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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ms International Plc | LSE:MSI | London | Ordinary Share | GB0005957005 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 830.00 | 820.00 | 840.00 | 830.00 | 820.00 | 820.00 | 544 | 08:00:03 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Special Industry Machy, Nec | 83.96M | 4.12M | 0.2521 | 32.92 | 135.5M |
TIDMMSI
RNS Number : 2630W
MS International PLC
10 December 2019
Hot Features
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MS INTERNATIONAL plc
Unaudited Interim Condensed
Group Financial Statements
31st October, 2019
EXECUTIVE DIRECTORS
Michael Bell
Michael O'Connell
Nicholas Bell
NON-EXECUTIVE DIRECTORS
Roger Lane-Smith
David Hansell
COMPANY SECRETARY
David Kirkup
REGISTERED OFFICE
Balby Carr Bank
Doncaster
DN4 8DH
England
PRINCIPAL OPERATING DIVISIONS
'Defence'
'Forgings'
'Petrol Station Superstructures'
'Corporate Branding'
Chairman's Statement
We anticipated that the first half year, ended 31st October 2019, would be a challenging period and advised in September that, in the short term, we expected a substantial weakening in the Company's results. The half year shows a loss of GBP0.49m before taxation (2018 - GBP3.19m profit), on reduced revenue of GBP33.32m (2018 - GBP37.74m). Loss per share amounted to 2.5p (2018 profit per share - 15.2p). Notwithstanding, the balance sheet remained strong with net cash at GBP19.37m compared to GBP22.89m at the last year end.
Clearly, although not unforeseen, the performance has been disappointing in some areas of the group but elsewhere what is being achieved is quite pleasing, albeit the benefits are yet to be demonstrated in our results. Opportunities are undoubtedly there, while fresh ones continue to arise, so we are seriously endeavouring to ensure that we are in a positive and capable position to maximise prospects as and when presented.
Currently, many markets that we serve have tightened considerably owing, inter alia, to the well-chronicled effects of global political and economic instability that prevail. Moreover, such widespread tough conditions have been exacerbated by some sector specific issues impacting across the Company.
The 'Defence Divisions' domestic sector of the global market remains subdued reflecting the continuing financial restraints on Government spending. Many of the 'Forgings Divisions' international customers, engaged in the production of material handling capital equipment, are overstocked owing to their own sales languishing in the doldrums and this inevitably flows through to restrained demand from their respective spares parts departments. Both the 'Petrol Station Superstructures' and the 'Corporate Branding' Divisions Europe-wide customers are going through a period of business restructuring and the changes to ownership have inevitably resulted in pauses to once planned major investment programmes.
In order to confront these various issues, we have already made some very positive moves and, although costly to implement, we are beginning to see the benefits emerge. 'Defence', as a highly reputable and innovative SME, is firmly committed to defending our position for the long term in this important strategic market. Accordingly, we took great pride in launching at the recent London International Defence Equipment Exhibition a number of new and exciting products, emanating from our ambitious privately funded product development programmes. A relatively new and capable international business development team is already assembled and in place. Pleasingly, the response from both our existing loyal and potential new customers is most encouraging. Though there is a short term cost to implement these programmes, we are furthermore upgrading, refurbishing and re-equipping major parts of our substantial defence business facilities in anticipation of their ultimate success.
The 'Forgings Division' is undergoing a major restructuring. The new manufacturing facility in the United States is performing to plan and therefore the extensive product support programme provided to date by our UK facility is nearly complete. This will now afford us the opportunity to re-organise and optimise our UK based steel forging manufacturing operations, to meet both current and anticipated market demands.
The 'Petrol Station Superstructures Division' is well structured to contend with the major changes in station ownership across Europe. Whilst this market is undergoing change, a cool head is required but we are well equipped and organised to face the future with confidence.
The 'Corporate Branding Division' is contemporaneously being restructured and expanded to take full advantage of the changes referred to above. To that end, we have acquired two specialist corporate branding businesses in the Netherlands, Armada Janse bv and Reklaspits bv. Both businesses participate in the design; manufacture; installation and service of corporate branding that includes inter-alia illuminated advertising; media facades; way-finding signage in airports; public illumination and creative lighting solutions. We believe that both businesses will bring considerable additional high quality established resources to our existing branding operations and create opportunities for adding new retail customers and markets to our established customer base.
