Interim Results

MS International PLC 23 November 2004 Date: Under embargo until 7.00am - Tuesday, 23rd November, 2004 Contacts: Michael Bell, Chairman, MS INTERNATIONAL plc Tel: 01302 322133 Terry Garrett, Weber Shandwick Square Mile Tel: 0207 067 0700 MS INTERNATIONAL plc Interim Results to 30th October, 2004 Highlights • Turnover of £19.44m (2003 - £15.21m) • Pre-tax profits £1.41m (2003 - £0.35m) • Earnings per share advanced to 5.0p (2003 - 1.1p) • Interim dividend 0.50p (2003 - 0.42p) per share • Net funds of £0.99m (2003 - net borrowings of £0.5m) • Order book continues at a 'pleasing level' Michael Bell, Chairman, commented: 'I am pleased to report further progress in the half year with profits rising to £1.41m on a 28% increase in sales. Our recent capital investment placed us in an excellent position to take advantage of a general upturn and this programme will continue with the clear objective of strengthening the leading market positions of our three divisions.' Chairman's Statement The recent and timely capital investments in innovative plant, equipment and product development placed the Group in an excellent position to take further advantage of the general upturn in world trading conditions and provided added impetus to advances being accomplished in the underlying operating performance. As a result, a profit before taxation of £1.41m (2003 - £0.35m) was achieved on sales of £19.44m (2003 - £15.21m) in the six months to 30th October 2004, sustaining the upward trend of the second half of last year. Earnings per share were 5.0p (2003 - 1.1p). Consolidated net funds remain positive at £0.99m (£2.20m at 1st May 2004). The movement reflects increased working capital requirements for contracts in progress; a higher than normal holding of strategic steel stocks and the purchase of 1.26m MS INTERNATIONAL plc shares bought in for cancellation. The order book continues at a pleasing level and is proportionately well distributed across the diverse businesses within the Group, contrasting the short and long-term order book vagaries of the various activities. The escalating price and restricted availability of steel and the rising costs of energy, in particular, has raised the external challenges that the Group faces. Nevertheless we are well positioned and committed positively, to meeting the tasks. In the meantime, our active capital investment programme will continue with the clear objective of strengthening the leading market positions of the three divisions of our specialist engineering group. These matters considered the Board has declared an interim dividend of 0.50p per share (2003 - 0.42p). Michael Bell 23rd November 2004 MS INTERNATIONAL plc Group Profit and Loss Account These interim financial statements which have been prepared on the basis of the accounting policies set out in the Company's 2004 statutory accounts do not constitute statutory accounts within the meaning of section 254 of the Companies Act 1985 and are unaudited. The abridged accounts for the year ended 1st May, 2004 are an extract from the accounts for that period on which the auditors gave an unqualified report and which have been filed with the Registrar of Companies. 26 weeks 26 weeks 52 weeks ended 30th ended 1st ended 1st Oct. 2004 Nov. 2003 May, 2004 £'000 £'000 £'000 Turnover: Group and share of joint venture 19,436 15,209 32,323 Less: Share of joint venture turnover (3,028) (2,856) (6,093) ------------------------------------------ --------- -------- -------- Group turnover 16,408 12,353 26,230 ------------------------------------------ --------- -------- -------- Operating profit 1,155 69 1,092 Share of operating profit of joint venture 232 285 302 ------------------------------------------ --------- -------- -------- Profit on ordinary activities before interest 1,387 354 1,394 Interest receivable: Group 35 15 19 Joint venture 4 2 10 Interest payable: Group (20) (24) (48) ------------------------------------------ --------- -------- -------- Profit on ordinary activities before taxation 1,406 347 1,375 Taxation on profit on ordinary activities (478) (132) (451) ------------------------------------------ --------- -------- -------- Profit for the financial period 928 215 924 --------- -------- -------- Dividends: Interim payable (88) (75) (75) Final payable - - (250) --------- -------- -------- (88) (75) (325) ------------------------------------------ --------- -------- -------- Profit for the period 840 140 599 ------------------------------------------ --------- -------- -------- Earnings per share - basic 5.0p 1.1p 5.0p Earnings per share - fully diluted 4.8p 1.1p 4.2p ------------------------------------------ --------- -------- -------- Group Statement of Recognised Gains and Losses £'000 Profit for the financial period 928 Translation differences on foreign currency net investments (8) ----------------------------------------------------------- --------- Total gains recognised in the period 920 ----------------------------------------------------------- --------- Notes 1. Taxation on profit on ordinary activities has been calculated at 34% (2003 - 38%) on the Group profit for the period as adjusted for taxation purposes, and includes a charge of £64,000 in respect of the joint venture. 