Last checked at 1 Jul 2020 07:00
Chairman's Statement
Results and Review
A year ago, in my Chairman's Statement, I stated that we were approaching 'very interesting times'. At that juncture, we were reasonably confident of making good progress throughout the coming year, although it later became evident that global, political and economic uncertainty was gathering momentum and our businesses would not be immune from its effects, as evidenced in our half year results.
What we could not foresee was the advent of the 'Covid-19' pandemic and the devastating effects that it would have on the whole global economy, let alone our diverse businesses. The imposed restrictions on movement in terms of personnel and goods seriously impacted both our national and widespread international trading activities.
Nevertheless, our commitment to research and development across our 'Defence' business continued unabated. During the period we expended some £2.00m (2019 - £0.96m) on expanding our portfolio of small/medium calibre naval and land based stabilised weapon systems.
I am however, bitterly disappointed to report a loss before taxation for the year ending 30th April 2020, amounting to £3.25m (2019 - profit £4.79m) and a loss per share of 15.1p (2019 - profit per share 23.1p) on revenue of £61.15m (2019 - £77.71m). Notwithstanding, the all-important balance sheet has remained strong with cash at a very healthy £16.30m (2019 - £22.89m) and no borrowings, excluding lease liabilities.
Outlook
Whilst prospects for the global economy are most uncertain and the current downturn could be prolonged, we remain keenly confident in the future success of our businesses. We believe that what we have been doing, and will continue to do, particularly in terms of developing innovative and creative new products while simultaneously upgrading existing ones, is the proven, right approach for the markets we serve that will deliver long term rewards. Furthermore, we will strive to expand our services beyond the current customer base into market sectors that have similar product requirements.
'Defence' - we will continue to invest in new product development, not only for naval applications but also suitable for wider land-based systems. Recent innovations have attracted considerable attention across international markets, and it is most pleasing to report that some very exciting opportunities are now being converted into much more serious sales prospects.
'Forgings' - our UK operations have been restructured to align with the changing requirements of the national and international markets we serve. We continue to invest in our highly successful United States based manufacturing operations and we are progressively gaining market share.
'Petrol Station Superstructures' - pent-up demand that resulted from the pandemic 'close-down' is starting to be unleashed as markets open up again for new construction and essential maintenance work on existing sites. Our UK based operations will directly benefit as will those we have in Poland, from where we design, supply, erect and maintain petrol station structures across many parts of eastern and northern Europe.
'Petrol Station Branding' - our UK and much larger European mainland operations should also achieve a similar strong recovery as international borders are reopened. The two signage and corporate branding businesses we acquired in the Netherlands last year both serve broader sectors than our traditional customer base. They will greatly assist the expansion of the division to include other signage markets such as 'Hospitality', - hotels and conference centres; 'Automotive' - motor car showrooms; 'Wayfinding' - relating to airports, holiday theme parks etc., thus adding to our strong petrol station market position. The enlarged division will be addressed as the MSI-Sign Group.
It is appropriate on this occasion to express my appreciation to all our employees, for their understanding and commitment to the business, during what has been a most challenging and disruptive year for everyone.
It is also proper to offer our thanks to HM Government and to those Governments, in countries where we have operating businesses located, for their 'Covid-19' support in what has been an unprecedented time.
We remain committed to moving the business forward again and with the unprecedented experience of the past three months almost behind us, we have the resilience, experience and dedication, along with a great team of people, to achieve our aim. Most importantly, we also enjoy significantly strong financial resources to support and develop opportunities as they arise.
At present the global outlook may be unclear, but with recent positive steps out of the 'lockdown', we are confident that we have the wherewithal not only to progressively recover but also to prosper and take advantage of many exciting opportunities.
All matters considered the Board recommends the payment of a prudent final dividend of 1.75p per share (2019 - 6.5p) making a total for the year of 3.5p (2019 - 8.25p). The final dividend is expected to be paid on 14th August 2020, to those shareholders on the register at the close of business on 17th July 2020.