'Corporate Life' as such, certainly remains in 'Interesting Times'. We believe, and are quietly confident, that we are doing all the right things for the Company, assisted by our attention to detail; a strong balance sheet; a firm commitment to do the job exceedingly well and to the very best of our ability; thereby protecting the interests and valuable assets of our shareholders at all times and delivering the benefit of long term, durable corporate ownership.
After some 50 years of service with the Company, David Pyle has retired his directorship. We thank him particularly for his loyal commitment and service and to the Company and fondly wish him well for the future.
All such matters considered, the Board has declared a maintained interim dividend per share of 1.7p (2018-1.7p) payable to shareholders on the 10th January 2020.
Michael Bell 9(th) December 2019
MS INTERNATIONAL plc Michael Bell Tel: 01302 322133 Shore Capital (Nominated Adviser and Broker) Patrick Castle Tel: 020 7408 4090 Daniel Bush Independent review report to MS INTERNATIONAL plc Introduction We have reviewed the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2019, 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. Directors' responsibilities 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. Our responsibility 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. Scope of review 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. Conclusion 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 2019 is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union. Use of our report 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 them 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. Grant Thornton UK LLP Statutory Auditor, Chartered Accountants Sheffield 9 December 2019 Interim condensed consolidated income statement
Restated half-year to 27th
Half-year to 31st October, 2019 October, 2018
unaudited unaudited
Notes GBP000 GBP000
Products 26,067 30,100
Contracts 7,250 7,642
Revenue 5 33,317 37,742
Cost of sales (24,910) (27,094)
Gross profit 8,407 10,648
Distribution costs (1,821) (1,571)
Administrative expenses (6,988) (5,811)
Operating (loss) / profit 5/6 (402) 3,266
Finance (cost) / income (2) 2
Other finance costs - pension (82) (82)
(Loss) / profit before taxation (486) 3,186
Tax income / (expense) 7 66 (679)
(Loss) / profit for the period
attributable to equity holders of
the parent (420) 2,507
(Loss) / earnings per share: basic
and diluted 8 (2.5p) 15.2p
The classification of expenses has been amended in the half-year to 27th October, 2018. There
has been no impact on the overall consolidated income statement. Cost of sales has decreased
by GBP292,000, distribution costs have increased by GBP6,000, and administrative expenses
have increased by GBP286,000. The changes better represent the activities of the entities.
Interim condensed consolidated statement of comprehensive income
Half-year to 31st Oct., 2019 Half-year to 27th Oct., 2018
unaudited unaudited
GBP000 GBP000
(Loss) / profit for the period attributable to
equity holders of the parent (420) 2,507
Exchange differences on retranslation of foreign
operations 44 (76)
Other comprehensive income / (loss) - items that
will be reclassified subsequently to profit
or loss 44 (76)
Remeasurement of defined benefit pension scheme
liability (849) 14
Deferred taxation on remeasurement of defined
benefit pension scheme 144 (2)
Other comprehensive (loss) / income - items that
will not be reclassified subsequently to
profit or loss (705) 12
Total comprehensive (loss) / income for the period
attributable to equity holders of the parent (1,081) 2,443
Interim condensed consolidated statement of financial position
Notes 31st October, 2019 27th October, 2018 27th April, 2019
unaudited unaudited audited
ASSETS GBP000 GBP000 GBP000
Non-current assets
Intangible assets 4,303 4,718 4,483
Property, plant and equipment 10 20,352 20,779 20,426
Right-of-use assets 11 1,185 - -
Deferred income tax asset 1,264 1,052 1,156
27,104 26,549 26,065
Current assets
Inventories 14,689 15,643 12,624
Trade and other receivables 9,335 13,106 7,044
Income tax receivable 3 44 44
Prepayments 1,708 2,329 1,774
Cash and cash equivalents 13 19,370 16,646 22,886
45,105 47,768 44,372
TOTAL ASSETS 72,209 74,317 70,437
EQUITY AND LIABILITIES
Equity
Share capital 1,840 1,840 1,840
Capital redemption reserve 901 901 901
Other reserve 2,815 2,815 2,815
Revaluation reserve 6,055 6,055 6,055
Special reserve 1,629 1,629 1,629
Currency translation reserve 323 445 279
Treasury shares (3,059) (3,059) (3,059)
Retained earnings 23,140 24,000 25,338
Total Equity 33,644 34,626 35,798
Non-current liabilities
Defined benefit pension liability 14 7,434 6,189 6,802
Deferred tax liabilities 1,386 1,595 1,567
Lease liabilities 12 942 - -
9,762 7,784 8,369
Current liabilities
Trade and other payables 27,747 30,717 25,375
Current tax liabilities 806 1,190 895
Lease liabilities 12 250 - -
28,803 31,907 26,270
TOTAL EQUITY AND LIABILITIES 72,209 74,317 70,437
The interim condensed consolidated financial statements of the Group for the six months ended
31st October, 2019 were authorised for issue in accordance with a resolution of the Directors
on 9th December, 2019 and signed on their behalf.
