Final Results

MS International PLC
26 June 2024
 

 

Chairman's statement

 

 

 

Results and Review

 

Shareholders will recall that I introduced my April 2023 Chairman's Statement by stating that the year had been one of considerable progress for the Company, even if this was not immediately apparent from the results.

           

Accordingly, it now gives me immense pleasure to confirm that said progress can now be clearly demonstrated in the results for the year ended April 2024.

 

A record pre-tax profit of £15.71m (2023 - £5.08m) was achieved on increased revenue of £109.58m (2023 - £83.96m), breaking through the £100m revenue level for the first time in the Company's history. Basic earnings per share amounted to 71.0p (2023 - 25.6p)

 

The Group's order book has, once again, risen substantially to a record value of £162m (2023 - £115m) at the year-end; an impressive 40% increase. The balance sheet has also further strengthened, with cash and cash equivalents standing at an all-time high of £42.68m (2023 - £15.25m). 

 

'Defence and Security'

 

Another year of considerable progress and growth has been achieved by this division. Our long-held commitment to investing in people, enhanced production facilities, product development and extensive international marketing, is clearly propelling the business to a new and higher level of financial performance.

 

International interest in both our naval and new land-based weapon systems remains most encouraging with an order intake during the year in excess of £100 million.

 

Pleasingly, included in that figure, were new orders for six MSI-DS30mm naval weapon systems to be fitted to the first three Royal Navy fleet support vessels. When delivered, this will bring the latest upgraded version of the MSI-DS-30mm weapon system into the Royal Navy's inventory which will significantly improve their 30mm weapon system capability.

 

These developments auger well for the Company's future as 'Defence and Security' rapidly establishes itself as the dominant division of growth potential.

 

'Forgings'

 

This division, which has operations in the UK, USA and Brazil, performed well, although not to the exceptional levels achieved in the previous year. Market conditions tightened in the global mobile material handling industry that we serve and many of our customers reacted quickly to reduce their purchasing requirements. Accordingly, we, in turn, reduced our purchases of raw materials and components to match changing conditions; thus preserving cash.

 

'Petrol Station Superstructures'

 

This division based in the UK and Poland, continues to hold a leading, and highly regarded, position in the UK and East European petrol station forecourt construction and maintenance markets.

 

The UK business performed strongly, notably completing several prestigious large 'new to industry' complex forecourt projects. The repairs and maintenance element of the business in particular, operated at a high level of activity, as station operators sought to preserve their forecourt structures and enhance site appearance.

 

Access to our own, highly valuable database of historical construction records for stations throughout the UK and Europe, spanning several decades, continues to underpin our important repairs and maintenance business. This source of detailed knowledge enables us to achieve the efficient repair, re-modelling and refurbishment of these structures in a most timely and economic manner.

 

Our Poland operations were adversely impacted in the second half of the year by the ongoing war in eastern Europe. Some of our major oil company customers cancelled or postponed, for the time being, projects that we had hoped to construct during the period. Despite those difficulties the business managed to break even for the year.

 

'Corporate Branding'

 

Another year of strong performance for our UK operations where the business, which is focused primarily on the petrol station branding market, continued to grow and prosper.

 

Following weaker than anticipated performances from operations in the Netherlands and Germany, we restructured them both to focus their activities on the enhanced demands of our growing number of automotive and airport 'way-finding' customers.

 

 

Outlook

 

'Defence and Security'

 

We live in an increasingly dangerous world and Governments are escalating defence budgets as a consequence. With this background and a strong and growing order book, we look forward with a good degree of confidence to a commendable outcome for the current year.

 

Deliveries to the US Navy of the first production order contracts of our 30mm naval weapon systems commence in the first half of 2024/25. We will also be delivering additional 30mm naval weapon systems to shipbuilders in the USA for their US 'Foreign Military Supply' contracts.

 

Of particular note will be our first supply of 30mm naval weapon systems to the German Navy. These, together with our 30mm naval weapon systems in service with the Royal Navy and those going to the US Navy, will make MSI the current primary supplier of small calibre naval weapon systems to three of the major 'NATO' navies.

 

We await the tender documents from the US Navy with regard to their proposed five-year procurement programme of our MSI-DS 30mm naval weapon systems. We believe we are well placed to secure this 'follow on' order but do not expect it to be placed until after the end of our current financial year.

 

A number of countries around the world continue to show considerable interest in our land-based mobile counter-drone weapon system, 'Paladin', previously known as V-SHORAD. The Company has further developed this product, successfully demonstrating its capability to protect against the ever-increasing aerial threat from incoming drones. These developments will continue.

 

Significant investment continues into both our product range and the Norwich production facility to increase capacity in line with the expanded order book.

 

All told, we perceive that the excellent prospects for the division bode well for the current year.

 

'Forgings'

 

This is a long-established, high quality, market leading international business. Prospects for the current year, as always, will depend on activity levels in the global mobile material handling industry. 

 

'Petrol Station Superstructures'

 

This is now a strong mature business that we have successfully developed, garnering a leading reputation for quality service and support, both in our domestic petrol station forecourt market and that of eastern and northern Europe.

 

Looking forward, the outlook for the petrol station forecourt industry in the UK looks promising. In eastern Europe much depends on what happens in reaction to the ongoing war in Ukraine.

