Last checked at 16 Dec 2020 07:00
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MS INTERNATIONAL plc |
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Unaudited Interim Condensed |
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Group Financial Statements |
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31st October, 2020 |
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EXECUTIVE DIRECTORS |
Michael Bell |
Michael O'Connell |
Nicholas Bell |
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NON-EXECUTIVE DIRECTORS |
Roger Lane-Smith |
David Hansell |
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COMPANY SECRETARY |
David Kirkup |
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REGISTERED OFFICE |
Balby Carr Bank |
Doncaster |
DN4 8DH |
England |
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PRINCIPAL OPERATING DIVISIONS |
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'Defence' |
'Forgings' |
'Petrol Station Superstructures' |
'Corporate Branding' |
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Chairman's Statement |
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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 £26.34m (2019 - £33.32m), a reduction which resulted in a loss before tax of £1.08m (2019 - Loss £ 0.49m).
Nevertheless, cash remained very strong at £14.01m, which compares to the £16.12m 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 15th December 2020
MS INTERNATIONAL plc |
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Michael Bell |
| Tel: 01302 322133 |
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Shore Capital (Nominated Adviser and Broker) |
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Patrick Castle |
| Tel: 020 7408 4090 |
Daniel Bush |
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Independent review report to MS INTERNATIONAL plc | ||||
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Introduction | ||||
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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. | ||||
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Directors' responsibilities | ||||
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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. | ||||
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Our responsibility | ||||
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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. | ||||
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Scope of review | ||||
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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. | ||||
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The impact of uncertainties arising from the UK exiting the European Union and COVID-19 on our review | ||||
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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. | ||||
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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. | ||||
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Conclusion | ||||
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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. | ||||
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Use of our report | ||||
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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. | ||||
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Grant Thornton UK LLP | ||||
Statutory Auditor, Chartered Accountants | ||||
Sheffield | ||||
15 December 2020 | ||||
Interim condensed consolidated income statement |
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| Half-year to 31st October, 2020 |
| Half-year to 31st October, 2019 |
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| unaudited |
| unaudited |
| Notes | £'000 |
| £'000 |
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Products |
| 19,727 |
| 26,067 |
Contracts |
| 6,615 |
| 7,250 |
Revenue | 5 | 26,342 |
| 33,317 |
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Cost of sales |
| (19,831) |
| (24,910) |
Gross profit |
| 6,511 |
| 8,407 |
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Distribution costs |
| (1,297) |
| (1,821) |
Administrative expenses |
| (6,204) |
| (6,988) |
Operating loss | 5 | (990) |
| (402) |
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Finance costs |
| (45) |
| (2) |
Other finance costs - pension |
| (70) |
| (82) |
Share of net profit of joint venture |
| 25 |
| - |
Loss before taxation |
| (1,080) |
| (486) |
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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) |
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Interim condensed consolidated statement of comprehensive income |
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| Half-year to 31st October, 2020 |
| Half-year to 31st October, 2019 |
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| unaudited |
| unaudited |
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| £'000 |
| £'000 |
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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) |
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Interim condensed consolidated statement of financial position |
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| Notes | 31st October, 2020 |
| 31st October, 2019 |
| 30th April, 2020 |
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| unaudited |
| audited |
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ASSETS |
| £'000 |
| £'000 |
| £'000 |
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Non-current assets |
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Intangible assets |
| 4,070 |
| 4,303 |
| 4,140 |
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Property, plant and equipment | 9 | 19,484 |
| 20,352 |
| 20,111 |
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Right-of-use assets | 10 | 682 |
| 1,185 |
| 1,214 |
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Investment in joint venture |
| 34 |
| - |
| - |
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Deferred income tax asset |
| 2,015 |
| 1,264 |
| 1,875 |
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| 26,285 |
| 27,104 |
| 27,340 |
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Current assets |
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Inventories |
| 17,624 |
| 14,689 |
| 15,857 |
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Trade and other receivables |
| 6,957 |
| 9,335 |
| 4,589 |
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Income tax receivable |
| 555 |
| 3 |
| 719 |
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Prepayments |
| 2,397 |
| 1,708 |
| 1,775 |
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Cash and cash equivalents | 11 | 14,011 |
| 19,370 |
| 16,125 |
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| 41,544 |
| 45,105 |
| 39,065 |
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TOTAL ASSETS |
| 67,829 |
| 72,209 |
| 66,405 |
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EQUITY AND LIABILITIES |
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Equity |
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Share capital |
| 1,840 |
| 1,840 |
| 1,840 |
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Capital redemption reserve |
| 901 |
| 901 |
| 901 |
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Other reserve |
| 2,815 |
| 2,815 |
| 2,815 |
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Revaluation reserve |
| 6,055 |
| 6,055 |
| 6,055 |
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Special reserve |
| 1,629 |
| 1,629 |
| 1,629 |
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Currency translation reserve |
| 443 |
| 323 |
| 224 |
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Treasury shares |
| (3,059) |
| (3,059) |
| (3,059) |
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Retained earnings |
| 17,832 |
| 23,140 |
| 19,723 |
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TOTAL EQUITY SHAREHOLDERS' FUNDS |
| 28,456 |
| 33,644 |
| 30,128 |
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Non-current liabilities |
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Defined benefit pension liability | 12 | 9,075 |
| 7,434 |
| 8,563 |
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Deferred income tax liability |
| 1,600 |
| 1,386 |
| 1,641 |
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Lease liabilities |
| 465 |
| 942 |
| 893 |
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| 11,140 |
| 9,762 |
| 11,097 |
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Current liabilities |
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Trade and other payables |
| 27,983 |
| 27,747 |
| 24,679 |
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Income tax payable |
| 18 |
| 806 |
| 165 |
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Lease liabilities |
| 232 |
| 250 |
| 336 |
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| 28,233 |
| 28,803 |
| 25,180 |
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TOTAL EQUITY AND LIABILITIES |
| 67,829 |
| 72,209 |
| 66,405 |
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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. |
