Ms Intl. Regulatory News (MSI)

MS INTERNATIONAL plc

Results for the 52 weeks ended 2nd May, 2015

Chairman's Statement

Results and review

I am pleased to announce that there has been a much improved performance by the Group during the second half of the year. Accordingly, for the 12 months to 2nd May 2015, profit before tax was £1.54m (2014 - £2.93m) on revenue of £45.50m (2014 - £47.13m). Earnings per share were 8.20p (2014 - 14.6p).

Net cash and short term deposits increased once again to a record high of £17.15m (2014 - £14.29m) at year-end.

The Group's current order book remains very strong. While marginally lower at year-end than that the £46m reported for 2014, it has since increased following the award of a follow-on two year contract by the UK MoD for the maintenance and support of MSI-DS 30mm naval gun systems and associated ancillary equipment in the RN fleet. Although the exact value of that contract is confidential, I can reveal that it is in excess of £12m.

'Defence' the global equipment markets of which remain constrained, despite the incredibly high number of conflicts and threats to international stability that are erupting, or intensifying, around the world. Restricted financial budgets, political instability and tensions, are critical factors that continue to disrupt military procurement plans and planning. As a consequence 'Defence' revenue was 15% lower than the previous year. This, combined with the essential investment committed to a number of major 'in-house' research and development programmes for new products - aimed at broadening our product range and extending our market opportunities - resulted in a full year loss, albeit considerably reduced from that reported at the interim stage.

'Forgings' achieved advances in both revenue and profit over the previous year. The UK and USA operations performed extremely well and ahead of our expectations, reaping the benefit of operational improvements, supported by plant and equipment upgrades. The South America operation, although highly efficient, had to contend with the negative impact of a weakening market and currency, owing to the region's current fiscal difficulties.

'Petrol Station Superstructures' overall revenue was similar to that of the previous year, with an increase from the UK operation as a result of strong growth in the number of forecourt convenience stores completed in the period. Conversely there was a distinct reduction in activity of the Poland based business that traditionally services many of the East European countries. Political uncertainty in the region discouraged many customers and potential developers to commit to their plans for new petrol station construction projects and station upgrades.

Outlook

'Defence', we are predicting an improvement in the level of activity for our business in the second half of the current year, even though markets remain constrained. A very positive result from our substantial new product development programme is the winning of the first order for our new MSI-DS 20mm naval gun system. The requirement for three systems - received from a European shipbuilder - will be delivered in the current year and installed on new ships for an overseas navy. This is an important breakthrough for the Group, and is part of our commitment to broaden the range of our product offering directed at the growing international market for small naval vessels. We look forward to completing the development of other new products that will become available to market in the course of the next twelve months.

'Forgings', should maintain a relatively stable position. The division's short lead-time order books are highly sensitive to variations in demand and the prevailing economic conditions in its individual global markets. Currently, we are planning to expand our capacity and capability in the United States to accommodate opportunities in that market. Throughout the division, we remain firmly committed to ensuring that we maintain and develop highly efficient production equipment and systems.

'Petrol Station Superstructures' markets continue to transform with the major oil companies leading the way in withdrawing from front line retailing by disposing of parts of their estates to independent dealers, dealer groups and operators. We perceive this to be an opportunity to expand our position in the market through providing an enhanced service to customers not only in terms of new build but also in relation to station maintenance and upgrades.

Post year-end event; Acquisition

I am pleased, also, to announce that the Company has acquired the entire issued share capital of Petrol Sign B.V., a company based in the Netherlands. The consideration for the acquisition is €3.4 million on a cash and debt free basis and includes "normalised" working capital. The consideration has been satisfied from the Company's existing cash resources.

Petrol Sign designs, restyles, produces and installs the complete branding and signage appearance of petrol station superstructures and forecourts throughout many parts of Western Europe. The acquisition will enhance our ability to offer and include branding and signage services as an option to petrol station markets and customers and will become an integral part of the Groups 'Petrol Station Superstructures' division. The vendor and managing director of Petrol Sign will continue to be employed by the company as its managing director.

Further details relating to this acquisition are set out in a separate announcement.

All matters considered the Board recommends the payment of a maintained final dividend of 6.5p per share (2014 - 6.5p), making the total for the year of 8p (2014 - 8p). The final dividend is expected to be paid on 24th July 2015 to those shareholders on the register at the close of business on 26th June 2015.

Michael Bell

17th June 2015