Michael Bell
30th June 2020
Copies of this announcement are available from the Company's registered office at MS INTERNATIONAL plc, Balby Carr Bank, Doncaster, DN4 8DH, England. The full Annual Report and Accounts, which will include the Notice of AGM, will be posted to shareholders shortly, will be 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 10th August 2020 at MS INTERNATIONAL plc, Balby Carr Bank, Doncaster DN4 8DH.
Shareholders are advised to read the statement in the full Annual Report and Accounts in relation to the arrangements for the forthcoming Annual General Meeting because of the current restrictions in force relating to public meetings due to Covid 19.
MS INTERNATIONAL plc | ||
Michael Bell | Tel: 01302 322133 | |
Shore Capital (Nominated Adviser and Broker) | ||
Patrick Castle | Tel: 020 7408 4090 | |
Daniel Bush |
Consolidated income statement | |||||||
For the period ended 30th April, 2020 | |||||||
2020 | 2019 | ||||||
Continuing operations | Total | Total | |||||
£'000 | £'000 | ||||||
Revenue | 61,153 | 77,708 | |||||
Cost of sales | (48,275) | (56,131) | |||||
Gross profit | 12,878 | 21,577 | |||||
Distribution costs | (3,455) | (3,537) | |||||
Administrative expenses | (12,542) | (11,846) | |||||
(15,997) | (15,383) | ||||||
Group operating (loss) / profit before exceptional items | (3,119) | 6,194 | |||||
Past service pension costs | - | (1,198) | |||||
Group operating (loss) / profit | (3,119) | 4,996 | |||||
Interest received | 133 | 93 | |||||
Interest paid | (103) | (116) | |||||
Other finance costs - pensions | (164) | (186) | |||||
(134) | (209) | ||||||
(Loss) / profit before taxation | (3,253) | 4,787 | |||||
Taxation | 762 | (975) | |||||
(Loss) / profit for the period attributable to equity holders of the parent | (2,491) | 3,812 | |||||
(Loss) / earnings per share: basic and diluted | (15.1p) | 23.1p | |||||
Consolidated statement of comprehensive income | |||||||
For the period ended 30th April, 2020 | |||||||
2020 | 2019 | ||||||
Total | Total | ||||||
£'000 | £'000 | ||||||
(Loss) / profit for the period attributable to equity holders of the parent | (2,491) | 3,812 | |||||
Exchange differences on retranslation of foreign operations | (55) | (242) | |||||
Net other comprehensive loss to be reclassified to profit or loss in subsequent periods | (55) | (242) | |||||
Remeasurement (losses) / gains on defined benefit pension scheme | (2,197) | 403 | |||||
Deferred taxation on remeasurement on defined benefit scheme | 545 | (69) | |||||
Deferred taxation on revaluation surplus on land and buildings | (110) | - | |||||
Net other comprehensive (loss) / income not being reclassified to profit or loss in subsequent periods | (1,762) | 334 | |||||
Total comprehensive (loss) / income for the period attributable to equity holders of the parent | (4,308) | 3,904 | |||||
Consolidated and company statement of changes in equity | |||||||||||||||||||
For the period ended 30th April, 2020 | |||||||||||||||||||
Share capital | Capital redemption reserve | Other reserves | Revaluation reserve | Share Premium account | Currency translation reserve | Treasury shares | Retained earnings | Total shareholders' funds | |||||||||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||||
(a) Group | |||||||||||||||||||
At 28th April, 2018 | 1,840 | 901 | 2,815 | 6,055 | 1,629 | 521 | (3,059) | 22,698 | 33,400 | ||||||||||
IFRS 15 adjustment | - | - | - | - | - | - | - | (144) | (144) | ||||||||||
Profit for the period | - | - | - | - | - | - | - | 3,812 | 3,812 | ||||||||||
Other comprehensive (loss) / income | - | - | - | - | - | (242) | - | 334 | 92 | ||||||||||