 

'Corporate Branding'

 

We are confident that the UK based operation will continue to flourish as we invest further to grow its capability.

 

The restructuring programme, to re-align the Netherlands and Germany based businesses to a more sustainable level, is progressing to plan.

 

Summary

 

This has been a year of outstanding trading performance and growth for the Company, reflecting the total commitment of the Board, over many years, to strengthen and develop each of our diverse businesses.

           

Clearly, the progress we have achieved in growing the 'Defence and Security' division has been outstanding and we must continue to exploit the many opportunities we have as we drive the future growth of MSI.

 

Following this positive significant change in our earnings profile we continue to review and evolve the future strategic priorities for MSI and the profile of the next generation of management. 

 

All matters considered the Board recommends the payment of a final dividend of 16.5p per share (2023 - 13p) making a total for the year of 19.5p per share (2023 - 15p).

 

The dividend is expected to be paid on the 23rd August 2024 to those shareholders on the register at the close of business on the 12th July 2024.

 

 

 

Michael Bell

25th June 2024

 

 

 

 

MS INTERNATIONAL plc 

 

 

Michael Bell

 

Tel: 01302 322133


 


Shore Capital (Nominated Adviser and Broker)

 

 

Patrick Castle / Daniel Bush / Lucy Bowden

 

Tel: 020 7408 4090


 

 


Copies of this announcement are available from the Company's registered office at MS INTERNATIONAL plc, Balby Carr Bank, Doncaster, DN4 8DH, England. The Notice of AGM will be posted to shareholders on or before 3rd July 2024. The full Annual Report and Accounts will be posted to shareholders no later than 19th July 2024. They will be made available on the Company's website at www.msiplc.com and will be delivered to the Registrar of Companies after it has been laid before the Company's members at the Annual General Meeting to be held on 25th July 2024 at The Holiday Inn, Warmsworth, Doncaster.

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018.



 

Consolidated income statement

 






For the year ended 30th April 2024











2024

 

2023

Continuing operations




Total

 

Total





£'000

 

£'000








Revenue




109,576

 

83,956

Cost of sales




(75,708)

 

(60,556)

Gross profit




33,868

 

23,400








Distribution costs




(4,092)


(3,402)

Administrative expenses




(16,232)

 

(14,748)

Derivative gains




1,207

 

  - 





(19,117)

 

(18,150)

Group operating profit




14,751

 

5,250








Share of net loss of joint venture




  - 

 

(36)

Interest received




1,244


134

Interest paid




(104)


(134)

Other finance costs - pensions




(179)

 

(136)





961

 

(136)

Profit before taxation




15,712

 

5,078

Taxation




(4,212)

 

(963)

Profit for the year attributable to equity holders of the parent




11,500

 

4,115








Basic earnings per share




71.0p

 

25.6p

Diluted earnings per share




67.5p

 

24.2p















Consolidated statement of comprehensive income

 


For the year ended 30th April 2024
















2024

 

2023





Total

 

Total





£'000

 

£'000








Profit for the year attributable to equity holders of the parent

 



11,500

 

4,115

Exchange differences on retranslation of foreign operations


 

 

(287)

 

97

Net other comprehensive (loss)/gain to be reclassified to profit or loss in subsequent years

 

(287)

 

97

Remeasurement gains/(losses) on defined benefit pension scheme




3,270

 

(35)

Deferred tax on remeasurement on defined benefit pension scheme




(817)

 

9

Deferred tax on revaluation surplus on land and buildings




 -

 

(252)

Net other comprehensive income/(loss) not being reclassified to profit or loss in subsequent years

 

2,453


(278)








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

 

13,666

 

3,934

 



 

Consolidated and company statement of changes in equity

For the year ended 30th April 2024

















Share capital


Capital redemption reserve


Other reserves

Revaluation reserve


Special reserve


Currency translation reserve


Treasury shares


Retained earnings


Total shareholders' funds

 



£'000


£'000


£'000

£'000


£'000


£'000


£'000


£'000


£'000

 



















(a) Group

 

















At 30th April 2022


1,784


957


2,815

9,923


1,629


(417)


(2,789)


24,673


38,575

Profit for the year








4,115


4,115

Other comprehensive income/(loss)




-



97



(278)


(181)

Total comprehensive income




-



97



3,837


3,934

Equity settled share-based payment expense


-


-


-

-


-


-


-


86

 

86

Exercise of share options


-


-


-

-


-


-


408


(408)

 

-

Dividends paid


-


-


-

-


-


-


-


(1,520)

 

(1,520)

Transactions with owners recognised directly in equity


-


-


-

-


-


-


408


(1,842)

 

(1,434)

At 30th April 2023


1,784


957


2,815

9,923


1,629


(320)


(2,381)


26,668


41,075

Profit for the year








11,500


11,500

Other comprehensive (loss)/income






(287)



2,453


2,166

Total comprehensive (loss)/income






(287)


-


13,953


13,666

Equity settled share-based payment expense




-


-




65


65

Purchase of own shares




-


-



(1,676)



(1,676)

Exercise of share options




-


-



355


(40)


315

Deferred tax on share option expense




-


-




(38)


(38)

Dividends paid




-


-




(2,610)


(2,610)

Transactions with owners recognised directly in equity







(1,321)


(2,623)


(3,944)

