Final Results

RNS Number : 3513X

MS International PLC

24 June 2008

 

Chairman's Statement 

Results and review

It is a pleasure to report on another year of successful high quality development and profitable growth for the Group. Once again, revenue, pre-tax profit, earnings per share, cash at bank, order intake and the forward order book all closed at a higher level than the previous year. 

For the year ended 3 May 2008, the Group profit before taxation amounted to £5.29m (2007-£4.40m) on revenue of £53.86m (2007-£47.88m). Earnings per share were 22.0p (2006-18.2p).

Net cash and short term deposits at the year-end reached a record level of £10.07m (2007-£7.61m), which is equivalent to 55p per share.

These results are clear evidence of the credibility of our strategy to operate a balanced portfolio of businesses, products and customers.

MSI continues to build upon its strong brand reputation in the markets in which it operates, reflecting our high value added design and manufacturing status focused on technology and productivity developments. 

The three operating divisions - defence, forgings and petrol station forecourt superstructures - produced highly commendable performances with each contributing its share of growth within the overall result. As highlighted at the interim stage, contract delivery requirements provided the defence division with a substantial second half bias. The forgings division, building on its investment in processes and productivity continues to enhance its strategic market positions. The petrol station forecourt superstructures joint venture division took full advantage of a buoyant situation in its construction market and as a result lifted both revenue and profit suitably above the previous year's result. 

During the period, the Company purchased 260,000 MS INTERNATIONAL plc shares for cancellation at a total cost of £477,000.

Outlook

The growing presence of overseas naval end-users and shipbuilders in the defence division's phased order book - which stands at a record level - underlines the growing international awareness and appreciation of the excellent reputation of this business and its products. This is a particularly salient feature occurring at a time when the release of new projects by the UK Ministry of Defence, is inhibited by financial constraints. 

Whilst sensitive to the global economic environment, our short to medium term order books for the forgings and forecourt superstructures businesses are holding up very well and we continue to win new business. Providing this trend is not seriously undermined by macro economic conditions, we look forward to developing these businesses and their effectiveness throughout the current year.

Overall, the Group is in excellent shape. The balance sheet, cash flow and forward order book have never been better. Around the Group, there is a good level of confidence in the belief that we can achieve our objectives in what may well be challenging times ahead. 

Accordingly, the Board recommends the payment of a final dividend of 3.80p (2007 - 3.00p) making a total for the year of 4.50p (2007 - 3.60p).  

Michael Bell
23 June 2008

Group income statement
For the 53 weeks ended 3rd May, 2008
					2008		2007
					Total		Total
					£000		£000
Revenue					53,861		47,878
Cost of sales					(40,393)		(35,795)
Gross profit					13,468		12,083
Distribution costs					(1,781)		(1,970)
Administrative expenses					(7,184)		(6,243)
					(8,965)		(8,213)
Group trading profit					4,503		3,870
Finance revenue					308		102
Finance costs					(8)		(7)
Other finance revenue - pensions					485		435
					785		530
Profit before taxation					5,288		4,400
Taxation					(1,355)		(1,384)
Profit for the period attributable to equity holders of the parent					3,933		3,016
Earnings per share: basic					22.0p		18.2p
diluted					21.5p		17.5p

Group statement of recognised income and expense

For the 53 weeks ended 3rd May, 2008	Group				Company
	2008		2007		2008		2007
	Total		Total		Total		Total
	£000		£000		£000		£000
Actuarial gains on defined benefit pension scheme	548		1,550		548		1,550
Deferred taxation on actuarial gains on defined benefit pension scheme	(127)		(465)		(127)		(465)
Exchange differences on retranslation of foreign operations	120		(58)		106		(55)
Net income recognised directly in equity	541		1,027		527		1,030
Profit attributable to equity holders of the parent	3,933		3,016		3,663		2,687
Total recognised income and expense for the period attributable to equity holders of the parent	4,474		4,043		4,190		3,717

The financial information set out above does not constitute the Company's statutory accounts for the periods ended 3rd May, 2008 or 28th April, 2007 but is derived from those accounts. Statutory accounts for 2007 have been delivered to the Registrar of Companies, and those for 2008 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.

The earnings per share is calculated by dividing the profit after taxation of £3,993,000 (2007 - £3,016,000) by the weighted average of 17,845,762 (2007 - 16,557,004) shares in issue in the year.