Total comprehensive (loss) / income | - | - | - | - | - | (242) | - | 4,146 | 3,904 | ||||||||||
Dividends paid | - | - | - | - | - | - | - | (1,362) | (1,362) | ||||||||||
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) | ||||||||||
Total comprehensive loss | - | - | - | - | - | (55) | - | (4,253) | (4,308) | ||||||||||
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 | ||||||||||
(b) Company | |||||||||||||||||||
At 28th April, 2018 | 1,840 | 901 | 1,565 | 6,055 | 1,629 | - | (3,059) | 18,627 | 27,558 | ||||||||||
IFRS 15 adjustment | - | - | - | - | - | - | - | (144) | (144) | ||||||||||
Reserve transfer | - | - | 6,055 | (6,055) | - | - | - | - | - | ||||||||||
Loss for the period | - | - | - | - | - | - | - | (233) | (233) | ||||||||||
Other comprehensive income | - | - | - | - | - | - | - | 334 | 334 | ||||||||||
Total comprehensive income | - | - | - | - | - | - | - | 101 | 101 | ||||||||||
Dividends paid | - | - | - | - | - | - | - | (1,362) | (1,362) | ||||||||||
At 27th April, 2019 | 1,840 | 901 | 7,620 | - | 1,629 | - | (3,059) | 17,222 | 26,153 | ||||||||||
Profit for the period | - | - | - | - | - | - | - | 1,366 | 1,366 | ||||||||||
Other comprehensive loss | - | - | - | - | - | - | - | (1,608) | (1,608) | ||||||||||
Total comprehensive loss | - | - | - | - | - | - | - | (242) | (242) | ||||||||||
Dividends paid | - | - | - | - | - | - | - | (1,362) | (1,362) | ||||||||||
At 30th April, 2020 | 1,840 | 901 | 7,620 | - | 1,629 | - | (3,059) | 15,618 | 24,549 | ||||||||||
Consolidated and company statements of financial position | |||||||||
At 30th April, 2020 | |||||||||
Group | Company | ||||||||
2020 | 2019 | 2020 | 2019 | ||||||
£'000 | £'000 | £'000 | £'000 | ||||||
ASSETS | |||||||||
Non-current assets | |||||||||
Property, plant and equipment | 20,111 | 20,426 | 1,121 | 1,265 | |||||
Right-of-use assets | 1,214 | - | 5,943 | - | |||||
Intangible assets | 4,140 | 4,483 | - | - | |||||
Investments in subsidiaries | - | - | 18,036 | 15,036 | |||||
Deferred income tax asset | 1,875 | 1,156 | 1,875 | 1,241 | |||||
27,340 | 26,065 | 26,975 | 17,542 | ||||||
Current assets | |||||||||
Inventories | 15,857 | 12,624 | 1,543 | 1,462 | |||||
Trade and other receivables | 4,589 | 7,044 | 15,433 | 22,489 | |||||
Income tax receivable | 719 | 44 | 139 | 21 | |||||
Prepayments | 1,775 | 1,774 | 296 | 299 | |||||
Cash and cash equivalents | 16,125 | 22,886 | - | - | |||||
39,065 | 44,372 | 17,411 | 24,271 | ||||||
TOTAL ASSETS | 66,405 | 70,437 | 44,386 | 41,813 | |||||
EQUITY AND LIABILITIES | |||||||||
Equity | |||||||||
Share capital | 1,840 | 1,840 | 1,840 | 1,840 | |||||
Capital redemption reserve | 901 | 901 | 901 | 901 | |||||
Other reserves | 2,815 | 2,815 | 7,620 | 7,620 | |||||
Revaluation reserve | 6,055 | 6,055 | - | - | |||||
Share premium account | 1,629 | 1,629 | 1,629 | 1,629 | |||||
Currency translation reserve | 224 | 279 | - | - | |||||
Treasury shares | (3,059) | (3,059) | (3,059) | (3,059) | |||||
(Loss) / profit for the period | (2,491) | 3,812 | (979) | (233) | |||||
Retained earnings brought forward | 22,214 | 21,526 | 16,597 | 17,455 | |||||
TOTAL EQUITY SHAREHOLDERS' FUNDS | 30,128 | 35,798 | 24,549 | 26,153 | |||||
Non-current liabilities | |||||||||
Defined benefit pension liability | 8,563 | 6,802 | 8,563 | 6,802 | |||||
Deferred income tax liability | 1,641 | 1,567 | - | - | |||||
Lease liabilities | 893 | - | 5,609 | - | |||||
11,097 | 8,369 | 14,172 | 6,802 | ||||||
Current liabilities | |||||||||
Bank overdraft | - | - | 391 | 582 | |||||
Trade and other payables | 24,679 | 25,375 | 4,891 | 8,276 | |||||
Income tax payable | 165 | 895 | - | - | |||||