At 30th April 2024

 

1,784

 

957

 

2,815

9,923

 

1,629

 

(607)

 

(3,702)

 

37,998

 

50,797

(b) Company

 

















At 30th April 2022


1,784


957


7,620


1,629



(2,789)


19,859


29,060

Profit for the year








305


305

Other comprehensive loss








(1)


(1)

Total comprehensive income








304


304

Equity settled share-based payment expense








86

 

86

Exercise of share options







408


(408)


Dividends paid








(1,520)

 

(1,520)

Transactions with owners recognised directly in equity







408


(1,842)


(1,434)

At 30th April 2023


1,784


957


7,620


1,629



(2,381)


18,321


27,930

Profit for the year








2,753


2,753

Other comprehensive income








2,215


2,215

Total comprehensive income








4,968


4,968

Equity settled share-based payment expense








65

 

65

Purchase of own shares







(1,676)



(1,676)

Exercise of share options







355


(40)


315

Dividends paid








(2,610)


(2,610)

Transactions with owners recognised directly in equity







(1,321)


(2,585)


(3,906)

At 30th April 2024

 

1,784

 

957

 

7,620

 

1,629

 

 

(3,702)

 

20,704

 

28,992

 



 

Consolidated and company statements of financial position

At 30th April 2024











Group

 

Company

 


2024

 

2023


2024

 

2023



£'000

 

£'000


£'000

 

£'000

ASSETS

 








Non-current assets

 








Property, plant and equipment


27,953

 

24,886


1,389

 

1,161

Right-of-use assets


760

 

1,162


6,099

 

4,571

Intangible assets


2,448

 

2,396


 - 

 

 - 

Investments in subsidiaries


 - 

 

 - 


15,669

 

15,669

Investment in joint venture


 - 

 

 - 


 - 

 

 - 

Deferred income tax asset


16

 

1,677


 - 

 

1,216

Derivative asset


309

 

 - 


309

 

 - 



31,486

 

30,121


23,466

 

22,617

Current assets

 








Inventories


25,250

 

24,764


1,823

 

2,765

Derivative asset


898

 

 - 


898

 

 - 

Trade and other receivables


28,304

 

9,031


11,529

 

14,344

Contract assets


100

 

144


 - 

 

 - 

Cash and cash equivalents


35,509

 

12,336


9,936

 

8,016

Restricted cash held in Escrow


7,170

 

2,917


 - 

 

 - 



97,231

 

49,192


24,186

 

25,125










TOTAL ASSETS

 

128,717

 

79,313


47,652

 

47,742










EQUITY AND LIABILITIES

 








Equity

 








Share capital


1,784

 

1,784


1,784

 

1,784

Capital redemption reserve


957

 

957


957

 

957

Other reserves


2,815

 

2,815


7,620

 

7,620

Revaluation reserve


9,923

 

9,923


 - 

 

 - 

Special reserve


1,629

 

1,629


1,629

 

1,629

Currency translation reserve


(607)

 

(320)


 - 

 

 - 

Treasury shares


(3,702)

 

(2,381)


(3,702)

 

(2,381)

Retained earnings


37,998

 

26,668


20,704

 

18,321

TOTAL EQUITY SHAREHOLDERS' FUNDS

 

50,797

 

41,075


28,992

 

27,930

Non-current liabilities

 








Defined benefit pension liability


 - 

 

4,216


 - 

 

4,216

Contract liabilities


10,019

 

 - 


 - 

 

 - 

Deferred income tax liability


3,132

 

2,943


163

 

 - 

Lease liabilities


422

 

829


5,771

 

4,388



13,573

 

7,988


5,934

 

8,604

Current liabilities

 








Trade and other payables


21,349

 

15,286


10,312

 

9,933

Contract liabilities


42,616

 

14,585


1,784

 

856

Lease liabilities


382

 

379


630

 

419



64,347

 

30,250


12,726

 

11,208










TOTAL EQUITY AND LIABILITIES

 

128,717

 

79,313


47,652

 

47,742

 

Consolidated and company cash flow statements

 

 

For the year ended 30th April 2024

 










Group

 

Company

 

 


2024

 

2023


2024

 

2023



£'000

 

£'000


£'000

 

£'000










Profit/(loss) before taxation


15,712

 

5,078


266

 

(1,233)

Adjustments to reconcile profit/(loss) before taxation to cash generated from operating activities:

 







Depreciation charge of owned assets and right-of-use assets


2,144

 

2,044


1,273

 

965

Amortisation charge


61

 

239


  - 

 

  - 

Impairment of goodwill


  - 

 

390


  - 

 

  - 

Impairment of investment


  - 

 

  - 


  - 

 

2,457

Profit on disposal of property, plant and equipment


(214)

 

(107)


(93)

 

(66)

Equity settled share-based payment expense


65

 

86


65

 

86

Share of net loss of joint venture


  - 

 

36


  - 

 

  - 

Profit on disposal of joint venture


(9)

 

  - 


  - 

 

  - 

Finance (income)/costs


(961)

 

136


(47)

 

246

Foreign exchange movements


-

 

(369)


  - 

 

  - 

(Increase)/decrease in inventories


(608)

 

(8,326)


942

 

(173)

(Increase)/decrease in receivables


(19,259)

 

5,510


2,814

 