Copies of this announcement are available from the Company's registered office at MS INTERNATIONAL plc, Balby Carr Bank, Doncaster, DN4 8DH, England. 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 29th August, 2008 to members on the books of the Company at 1st August, 2008.

Balance sheets
At 3rd May, 2008
		Group				Company
		2008		2007		2008		2007
		£'000		£'000		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment		16,101		14,676		15,269		13,837
Intangible assets		138		253		138		253
Investments in subsidiaries		-		-		6,869		6,869
Investment in joint venture		-		-		50		50
Defined benefit pension asset		1,856		894		1,856		894
		18,095		15,823		24,182		21,903
Current assets
Inventories		5,104		4,327		3,779		3,141
Trade and other receivables		7,574		7,288		6,970		6,874
Prepayments		2,925		2,109		2,846		2,025
Cash and short-term deposits		10,071		7,608		9,209		6,884
		25,674		21,332		22,804		18,924
TOTAL ASSETS		43,769		37,155		46,986		40,827
EQUITY AND LIABILITIES
Equity
Equity share capital		1,845		1,871		1,845		1,871
Capital redemption reserve		896		870		896		870
Other reserves		1,565		1,544		1,565		1,544
Revaluation reserve		2,969		2,942		2,969		2,942
Special reserve		1,629		1,629		1,629		1,629
Currency translation reserve		(31)		(151)		(5)		(111)
Treasury shares		(391)		(738)		(391)		(738)
Retained earnings		12,131		8,719		10,252		7,110
		20,613		16,686		18,760		15,117
Non-current liabilities
Finance leases		-		4		-		-
Provisions		-		48		-		48
Government grants		16		28		16		28
Deferred income tax liability		1,941		1,779		1,920		1,759
		1,957		1,859		1,936		1,835
Current liabilities
Trade and other payables		20,606		18,060		25,754		23,423
Finance leases		4		7		-		-
Provisions		-		65		-		65
Government grants		13		13		13		13
Income tax payable		576		465		523		374
		21,199		18,610		26,290		23,875
TOTAL EQUITY AND LIABILITIES		43,769		37,155		46,986		40,827

Cash flow statements
For the 53 weeks ended 3rd May, 2008		Group				Company
		2008		2007		2008		2007
		£000		£000		£000		£000
Trading profit		4,503		3,870		3,442		3,420
Adjustments to reconcile trading profit to net cash in flow from operating activities
Depreciation charge		1,412		1,127		1,169		924
Amortisation charge		115		128		115		128
Diminution in value of subsidiaries		-		-		2		-
Foreign exchange gains/(losses)		37		(58)		106		(55)
RSA grant release		(12)		(13)		(12)		(13)
Pension charge		685		528		685		528
Share based payments		205		-		205		-
(Increase)/decrease in inventories		(555)		576		(57)		296
(Increase)/decrease in receivables		(286)		683		(96)		1,561
Increase in prepayments		(816)		(246)		(821)		(244)
Increase in payables		771		1,061		600		572
Increase/(decrease) in progress payments		1,553		(68)		1,150		(198)
Provisions utilised		(113)		(66)		(113)		(66)
Pension fund payments		(614)		(608)		(614)		(608)
Cash generated from operating activities		6,885		6,914		5,761		6,245
Interest received		300		95		277		78
Taxation paid		(1,165)		(1,329)		(812)		(1,155)
Net cash flow from operating activities		6,020		5,680		5,226		5,168
Investing activities
Purchase of property , plant and equipment		(2,838)		(3,613)		(2,687)		(3,053)
Purchase of intangible assets		-		(85)		-		(85)
Sale of property, plant and equipment		88		178		86		106
Dividends received from joint venture		-		-		500		-
Net cash from investing activities		(2,750)		(3,520)		(2,101)		(3,032)
Financing activities
Purchase of own shares		(308)		-		(308)		-
Repurchase of shares		(477)		-		(477)		-
Share options exercised		655		-		655		-
Dividends paid		(670)		(464)		(670)		(464)
New finance leases		-		12		-		-
Repayments of capital element of finance leases		(7)		(7)		-		-
Net cash flow from financing activities		(807)		(459)		(800)		(464)
Increase in cash and cash equivalents		2,463		1,701		2,325		1,672
Opening cash and cash equivalents		7,608		5,907		6,884		5,212
Closing cash and cash equivalents		10,071		7,608		9,209		6,884