Michael O'Connell
Finance Director
Interim consolidated statement of changes in equity
Share Capital Other Revaluation Special Currency Treasury Retained Total
capital redemption reserve reserve reserve translation shares earnings unaudited
reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
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)
1,840 901 2,815 6,055 1,629 323 (3,059) 24,213 34,717
Dividend paid
(note 9) - - - - - - - (1,073) (1,073)
At 31st
October, 2019 1,840 901 2,815 6,055 1,629 323 (3,059) 23,140 33,644
Share Capital Other Revaluation Special Currency Treasury Retained Total
capital redemption reserve reserve reserve translation shares earnings unaudited
reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 28th April,
2018 1,840 901 2,815 6,055 1,629 521 (3,059) 22,698 33,400
IFRS 15 opening
adjustment - - - - - - - (144) (144)
Profit for the
period - - - - - - - 2,507 2,507
Other
comprehensive
(loss) / income - - - - - (76) - 12 (64)
1,840 901 2,815 6,055 1,629 445 (3,059) 25,073 35,699
Dividend paid
(note 9) - - - - - - - (1,073) (1,073)
At 27th
October, 2018 1,840 901 2,815 6,055 1,629 445 (3,059) 24,000 34,626
Share Capital Other Revaluation Special Currency Treasury Retained Total
capital redemption reserve reserve reserve translation shares earnings audited
reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 28th April,
2018 1,840 901 2,815 6,055 1,629 521 (3,059) 22,698 33,400
IFRS 15 opening
adjustment - - - - - - - (144) (144)
Profit for the
period 3,812 3,812
Other
comprehensive
(loss) / income (242) 334 92
1,840 901 2,815 6,055 1,629 279 (3,059) 26,700 37,160
Dividend paid
(note 9) - - - - - - - (1,362) (1,362)
At 27th April,
2019 1,840 901 2,815 6,055 1,629 279 (3,059) 25,338 35,798
Interim consolidated cash flow statement
Half-year to 31st October, 2019 Half-year to 27th October, 2018
unaudited unaudited
GBP000 GBP000
(Loss) / profit before taxation (486) 3,186
Adjustments to reconcile profit before
taxation to net cash flows from operating
activities
IFRS 15 opening adjustment - (144)
Depreciation charge 782 653
Amortisation charge 332 195
Profit on disposal of fixed assets (61) (46)
Finance costs 84 80
Foreign exchange movements (161) (275)
Increase in inventories (1,645) (3,977)
(Increase) / decrease in receivables (1,849) 1,511
Decrease / (increase) in prepayments 93 (1,202)
(Decrease) / increase in payables (334) 1,756
Increase in progress payments 2,105 909
Pension fund deficit reduction payments (300) (300)
Cash flows from operations (1,440) 2,346
Net interest received 14 2
Taxes paid (126) (47)
Net cash flow from operating activities (1,552) 2,301
Investing activities
--------------------------------
Purchase of property, plant and equipment (351) (593)
Sale of property, plant and equipment 72 133
Payments for acquisitions, net of cash
acquired (note 16) (748) -
Payments for right-of-use assets (100) -
Net cash flows used in investing activities (1,127) (460)
Financing activities
Dividend paid (1,073) (1,073)
Net cash flows used in financing activities (1,073) (1,073)
Movement in cash and cash equivalents (3,752) 768
Opening cash and cash equivalents 22,886 15,866
Exchange differences on cash and cash
equivalents 236 12
Closing cash and cash equivalents 19,370 16,646
Notes to the interim consolidated 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 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:
Defence - design, manufacture and service
of defence equipment.