2. Dividend warrants will be posted on 28th January, 2005 to members registered on the books of the Company at 7th January, 2005 MS INTERNATIONAL plc Group Balance Sheet At At At 30th Oct. 1st Nov. 1st May, 2004 2003 2004 £'000 £'000 £'000 Assets employed Intangible assets 280 251 280 Fixed assets 8,076 8,066 7,995 Investment in joint venture: Share of gross assets 2,293 2,217 2,361 Share of gross liabilities (1,697) (1,474) (1,745) --------------------------------------------------------- ------- ------- ------- 8,952 9,060 8,891 --------------------------------------------------------- ------- ------- ------- Current assets Stocks 5,190 3,772 4,143 Debtors 6,654 4,977 6,554 Group pension scheme prepayment - due after more than one year 6,470 6,378 6,368 Cash at bank and in hand 1,454 610 2,919 ---------------------------------------------------------- ------- ------- ------- 19,768 15,737 19,984 Creditors - amounts falling due within one year Bank loans and overdrafts 333 349 334 Other 12,081 8,623 12,210 ---------------------------------------------------------- ------- ------- ------- Net current assets 7,354 6,765 7,440 ---------------------------------------------------------- ------- ------- ------- Total assets less current liabilities 16,306 15,825 16,331 Creditors - amounts falling due after more than one year Bank loans and overdrafts - 333 166 Other 42 127 79 Provisions for liabilities and charges 2,940 2,956 2,925 ---------------------------------------------------------- ------- ------- ------- Total assets less liabilities 13,324 12,409 13,161 ---------------------------------------------------------- ------- ------- ------- Capital and Reserves Called up share capital 1,969 2,096 2,096 Capital redemption reserve 772 645 645 Revaluation reserve 1,853 1,853 1,853 Other reserves 4,053 3,970 3,959 Special reserve 1,629 1,629 1,629 Profit and loss account 3,786 3,304 3,717 Investment in own shares (738) (1,088) (738) ---------------------------------------------------------- ------- ------- ------- Equity shareholders' funds 13,324 12,409 13,161 ---------------------------------------------------------- ------- ------- ------- Notes: £'000 (1) Movement in profit and loss account is as follows : At 1st November, 2003 3,304 Profit attributable to members 26 weeks ended 1st May, 2004 709 Transfer to other reserves in respect of pension scheme (46) Dividends (250) ------- At 1st May, 2004 3,717 Purchase of own shares (669) Profit attributable to members 26 weeks ended 30th October, 2004 928 Transfer to other reserves in respect of pension scheme (102) Dividends (88) ------- At 30th October, 2004 3,786 ------- (2) On 13th October, 2004 the Company redeemed 1,261,637 of its own Ordinary shares at a market price of 53.0p (3) Urgent Issues Task Force (UITF) Abstract 38 'Accounting for ESOP trusts' has been adopted for the first time in this interim statement. The UITF requires that the investment in shares held by the Group's ESOT be reclassified as a deduction from shareholders' funds. MS INTERNATIONAL plc Group Cash Flow Statement 26 weeks 26 weeks 52 weeks ended 30th ended 1st ended 1st Oct. 2004 Nov. 2003 May, 2004 £'000 £'000 £'000 Operating profit 1,155 69 1,092 Depreciation charge 418 395 818 Foreign exchange (gains)/losses (16) 14 (22) RSA grant release (5) (6) (13) Increase in stocks (1,101) (241) (1,104) Increase in debtors (203) (420) (1,981) Increase in creditors 457 154 1,844 (Decrease)/increase in progress payments (359) (250) 1,892 Increase in provisions 48 33 77 Provisions utilised (33) (33) (65) ---------------------------------------------------- --------- --------- ---------- Cash inflow/(outflow) from operating activities 361 (285) 2,538 Dividends received from joint venture 200 25 125 Interest received/(paid) 13 (2) (35) Taxation (361) (79) (136) --------- --------- ---------- Purchase of tangible fixed assets (489) (323) (688) Purchase of intangible fixed assets - - (29) Sale of tangible fixed assets - - 13 Shares purchased by ESOT - (357) (356) Share options exercised - - 349 --------- --------- ---------- Capital expenditure and financial investment (489) (680) (711) Dividends paid (250) (238) (341) ----------------------------------------------------- --------- --------- ---------- Cash flow before financing (526) (1,259) 1,440 Financing Purchase of own shares (669) (354) (354) Decrease in long term bank loans (167) (152) (334) Repayments of capital element of finance leases and hire purchase contracts (103) (93) (301) ----------------------------------------------------- --------- --------- ---------- (939) (599) (989) ----------------------------------------------------- --------- --------- ---------- (Decrease)/increase in cash (1,465) (1,858) 451 ----------------------------------------------------- --------- --------- ---------- Reconciliation of net cash flow to movement in net funds/(borrowings) £'000 £'000 £'000 (Decrease)/increase in cash (1,465) (1,858) 451 Cash outflow from decrease in long term bank loans 167 152 334 Repayments of capital element of finance leases and hire purchase contracts 103 93 301 ---------------------------------------------------------- --------- --------- ---------- Changes in net borrowings resulting from cash flow (1,195) (1,613) 1,086 New finance leases and hire purchase contracts (10) (99) (99) ---------------------------------------------------------- --------- --------- ---------- Movement in net (borrowings)/funds (1,205) (1,712) 987 Net funds 2,195 1,208 1,208 -------------------------- ------------------------------- --------- --------- ---------- Net funds/(borrowings) 990 (504) 2,195 ---------------------------------------------------------- --------- --------- ---------- Analysis of net funds/(borrowings) Other non-cash 30th Oct. 2004 Cash flows movements 1st May, 2004 £'000 £'000 £'000 £'000 Cash at bank and in hand 1,454 (1,465) - 2,919 Bank loans (333) 167 - (500) Finance leases and hire purchase contracts (131) 103 (10) (224) ------------------------------------------ -------- -------- -------- ---------- Net funds 990 (1,195) (10) 2,195 ------------------------------------------ -------- -------- -------- ---------- This information is provided by RNS The company news service from the London Stock Exchange

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