Lease liabilities | 336 | - | 383 | - | |||||
25,180 | 26,270 | 5,665 | 8,858 | ||||||
TOTAL EQUITY AND LIABILITIES | 66,405 | 70,437 | 44,386 | 41,813 | |||||
Consolidated and company cash flow statements | |||||||||
For the period ended 30th April, 2020 | Group | Company | |||||||
2020 | 2019 | 2020 | 2019 | ||||||
£'000 | £'000 | £'000 | £'000 | ||||||
(Loss) / profit before taxation | (3,253) | 4,787 | 1,129 | (312) | |||||
Adjustments to reconcile profit before taxation to net cash inflow / (outflow) from operating activities | |||||||||
Past service pension costs | - | 1,198 | - | 1,198 | |||||
IFRS 15 working capital adjustment | - | (144) | - | (144) | |||||
Depreciation charge | 1,671 | 1,318 | 1,001 | 551 | |||||
Amortisation charge | 631 | 375 | - | - | |||||
Net increase of impairment in investment in subsidiary undertaking | - | - | - | 168 | |||||
Profit on sale of fixed assets | (104) | (80) | (93) | (60) | |||||
Dividends received | - | - | (2,345) | (690) | |||||
Finance costs | 134 | 209 | 412 | 249 | |||||
Foreign exchange gains / (losses) | 10 | (460) | - | - | |||||
Increase in inventories | (1,445) | (958) | (81) | (445) | |||||
Decrease / (increase) in receivables | 3,019 | 7,573 | 4,057 | (1,384) | |||||
Decrease / (increase) in prepayments | 25 | (647) | 3 | 36 | |||||
(Decrease) / increase in payables | (1,021) | (1,849) | (3,462) | 1,992 | |||||
(Decrease) / increase in progress payments | (1,611) | (828) | 571 | 80 | |||||
Pension fund payments | (600) | (600) | (600) | (600) | |||||
Cash (invested in) / generated from operating activities | (2,544) | 9,894 | 592 | 639 | |||||
Net interest received / (paid) | 66 | (23) | (59) | (63) | |||||
Taxation (paid) / received | (848) | (797) | 30 | (36) | |||||
Net cash (outflow) / inflow from operating activities | (3,326) | 9,074 | 563 | 540 | |||||
Investing activities | |||||||||
Payments for acquisitions, net of cash acquired | (1,178) | - | - | - | |||||
Dividends received from subsidiaries | - | - | 1,895 | 690 | |||||
Purchase of property, plant and equipment | (721) | (891) | (409) | (284) | |||||
Proceeds on disposal of property, plant and equipment | 128 | 199 | 101 | 176 | |||||
Net cash (outflow) / inflow from investing activities | (1,771) | (692) | 1,587 | 582 | |||||
Financing activities | |||||||||
Lease payments | (268) | - | (597) | - | |||||
Dividends paid | (1,362) | (1,362) | (1,362) | (1,362) | |||||
Net cash outflow from financing activities | (1,630) | (1,362) | (1,959) | (1,362) | |||||
(Decrease) / increase in cash and cash equivalents | (6,727) | 7,020 | 191 | (240) | |||||
Opening cash and cash equivalents / (bank overdraft) | 22,886 | 15,884 | (582) | (342) | |||||
Exchange differences on cash and cash equivalents | (34) | (18) | - | - | |||||
Closing cash and cash equivalents / (bank overdraft) | 16,125 | 22,886 | (391) | (582) | |||||
The financial information set out above does not constitute the Company's statutory accounts for the periods ended 30th April, 2020 or 27th April, 2019 but is derived from those accounts. Statutory accounts for 2019 have been delivered to the Registrar of Companies, and those for 2020 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 periods ended 30th April, 2020 and 27th April, 2019. 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 not allocated to operating segments. | |||||||||||||||||||||
'Defence' | 'Forgings' | 'Petrol Station | 'Corporate | Total | |||||||||||||||||
Superstructures' | Branding' | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||||
Revenue | |||||||||||||||||||||
