MS INTERNATIONAL plc
Annual Report 2024
Company Registration Number 00653735
Contents
M S I N T E R N A T I O N A L p l c
1
The year in brief
2
Chairman’s statement
3
Directors
6
Advisors
7
Strategic report
8
Statement of directors’ responsibilities
13
Independent auditor’s report
14
Consolidated income statement
23
Consolidated statement of comprehensive income
23
Consolidated and company statement of changes in equity
24
Consolidated and company statements of financial position
25
Consolidated and company cash flow statements
26
Notes to the financial statements
27
Summary of Group results 2020 – 2024
65
Corporate governance statement
66
Audit committee report
69
Remuneration committee report
70
Report of the directors
71
Directors’ remuneration report
76
List of subsidiaries
79
2024
2023
Total
Total
£’000
£’000
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Revenue
109,576
83,956
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Profit before taxation
15,712
5,078
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Earnings per share: basic
71.0p
25.6p
Earnings per share: diluted
67.5p
24.2p
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Dividends payable per share
19.5p
15p
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Financial calendar key dates
Annual results announced
June
Annual general meeting
July
Final dividend payable
August
Half-year results announced
December
Interim dividend payable
January
The year in brief
M S I N T E R N A T I O N A L p l c
2
Chairman’s statement
M S I N T E R N A T I O N A L p l c
3
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.
Chairman’s statement
M S I N T E R N A T I O N A L p l c
4
‘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.
M S I N T E R N A T I O N A L p l c
5
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
Chairman’s statement
Directors
M S I N T E R N A T I O N A L p l c
6
Directors
Executive
Michael Bell ARICS (Executive Chairman)
Michael O’Connell FCA (Finance)
Nicholas Bell
Non-executive
Roger Lane-Smith – Age 78
Appointed as a director on 21st January, 1983. He is a non-executive director of Mostyn Estates Limited and a
number of other private companies.
David Hansell – Age 79
Appointed as a non-executive director on 3rd June, 2014. David has been with MS INTERNATIONAL plc, working
at MSI-Defence Systems Ltd since 1962, becoming managing director in 2002 until his retirement from the position
in May 2014.
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Company Secretary
Shelley Ashcroft ACMA
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Registered Office
Balby Carr Bank
Doncaster
DN4 8DH
England
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Company Registration Number 00653735
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Advisors
M S I N T E R N A T I O N A L p l c
7
Independent Auditor
Grant Thornton UK LLP
No. 1 Whitehall Riverside
Whitehall Road
Leeds
LS1 4BN
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Registrars and Transfer Office
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
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Solicitors
DLA Piper UK LLP
1 St. Peter’s Square
Manchester
M2 3DE
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Nominated Advisors
Shore Capital & Corporate Limited
Cassini House
57 St James’s Street
London
SW1A 1LD
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Brokers
Shore Capital Stockbrokers Limited
Cassini House
57 St James’s Street
London
SW1A 1LD
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Bankers
Lloyds Bank plc
First Floor
14 Church Street
Sheffield
S1 1HP
Barclays Bank plc
1 Churchill Place
London
E14 5HP
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Strategic report
M S I N T E R N A T I O N A L p l c
8
This report should be read in conjunction with the Chairman’s statement and the Corporate governance statement.
Strategy
The Group is engaged in the design and manufacture of specialist engineering products and the provision of related
services.
The Group’s long-term strategy is to invest in people, products and processes to seek continuous improvement in its
four diverse operating divisions: ‘Defence and Security’, ‘Forgings’, ‘Petrol Station Superstructures’ and ‘Corporate
Branding’, each holding a leading position in its specialist market.
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Principal activities
The Group is comprised of four main operating divisions, each with distinct principal activities.
G
‘Defence and Security’ division - the design and manufacture of defence and security equipment.
G
‘Forgings’ division - the manufacture of fork-arms and open die forgings.
G
‘Petrol Station Superstructures’ - the design, manufacture, construction, and maintenance of petrol
station superstructures.