Forging - manufacture of forgings.
Petrol Station Superstructures - design, manufacture, construction, branding,
maintenance and restyling of petrol station superstructures.
Corporate Branding - design, manufacture, installation and service of
corporate brandings.
2 Basis of preparation and accounting policies
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 27th April, 2019 and any public announcements made by MS INTERNATIONAL
plc during the interim reporting period.
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 52 weeks ended 27th April, 2019 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.
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.
The accounting policies are consistent with those applied in the Group
Annual financial statements for the 52 weeks ended 27th April, 2019, except
for the adoption of IFRS 16 'Leases', as set out in note 3. The Group
has not early adopted any other standard, interpretation or amendment
that has been issued but is not yet effective.
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.
3 Changes in accounting policies
The Group has adopted IFRS 16 'Leases' from 28th April, 2019, using the
standard's modified retrospective approach. As permitted by the standard,
comparatives for the period ending 27th April, 2019 have not been restated
and are therefore still reported under IAS 17. Reclassifications and adjustments
arising from the new leasing rules have been recognised in the opening
Statement of financial position on 28th April, 2019.
3 (a) Adjustments recognised on adoption of IFRS 16
On adoption of IFRS 16, the group recognised lease liabilities in relation
to leases which had previously been reported as 'operating leases' under
the principles of IAS 17. The Group has measured these liabilities at
the present value of the remaining lease payments, discounted using the
relevant incremental borrowing rate, as at the transition date. At the
transition date, the weighted average incremental borrowing rate applied
to the lease liabilities was 3.6%.
At the date of initial application, being 28th April, 2019, the Group
has chosen to measure right-of-use assets at an amount equal to the lease
liability. There were no onerous lease contracts that would have required
an adjustment to the right-of-use assets.
On transition to IFRS 16, the group has opted to apply the exemption of
not recognising a right-of-use asset or lease liability for any leases
previously accounted for as an operating lease with a remaining lease
term of less than 12 months. These leases will be expensed on a straight-line
basis over the remaining term of the lease.
The following is a reconciliation of total operating lease commitments,
as disclosed in the Annual Report for the period ended 27th April, 2019,
to the lease liabilities recognised under IFRS 16 at 28th April, 2019:
GBP000
Total operating lease commitments disclosed
at 27th April, 2019 921
Lease with remaining lease term of less than
12 months (54)
Low value leases (3)
Other adjustments (3)
Operating lease liabilities before discounting 861
Discounted using incremental borrowing rate (80)
Lease liabilities recognised under IFRS 16
as at 28th April, 2019 781
Of which are:
Current lease liabilities 150
Non-current lease liabilities 631
Lease liabilities recognised under IFRS 16
as at 28th April, 2019 781
The recognised right-of-use assets as at 28th April, 2019
relate to the following types of asset:
28th April,
2019
GBP000
Properties 755
Plant and equipment 26
Total right-of-use assets 781
3 (b) Accounting policy for leases
Up until 27th April, 2019 payments made under operating leases within
the Group were charged to profit or loss on a straight-line basis over
the term of the lease.
From 28th April, 2019, for any new contracts entered into, the Group considers
whether a contract is, or contains, a lease. A lease is defined as "a
contract, or part of a contract, that conveys the right to use an asset
(the underlying asset) for a period of time in exchange for consideration".
New leases are then recognised in the Statement of financial position
as a right-of-use asset and a corresponding lease liability at the date
at which the leased asset is available for use by the Group.
Lease liabilities are measured at the present value of the lease payments
unpaid at the recognition date, discounted using the interest rate implicit
in the lease, or, if that rate cannot be determined, the Group's incremental
borrowing rate. Lease payments include fixed payments, variable lease
payments that are based on an index or rate, less any lease incentives
receivable. Following initial measurement, the liability will be reduced
for payments made and increased for interest. Interest will be charged
to profit or loss as an interest expense.
The liability will be remeasured to reflect any reassessment of or modification
to the lease contract when applicable. When the lease liability if remeasured,
the corresponding adjustment is also reflected in the right-of-use asset,
or profit and loss if the right-of-use asset is already reduced to zero.