From external customers | 23,464 | 26,678 | 11,482 | 15,695 | 11,910 | 15,871 | 14,297 | 19,464 | 61,153 | 77,708 | |||||||||||
From other segments | - | - | - | - | 386 | 450 | 123 | 226 | 509 | 676 | |||||||||||
Segment revenue | 23,464 | 26,678 | 11,482 | 15,695 | 12,296 | 16,321 | 14,420 | 19,690 | 61,662 | 78,384 | |||||||||||
Segment result | (289) | 2,836 | (340) | (442) | 3 | 2,055 | (2,493) | 1,745 | (3,119) | 6,194 | |||||||||||
Past service pension costs | - | (1,198) | |||||||||||||||||||
Net finance costs | (134) | (209) | |||||||||||||||||||
(Loss) / profit before taxation | (3,253) | 4,787 | |||||||||||||||||||
Taxation | 762 | (975) | |||||||||||||||||||
(Loss) / profit for the period | (2,491) | 3,812 | |||||||||||||||||||
Segmental assets | 26,666 | 29,942 | 3,570 | 8,988 | 8,382 | 10,787 | 10,740 | 9,291 | 49,358 | 59,008 | |||||||||||
Unallocated assets (see below) | 17,047 | 11,429 | |||||||||||||||||||
Total assets | 66,405 | 70,437 | |||||||||||||||||||
Segmental liabilities | 16,639 | 19,500 | 1,285 | 6,125 | 2,274 | 4,330 | 4,922 | 2,806 | 25,120 | 32,761 | |||||||||||
Unallocated liabilities (see below) | 11,157 | 1,878 | |||||||||||||||||||
Total liabilities | 36,277 | 34,639 | |||||||||||||||||||
Capital expenditure | 80 | 67 | 62 | 406 | 293 | 196 | 286 | 118 | 721 | 787 | |||||||||||
Depreciation | 222 | 77 | 620 | 517 | 346 | 488 | 235 | 365 | 1,423 | 1,447 | |||||||||||
Unallocated assets include certain fixed assets (including all UK properties), intangible assets, current assets and deferred tax assets. Unallocated liabilities include the defined pension benefit scheme liability and certain current liabilities.
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Geographical analysis | |||||||||||||||||||||||||
The following table presents revenue and expenditure and certain assets and liabilities information by geographical segment for the periods ended 30th April, 2020 and 27th April, 2019. The Group's geographical segments are based on the location of the Group's assets. Revenue from external customers is based on the geographical location of its customers. | |||||||||||||||||||||||||
United Kingdom | Europe | Americas | Rest of the World | Total | |||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||||||||
External revenue | 21,036 | 30,755 | 30,748 | 33,143 | 8,401 | 9,572 | 968 | 4,238 | 61,153 | 77,708 | |||||||||||||||
Non-current assets | 17,803 | 17,637 | 5,017 | 3,832 | 4,520 | 4,596 | - | - | 27,340 | 26,065 | |||||||||||||||
Current assets | 29,004 | 34,301 | 8,378 | 7,670 | 1,683 | 2,401 | - | - | 39,065 | 44,372 | |||||||||||||||
Liabilities | 30,473 | 31,701 | 5,051 | 2,260 | 753 | 679 | - | - | 36,277 | 34,640 | |||||||||||||||
Capital expenditure | 477 | 350 | 244 | 190 | - | 351 | - | - | 721 | 891 | |||||||||||||||
Information about major customers | 2020 | 2019 | ||||||||||||||||||||||||||||
Revenue from major customers arising from sales reported in the 'Defence' segment: | £'000 | £'000 | ||||||||||||||||||||||||||||
Customer 1 | - | 10,871 | ||||||||||||||||||||||||||||
Customer 1 | 12,633 | - | ||||||||||||||||||||||||||||
Revenue from major customers arising from sales reported in the 'Corporate Branding' segment: | ||||||||||||||||||||||||||||||
Customer 1 | - | 11,905 | ||||||||||||||||||||||||||||
Customer 1 | 3,841 | - | ||||||||||||||||||||||||||||
2 | Employee information | 2020 | 2019 | |||||||||||||||||||||||||||
Number | Number | |||||||||||||||||||||||||||||
The average number of employees, including executive directors, during the period was: | ||||||||||||||||||||||||||||||
Production | 252 | 264 | ||||||||||||||||||||||||||||
Technical | 66 | 65 | ||||||||||||||||||||||||||||
