Ms Intl. Regulatory News (MSI)

MS INTERNATIONAL plc

Unaudited Interim Condensed

Group Financial Statements

29th October, 2011

MS INTERNATIONAL plc

EXECUTIVE DIRECTORS

Michael Bell

Michael O'Connell

David Pyle

NON EXECUTIVE

Roger Lane-Smith

SECRETARY

David Pyle

REGISTERED OFFICE

Balby Carr Bank

Doncaster

DN4 8DH

England

PRINCIPAL OPERATING DIVISIONS

Defence

Forgings

Petrol Station Superstructures

Chairman's Statement

It is once again, a pleasure to report another compelling performance for the Group presenting a 60% uplift in profit before taxation and exceptional gain, on revenue some 10% higher than that reported for the corresponding period.

For the half year ended 29th October 2011, a £4.09m (2010-£2.56m) profit before taxation and exceptional gain was realised on revenue of £27.86m (2010-£25.34m). Earnings per share amounted to 16.6p (2010-10.0p).

The balance sheet remains robust with net cash and short term deposits totalling £7.67m. At the 30th April 2011, the figure was £9.88m.

'Defence' opened the period with a substantial level of orders on hand and a well-balanced programme of output to meet contract obligations throughout the current year. It delivered another strong performance in the half year although overall revenue and profits did not quite match the record figures for the comparable period, essentially owing to the phasing of customer delivery requirements.

'Forgings' has continued to make an encouraging recovery, lifting revenue and profitability, making a welcome contribution to Group profits. This positive progression follows through from the sustained investment and development within the divisions businesses, here in the UK and those of our operations in both North and South America.

Similarly, 'Petrol Station Superstructures' has flourished since becoming a wholly owned subsidiary of the Group last year. Restructured and redirected with a firm focus on operational performance and product development, operations in both the UK and Poland have grown revenue and returned a notable profit contribution to the Group.

The total profit contribution to the Group from the two latter industrial engineering divisions of £1.34m (2010-£0.49m loss) is encouraging particularly in this squally economic environment.

As we enter the second half of the year, overall the Group is in good shape. The balance sheet is strong and the order book is better balanced over the three divisions than has been the case for some considerable time. 'Defence' has a formidable base load of business for the remainder of the year, providing a good measure of certainty. 'Forgings' has a higher value order book than has been the case for many months, despite the visibility remaining characteristically very short term. The two 'Petrol Station Superstructure' businesses should also benefit from a good workload in hand with some further opportunities anticipated.

The Board is confident as to the full year outlook for the Group, but clearly, the prolonged macro-economic turmoil is not helpful in offering any real degree of certainty beyond that time frame. Nevertheless, the Group, as I have outlined, is in robust condition, vigilant and ready to adapt to any shifts in market conditions. Consequently, the Board considers it appropriate to increase the interim dividend per share to 1.5p (2010-1.0p)

Michael Bell 23rd November 2011

Interim Group income statement

26 weeks ended 29th Oct., 2011

26 weeks ended 30th Oct., 2010

Unaudited

Unaudited

Notes

£000

£000

Products

20,855

16,311

Contracts

7,008

9,024

Revenue

5

27,863

25,335

Cost of sales

(18,629)

(17,546)

Gross profit

9,234

7,789

 Distribution costs

(1,120)

(847)

Administrative expenses

(3,887)

(4,339)

Group trading profit

5

4,227

2,603

Finance revenue

11

9

Financial instrument fair value

(237)

-

Finance costs

(3)

(28)

Other finance revenue/(costs)- pension

94

(25)

Profit before taxation and exceptional gain

4,092

2,559

Exceptional gain

-

1,250

Profit before taxation

4,092

3,809

Taxation

6

(1,070)

(754)

