MS International - A valuation using return on net tangible assets

PUBLISHED: 26 Jun 2019 @ 10:16 | Comments (0) |

MS International (LSE:MSI) is trading at 214p putting it on a market capitalisation of £35.3m. We’ve already seen that its shares are at a low price relative to average earnings over the past decade, that it has four good businesses and it is very financially stable. Today I attempt a valuation using historical return on capital data.

£’000s Year end April	2019	2018	2017	2016
INCOME STATEMENT
Profit after tax	3,812	3,386	1,498	1,584
Amortisation charge this year for accounting goodwill following acquisitions	0	0	0	0
Exceptional items distorting profits (positive or negative)	1,198	0	0	0
Profit for shareholders	5,010	3,386	1,498	1,584


CURRENT ASSETS AND LIABILITIES
Inventories	12,624	11,666	10,145	7,043
Receivables	7,044	14,617	11,393	8,996
Cash needed for operations (assumed)	1,000	1,000	1,000	1,000
Other current assets	1,818	1,241	1,142	902
Payables	-25,375	-28,052	-25,464	-15,253
Short-term debt	0	0	-0	-0
Other current liabilities	-895	-643	-123	-154
Working capital for operations	-3,784	-171	-1,907	2,534

Surplus cash (assumed)	21,886	14,866	14,210	11,758

NON-CURRENT ASSETS AND LIABILITIES
Property, Plant and Equipment	20,426	20,766	19,099	15,955
Goodwill in BS	2,780 (est)	2,780	2,749	2,700
Previously written-off acquired goodwill – add back	0	0	0	0
Other acquired intangible assets in BS	0	0	0	0
Previously written-off other acquired intangibles – add back	0	0	0	0
Long-term debt	0	0	0	0
Other non-current liabilities	0	0	0	0
Net non-current assets for operations	23,206	23,546	21,848	18,655

OTHER ITEMS TO CONSIDER
Defined benefit pension deficit	6,802	6,421	7,485	7,644
Internally generated intangible assets capitalised to BS	2,113 est.	2,113	2,552	2,971
Investments (in shares, bonds, etc.)	0	0	0	0
Operating lease non-cancellable commitments	993 est	993	998	1,138
Preference share capital	0	0	0	0
Minority interests in profit	0	0	0	0
Minority interests in net assets	0	0	0	0

£’000s Year end April	2014	2013	2012	2011
INCOME STATEMENT
Profit after tax	2,574	4,420	6,310	5,505
Amortisation charge this year for accounting goodwill following acquisitions	0	0	0	0
Exceptional items distorting profits (positive or negative)	0	0	0	0
Profit for shareholders	2,574	4,420	6,310	5,505


CURRENT ASSETS AND LIABILITIES
Inventories	8,162	6,536	7,824	7,099
Receivables	8,260	13,065	12,208	12,482
Cash needed for operations (assumed)	1,000	1,000	1,000	1,000
Other current assets	498	520	604	1,887
Payables	-15,225	-16,143	-14,995	-19,405
Short-term debt	-0	-0	-0	-0
Other current liabilities	-0	-91	-1217	-814
Working capital for operations	2,695	4,887	5424	2,249

Surplus cash (assumed)	13,286	12,447	9,037	8,877

NON-CURRENT ASSETS AND LIABILITIES
Property, Plant and Equipment	15,127	13,755	13,818	12,514
Goodwill in BS	2,064	2,064	2,064	2,064
Previously written-off acquired goodwill – add back	0	0	0	0
Other acquired intangible assets in BS	0	0	0	0
Previously written-off other acquired intangibles – add back	0	0	0	0
Long-term debt	0	0	0	0
Other non-current liabilities	0	0	0	0
Net non-current assets for operations	17,181	15,819	15,882	14,578

OTHER ITEMS TO CONSIDER
Defined benefit pension deficit	5,889	6,766	4,167	1,819
Internally generated intangible assets capitalised to BS	2,071	2,387	2,738	3,096
Investments (in shares, bonds, etc.)	0	0	0	0
Operating lease non-cancellable commitments	199	211	220	205
Preference share capital	0	0	0	0
Minority interests in profit	0	0	0	0
Minority interests in net assets	0	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 net assets, RONA = Profit for shareholders ÷ Average net assets over the year (includes internally generated intangible assets capitalised)

£’000s	2019	2018	2017	2016	2015
Profit	5,010	3,386	1,498	1,584	1,353

WC averaged

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