1,268

Increase in derivatives


(1,207)

 

  - 


(1,207)

 

  - 

Increase/(decrease) in payables


6,637

 

(5)


547

 

2,194

Increase/(decrease) in contract liabilities


37,985

 

(3,726)


928

 

234

Pension fund deficit reduction payments


(1,125)

 

(675)


(1,125)

 

(675)

Cash generated from operating activities

 

39,221

 

311


4,363

 

5,303

Net interest received


1,177

 

50


449

 

44

Taxation paid


(3,796)

 

(758)


(597)

 

(363)

Net cash inflow/(outflow) from operating activities

 

36,602

 

(397)


4,215

 

4,984










Investing activities

 








Dividends received from subsidiaries


  - 

 

  - 


3,224

 

2,439

Purchase of property, plant and equipment


(4,898)

 

(1,971)


(832)

 

(705)

Purchase of intangible assets


(142)

 

  - 


  - 

 

  - 

Proceeds on disposal of property, plant and equipment


314

 

237


101

 

120

Increase in cash held in the Escrow account maturing in more than 90 days


(4,253)

 

(1,759)


  - 

 

  - 

Net cash (outflow)/inflow from investing activities

 


(8,979)

 

(3,493)


2,493

 

1,854

Financing activities

 








Buy back of own shares


(1,676)

 

  - 


(1,676)

 

  - 

Money received from the exercise of share options


315

 

  - 


315

 

  - 

Lease payments


(409)

 

(415)


(817)

 

(560)

Dividends paid


(2,610)

 

(1,520)


(2,610)

 

(1,520)

Net cash outflow from financing activities

 

(4,380)

 

(1,935)


(4,788)

 

(2,080)

Increase/(decrease) in cash and cash equivalents

 

23,243

 

(5,825)


1,920

 

4,758

Opening cash and cash equivalents


12,336

 

18,092


8,016

 

3,258

Exchange differences on cash and cash equivalents


(70)

 

69


  - 

 

  - 

Closing cash and cash equivalents

 

35,509

 

12,336


9,936

 

8,016

 

The financial information set out above does not constitute the Company's statutory accounts for the periods ended 30th April 2024 or 30th April 2023 but is derived from those accounts. Statutory accounts for 2023 have been delivered to the Registrar of Companies and those for 2024 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

1.     Segment information

 









































For management and reporting purposes, the Group operated through four trading divisions during the years ended 30th April 2024 and 30th April 2023. This includes 'Defence and Security', 'Forgings', 'Petrol Station Superstructures', and 'Corporate Brandings' divisions. These divisions are the basis on which the Group reports its primary business segment information. The Board, which includes the chief operating decision maker, considers each trading division as a separate operating segment and monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Group financing (including finance costs and finance revenue) and income taxes are managed on a group basis and are therefore not allocated to operating segments.






















 



'Defence and


'Forgings'


'Petrol Station


'Corporate


Total



Security'






Superstructures'


Branding'







2024

 

2023


2024

 

2023


2024

 

2023


2024

 

2023


2024

 

2023



£'000

 

£'000


£'000

 

£'000


£'000

 

£'000


£'000

 

£'000


£'000

 

£'000

Segmental revenue

 




















Total revenue


67,228

 

32,433


17,627

 

23,266


16,355

 

16,336


8,957

 

12,412


110,167

 

84,447

Revenue from other segments


 


 


(309)

 

(316)


(282)

 

(175)


(591)

 

(491)

Revenue from external customers


67,228

 

32,433


17,627

 

23,266


16,046

 

16,020


8,675

 

12,237


109,576

 

83,956






















Segment result

 




















Operating profit/(loss)


13,009

 

2,023


1,137

 

3,864


2,011

 

2,053


(1,406)

 

(2,690)


14,751

 

5,250

Share of net loss of joint venture


















 

(36)

Net finance income/(expense)


















961

 

(136)

Profit before taxation


















15,712

 

5,078

Taxation


















(4,212)

 

(963)

Profit for the year

 

















11,500

 

4,115






















Segmental assets

 




















Assets attributable to segments


78,990

 

28,145


7,776

 

9,394


12,874

 

10,732


4,627

 

6,744


104,267

 

55,015

Unallocated assets*


















24,450

 

24,298

Total assets


















128,717

 

79,313






















Segmental liabilities

 




















Liabilities attributable to segments


63,320

 

19,012


2,255

 

3,942


4,711

 

3,402


2,455

 

3,391


72,741

 

29,747

Unallocated liabilities*


















5,179

 

8,491

Total liabilities


















77,920

 

38,238






















Other segmental information

 




















Capital expenditure


3,513

 

1,065


569

 

213


545

 

353


271

 

340


4,898

 

1,971

Depreciation


499

 

322


637

 

644


740

 

728


268

 

350


2,144

 

2,044

Amortisation


18

 

18


 


43

 

43


 

178


61

 

239

Impairment


 


 


 


 

390


 

390

 

* Unallocated assets include certain fixed assets (including all UK properties), current assets and deferred income tax assets. Unallocated liabilities include the defined pension benefit scheme liability, the deferred income tax liability, and certain current liabilities.






















Assets and liabilities attributable to segments comprise the assets and liabilities of each segment adjusted to reflect the elimination of the cost of investment in subsidiaries and the provision of financing loans provided by MS INTERNATIONAL plc.






















