Ms Intl. Regulatory News (MSI)

Chairman's Statement

Results and review

It is a pleasure to report on the continuing prosperity of the Group, with a doubling of pre-tax profit on revenue thirty-two per cent higher than the previous year, despite the lacklustre economic background.

Profit before taxation for the 12 months ended 30 April 2011 amounted to £6.68m (2010 - £3.34m) on revenue of £54.20m (2010 - £41.04m). Earnings per share were 30.6p (2010 - 13.3p).

Net cash and short term deposits at the year-end increased to £9.88m (2010 - £8.91m) even after the £3.53m net cash outlay in May 2010 to purchase the half share in Global-MSI not previously owned. Cash generated from operating activities amounted to £6.27m (2010 - £3.69m).

These results represent a Group record, comfortably surpassing the previous peak performance achieved in the year to 3 May 2008. This outcome is a significant positive step in restoring the Group's record of delivering a year-on-year upward trajectory in trading performance, which was the norm prior to the global economic downturn.

Pleasingly, results from all three divisions, 'Defence', 'Forgings' and 'Petrol Station Forecourt Structures' exceeded the figures reported last year. 'Defence', unaffected by the recession, continued to make excellent progress and both 'Forgings' and 'Petrol Station Forecourt Structures' benefited from an upturn in their respective markets towards the latter part of the year.

'Defence' - the Group's largest division, again performed admirably. We started the year with a substantial order book, a major part of which was customer programmed for delivery within the financial year. This was, in fact, an important challenge for the business as it immediately tested the fortitude of our much enhanced manufacturing facilities and systems, designed to facilitate this planned increase in activity. The upshot was an 18% growth in the division's revenue reflecting a significant expansion in direct export sales, over and above our established contract business with the UK Ministry of Defence.

'Forgings' - global markets for forged fork-arms, fitted to fork-lift trucks and other industrial vehicles, demonstrated a welcome upward trend in the second half of the year from what had been an extraordinarily low level of demand in the preceding twenty four months. This recovery coincided with the successful completion of a host of efficiency improvement and capital investment programmesinitiated in our plants during the downturn. As markets improved month on month, so the positive benefits of our actions quickly percolated through in the results of the division.

 'Petrol Station Forecourt Structures' - markets for new site developments in the UK and mainland Europe had been weak for some time prior to the full integration of Global-MSI into the Group. This weakness was further exasperated by the long period of severe winter weather which had an unhelpful impact on site construction works. Unwelcome though it was, this hiatus presented the ideal opportunity to consolidate our two UK facilities into one, combining the design, project management and manufacturing operations onto our prime site in Doncaster, with limited disruption to operations. The subsequent reduction in costs, improved efficiency and a closer working relationship with our facility in Poland, made for a much improved set of results, despite some anticipated site development projects not coming through to construction within the year.

On the 26 April 2011 we announced to the Stock Exchange that I had exercised an option to purchase 150,000 ordinary shares in the Company at 194p per share. It is my intention to hold these shares, along with my other holdings in MS INTERNATIONALplc,as a long term investment.

Outlook

Clearly, the world economic climate remains uncertain and although there has been some recovery, it still remains a long way short of the pre-recession heights. Maintaining general economic momentum in the coming months of the summer holiday period will be critical if the revival is to continue without interruption. As a business, we must remain vigilant and be prepared for the possibility of some unsettled times ahead.

Reviewing prospects for 'Defence' a year ago, I commented 'that the outlook for this business looked very promising'. Today, that optimism endures undeterred, supported in the knowledge that orders on hand for delivery within the current financial year are at a high level. Included will be the first direct sales of our 30mm naval gun systems to the United States Naval Sea System Command. Looking further ahead, there are some interesting prospects on the horizon for products from not only our existing range but those in the course of development.

Chairman's Statement

Continued

'Forgings', we perceive, may be moving into a period of more sustainable recovery and currently the value of orders on hand is twice that of a year ago. Productivity improvements achieved within the plants and an increased flow of orders, week by week, are indicating a firmer basis for a prospective upturn in results this year.

Having implemented numerous initiatives to enhance the performance of 'Petrol Station Forecourt Structures' since the consolidation, the division has settled down to become a highly productive and competitive business and has already been appointed as the nominated supplier for a number of new developments to be built this year.

Overall, much has been accomplished in a difficult time. The Group is in good shape and the Board is optimistic. Nevertheless we will remain very sensitive to market changes and respond quickly to both favourable and adverse situations. We will continue with the ubiquitous cost reduction exercises and the tight control of cash, whilst enhancing our ability to perform through investment in upgrading our manufacturing facilities and systems and furthering our research and development programmes. Such commitments, supported by our strong financial resources and good marketing should contribute to our global competitiveness.

Accordingly the Board recommends the payment of an increased final dividend of 5.5p per share (2010 - 3.8p) making a total for the year of 6.5p per share (2010 - 4.5p).

Michael Bell

8 June 2011