MS International – Return on net tangible assets updated

PUBLISHED: 09 Dec 2017 @ 11:54 | Comments (0) |

I wrote about MS International’s (LSE:MSI) return on net tangible assets only a month ago, concluding that it was cheap and bought some more (see Newsletters dated 9^th and 14^th November). Since then the half year report has been published. It provides some more numbers to go into the return on net tangible assets calculation, so I’ll update that analysis today.

£’000s Year end April	2018 (Profit: half year doubled)	2017	2016
INCOME STATEMENT
Profit after tax	2,568	1,498	1,584
Amortisation charge this year for accounting goodwill following acquisitions	0	0	0
Exceptional items distorting profits (positive or negative)	0	0	0
Profit for shareholders	2,568	1,498	1,584


CURRENT ASSETS AND LIABILITIES
Inventories	11,693	10,145	7,043
Receivables	10,430	11,393	8,996
Cash needed for operations (assumed)	1,000	1,000	1,000
Other current assets	1,252	1,142	902
Payables	-24,875	-25,464	-15,253
Short-term debt	0	-0	-0
Other current liabilities	-539	-123	-154
Working capital for operations	-1,039	-1,907	2,534

Surplus cash (assumed)	13,535	14,210	11,758

NON-CURRENT ASSETS AND LIABILITIES
Property, Plant and Equipment	19,302	19,099	15,955
Goodwill in BS	Est. 2,605	2,749	2,700
Previously written-off acquired goodwill – add back	0	0	0
Other acquired intangible assets in BS	0	0	0
Previously written-off other acquired intangibles – add back	0	0	0
Long-term debt	0	0	0
Other non-current liabilities	0	0	0
Net non-current assets for operations	21,907	21,848	18,655

OTHER ITEMS TO CONSIDER
Defined benefit pension deficit	6,149	7,485	7,644
Internally generated intangible assets capitalised to BS	Est. 2,552	2,552	2,971
Investments (in shares, bonds, etc.)	0	0	0
Operating lease non-cancellable commitments	Est. 998	998	1,138
Preference share capital	0	0	0
Minority interests in profit	0	0	0
Minority interests in net assets	0	0	0

Return on net tangible assets, RONTA = Profit for shareholders ÷ Average net tangible assets over the year (beginning BS and end BS averaged).

Return on tangible assets, RONA = Profit for shareholders ÷ Average net assets over the year (includes internally generated intangible assets capitalised)

£’000s	2018	2017	2016	2015
Profit	2,568	1,498	1,584	1,353

WC – averaged	-1473	314	1,544	1,625
Net non-current assets – averaged	21,877	20,252	17,641	16,904
Totals to Net tang. assets – averaged	20,404	20,566	19,185	18,529
RONTA	12.6%	7.3%	8.3%	7.3%
Intern. gen.intang. assets – averaged	2,552	2,762	2,363	1,913
Net assets – averaged	22,281	23,328	21,548	20,442
RONA	11.5%	6.4%	7.4%	6.6%

£’000s	2014	2013	2012
Profit	2,574	4,420	6,310

WC – averaged	3,791	5,156	3,837
Net non-current assets – averaged	16,500	15,851	15,230
Totals to Net tang. assets – averaged	20,291	21,007	18,067
RONTA	12.7%	21%	34.9%
Intern. gen. intang. assets – averaged	2,229	2,563	2,917
Net assets – averaged	22,520	23,570	20,984
RONA	11.4%	18.8%	30.1%

The average RONTA over seven years is 14.9%. This period had………………….

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