Profit for the period attributable to equity holders of the parent

3,022

3,055

Earnings per share: basic and diluted

7

16.6p

17.0p

Adjusted earnings per share : basic and diluted

7

16.6p

10.0p

Interim Group statement of comprehensive income

26 weeks ended 29th Oct., 2011

26 weeks ended 30th Oct., 2010

Unaudited

Unaudited

£000

£000

Actuarial losses on defined benefit pension scheme

(1,929)

(255)

Deferred taxation on actuarial losses on defined benefit pension scheme

467

72

Exchange differences on retranslation of foreign operations

(87)

(19)

Net losses recognised directly in equity

(1,549)

(202)

Profit attributable to equity holders of the parent

3,022

3,055

Total comprehensive income for the period attributable to equity holders of the parent

1,473

2,853

Interim Group balance sheet

Notes

29th Oct., 2011

30th April, 2011

Unaudited

Audited

ASSETS

£000

£000

Non-current assets

Property, plant and equipment

9

12,447

12,514

Intangible assets

4,972

5,160

17,419

17,674

Current assets

Inventories

5,309

3,556

Trade and other receivables

14,273

12,482

Financial assets

140

377

Prepayments

1,291

1,510

Cash and short-term deposits

10

7,670

9,877

28,683

27,802

TOTAL ASSETS

46,102

45,476

EQUITY AND LIABILITIES

Equity

Issued capital

1,840

1,840

Capital redemption reserve

901

901

Other reserves

2,815

2,815

Revaluation reserve

2,490

2,469

Special reserve

1,629

1,629

Currency translation reserve

97

184

Treasury shares

(100)

(100)

Retained earnings

16,598

16,036

Total Equity

26,270

25,774

Non-current liabilities

Deferred income tax liability

686

1,207

Defined benefit pension liability

11

3,454

1,819

4,140

3,026

Current liabilities

Trade and other payables

14,309

15,862

Income tax payable

1,383

814

15,692

16,676

TOTAL EQUITY AND LIABILITIES

46,102

45,476

Interim Group statement of changes in equity

Issued capital

Capital redemption reserve

Other reserves

Revaluation reserve

Special reserve

Foreign exchange reserve

Treasury shares

Retained earnings

Total Unaudited

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 £'000

 £'000

At 30th April, 2011

1,840

901

2,815

2,469

1,629

184

(100)

16,036

25,774

Profit for the period

-

-

-

-

-

-

-

3,022

3,022

Other comprehensive loss

-

-

-

-

-

(87)

-

(1,462)

(1,549)

1,840

901

2,815

2,469

1,629

97

(100)

17,596

27,247

Change in taxation rates

-

-

-

21

-

-

-

-

21

Dividend paid

-

-

-

-

-

-

-

(998)

(998)

At 29th October, 2011

1,840

901

2,815

2,490

1,629

97

(100)

16,598

26,270

Issued capital

Capital redemption reserve

Other reserves

Revaluation reserve

Special reserve

Foreign exchange reserve

Treasury shares

Retained earnings

Total Unaudited

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 £'000

 £'000

At 1st May, 2010

1,840

901

1,565

2,969

1,629

181

(391)

10,279

18,973

Profit for the period

-

-

-

-

-

-

-

3,055

3,055

Transfer

-

-

1,250

-

-

-

-

(1,250)

-

Other comprehensive loss

-

-

-

-

-

(19)

-

(183)

(202)

1,840

901

2,815

2,969

1,629

162

(391)

11,901

21,826

Share based payments

-

-

-

-

-

-

-

6

6

At 30th October, 2010

1,840

901

2,815

2,969

1,629

162

(391)

11,907

21,832

Interim Group cash flow statement

26 weeks ended 29th Oct., 2011

26 weeks ended 30th Oct., 2010

Unaudited

Unaudited

£'000

£'000

Profit before taxation and exceptional gain

4,092

2,559

Adjustments to reconcile profit before taxation to net cash in flows from operating activities

Depreciation charge

634

823

Amortisation charge

188

204

Profit on disposal of fixed assets

(25)