Revenue between segments is determined on an arm's length basis. Segment results, assets, and liabilities include items directly attributable to the segment as well as those that can be allocated on a reasonable basis.






















Geographical analysis

 



































The following table presents revenue and expenditure and certain assets and liabilities information by geographical segment for the years ended 30th April 2024 and 30th April 2023. The Group's geographical segments are based on the location of the Group's assets.



United Kingdom


Europe


USA


South America


Total



2024


2023


2024

 

2023


2024

 

2023


2024

 

2023


2024

 

2023



£'000


£'000


£'000

 

£'000


£'000

 

£'000


£'000

 

£'000


£'000

 

£'000






















External revenue by origin


79,893


51,424


8,101

 

12,333


19,450

 

17,270


2,132

 

2,929


109,576

 

83,956

Non-current assets


23,029


20,529


2,899

 

3,365


5,476

 

6,107


82

 

120


31,486

 

30,121

Current assets


82,260


40,269


3,559

 

5,158


10,631

 

2,844


781

 

921


97,231

 

49,192

Liabilities


42,639


23,281


2,739

 

3,345


32,254

 

11,380


288

 

232


77,920

 

38,238

Capital expenditure


4,817


1,569


56

 

162


25

 

240


 


4,898

 

1,971











































 

Revenue disaggregated by customer base is shown as follows:















2024

 

2023















£'000

 

%

 

£'000


%






















United Kingdom














48,974

 

45%

 

28,354


34%

Asia














24,350

 

22%

 

13,578


16%

USA














19,450

 

18%

 

17,270


21%

Europe














13,708

 

12%

 

21,158


25%

South America














3,086

 

3%

 

3,036


3%

Rest of World














8

 

0%

 

560


1%






















Total revenue














109,576

 

100%

 

83,956


100%

 

The Group's largest customer, which is reported in the 'Defence and Security' division, contributed 27.4% to the Group's revenue (2023 - 12.6% from the same customer). The Group's second largest customer, also reported in the 'Defence and Security' division, was the only other customer that contributed more than 10% to the Group's revenue with a total of 21.6% (2023 - nil).

 

2.     Derivative financial instruments

 

 

 

 

 




 

 

 

 

 

 




During the year the Group and Company entered into a number of forward currency contracts in respect of USD denominated cash inflows in the 'Defence and Security' division. In total $99,000,000 was hedged in the year at an average exchange rate of 1.2330. By the 30th April 2024 a total of $25,000,000 of contracts had matured at an average rate of 1.2381, leaving a balance of $74,000,000 at an average rate of 1.2312.

 

 

 

 

 

 




The Group and Company has chosen not to adopt hedge accounting with respect to forward exchange contracts and as a result a gain of £1,207,000 arising from the change in the fair value of the contracts has been included within operating profit.

 

 

 

 

 

 




 

 

US Dollar

 

Sterling

 

Average forward rate


Change in fair value

 

 

$'000

 

£'000

 



£'000

 

 

 

 

 

 

 



Non-current derivative asset

 

20,000

 

16,134


1.2396


309

Current derivative asset

 

54,000

 

43,968


1.2282


898

Total

 

74,000

 

60,102

 

1.2312

 

1,207

 

 

 

 

 

 

 



 

 

 

 

 

 




3.     Employee information

 

 

 

 

 













The average number of employees, including executive directors, during the year was as follows:



 

 

 

 


 

Group

 

Company


 

2024


2023


2024

 

2023


 

Number


Number


Number

 

Number










Production

 

261


263


74

 

78

Technical

 

77


71


21

 

21

Distribution

 

28


26


2

 

2

Administration

 

89


94


37

 

39


 

455


454


134

 

140










(a)   Staff costs


















Including executive directors, employment costs were as follows:











Group

 

Company



2024


2023


2024

 

2023



£'000


£'000


£'000

 

£'000










Wages and salaries


23,757


21,024


8,782

 

7,415

Social security costs


3,718


3,853


1,058

 

822

Pension costs


830


667


469

 

423

Redundancy costs


160


  - 


  - 

 

  - 

Share options expense


65

 

 

30


65

 

30


28,530

25,574


10,374

 

8,690



















(b)   Directors' emoluments















2024

 

2023







£'000

 

£'000










Aggregate directors' emoluments






3,517

 

2,072

Pension contributions






115

 

65

Gain on exercise of share options






1,043

 

1,042







4,675

 

3,179

 

In October 2023 two directors exercised LTIP share options totalling 100,000 (2023 - 250,000) at an exercise price of £0 (2023 - £0) per share. The gain on these options is the difference between the market price at the date of exercise, which ranged from £7.20 per share to £7.30 per share (2023 - £4.17), and the exercise price of £0 (2023 - £0) per share.

 

Between June 2023 and October 2023 four directors exercised CSOP share options totalling 63,335 (2023 - nil) at an exercise price of £1.41 per share. The gain on these options is the difference between the market price at the date of exercise, which ranged from £5.88 per share to £7.15 per share, and the exercise price of £1.41 per share.

