MS International : 2019 Final Results

MS INTERNATIONAL plc

Annual Report 2019

Company Registration Number 00653735

M S I N T E R N A T I O N A L p l c
Contents
The year in brief	2
Chairman's Statement	3
Directors	4
Advisors	5
Strategic report	6
Statement of directors' responsibilities	8
Independent report of the auditors	9
Consolidated income statement	14
Consolidated statement of comprehensive income	14
Consolidated and company statement of changes in equity	15
Consolidated and company statements of financial position	16
Consolidated and company cash flow statements	17
Notes to the financial statements	18
Summary of Group results 2015 - 2019	48
Corporate governance statement	49
Audit committee report	52
Report of the directors	54
Directors' remuneration report	58
List of subsidiaries	60
Notice of Annual General Meeting	62

1

M S I N T E R N A T I O N A L p l c

The year in brief

2019 2018

Total Total

£000 £000

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Revenue

77,708

68,085

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Profit before taxation

4,787

4,039

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Earnings per share

23.1p

20.5p

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Dividends payable per share

8.25p

8.25p

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Financial Calendar Key Dates

Annual Results Announced	June
Annual General Meeting	July
Final Dividend Payable	July
Half-Year Results Announced	November
Interim Dividend Payable	December

2

M S I N T E R N A T I O N A L p l c

Chairman's Statement

Results and Review

For the year ending 27th April 2019, the result on a 'like for like' basis increased by 48% to £5.99m (2018 - £4.04m) on revenue of £77.71m (2018 - 68.09m) an uplift of 14% on last year. On a similar basis, earnings per share would have been 29.0p (2018- 20.5p) an increase of 41%.

However, after a one-off £1.2m charge for 'guaranteed minimum pension equalisation' (see note 8 of the notes to the financial statements) the profit before taxation is reduced to £4.79m and earnings per share to 23.1p. Net cash was £22.89m (2018 - £15.87m) an increase of 44% on last year. The value of the Group order book at year-end was down on this time last year and there is very clear evidence, that many customers are reticent to place new orders until their perceived specific requirements become critically essential.

Reviewing the status of the varied markets we serve and responding to notable changes whether they be positive or negative is clearly an important management function and one that we always take very seriously in a thoroughly well informed, but also sensitive manner.

Fortuitously, as a Group we are very well armed, as we align to the ups and downs of the global markets we serve thanks to our diverse, profitable, international operations and a strong cash position, which supports those major product and facility developments that are in hand.

A key element in our 'Defence' business strategy has been to increase our presence significantly within the global defence market so that we can effectively counter the varied current constraints on UK MoD decisions regarding future requirements and expenditure. It is pleasing to report that once again, international sales accounted for the major component of revenue as we reap the benefits of our considerable investment in a substantial number of new products aimed specifically at the global market.

'Forgings' had a 10% uplift in revenue over the comparable period, overcoming the many challenges in international markets posed by product imported from lower cost economies. Our strategic move last year to focus on manufacturing in the United States has been exceptionally well received in a country where domestically manufactured product has considerable appeal over imported goods. This maturing investment phase is also enabling us to rationalise and re-position some of our UK production facilities, thereby better aligning our business with the notable decline of fork-lift truck production in the UK.

'Petrol Station Superstructures' enjoyed a significant upturn in activity with revenue increasing markedly compared to the period of market weakness during the previous year. Largely this is being driven by the structural transformation of traditional 'petrol filling station' sites, that were once almost exclusively selling fuel, into ones that are distinct, local convenience stores and multiple food outlets with ample car parking - that also serve fuel. This repositioning to a much broader retail offering has gathered substantial momentum across our customer base with clear benefits for the division. Furthermore, a much higher focus by management and the team on improving all round performance brought its just rewards.

'Petrol Station Branding' division maintained an admirable performance in line with that of the previous year. Here again the market is rapidly changing as the global oil companies continue to divest their estates to the numerous groups of fuel retail ownership. As a result the established branding programmes of the vendors are subject to review as the new owners determine their own priorities, fuel suppliers and schedules of requirements. Notwithstanding such significant changes, we are able to accommodate and support the priorities of these new customers without difficulty, thanks to the high reputation of our business. Pleasingly, our substantial activities across much of mainland Europe are now gaining notable traction in the UK through our fledgling operation which continues to prosper.

Outlook

This has been a creditable year of progress for the Group and we are encouraged by the good progress made across the various businesses. However, we believe that we are approaching 'very interesting times'. Despite our best endeavours in corporate product development and international marketing, there are times, such as now, when experience tells us some challenging external influences may come to bear on the business.

Nevertheless, recognising the challenges ahead of the game, is of course critical to maintain momentum. We believe that we are fully aware of such circumstances and we will do whatever is necessary to overcome any hurdles and protect at all times the Company's past and future development.

We are committed to moving the business forward and have the resilience, experience, and dedication along with a great team of people plus the financial resources to support and develop opportunities as they arise.

All matters considered the Board recommends the payment of a maintained final dividend of 6.5p per share, making the total for the year of 8.25p (2018 - 8.25p). The final dividend is expected to be paid on 25th July, 2019 to those shareholders on the register at the close of business on 21st June, 2019.

Michael Bell

5th June 2019

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