Right-of-use assets are measured at cost, which comprises the following:
-- the amount of the initial measurement of lease liability,
-- any lease payments (net of any incentives received) made in advance
of the lease commencement date,
-- any initial direct costs incurred,
-- an estimate of any costs to dismantle or remove the asset at the end
of the lease.
The Group depreciates the right-of-use asset on a straight-line basis
from the lease commencement date to the earlier of the useful economic
life or the end of the lease term.
Payments associated with short-term leases, defined as a lease with a
term of 12 months or less, and leases of low-value assets are recognised
on a straight-line basis as an expense in profit or loss.
4 Principal risks and uncertainties
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 6 of our Annual
Report for the year ended 27 April, 2019 available from MS INTERNATIONAL
plc's website: www.msiplc.com.
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.
As the delay in the Brexit timeline was confirmed during the period, 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. As a result of the delay, the Board are
monitoring the likely 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.
Given that the Group has considerable financial resources together with
long term contracts with a number of customers, the Directors believe
that the Group is well placed to manage its business risk successfully
despite the current uncertain economic outlook. 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 these interim
financial statements.
5 Segment information
(a) Primary reporting format - divisional segments
The following table presents revenue and profit information about the Group's divisions for
the half-year periods ended 31st October, 2019 and 27th October, 2018.
'Defence' 'Forgings' 'Petrol Station 'Corporate Total
Superstructures' Branding"
2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
unaudited unaudited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
From external customers 12,054 9,010 7,263 7,764 7,277 7,677 6,723 13,291 33,317 37,742
From other segments - - - - 145 292 95 120 240 412
Segment revenue 12,054 9,010 7,263 7,764 7,422 7,969 6,818 13,411 33,557 38,154
Segment result 42 24 54 (232) 291 1,179 (789) 2,295 (402) 3,266
Net finance expense (84) (80)
Profit before taxation (486) 3,186
Taxation 66 (679)
Profit for the period (420) 2,507
Capital expenditure 12 10 - 332 171 164 168 53
Depreciation 112 38 327 250 171 154 172 92
The following table presents segment assets and liabilities of the Group's divisions for the
half-year periods ended 31st October, 2019 and 27th October, 2018.
Segmental assets 29,444 28,248 8,627 5,327 10,552 11,059 10,018 11,066 58,641 55,700
Unallocated assets 13,568 18,617
Total assets 72,209 74,317
Segmental
liabilities 19,402 20,093 2,014 2,382 3,531 4,510 4,024 4,115 28,971 31,100
Unallocated
liabilities 9,594 8,591
Total liabilities 38,565 39,691
Unallocated assets include certain fixed assets, intangible assets, current assets and deferred
tax assets. Unallocated liabilities include the defined benefit pension scheme liability and
certain current liabilities.
6 Release of impairment
provision
At 27th April, 2018, an impairment provision of GBP615,000, relating to the uncertainty of
the recovery of certain indirect taxes due to the 'Corporate Branding' division, was made.
Following the resolution of the uncertainty with the relevant authorities, the impairment
provision of GBP615,000 was released at 27th October, 2018.
7 Tax expense
The major components of tax expense in the consolidated income statement are:
Half-year to Half-year to
31st October, 27th October,
2019 2018
unaudited unaudited
GBP000 GBP000
Current tax charge 79 674
Current tax 79 674
Relating to origination and reversal of temporary differences (145) 5
Deferred tax (income) / expense (145) 5
Total tax (income) / expense reported in the Consolidated income statement (66) 679
The UK corporation tax rate will remain at 19% until it reduces to 17% from April 2020. At
31st October, 2019 the rate reductions to 17% had been enacted. Deferred tax at 31st October,
2019 has therefore been provided at 17% or a blended rate depending upon when the underlying
temporary timing differences are expected to unwind. Deferred tax in relation to intangibles
recognised on the acquisition of 'Petrol Sign BV' has been provided at 25% being the main
corporation tax rate in The Netherlands.
8 Earnings per share
The calculation of basic earnings per share is based on:
Loss for the period attributable to equity holders of the parent of GBP420,000 (2018 -
GBP2,507,000
(a) profit);
16,504,691 (2018 - 16,504,691) Ordinary shares, being the weighted average number of Ordinary
(b) shares in issue.