 

4. Taxation

 









(a) Tax expense





 





The charge for taxation comprises:







2024

 

2023



£'000

 

£'000

Current tax

 




United Kingdom corporation tax


3,187

 

860

Foreign corporation tax


188

 

311

Adjustments in respect of previous years


(152)

 

(76)

Group current tax expense


3,223

 

1,095






Deferred tax

 




Origination and reversal of temporary differences


857

 

(122)

Adjustments in respect of previous years


132

 

(2)

Adjustments in respect of difference in applicable tax rate


  - 

 

(8)

Group deferred tax expense/(credit)


989

 

(132)

Total tax expense on profit

 

4,212

 

963






Tax relating to items charged to other comprehensive income:







2024


2023



£'000


£'000

Deferred tax charged through other comprehensive income

 




Deferred tax on measurement gains on pension scheme current year


817

 

(9)

Deferred tax on revaluation surplus on land and buildings


  - 

 

252

Deferred tax expense in the Consolidated statement of comprehensive income


817

 

243











(b)   Factors affecting the tax charge for the year

 




 

The tax charge assessed for the year is higher than (2023: lower than) the standard rate of corporation tax in the UK of 25% (2023 - 19.5%). The differences are explained below:






 



2024

 

2023

 



£'000

 

£'000

 






 

Profit before tax


15,712

 

5,078

 

Profit multiplied by standard rate of corporation tax of 25% (2023 - 19.5%)


3,928

 

990

 

 





 

Effects of:





 

Expenses not deductible for tax purposes


102


35

 

R&D tax credit


(322)


(293)

 

Adjustments in respect of overseas tax rates


5


160

 

Unrecognised tax losses


390

 

(35)

 

Dual residency tax


129

 

232

 

Current tax adjustment in respect of previous years


(152)

 

(76)

 

UK deferred tax not previously recognised


  - 

 

(40)

 

Deferred tax adjustment in respect of previous years


132

 

(2)

 

Deferred tax adjustment in respect of different applicable rates


  - 

 

(8)

 

Total taxation expense for the year


4,212

 

963

 

 





 

(c)   Factors affecting future tax charge

 




 

At the reporting date, there are no factors that would affect the future tax charge and therefore deferred income taxation has been provided at the rate at the reporting date of 25%.

 

 

5.     Earnings per share

 









The calculation of basic earnings per share of 71.0p (2023 - 25.6p) is based on the profit for the year attributable to equity holders of the parent of £11,500,000 (2023 - £4,115,000) and on a weighted average number of ordinary shares in issue of 16,186,103 (2023 - 16,045,581). At 30th April 2024 there were 1,068,693 (2023 - 1,270,000) dilutive shares on option with a weighted average effect of 845,288 (2023 - 980,875) giving a diluted earnings per share of 67.5p (2023 - 24.2p).








2024

 

2023






Number of ordinary shares in issue at start of the year


17,841,073

 

17,841,073

Cancellation of ordinary shares during the year


  - 

 

  - 

Number of ordinary shares in issue at the end of the year


17,841,073

 

17,841,073



 



Weighted average number of shares in issue


17,841,073

 

17,841,073

Less weighted average number of shared held in the ESOT


(163,021)

 

(245,048)

Less weighted average number of shares purchased by the Company


(1,491,949)

 

(1,550,444)

Weighted average number of shares to be used in basic EPS calculation


16,186,103

 

16,045,581

Weighted average number of the 1,068,693 (2023 - 1,270,000) dilutive shares

845,288

 

980,875

Weighted average diluted shares


17,031,391

 

17,026,456






Profit for the year attributable to equity holders of the parent in £


11,500,000

 

4,115,000

Basic earnings per share


71.0p

 

25.6p

Diluted earnings per share


67.5p

 

24.2p
















6.    Dividends paid and proposed

 

2024

 

2023



£'000

 

£'000

Declared and paid during the year:





Final dividend for 2023: 13p (2022 - 7.5p)


2,123

 

1,196

Interim dividend for 2024: 3p (2023 - 2p)


487

 

324



2,610

 

1,520



 

 


Proposed for approval by shareholders at the AGM:


 

 


Final dividend for 2024: 16.5p (2023 - 13p)


2,679

 

2,123

 

7.   Trade and other receivables














Group

 

Company

 






2024

 

2023


2024

 

2023







£'000

 

£'000


£'000

 

£'000














Trade receivables (net of allowance for expected credit losses)

14,705

 

6,931


2,690

 

2,756

Amounts owed by subsidiary undertakings


-

 

-


8,502

 

11,356

Prepayments


6,061

 

1,027


313

 

228

Other receivables (*)


7,429

 

1,071


24

 

4

Income tax receivable


109

 

2


-

 

-







28,304

 

9,031


11,529

 

14,344














(*) Included in Other receivables in the Group is £5,661,000 (2023 - £23,000) of costs in relation to obtaining a contract. There are no costs in relation to obtaining a contract within the Company (2023 - nil).