G
‘Corporate Branding’ - the design, manufacture, installation, and service of corporate branding,
including media facades, way-finding signage, public illumination, creative lighting solutions, and the
complete appearance of petrol station superstructures and forecourts.
The Company is engaged in the activities of head offices in addition to the activities of the ‘Forgings’, ‘Petrol Station
Superstructures’ and ‘Corporate Branding’ divisions described above.
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Business review
During the year the Group achieved record revenue £109.58m, which represents a 30.5% increase on the prior year
revenue of £83.96m. The main driver of the increase was the additional sales generated in the ‘Defence and Security’
as the first deliveries of the new PALADIN counter drone land-based weapon systems took place during the year.
The Group registered a profit before taxation of £15.71m (2023 – £5.08m) after a gain of £1.21m in relation to
marking outstanding forward exchange contracts to fair value.
A review of the operations of the Company and subsidiaries and their position at 30th April 2024 are provided in the
Chairman’s Statement. Segment information for the year under review is provided in note 4 of the Group financial
statements.
Information on the Group’s activities, strategy, and future prospects can be found in the Chairman’s Statement.
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Key performance indicators
2024
2023
£’000
£’000
Revenue
109,576
83,956
Profit before tax
15,712
5,078
Profit before tax %
14%
6%
Basic earnings per share
71.0p
25.6p
Diluted earnings per share
67.5p
24.2p
Cash and cash equivalents
35,509
12,336
Total cash balance (including short term Escrow investments)
42,679
15,253
A review of the changes in the key performance indicators is provided in the Chairman’s Statement.
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Strategic report
Continued
M S I N T E R N A T I O N A L p l c
9
Forward exchange contracts
During the year the risk of exposure to USD has increased significantly due to a number of USD denominated
contracts in the ‘Defence and Security’ division. Management has taken steps to reduce the risk of exposure by taking
out a total of $99m of USD to GBP forward exchange contracts, the details of which can be found in note 6. Hedge
accounting has not been adopted and as a result a gain of £1.21m in relation to the change in the fair value of the
forward contracts has been recognised within the Consolidated income statement.
At 30th April 2024 $25m of these forward exchange contracts had matured. A further $54m will mature in the
financial year ending 30th April 2025 and the remaining $20m will mature in the financial year ending 30th April
2026. If exchange rates were to remain the same as the balance sheet closing rate, a loss of £0.90m will be recognised
in the year ending 30th April 2025 with the remaining £0.31m loss being recognised in the year ending 30th April
2026.
Cash flow
During the year the Group’s cash balance, including restricted cash held in Escrow, increased from £15.25m to
£42.68m. Cash generated from operating activities was £39.22m (2023 – £0.31m), which was driven largely by the
cash received from the increase in contract liabilities in the ‘Defence and Security’ division.
The Group’s central treasury function has sought to maximise interest income on positive bank balances and have
been successful in generating £1.18m (2023 – £0.05m) of interest during the year. This has been the result of
favourable interest rates on transactional bank accounts and the use of overnight and 32 day notice deposit accounts.
There continues to be significant investment into production facilities and product development within the ‘Defence
and Security’ division. The Group has continued to invest in research and development, with costs of £1.18m (2023
– £1.91m) incurred during the year, primarily on the development of the portfolio of small to medium calibre naval,
land-based, and other stabilised weapon systems that the ‘Defence and Security’ division offers to its worldwide
customer base.
Capital expenditure for the Group totalled £4.90m in the year. This includes £2.19m invested into the production
facility in Norwich in order to increase production capacity and meet the demands of the expanding orderbook in the
‘Defence and Security’ division. A total of £3.58m has now been expended on the Norwich facility over the past two
years. In addition, a further £0.48m has been invested into the introduction of solar panelling at the Doncaster site
that has reduced electricity consumption. Solar panelling is now in place at both UK sites.