Distribution | 45 | 27 | ||||||||||||||||||||||||||||
Administration | 85 | 91 | ||||||||||||||||||||||||||||
448 | 447 | |||||||||||||||||||||||||||||
(a) | Staff costs | 2020 | 2019 | |||||||||||||||||||||||||||
Including executive directors, employment costs were as follows: | £'000 | £'000 | ||||||||||||||||||||||||||||
Wages and salaries | 16,893 | 17,609 | ||||||||||||||||||||||||||||
Social Security costs | 2,629 | 1,934 | ||||||||||||||||||||||||||||
Other pension costs | 870 | 666 | ||||||||||||||||||||||||||||
20,392 | 20,209 | |||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||
(b) | Directors' emoluments | £'000 | £'000 | ||||||||||||||||||
Aggregate directors' emoluments | 1,300 | 1,672 | |||||||||||||||||||
Pension contributions | 33 | 47 | |||||||||||||||||||
1,333 | 1,719 | ||||||||||||||||||||
3 | Past service pension costs | 2020 | 2019 | ||||||||||||||||||
£'000 | £'000 | ||||||||||||||||||||
Guaranteed minimum pension equalisation adjustment | - | 1,198 | |||||||||||||||||||
- | 1,198 | ||||||||||||||||||||
4 | (a) | Taxation | ||||
The charge for taxation comprises: | 2020 | 2019 | ||||
£'000 | £'000 | |||||
Current tax | ||||||
United Kingdom corporation tax | (510) | 540 | ||||
Adjustments in respect of previous years | 165 | (16) | ||||
Foreign corporation tax | (203) | 635 | ||||
Group current tax | (548) | 1,159 | ||||
Deferred tax | ||||||
Origination and reversal of temporary differences | (95) | (247) | ||||
Adjustments in respect of prior years | (153) | 63 | ||||
Change in tax rate | 34 | - | ||||
Group deferred tax | (214) | (184) | ||||
Tax on (loss) / profit | (762) | 975 | ||||
Tax relating to items charged or credited to other comprehensive income: | ||||||
Deferred tax | ||||||
Deferred tax on measurement gains on pension scheme current year | 545 | 69 | ||||
Deferred tax on revaluation surplus on land and buildings | (110) | - | ||||
Deferred tax in the Consolidated statement of comprehensive income | 435 | 69 | ||||
(b) | Factors affecting the tax charge for the year | |||||
The tax assessed for the period differs to the standard rate of corporation tax in the UK (19%) (2019 - 19%). The differences are explained below: | ||||||
| ||||||
2020 | 2019 | |||||
£'000 | £'000 | |||||
(Loss) / profit before tax | (3,253) | 4,787 | ||||
(Loss) / profit multiplied by standard rate of corporation tax of 19% (2019 - 19%) | (618) | 910 | ||||
Expenses not deductible for tax purposes | (420) | (102) | ||||
Adjustments in respect of overseas tax rates | 230 | 120 | ||||
Current tax adjustment in respect of prior periods | 165 | (16) | ||||
Deferred tax adjustment in respect of prior periods | (153) | 63 | ||||
Deferred tax adjustment in respect of change in rate | 34 | - | ||||
Total tax charge for the period | (762) | 975 | ||||
(c) | Factors affecting future tax charge | |||||
A change to the main UK corporation tax rate was enacted in a budget resolution on 17th March, 2020. From 1 April, 2020 the enacted rate remains at 19%, cancelling the previously enacted rate reduction to 17%. Deferred tax at 30th April, 2020 has therefore been provided at 19%. Deferred 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. | ||||||
5 | Earnings per share | |||||
The calculation of basic earnings per share is based on: | ||||||
(a) Loss for the period attributable to equity holders of the parent of £2,491,000 (2019 - profit of £3,812,000). | ||||||
(b) 16,504,691 (2019 - 16,504,691) Ordinary shares, being the weighted average number of Ordinary shares in issue. | ||||||