 









(a)   Trade receivables


















Trade receivables are denominated in the following currencies:







Group

 

Company

 






2024

 

2023


2024

 

2023







£'000

 

£'000


£'000


£'000














Sterling





12,222

 

3,946


2,220

 

1,739

Euro






1,084

 

1,973


470

 

1,017

US dollar


867

 

736


-

 

-

Other currencies


532

 

276


-

 

-







14,705 

 

6,931


2,690 

 

2,756 














Trade receivables are non-interest bearing, generally have 30 day terms, and are shown net of provision for expected credit losses. The aged analysis of trade receivables after provision for expected credit losses is as follows:














 

 





Group

 

Company







2024


2023


2024


2023

 

 

 

 

 

 

£'000

 

£'000

 

£'000

 

£'000














Not past due


13,504 


5,059 


2,555 


2,282 

< 30 days


396 


1,745 


83 


482 

30-60 days


92 


90 


47 


18 

60-90 days


50 


37 



> 90 days


663 



-


(26)

Total






14,705 


6,931 


2,690 


2,756 














In the Group, trade receivables with a nominal value of £15,000 (2023 - £36,000) were impaired and fully provided as at 30th April 2024. During the year, expected credit losses of £21,000 (2023 - £42,000) were recovered and expected credit losses of £nil (2023 - £26,000) were incurred.















In the Company, trade receivables with a nominal value of £5,000 (2023 - £16,000) were impaired and fully provided as at 30th April 2024. During the year, expected credit losses of £11,000 (2023 - £30,000) were recovered and expected credit losses of £nil (2023 - £13,000) were incurred.














(b)   Amounts owed by subsidiary undertakings


















All amounts due from Group companies are repayable on demand and are not charged interest. The majority of intercompany balances are to group entities with liquid assets and are capable of being repaid on demand. An impairment charge of £1,686,000 relating to 'MSI-Sign Group B.V.' and 'MSI-Sign Group GmbH' has been recognised on intercompany receivables in the company during the year to give a cumulative impairment charge of £3,113,000 (2023 - £1,470,000).














There are loans to 'MS INTERNATIONAL Estates Limited' and 'MS INTERNATIONAL Estates LLC', which although repayable on demand, are supported by properties, which will not be immediately realisable. The directors have assessed the likelihood of default and the loss in the event of default as well as the balance at the reporting date and conclude that there is no material impairment of the receivable.


The amounts receivable at the reporting date can be categorised as:











Company











2024

 

2023











£'000

 

£'000














Amounts due from companies backed by liquid assets




1,898

 

3,607

Amounts due from 'MS INTERNATIONAL Estates Limited'



5,207

 

5,461

Amounts due from 'MS INTERNATIONAL Estates LLC'


1,397

 

2,288











8,502

 

11,356

 

8.   Cash and cash equivalents

 


















Group

 

Company

 






2023

 

2022


2023

 

2022







£'000

 

£'000


£'000

 

£'000














Cash at bank and in hand






       35,509

 

       12,336


9,936

 

8,016

Restricted cash held in Escrow - maturing in more than 90 days




7,170

 

2,917


        -

 

 - 

Total cash






       42,679

 

       15,253


           9,936

 

8,016














The balance held in Escrow provides security to both Lloyds Bank plc and Barclays Bank plc in respect of certain guarantees, indemnities, and performance bonds given by the Group in the ordinary course of business.

The Company is party to a cross guarantee between 'MS INTERNATIONAL plc' and 'MSI-Defence Systems Ltd' which has been put in place to ensure compliance with banking operations.














9.   Net funds

 

























(a) Analysis of net funds

 





 

 

 

 

 





Group

 

Company

 






2024

 

2023


2024

 

2023







£'000

 

£'000


£'000

 

£'000







 

 



 

 


Cash and cash equivalents






35,509

 

12,336


9,936

 

8,016

Restricted cash held in Escrow






7,170

 

2,917


  - 

 

  - 

Lease liabilities






(804)

 

(1,208)


(6,401)

 

(4,807)







41,875

 

14,045


3,535

 

3,209














(b) Group movement in net funds

 


















Cash and cash equivalent

 

Restricted cash held in Escrow

 

Lease liabilities

 

Total














At 30th April 2022






18,092


1,158


(1,511)


17,739

Cash flows






(5,825)


1,759


415


(3,651)

Foreign exchange adjustments






69


  - 


(61)


8

Interest






  - 


  - 


(51)


(51)

At 30th April 2023

 

 

 

 

 

 

12,336


2,917


(1,208)


14,045

Cash flows






23,243


4,253


409


27,905

Foreign exchange adjustments






(70)


  - 


32


(38)

Interest






  - 


  - 


(37)


(37)

At 30th April 2024






35,509

 

7,170

 

(804)

 

41,875

 













(c) Company movement in net funds

 


















 

 

Cash and cash equivalents

 

Lease liabilities

 

Total














At 30th April 2022








3,258


(5,214)


(1,956)

Cash flows








4,758


560


5,318

Interest








  - 


(153)


(153)

At 30th April 2023

 

 

 

 

 



8,016


(4,807)


3,209

Cash flows








1,920


817


2,737

New leases








  - 


(2,205)


(2,205)

Interest








  - 


(206)


(206)

At 30th April 2024






 

 

9,936

 

(6,401)

 

3,535

 













 

10.   Reserves

 
























Capital redemption reserve

 











The balance classified as capital redemption reserve represents the nominal value of issued share capital of the Company, repurchased.

 













Other reserves

 











Following the transfer of assets held at valuation by the Company to a subsidiary company, a reserve has been created which is non-distributable. This is equal to the revaluation reserve previously arising.

 













Additionally, it includes the non-distributable retained reserve for the revaluation reserve previously showing in the Company for properties now transferred to other members of the Group.