This represents 18,396,073 (2018 - 18,396,073), being the weighted average number of Ordinary
shares in issue less 245,048 (2018 - 245,048), being the number of shares held within the
ESOT and less 1,646,334 (2018 - 1,646,334), being the number of shares purchased by the Company.
There are no dilutive instruments in place.
9 Dividends paid and proposed
Half-year to Half-year to
31st October, 27th October,
2019 2018
unaudited unaudited
GBP000 GBP000
Declared and paid during the 26 week period
Dividend on ordinary shares
Final dividend for 2019 - 6.50p (2018 - 6.50p) 1,073 1,073
Proposed for approval
Interim dividend for 2020 - 1.75p (2019 - 1.75p) 289 289
Dividend warrants will be posted on 9th January, 2020 to those members registered on the books
of the Company on 20th December, 2019.
10 Property, plant and equipment
Freehold Plant and
property equipment Total
GBP000 GBP000 GBP000
Cost or valuation
At 27th April, 2019 17,706 15,585 33,291
Additions - 351 351
Disposals - (437) (437)
Acquisition of subsidiary (note 16) - 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
Freehold Plant and
property equipment Total
GBP000 GBP000 GBP000
Cost or valuation
At 27th April, 2018 17,534 15,536 33,070
Additions - 593 593
Disposals - (670) (670)
Exchange differences 105 78 183
At 27th October, 2018 17,639 15,537 33,176
Accumulated depreciation
At 27th April, 2018 354 11,950 12,304
Depreciation charge for the period 156 497 653
Disposals - (583) (583)
Exchange differences - 23 23
At 27th October, 2018 510 11,887 12,397
Net book value at 27th October, 2018 17,129 3,650 20,779
Freehold Plant and
property equipment Total
GBP000 GBP000 GBP000
Cost or valuation
At 27th April, 2018 17,534 15,536 33,070
Additions - 891 891
Disposals - (842) (842)
Exchange differences 172 - 172
At 27th April, 2019 17,706 15,585 33,291
Accumulated depreciation
At 27th April, 2018 354 11,950 12,304
Depreciation charge for the period 309 1,009 1,318
Disposals - (723) (723)
Exchange differences (1) (33) (34)
At 27th April, 2019 662 12,203 12,865
Net book value at 27th April, 2019 17,044 3,382 20,426
Freehold Plant and
property equipment Total
GBP000 GBP000 GBP000
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
Analysis of cost or valuation
At professional valuation 2018 12,300 - 12,300
At cost 5,339 15,537 20,876
At 27th October, 2018 17,639 15,537 33,176
Analysis of cost or valuation
At professional valuation 2018 12,300 - 12,300
At cost 5,406 15,585 20,991
At 27th April, 2019 17,706 15,585 33,291
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 UK properties 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 Poland property was valued based on the income approach, converting anticipated
future benefits in the form of rental income into present value. The USA 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 UK properties has been processed in the financial statements. The Poland
property and the USA property valuations were sufficiently close to their carrying value such
that the valuations were not processed.
11 Right-of-use assets
Plant and
Property equipment Total
GBP000 GBP000 GBP000
At 27th April, 2019 - - -
IFRS 16 adjustment
(note 3) 755 26 781
Additions - - -
Acquisition of
subsidiary (note 16) 501 - 501
Exchange differences (8) - (8)
At 31st October, 2019 1,248 26 1,274
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
12 Leasing
The Group has entered into commercial leases on certain properties and motor vehicles. The
remaining duration of these leases are from 1 year up to 7 years from the Statement of financial
position date.
The future minimum lease payments as at
31st October, 2019 were as follows:
Within one year One to five years After five years Total
GBP000 GBP000 GBP000 GBP000
At 31st October,
2019
Lease payments 286 881 126 1,293
Finance charges (36) (63) (2) (101)
Net present values 250 818 124 1,192
At 27th April, 2019
Lease payments 176 504 181 861
Finance charges (26) (49) (5) (80)
Net present values 150 455 176 781
The Group has elected not to recognise a lease liability for short-term or low value leases.
Payments for such leases are expensed to profit or loss on a straight-line basis.