Pension scheme
Over the financial year the defined benefit pension liability has reduced from £4.22m in 2023 to £nil at the reporting
date. The implementation of a new investment strategy in August 2023 has allowed the Company to significantly
derisk the Scheme and the majority of the Scheme’s assets have been transferred into low risk investments such as
UK bond funds. It is anticipated that the new investment strategy will significantly reduce the risk of interest rate
movements and the Scheme’s funding will become stable.
At 5th April 2024 the actuarial report showed a small surplus of £0.5m on a technical provisions basis. As a result
of the funded status, the last deficit reduction contribution was paid in April 2024 and no further contributions are
scheduled to be made. As the Company does not have an unconditional right to the economic benefit of the surplus,
the value of the pension scheme in accordance with IFRIC 14 is the present value of future contributions, which at
the reporting date was £nil.
Strategic report
Continued
M S I N T E R N A T I O N A L p l c
10
Risk and impact
Foreign exchange
A proportion of the Group's revenue, profits, and net
assets are denominated in currencies other than
Sterling, such as the US Dollar and Euro, and to a
lesser extent the Brazilian Real and Polish Zloty.
Fluctuations in exchange rates may impact the
Group's financial position and results due to
translation into sterling, as well as having
implications on the pricing of materials sourced in
foreign currencies.
During the year, the risk that foreign exchange
fluctuations will impact the Group's performance has
increased significantly. A number of international
contracts in the 'Defence and Security' division are
denominated in USD, which created a currency
exposure within the Group.
How the risk is mitigated
G
The largest currency exposures are in USD and
Euro. Receipts and payments are offset against
each other where possible and any surpluses are
either hedged or sold at spot rate, depending on
the requirements of the Group as a whole.
G
Given that a number of international contracts in
the
'Defence
and
Security'
division
are
denominated in USD, management have taken
steps to mitigate the risk of currency exposure by
taking out various forward exchange contracts
(note 6). The level of forward cover is determined
on an individual contract basis, taking into
account the net currency exposure to receipts and
purchases.
G
Cash flows are monitored weekly to ensure
currency requirements are satisfied.
G
Cashflows in other currencies, including Brazilian
Real and Polish Zloty, are not hedged, however, as
volumes are so low management does not deem
this necessary.
G
A central treasury function monitors foreign
currency cashflows, ensuring that balances are
transferred around the group when required, and
engaging in foreign currency trading when
appropriate. The details of current forward
exchange contracts are shown in note 6. The need
for further contracts is monitored on an ongoing
basis.
G
More information on the Group's exposure to
foreign exchange can be found in note 28
"Financial instruments".
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Principal risks and uncertainties
The principal risks and uncertainties facing the Group have been identified as follows:
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Inflationary pressures
There is a risk to the Group of increasing inflation in
the countries in which it operates. Both raw materials
prices and energy prices have increased significantly
over the past year. As the Group has a number of long-
term contracts, rapid increases in prices could impact
the profitability of the contract.
G
The impact of raw materials prices is monitored
regularly at a divisional level and reported to the
Board. Where possible increases are passed to the
customer.
G
With regards to customers under long-term
contracts, such contracts include a clause to allow
for raw materials price increases.
G
There are a number of projects and energy saving
initiatives across the Group to reduce energy
consumption as outlined in section 11 of the Report
of the directors.
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M S I N T E R N A T I O N A L p l c
11
Strategic report
Continued
Production capacity
Given the increasing demand for the Group's products,
specifically in the 'Defence and Security' division,
increased capacity is required to satisfy customers'
delivery requirements. The management of increasing
production capacity comes with both risks and
challenges.
G
Significant investment in the facility at Norwich
has taken place over the last year, including a new
production line for PALADIN systems, which is
now in operation and adds to the already expanded
gun build capacity.
G
Further expansion of production capacity is
planned for the coming year with a further area
identified for re-development for both continued
orders for current products and anticipated orders
for new products.
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Customer demand
The level of customer demand for the Group's products
and services is another risk and uncertainty. Customer
demand is driven not only by general economic
conditions but also by pricing, product quality, and
delivery performance and how well the divisions do
this in comparison to their competitors.