 














Revaluation reserve

 











The asset revaluation reserve is used to record increases in the fair value of land and buildings and decreases to the extent that such decrease relates to an increase on the same assets previously recognised in equity.

 













Special reserve

 











The special reserve is a distributable reserve created following the cancellation of a share premium account by way of court order in March 1993.

 













Currency translation reserve

 











The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. It is also used to record the effect of hedging net investments in foreign operations.

 













Treasury shares

 











The treasury share reserve is detailed as follows:




 







2024

 

2023

 







£'000

 

£'000

 







 

 


 

Employee Share Ownership Trust (a)






37

 

100

 

Shares in treasury (b)






3,665

 

2,281

 







3,702

 

2,381

 













(a) The Employee Share Ownership Trust

























The Employee Share Ownership Trust ("ESOT") provides for the issue of options over ordinary shares in the Company to Group employees, including executive directors, at the discretion of the Remuneration Committee. The trustee of the ESOT is Ocorian Ltd, an independent company registered in Jersey.

 













At 30th April 2024 the ESOT held 91,048 shares (2023 - 245,048), which represents 0.56% (2023 - 1.49%) of the issued share capital of the Company excluding treasury shares. The market value of these shares was £829,000 (2023 - £1,250,000) at 30th April 2024.

 













A reconciliation of the movement in the number of shares held by the ESOT is as follows:

 



















Number


£'000

 








 

ESOT shares at 30th April 2022




245,048


100

 

Exercise of share options




-


-

 

ESOT shares at 30th April 2023




245,048


100

 

Exercise of LTIP share options




(100,000)


(41)

 

Exercise of CSOP share options




(54,000)


(22)

 

ESOT shares at 30th April 2024

 

 

 

91,048

 

37

 

 

 

 

 

 

 

 

 

During the year, 324,007 (2023 - 250,000) share options were exercised by Group employees, of which 154,000 (2023 - nil) were satisfied by the transfer of shares from the ESOT. These shares have been valued at a weighted average cost of £0.41 per share.

 

 

 

 

 

 

 

 

 

The assets, liabilities, income, and costs of the ESOT have been incorporated into the Company's financial statements. Total ESOT costs charged to the income statement in the year amounts to £29,000 (2023 - £8,000). The Company has not made any payments (2023 - nil) into the ESOT bank accounts during the year. Details of the outstanding share options for directors are included in the Directors' remuneration report.

 

 

 

 

 

 

 

 

 

(b) Shares in treasury

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A reconciliation of the movement in the Company's own 10p ordinary shares held in treasury is shown below:

 

 

 

 

 

 

Number

 

£'000

 

 

 

 

 

 

 

 

 

Treasury shares at 30th April 2022

 

 

 

1,646,334

 

2,689

 

Exercise of LTIP share options

 

 

 

(250,000)

 

(408)

 

Treasury shares at 30th April 2023

 

 

 

1,396,334

 

2,281

 

Purchase of 290,000 shares from pension scheme

 

 

 

290,000

 

1,676

 

Exercise of CSOP share options

 

 

 

(170,007)

 

(292)

 

Treasury shares at 30th April 2024

 

 

 

1,516,327

 

3,665

 

 

 

 

 

 

 

 

 

On 7th July 2023 the Company purchased 290,000 (2023 - nil) shares from the Group's pension scheme at a price of £5.78 per share, totalling £1,676,000. During the year, 324,007 (2023 - 250,000) share options were exercised, of which 170,007 (2023 - 250,000) were satisfied by the transfer of shares held in treasury by the Company. The share options issued from treasury have been valued at a weighted average cost of £1.72 (2022 - £1.63) per share totalling £293,000.

 

 

 

11.   Contracts with customers

 


 

The Group and Company have recognised the following assets and liabilities relating to contracts with customers:

 


 



Group


Company

 



2024


2023


2024


2023

 



£'000


£'000


£'000


£'000

 










 

Current contract assets


100


144



 

Current contract liabilities


(42,616)


(14,585)


(1,784)


(856)

 

Non-current contract liabilities


(10,019)




 

Net contract liabilities


(52,535)

 

(14,441)


(1,784)

 

(856)

 


 

At 30th April 2024 there was no provision for expected credit losses relating to contract assets (2023 - nil).

 


 

A reconciliation of the movements in contract liabilities during the year is shown below:

 


 



Group

 

Company

 



£'000

 

£'000

 



 

 

 

 

Contract liabilities as at 30th April 2023


14,585


856

 

New contract liabilities


105,443


5,448

 

Revenue recognised in the year:





 

 - that was included in the contract liability balance as at 30th April 2023


(9,667)


(856)

 

 - relating to new contract liabilities in the year


(57,505)


(3,664)

 

Other movements


(22)


 

Exchange differences


(199)


 

Contract liabilities as at 30th April 2024


52,635


1,784

 






 

Included in the contract liabilities balance at 30th April 2024 is £6,987,000 relating to unpaid invoices.

 


 

Of the existing contracts that were unsatisfied or partially unsatisfied at 30th April 2024, revenue is expected to be recognised as follows:

 


 



Group


Company

 



£'000


£'000

 






 

2025


42,616


1,784

 

2026


9,892


 

2027


127


 

Total


52,635


1,784

 


 


 

 

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