Preliminary Results

MS International PLC 26 June 2001 Contacts: Michael Bell, Chairman, MS International plc Tel: 01302 322133 Terry Garrett, Square Mile BSMG Worldwide Tel: 020 7601 1000 MS INTERNATIONAL plc Full Year Results to April 28th, 2001 * Pre-tax profits from continuing businesses increased by 32% to £2.17m (2000: £1.65m) * Turnover from continuing businesses increased by 15% to £32.87m (2000: £28.63m) * Net cash increased to £2.79m (2000: £2.47m) * Order book for continuing businesses improved to £26.19m (2000: £24.32m) * Final dividend of 1.00p per share (2000: 0.90p) for an 11% increase for the full year at 1.33p (2000: 1.20p) * EPS for continuing businesses 29% higher at 6.7p (2000: 5.2p) Michael Bell, Chairman, commented: 'The good underlying progress achieved in the first six months continued strongly in the second half of the year. Each division performed well, generating profits and cash, and clearly demonstrating the benefits of sharper focus on business sectors where we enjoy prime trading niches. The order book has increased and, with further concentration on our known strengths, and the closure of a loss-making subsidiary behind us, we look forward to further achievements in the coming year'. Chairman's Statement Introduction In my interim statement I commented on the underlying progress of MS International plc and the closure of a loss-making subsidiary. I am pleased to reaffirm that the progress has followed through strongly in the second half of the year. Furthermore, I perceive that we have enhanced the opportunities for the Group to attain a more rapid upgrade in both the amount and quality of earnings, despite the short-term implication of the closure on this year's consolidated profit and loss account. To amplify the scale of the achievements, we have constructed the profit and loss account in a format that compares the results of both the continuing and discontinued businesses of the Group. Accordingly, for the year ending April 2001, the Group's continuing businesses produced a 32% increase in profit before tax of £2.17m (2000 - £1.65m) on sales 15% higher at £32.87m (2000 - £28.63m), and a 29% increase in EPS of 6.7p (2000 - 5.2p). The ensuing combined trading loss and one-off costs associated with the winding-up of the discontinued businesses amounted to £3.10m. The Group's consolidated net cash position has remained robust throughout and advanced by 13% to £2.79m (2000 - £2.47m), despite a cash outflow of £1.8m relating to the discontinued businesses. The accomplishment of the continuing businesses has proven highly satisfying. Each division generated both profit and cash and the results illustrate clearly the benefits of a sharper focus in business sectors where we enjoy prime trading niches. On April 27th, 2001, I, together with my two executive board directors, exercised options to purchase a total of 2,283,350 ordinary shares in the Company at an average price of 21.6p each. It is our intention to hold these shares as a long-term investment. Operating divisions The defence division achieved a creditable performance, increasing profit margins on sales that were at a level similar to the previous year. The changing nature of defence procurement, continues to heighten the challenges facing our industry. I believe that we are responding positively and effectively to the task, whilst balancing carefully the needs of our business, as evidenced by the increase in profits. The division's order book remains sound and well balanced, reflecting a good level of order intake for our proprietary products and services, plus augmented participation in major defence procurement programmes through teaming arrangements with other contractors. The forgings division enjoyed a year that was full of very positive activity. Further investment in plant and equipment for both fork-arm manufacture and general forging production, broadened and enhanced our capabilities, the benefits of which permeated through in greater efficiencies, added market penetration, and notable gains in profitability. Demand for our products in our principal markets around the world remained buoyant, although towards the end of the period there was a softening in activity in North America, indicative of the general economic climate in that large and important market. Global-MSI plc, our joint venture company that holds a leading market position in the design, manufacture and construction of petrol station canopies for fuel retailers across Europe, confirmed our expectations of a good recovery as the market improved, from the previous year's low level. Added to that, our status was strengthened by the successful integration into our business of Conder, a former sizeable though loss-making competitor, acquired last year. The manufacturing and administrative buildings vacated by the discontinued business have been refurbished and upgraded to a high standard, to provide cost effective production and office space. These facilities are now gainfully occupied by the continuing businesses, relieving past constraints and also creating room for expansion. Outlook The Group order book for each of the continuing businesses is higher than at this time last year, and when consolidated amounts to £26.19m (2000 - £24.32m). With