The expenses relating to payments not included in the measurement of a lease liability are
included in the consolidated income statement as follows:
6 months ended 31st
October, 2019
GBP000
Short-term leases 62
Leases of low value
assets 16
Total 78
Cash and cash
13 equivalents
For the purpose of the interim consolidated cash flow statement, cash and cash equivalents
are comprised of the following:
31st October, 2019 27th October, 2019 27th April, 2019
unaudited unaudited audited
GBP000 GBP000 GBP000
Cash at bank and in
hand 13,955 11,273 17,151
Short term deposits 5,415 5,373 5,735
19,370 16,646 22,886
14 Pension liability
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:
- 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.
- The last formal valuation of the Scheme was performed at 5th April, 2017
by a professionally
qualified actuary.
- 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
GBP600,000 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.
- 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.
- During the period, the Scheme liability has increased by GBP684,000. A
re-measurement loss
of GBP849,000 (2018 - GBP14,000 gain) has been recognised through other
comprehensive income
and comprises of a GBP354,000 remeasurement gain compared to the
interest income on the plan
assets and a GBP1,644,000 actuarial loss due to changes in financial
assumptions. This partially
offset by a GBP441,000 liability experience gain in the period. The
actuarial loss of GBP1,644,000
due to changes in financial assumptions primarily reflected the lower
discount rate at the
period end which increased the value placed on the Scheme's liabilities
at 31st October, 2019.
The interest cost on the net defined benefit liability of GBP82,000 has
been recognised through
the income statement. The Scheme's liabilities have been reduced by
pension fund deficit payments
in the period of GBP300,000 (2018 - GBP300,000).
- A GBP1,198,000 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,
2019.
- 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.
Commitments and
15 contingencies
The Company is contingently liable in respect of guarantees, indemnities and performance bonds
given in the ordinary course of business amounting to GBP4,637,538 at 31st October, 2019 (2018
- GBP3,197,739).
In the opinion of the Directors, no material loss will arise in connection with the above
matters.
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.
16 Business combinations
On 11th September, 2019 the Group acquired 100% of the issued share capital and voting rights
of 'Armada Janse BV', a company based in the Netherlands, from Armada Group BV. The consideration
for the acquisition was EUR339,000 and was paid in cash on completion. Additionally, EUR281,000
owing by 'Armada Janse BV' to Armada Group BV was repaid on completion.
Armada Janse BV' provides illuminated advertising, media facades, signage, public illumination
and creative lighting solutions. The acquisition will further strengthen the Group's position
in the petrol station branding market and provide opportunities in general retail and automotive
markets. Accordingly, the division's name has been changed from 'Petrol Station Brandings'
to 'Corporate Branding'.
From the date of acquisition, 'Armada Janse BV' has contributed GBP504,000 to revenue and
GBPnil to profit before tax from continuing operations of the Group. If the combination had
taken place at the beginning of the year the consolidated revenue of the Group would have
been GBP34,593,000 and the consolidated loss before tax would have been GBP543,000.
Additionally, the Group paid EUR230,000 for the trade, intellectual property rights and inventory
of the price-display units division of 'Schauf GmbH', a German company which specialises in
supplying price-display units for petrol stations.
The directors have considered the existence of intangible assets and the fair values of the
assets acquired, and provisionally believe there are no fair value adjustments necessary.
The provisional fair values of the identifiable assets and liabilities as at the date of acquisition
were:
'Schauf' 'Armada Janse BV' Total
GBP000 GBP000 GBP000
Plant and equipment - 274 274
Right-of-use assets - 501 501
Inventories 63 379 442
Receivables - 482 482
Payables - (601) (601)
Bank overdraft - (245) (245)
Lease liabilities - (501) (501)
Intangible assets (*) 144 7 151
Consideration and net assets
acquired 207 296 503
Add back bank overdraft - 245 245
Per cashflow 207 541 748
(*) The acquired Intangible assets of GBP151,000 have been written off in full to the consolidated
income statement during the period.
Transaction costs of GBP79,000 arising from both acquisitions have been expensed and included
in administrative expenses.
Events after the reporting
17 date
On 13th November, 2019 the Group acquired the trade and assets of the wayfinder business of
'Reklaspits BV', a company based in the Netherlands, for a cash consideration of EUR500,000.
The objective of the acquisition is to further expand and strengthen the Group's operations
within the 'Corporate Branding' division. 'Reklaspits BV' provide illuminated lighting and
wayfinding signage.
The Group is in the process of determining the fair values of the acquired assets of 'Reklaspits
BV'. The valuation is expected to be completed before year-end.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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