This represents 18,396,073 (2019 - 18,396,073) being the weighted average number of Ordinary shares in issue less 1,891,382 (2019 - less 1,891,382) being the weighted average number of shares both held within the ESOT 245,048 (2019 - 245,048) and purchased by the Company 1,646,334 (2019 - 1,646,334). | ||||||
The share options issued in the period do not have a dilutive effect on the loss for the period. | ||||||
6 | Dividends paid and proposed | 2020 | 2019 | |||
£'000 | £'000 | |||||
Declared and paid during the year | ||||||
On Ordinary shares | ||||||
Final dividend for 2019: 6.50p (2018 - 6.50p) | 1,073 | 1,073 | ||||
Interim dividend for 2020: 1.75p (2019 - 1.75p) | 289 | 289 | ||||
1,362 | 1,362 | |||||
Proposed for approval by shareholders at the AGM | ||||||
Final dividend for 2020: 1.75p (2019 - 6.50p) | 289 | 1,073 | ||||
7 | Trade and other receivables | ||||||||||||
Group | Company | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
£'000 | £'000 | £'000 | £'000 | ||||||||||
Trade receivables | 4,413 | 6,913 | 932 | 3,456 | |||||||||
Retentions on contracts | - | 113 | - | - | |||||||||
Amounts owed by subsidiary undertakings | - | - | 14,422 | 19,029 | |||||||||
Other receivables | 176 | 18 | 79 | 4 | |||||||||
4,589 | 7,044 | 15,433 | 22,489 | ||||||||||
The aggregate amount of costs incurred and recognised profits to date on contracts is £11,858,000 (2019 - £15,819,000). | |||||||||||||
(a) Trade receivables are denominated in the following currencies: | |||||||||||||
Group | Company | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
£'000 | £'000 | £'000 | £'000 | ||||||||||
Sterling | 1,551 | 3,674 | 838 | 2,751 | |||||||||
Euro | 2,319 | 2,141 | 94 | 701 | |||||||||
US dollar | 349 | 778 | - | - | |||||||||
Other currencies | 194 | 320 | - | 4 | |||||||||
4,413 | 6,913 | 932 | 3,456 | ||||||||||
Trade receivables are non-interest bearing and are generally on 30 day terms and are shown net of provision for impairment. The aged analysis of trade receivables after impairment is as follows: | |||||||||||||
Group | Total | Not past due | < 30 days | 30-60 days | 60-90 days | > 90 days | |||||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
2020 | 4,413 | 2,745 | 343 | 211 | 327 | 787 | |||||||
2019 | 6,913 | 6,245 | 505 | 148 | 13 | 2 | |||||||
As at 30th April, 2020 trade receivables at a nominal value of £109,000 (2019 - £105,000) were impaired and fully provided. Bad debts of £62,000 (2019 - £65,000) were recovered and bad debts of £68,000 (2019 - £52,000) were incurred. | |||||||||||||
Company | |||||||||||||
2020 | 932 | 865 | 54 | 3 | 7 | 3 | |||||||
2019 | 2,764 | 2,649 | 40 | 81 | - | (6) | |||||||
As at 30th April, 2020 trade receivables at a nominal value of £73,000 (2019 - £51,000) were impaired and fully provided. Bad debts of £33,000 (2019 - £20,000) were recovered and bad debts of £55,000 (2019 - £39,000) were incurred. | |||||||||||||
(b) Retentions on contracts are denominated in the following currencies: | |||||||||||||
Group | Company | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
£'000 | £'000 | £'000 | £'000 | ||||||||||
Sterling | - | 113 | - | - | |||||||||
- | 113 | - | - | ||||||||||
Retentions on contracts are non-interest bearing and represent amounts contractually retained by customers on completion of contracts for specific time periods as follows: | |||||||||||||
Group | Total | Up to 6 months | 6 - 12 months | 12 - 18 months | 18 - 24 months | ||||||||
£'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
2020 | - | - | - | - | - | ||||||||
2019 | 113 | 93 | 20 | - | - | ||||||||
Company | |||||||||||||
2020 | - | - | - | - | - | ||||||||
2019 | - | - | - | - | - | ||||||||