-

Finance costs

135

44

Foreign exchange movements

(70)

4

RSA grant release

-

(3)

Share based payments

-

6

Increase in inventories

(2,760)

(2,626)

Increase in receivables

(1,791)

(2,466)

Decrease/(increase) in prepayments

219

(235)

Increase in payables

1,105

1,321

Decrease in progress payments

(1,651)

(72)

Pension fund payments

(200)

(200)

Cash generated from operating activities

(124)

(641)

Interest received/(paid)

8

(19)

Taxation paid

(535)

(669)

Net cash flow from operating activities

(651)

(1,329)

Investing activities

Purchase of shares in Global-MSI plc net of cash acquired

-

(3,532)

Purchase of property, plant and equipment

(602)

(174)

Sale of property, plant and equipment

44

141

Net cash used in investing activities

(558)

(3,565)

Financing activities

Dividend paid

(998)

-

Net cash flows used in financing activities

(998)

-

Movement in cash and cash equivalents

(2,207)

(4,894)

Opening cash and cash equivalents

9,877

8,911

Closing cash and cash equivalents

7,670

4,017

Notes to the interim Group financial statements

1

Corporate information

MS INTERNATIONAL plc is a public limited company incorporated in England and Wales. The Company's ordinary shares are traded on the London Stock Exchange. The principal activities of the Company and its subsidiaries ("the Group") are described in Note 5.

The interim condensed consolidated financial statement of the Group for the twenty six weeks ended 29th October, 2011 were authorised for issue in accordance with a resolution of the directors on 23rd November, 2011.

2

Basis of preparation and accounting policies

The annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report which has not been audited has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

The interim financial information has been reviewed by the Group's auditors, Ernst & Young LLP, their report is included on page 3. These interim financial statements do not constitute statutory financial statements within the meaning of section 435 of the Companies Act 2006. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements as at 30th April, 2011.

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 30th April, 2011. The following standards, amendments and interpretations will be applied for the first time in the Group's statutory accounts for the year ended 28th April, 2012.

International Accounting Standards (IAS/IFRSs)

IFRS 7 Financial Instruments: (Disclosures Amendments)

IAS 24 Related Party Disclosures (Revised)

International Financial Reporting Interpretations Committee (IFRIC)

IFRIC 14 Prepayments of Minimum Funding Requirements (Amendment)

The figures for the year ended 30th April, 2011 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.

3

Principal risks and uncertainties

The principal risk and uncertainties facing the Group relate to levels of customer demand for the Group's products and services. Customer demand is driven mainly by general economic conditions but also by pricing, product quality and delivery performance of MS INTERNATIONAL plc and in comparison with our competitors. Sterling exchange rates against other currencies can influence pricing.

The Group has considerable financial resources together with long term contracts with a number of customers. As a consequence, the Directors believe that the Group is well placed to manage its business risk successfully despite the current uncertain economic outlook.

After making enquiries the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

4

Statement of directors' responsibilities

The directors as listed on page 1 confirm that this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, which includes information required on material transactions with related parties and changes since the last annual report.

5

Segment information

(a)

Primary reporting format - Divisional segments

The following table presents revenue and profit and certain assets and liability information regarding the Group's divisions for the periods ended 29th October, 2011 and 30th October, 2010. 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 Forecourt Structures division is engaged in the design and construction of petrol station forecourt structures. The Directors are of the opinion that seasonality does not significantly affect these results.

Defence

Forgings

Petrol Station

Total

Forecourt Structures

2011

2010

2011

2010

2011

2010

2011

2010

Unaudited

Unaudited

£000

£000

£000

£000

£000

£000

£000

£000

Revenue

External

14,454

15,610

7,875

5,966

5,534

3,759

27,863

25,335

Total revenue

14,454

15,610

7,875

5,966

5,534

3,759

27,863

25,335

Segment result

2,886

3,096

501

(292)

840

(201)

4,227

2,603

Net finance expense

(135)

(44)