intensifying concentration on our known strengths, and the closure of the loss-making subsidiary behind us, we look forward to further achievements, in the coming year. The Board therefore recommends the payment of an increased final dividend of 1.00p per share (2000 - 0.90p), making a total for the year of 1.33p (2000 - 1.20p), payable to shareholders on September 10th, 2001. Michael Bell June 26th, 2001 Group Profit and Loss Account For the 52 weeks ended April 28th, 2001 2001 2001 2001 Continuing Discontinued Total £000 £000 £000 Turnover: Group and share of joint venture 32,866 2,994 35,860 Less: Share of joint venture turnover (5,648) - (5,648) ___________________________ _________ ________ ________ Group turnover 27,218 2,994 30,212 ___________________________ _________ ________ ________ Operating profit/(loss) 1,948 (2,293) (345) Share of operating profit of joint venture 197 - 197 ___________________________ _________ _________ _________ 2,145 (2,293) (148) Exceptional items Profit/(loss) on sale of tangible fixed assets: Group 9 (18) (9) Joint venture 1 - 1 (Loss) on sale/closure of businesses: Net assets less sale proceeds/closure costs - (305) (305) Goodwill previously written off to reserves - (488) (488) __________________________ _________ __________ __________ Profit/(loss) on ordinary activities before interest 2,155 (3,104) (949) Interest receivable: Group 144 - 144 Joint venture 1 - 1 Interest payable: Group (130) - (130) __________________________ _________ __________ __________ Profit/(loss) on ordinary activities before taxation 2,170 (3,104) (934) Tax on profit/(loss) on ordinary activities (773) 850 77 __________________________ _________ __________ _________ Profit on ordinary activities after taxation 1,397 (2,254) (857) Dividends (292) __________________________ _________ Retained (loss)/profit for the Group and its share of joint venture (1,149) __________________________ _________ Earnings/(loss) per share - basic and fully diluted 6.7p (10.8p) (4.1p) __________________________ _______ _________ ________ Group Profit and Loss Account (Cont) For the 52 weeks ended April 28th, 2001 2000 2000 2000 Continuing Discontinued Total £000 £000 £000 Turnover: Group and share of joint venture 28,630 3,605 32,235 Less: Share of joint venture turnover (3,797) - (3,797) ___________________________ __________ _________ _________ Group turnover 24,833 3,605 28,438 ___________________________ __________ _________ _________ Operating profit/(loss) 1,648 (436) 1,212 Share of operating profit of joint venture 10 - 10 ___________________________ __________ __________ _________ 1,658 (436) 1,222 Exceptional items Profit/(loss) on sale of tangible fixed assets: Group 5 - 5 Joint venture 3 - 3 (Loss) on sale/closure of businesses: Net assets less sale proceeds/closure costs - - - Goodwill previously written off to reserves - - - ______________________________ _________ __________ _________ Profit/(loss) on ordinary activities before interest 1,666 (436) 1,230 Interest receivable: Group 126 - 126 Joint venture 9 - 9 Interest payable: Group (151) - (151) _______________________________ _________ __________ _________ Profit/(loss) on ordinary activities before taxation 1,650 (436) 1,214 Tax on profit/(loss) on ordinary activities (499) 128 (371) _______________________________ _________ __________ ________ Profit on ordinary activities after taxation 1,151 (308) 843 _________ __________ Dividends (249) _______________________________ ________ Retained (loss)/profit for the Group and its share of joint venture 594 _______________________________ ________ Earnings/(loss) per share - basic and fully diluted 5.2p (1.4p) 3.8p _______________________________ _________ _________ ________ Group Statement of Recognised Gains and Losses 2001 2000 £000 £000 (Loss)/profit for the financial period (857) 843 Translation differences on foreign currency net investments (67) 4 _______________________________ _______ ______ Total (losses)/gains recognised (924) 847 since last annual report _______________________________ _______ ______ Historical cost profits and losses There is no material difference between the result as disclosed in the profit and loss account and the result which would have been reported had the Group prepared the accounts on an unmodified historical cost basis. Notes The financial information set out above does not constitute the Company's statutory accounts for the periods ended April 28th, 2001 or April 29th, 2000 but is derived from those accounts. Statutory accounts for 2000 have been delivered to the Registrar of Companies, and those for 2001 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 237(2) or (3) of the Companies Act 1985. Copies of this announcement are available from the Company's registered office at MS International plc. Balby Carr Bank, Doncaster, South Yorkshire, DN4 8DH. The full Annual Report and Accounts will be posted to shareholders shortly and will be delivered to the Registrar of Companies after it has been laid before the Company in general meeting. Dividend warrants will be posted on September 7th, 2001 to members registered on the books of the Company at August 10th, 2001. Group Balance Sheet At April 28th, 2001 2001 2000 £000 £000 Assets employed _______________________________________ _______ _______ Fixed assets Tangible assets 6,222 6,358 Joint venture: Share of gross assets 1,621 1,587 Share of gross liabilities (1,284) (1,184) Investment in own shares 266 598 _______________________________________ _______ _______ 6,825 7,359 _______________________________________ _______ _______ Current assets Stocks 2,666 3,870 Debtors 7,041 5,717 Group pension scheme prepayment - due after more than one year 6,938 6,990 Cash at bank and in hand 2,789 3,165 _______________________________________ ________ _______ 19,434 19,742 Creditors - amounts falling due within one year 9,944 10,229 _______________________________________ ________ ________ Net current assets 9,490 9,513 _______________________________________ ________ ________ Total assets less current liabilities 16,315 16,872 Creditors - amounts falling due after more than one year 217 78 Provisions for liabilities and charges 2,644 2,612 _______________________________________ _________ ________ Total assets less liabilities 13,454 14,182 _______________________________________ _________ ________ Capital and reserves Called up share capital 2,343 2,343 Capital redemption reserve 398 398 Revaluation reserve 1,853 2,368 Other reserves 4,652 4,719 Special reserve 1,487 1,487 Profit and loss account 2,721 2,867 _______________________________________ _________ ________ Equity shareholders' funds 13,454 14,182 _______________________________________ _________ _________ Group Cash Flow Statement For the 52 weeks ended April 28th, 2001 2001 2001 2000 2000 £000 £000 £000 £000 Operating (loss)/profit (345) 1,212 Closure costs (305) - Depreciation charge 625 533 Foreign exchange (gains)/losses (33) 4 RSA grant release (37) (38) Decrease in stocks 1,320 2,212 (Increase)/decrease in debtors (1,187) 674 Increase/(decrease) in creditors 550 (1,081) (Decrease) in progress payments (25) (274) Increase in provisions 117 119 Provisions utilised (65) (151) _________________________________ _______ ________ Cash flow from operating activities 615 3,210 Dividend received from joint venture 50 51 Interest (paid)/received (8) 26 Taxation paid (236) (417) Purchase of tangible fixed assets (556) (469) Sale of tangible fixed assets 58 11 Shares purchased by ESOT (160) - Loan repaid/(paid) by/to joint venture 75 (75) _______________________________ _______ ________ Capital expenditure and financial investment (583) (533) Dividends paid (254) (268) ______________________________ _______ ________ Cash (outflow) / inflow before financing (416) 2,069 _____________________________ _______ ________ Cash (outflow) / inflow before financing (416) 2,069 Financing Purchase of own shares - (1,032) Long term bank loans repaid - (111) Repayments of capital element of finance leases and hire purchase contracts (83) (75) New leases 322 94 Share options exercised 492 - ________ _______ 731 (1,124) ______________________________________________________________________________ Increase in cash 315 945 ______________________________________________________________________________ Reconciliation of net cash flow to movement in net funds 2001 2000 £000 £000 Increase in cash 315 945 Cash flow from decrease in bank loans - 111 Repayments of capital element of finance leases and hire purchase contracts 83 75 __________________________________________ ________ ______ Changes in net funds resulting from cash flow 398 1,131 New leases (322) (94) __________________________________________ _________ _______ Movement in net funds 76 1,037 Net funds at April 29th, 2000 2,365 1,328 _________________________________________ __________ ________ Net funds at April 28th, 2001 2,441 2,365 ________________________________________ __________ _______ Analysis of net funds 2001 Cash flows 2000 £000 £000 £000 Cash at bank and in hand 2,789 (376) 3,165 Bank overdraft - 691 (691) _______ _______ _______ 2,789 315 2,474 Finance leases and hire purchase contracts (348) (239) (109) _______ _______ ________ 2,441 76 2,365 _______ _______ ________ Movement on reserves and reconciliation of movements in shareholders'funds Movements in reserves are as follows: Capital Share redemption Revaluation Other capital reserve reserve reserves £000 £000 £000 £000 At April 29th, 2000 2,343 398 2,368 4,719 (Loss)attributable to members - - - - Dividends - - - - Transfer - - (515) - Foreign exchange adjustments in retranslation of overseas investments - - - (67) Goodwill adjustments - - - - ________________________________ _______ _______ _______ _______ At April 28th, 2001 2,343 398 1,853 4,652 ________________________________ _______ _______ _______ _______ Movement on reserves and reconciliation of movements in shareholders'funds (Cont) Movements in reserves are as follows: Profit Special and loss reserves account Total £000 £000 £000 At April 29th, 2000 1,487 2,867 14,182 (Loss) attributable to members - (857) (857) Dividends - (292) (292) Transfer - 515 - Foreign exchange adjustments in retranslation of overseas investments - - (67) Goodwill adjustments - 488 488 _____________________________________ ________ ________ _______ At April 28th, 2001 1,487 2,721 13,454 _____________________________________ ________ ________ _______

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