||||||||||
60-90 days | 12 | 6 | ||||||||||
Total | 228 | 130 | ||||||||||
At 30th April, 2022 there was no provision for expected credit losses relating to amounts owed by joint venture (2021 - 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. There has been no impairment recognised on intercompany receivables (2021 - nil). | ||||||||||||
There are loans to 'MS INTERNATIONAL Estates Limited', 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 | ||||||||||||
2022 |
| 2021 | ||||||||||
£'000 |
| £'000 | ||||||||||
Amounts due from companies backed by liquid assets | 7,099 |
| 7,587 | |||||||||
Amounts due from 'MS INTERNATIONAL Estates Limited' | 5,925 |
| 6,285 | |||||||||
13,024 |
| 13,872 | ||||||||||
7. Cash and cash equivalents |
| |||||||||||
Group |
| Company | ||||||||||
| 2022 |
| 2021 | 2022 |
| 2021 | ||||||
£'000 |
| £'000 | £'000 |
| £'000 | |||||||
Cash at bank and in hand | 18,092 |
| 17,390 | 3,258 |
| 943 | ||||||
Restricted cash held in Escrow - maturing in more than 90 days | 1,158 |
| 6,165 | - |
| - | ||||||
Total cash | 19,250 |
| 23,555 | 3,258 |
| 943 | ||||||
The balance held in Escrow provides security to Lloyds Bank plc in respect of any guarantees, indemnities, and performance bonds given by the Group in the ordinary course of business. | ||||||||||||
8. Net funds |
| |||||||||||
Analysis of net funds |
| Group |
| Company | ||||||||
| 2022 |
| 2021 | 2022 |
| 2021 | ||||||
£'000 |
| £'000 | £'000 |
| £'000 | |||||||
|
|
|
| |||||||||
Cash and cash equivalents | 18,092 |
| 17,390 | 3,258 |
| 943 | ||||||
Restricted cash held in Escrow | 1,158 |
| 6,165 | - |
| - | ||||||
Lease liabilities | (1,511) |
| (545) | (5,214) |
| (5,609) | ||||||
17,739 |
| 23,010 | (1,956) |
| (4,666) | |||||||
Group movement in net funds |
| |||||||||||
Cash and cash equivalent |
| Restricted cash held in Escrow |
| Lease liabilities |
| Total | ||||||
At 30th April, 2020 | 16,125 | - | (1,229) | 14,896 | ||||||||
Cash flows | 1,306 | 6,165 | 327 | 7,798 | ||||||||
Foreign exchange adjustments | (41) | - | (16) | (57) | ||||||||
Leases on acquisition | - | - | 402 | 402 | ||||||||
Other changes | - | - | (29) | (29) | ||||||||
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 | |||||
| ||||||||||||
Company movement in net funds |
| |||||||||||
|
| Cash and cash equivalents |
| Lease liabilities |
| Total | ||||||
At 30th April, 2020 | (391) | (5,992) | (6,383) | |||||||||
Cash flows | 1,334 | 560 | 1,894 | |||||||||
Other changes | - | (177) | (177) | |||||||||
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) | |||||
| ||||||||||||
9. Reserves |
| |||||||||||
Share capital |
| |||||||||||
The balance classified as share capital includes the nominal value on issue of the Company's equity share capital, comprising 10p ordinary shares. | ||||||||||||
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 | 100 |
| 100 | |||||||||
Shares in treasury (see below) | 2,689 |
| 2,959 | |||||||||
2,789 |
| 3,059 | ||||||||||
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 Appleby Trust (Jersey) Ltd, an independent company registered in Jersey. | ||||||||||||
The trust has purchased an aggregate 245,048 (2021 - 245,048) ordinary shares, which represents 1.5% (2021 - 1.5%) of the issued share capital of the Company at an aggregate cost of £100,006. The market value of the shares at 30th April, 2022 was £728,000 (2021 - £380,000). The Company has not made any payments (2021 - 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 £1,000 (2021 - £3,000). During the year, no options have been granted over shares (2021 - nil), no options on shares were exercised (2021 - nil) and no shares were purchased (2021 - nil). | ||||||||||||
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) | ||||||||||
Net value of treasury shares | 1,646,334 |
| 2,689 | |||||||||
| ||||||||||||