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Michael O'Connell |
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Finance Director |
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Interim consolidated statement of changes in equity |
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| Share capital |
| Capital redemption reserve |
| Other reserve |
| Revaluation reserve |
| Special reserve |
| Currency translation reserve |
| Treasury shares |
| Retained earnings |
| Total unaudited |
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| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
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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 |
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| Share capital |
| Capital redemption reserve |
| Other reserve |
| Revaluation reserve |
| Special reserve |
| Currency translation reserve |
| Treasury shares |
| Retained earnings |
| Total unaudited |
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| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
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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 |
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| Share capital |
| Capital redemption reserve |
| Other reserve |
| Revaluation reserve |
| Special reserve |
| Currency translation reserve |
| Treasury shares |
| Retained earnings |
| Total audited |
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| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
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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 |
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Interim consolidated cash flow statement |
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| Half-year to 31st October, 2020 |
| Half-year to 31st October, 2019 |
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| unaudited |
| unaudited |
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| £'000 |
| £'000 |
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Loss before taxation |
| (1,080) |
| (486) |
Adjustments to reconcile loss before taxation to net cash outflow from operating activities: |
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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) |
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Investing activities |
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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) |
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Financing activities |
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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 |
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Notes to the interim consolidated financial statements |
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1. Corporate information |
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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: | |||
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'Defence' - design, manufacture, and service of defence equipment. |
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'Forging' - manufacture of fork-arms and open die forgings. |
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'Petrol Station Superstructures' - design, manufacture, construction, and maintenance of petrol station superstructures. | |||
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'Corporate Branding' - design, manufacture, installation, and service of corporate brandings. | |||
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2. Basis of preparation and accounting policies |
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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. | |||
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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. | |||
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|
|
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. | |||
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|
|
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. | |||
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|
|
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. | |||
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3. Principal risks and uncertainties |
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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. | |||
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|
|
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. | |||
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|
|
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. | |||
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|
|
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. | |||
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4. Going concern |
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|
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 |
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(a) Primary reporting format - divisional segments |
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| ||||
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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 Superstructures' | 'Corporate Branding' | Total | ||||||||||||
|
|
|
| |||||||||||||||||
|
| 2020 |
| 2019 |
| 2020 |
| 2019 |
| 2020 |
| 2019 |
| 2020 |
| 2019 |
| 2020 |
| 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| unaudited |
| unaudited |
|
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'000 |
| £'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 |
|
|
| £'000 |
| £'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: |
|
|
|
| |
|
|
|
|
|
|
(a) | Loss for the period attributable to equity holders of the parent of £1,082,000 (2019 - £420,000 loss); |
|
| ||
|
|
|
|
|
|
(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 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 |
|
|
| £'000 |
| £'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 |
|
| £'000 |
| £'000 |
| £'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 |
|
| £'000 |
| £'000 |
| £'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 |
|
| £'000 |
| £'000 |
| £'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 |
|
|
|
| £'000 |
| £'000 |
| £'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 |
|
|
|
| £'000 |
| £'000 |
| £'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 |
|
|
|
| £'000 |
| £'000 |
| £'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 |
|
|
|
| £'000 |
| £'000 |
| £'000 |
Cash at bank and in hand |
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| 7,457 |
| 13,955 |
| 16,125 |
Escrow account |
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| 6,554 |
| - |
| - |
Short term deposits |
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| - |
| 5,415 |
| - |
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| 14,011 |
| 19,370 |
| 16,125 |
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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 |
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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: | ||||||||
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| 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. | ||||||
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| The last formal valuation of the Scheme was performed at 5th April, 2017 by a professionally qualified actuary. | ||||||
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| 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 £600,000 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. | ||||||
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| 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. | ||||||
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| During the period, the Scheme liability has increased by £512,000. A re-measurement loss of £642,000 (2019 - £849,000 loss) has been recognised through other comprehensive income. It comprises of a £484,000 remeasurement gain compared to the interest income on the plan assets and a £1,126,000 actuarial loss due to changes in financial assumptions. The actuarial loss of £1,126,000 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 £70,000 has been recognised through the income statement. The Scheme's liabilities have been reduced by pension fund deficit payments in the period of £200,000 (2019 - £300,000). | ||||||
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| A £1,198,000 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. | ||||||
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| 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. | ||||||
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13. Commitments and contingencies |
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The Company is contingently liable in respect of guarantees, indemnities and performance bonds given in the ordinary course of business amounting to £6,976,530 at 31st October, 2020 (2019 - £4,637,538). | ||||||||
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In the opinion of the Directors, no material loss will arise in connection with the above matters. | ||||||||
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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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