(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 (2019 - £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: | |||||||||||||
2020 | 2019 | ||||||||||||
£'000 | £'000 | ||||||||||||
Amounts due from companies backed by liquid assets | 7,530 | 7,219 | |||||||||||
Amounts due from 'MS INTERNATIONAL Estates Limited'
| 6,892 | 11,810 | |||||||||||
14,422 | 19,029 | ||||||||||||
8 | Cash and cash equivalents / bank overdraft | Group | Company | |||||||
2020 | 2019 | 2020 | 2019 | |||||||
£'000 | £'000 | £'000 | £'000 | |||||||
Cash at bank and in hand | 16,125 | 17,151 | - | - | ||||||
Short-term deposits | - | 5,735 | - | - | ||||||
Bank overdraft | - | - | (391) | (582) | ||||||
16,125 | 22,886 | (391) | (582) | |||||||
9 | Net funds | |||||||||
Analysis of net funds | Group | |||||||||
2020 | 2019 | |||||||||
£'000 | £'000 | |||||||||
Cash and cash equivalents | 16,125 | 22,886 | ||||||||
Lease liabilities | (1,229) | - | ||||||||
14,896 | 22,886 | |||||||||
Group movement in net funds | ||||||||||
Cash / bank overdraft | Lease liabilities | Total | ||||||||
Net funds as at 28th April, 2018 | 15,884 | - | 15,884 | |||||||
Cash flows | 7,020 | - | 7,020 | |||||||
Foreign exchange adjustments | (18) | - | (18) | |||||||
Net funds as at 27th April, 2019 | 22,886 | - | 22,886 | |||||||
Recognised on adoption of IFRS 16 | - | (781) | (781) | |||||||
Net funds as at 28th April, 2019 | 22,886 | (781) | 22,105 | |||||||
Cash flows | (6,727) | 268 | (6,459) | |||||||
Foreign exchange adjustments | (34) | 6 | (28) | |||||||
Leases on acquisition | - | (501) | (501) | |||||||
New leases | - | (185) | (185) | |||||||
Other changes | - | (36) | (36) | |||||||
Net funds as at 30 April, 2020 | 16,125 | (1,229) | 14,896 | |||||||
10 | 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 - Company | ||||||||||
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. This also includes the impact of the change in the enacted corporation tax rate from 17% to 19% on the related deferred tax provision from prior year. | ||||||||||
Share premium account | ||||||||||
The balance classified as special reserve represents the share premium on the issue of the Company's equity share capital. | ||||||||||
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 | ||||||||||
2020 | 2019 | |||||||||
£'000 | £'000 | |||||||||
Employee Share Ownership Trust | 100 | 100 | ||||||||
Shares in treasury (see below) | 2,959 | 2,959 | ||||||||
3,059 | 3,059 | |||||||||
During 1991 the Company established an Employee Share Ownership Trust ("ESOT"). The trustee of the ESOT is Appleby Trust (Jersey) Ltd, an independent company registered in Jersey. The 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 trust has purchased an aggregate 245,048 (2019 - 245,048) Ordinary shares, which represents 1.3% (2019 - 1.3%) of the issued share capital of the Company at an aggregate cost of £100,006. The market value of the shares at 30th April, 2020 was £338,000 (2019 - £505,000). The Company has made payments of £nil (2019 - £nil) into the ESOT bank accounts during the period. During the period 1,575,000 (2019 - nil) options over shares have been granted. 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 period amounts to £8,000 (2019 - £7,000). During the period no options on shares were exercised (2019 - nil) and no shares were purchased (2019 - nil). | ||||||||||
The Company made the following purchases of its own 10p Ordinary shares to be held in Treasury: | ||||||||||
£'000 | ||||||||||
1,000,000 shares from the Group's pension scheme on 11th December, 2013. | 1,722 | |||||||||
646,334 shares on 30th January, 2014. | 1,237 | |||||||||
2,959 | ||||||||||