  Reconciliation of movement in equity

				Capital								Currency
		Issued		redemption		Other		Revaluation		Special		translation		Treasury		Retained
		capital		reserve		reserves		reserve		reserve		reserve		shares		earnings		Total
		£000		£000		£000		£000		£000		£000		£000		£000		£000
(a) Group
At 29th April, 2006		1,871		870		1,544		2,942		1,629		(93)		(738)		5,082		13,107
Total recognised income and expense for the year		-		-		-		-		-		(58)		-		4,101		4,043
Dividends paid		-		-		-		-		-		-		-		(464)		(464)
At 28th April, 2007		1,871		870		1,544		2,942		1,629		(151)		(738)		8,719		16,686
Total recognised income and expense for the year		-		-		-		-		-		120		-		4,354		4,474
Dividends paid		-		-		-		-		-		-		-		(670)		(670)
Repurchase of shares		(26)		26		-		-		-		-		-		(477)		(477)
Change in taxation rate		-		-		21		27		-		-		-		-		48
Share options		-		-		-		-		-		-		-		205		205
Exercise of share options		-		-		-		-		-		-		655		-		655
Purchase of own shares		-		-		-		-		-		-		(308)		-		(308)
At 3rd May, 2008		1,845		896		1,565		2,969		1,629		(31)		(391)		12,131		20,613
(b) Company
At 29th April, 2006		1,871		870		1,544		2,942		1,629		(56)		(738)		3,802		11,864
Total recognised income and expense for the year		-		-		-		-		-		(55)		-		3,772		3,717
Dividends paid		-		-		-		-		-		-		-		(464)		(464)
At 28th April, 2007		1,871		870		1,544		2,942		1,629		(111)		(738)		7,110		15,117
Total recognised income and expense for the year		-		-		-		-		-		106		-		4,084		4,190
Dividends paid		-		-		-		-		-		-		-		(670)		(670)
Repurchase of shares		(26)		26		-		-		-		-		-		(477)		(477)
Change in taxation rate		-		-		21		27		-		-		-		-		48
Share options		-		-		-		-		-		-		-		205		205
Exercise of share options		-		-		-		-		-		-		655		-		655
Purchase of own shares		-		-		-		-		-		-		(308)		-		(308)
At 3rd May, 2008		1,845		896		1,565		2,969		1,629		(5)		(391)		10,252		18,760

(1) Share capital                                                                        

    The balance classified as share capital includes the nominal value on issue of the Company's equity share capital, comprising 10p Ordinary shares.        

(2) Capital redemption reserve                                                                

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

(3) Other reserves                                                                        

  This is the revaluation reserve previously arising under UK GAAP which is now part of non-distributable retained reserves. This also includes the impact of the change in related deferred tax due to the change in corporation tax (30% to 28%).                        

(4) 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. This also includes the impact of the change in related deferred tax due to the change in corporation tax (30% to 28%).      
                                                  

(5)   Special reserve                                                                        

     The balance classified as special reserve represents the share premium on the issue of the Company's equity share capital.    

  (6) 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.

(7) Treasury Shares                                                                        

     During 1991 the Company established an Employee Share Ownership Trust ('ESOT'). The trustee of the ESOT is Appleby Trust (Jersey) Ltd, an independent company registered in Jersey. The 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 trust has purchased an aggregate 395,048 Ordinary shares, which represents 2.1% of the issued share capital of the Company at an aggregate cost of £391,000. The market value of the shares at 3rd May, 2008 was £757,000. The Company has made payments of £Nil (2007 - £Nil) into the ESOT bank accounts during the period.  Options over 374,000 shares (2007 - Nil) have been granted during the period. Details of the outstanding share options are included in the Directors' Remuneration Report.

The assets, liabilities, income and costs of the ESOT have been incorporated into the Company's financial statements. Total ESOT costs charged to the profit and loss account in the period amounts to £9,000 (2007 - £5,000). During the period 1,912,521 options were exercised (2007 - £Nil) and 153,500 shares were purchased (2007 - Nil).        

 

END

 

 

FR FJMRTMMATBPP