G
Significant investment into both production
facilities and product development has placed the
Group in a strong position to be able to take
advantage of opportunities worldwide. Both the
continuous improvement of existing product
ranges and the development of new products has
given rise to new opportunities for the Group,
which has in turn opened up new markets and
territories. Through its ongoing investment into
product development, the Group believes it can
maintain competitive advantage.
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Staff retention
The group's performance is largely dependent on the
retention of key members of staff, including senior
management, technical staff and product development
teams.
G
The
Group's
growth
provides
excellent
opportunities for career development of talented
individuals.
G
The Group offers competitive rates of pay and
certain incentive schemes to retain key staff.
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General duties of directors
The directors of the Company undertake their duties in accordance with the requirements outlined in Section 172 of
the Companies Act 2006, which states that “a director of a company must act in a way that they consider, in good
faith, would be most likely to promote the success of the company for its members as a whole”.
In doing so, the Board is required to have regard for the following:
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the likely long-term consequences of any decision;
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the interests of the Group’s employees;
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the need to foster and maintain good business relationships with customers, suppliers, and others;
G
the impact of the Group’s operations on the community and environment;
G
the Group’s reputation for high standards of business conduct and the need to act fairly between
members of the Company, and;
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the need to act fairly between members of the Company.
Long-term decision making
The Board considers its employees, customers, suppliers, and shareholders to be its major stakeholders. When
taking decisions for the long-term future of the Group, the Board takes into consideration the interests of all these
stakeholders in its deliberations.
Risk and impact
How the risk is mitigated
Principal risks and uncertainties (continued)
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M S I N T E R N A T I O N A L p l c
12
Strategic report
Continued
Our employees
The Board recognises that employees are essential to the success, growth and development of the Group. Their hard
work, skill, and ability to satisfy customers’ needs are fundamental in driving the performance of the Group and
underpin the Group’s ability to deliver future strategy. The retention of staff is therefore critical to the long-term
success of the business.
To this end, health, safety and wellbeing of employees is a key priority. The Board seeks to ensure that employees are
remunerated competitively and fairly, with pay reviews being conducted at least once per year. Furthermore, various
employee incentive schemes align with the goals and objectives of the Group, both in the long and short term, in order
to foster mutual success. Finally, the Group identifies opportunities for employee development where possible and it is
hoped that the growth in the Group provide exciting and rewarding challenges for staff.
Business relationships
The Group operates on a decentralised structure with employee, customer, and supplier relationships delegated to
the management of the operating companies. It is the responsibility of divisional management teams to ensure that
good relationships are maintained with employees, customers, and suppliers and to report regularly to the executive
directors regarding these relationships.
The Group’s divisions maintain good long-term supplier relationships by contracting on standard terms and
conditions, and ensuring payment is made on a prompt basis. These relationships with key suppliers ensure the
quality and continuity in the supply chain. As the Group is experiencing a period of significant growth, the
relationship with the supply chain has become of increasing importance. By working with key suppliers to aid
capacity planning, the Group has been able to procure efficiently.
The executive directors receive regular updates from the management of operating companies on both existing and
new potential customer relationships. This ensures that the Board’s decision making takes into account the
commercial and service requirements of the customer base.
Community and environment
The Board recognises the impact of its business decisions on the community and the environment. The Group
maintains its continuous improvement approach to reducing energy consumption, particularly at both the Doncaster
and Norwich sites. Ongoing energy reduction plans and production efficiency improvements continue to reduce
energy usage across the Group, therefore minimising as the environmental impact of our processes. During the year
solar panels have been installed at both the Doncaster and Norwich site, allowing the Group to draw on green energy
during the day and feed back surplus green energy into the National Grid. Further details of our carbon and energy
reporting can be found in the Report of the Directors on page 71.
Group’s reputation
The Board recognises the importance of maintaining high standards of business conduct and has appropriate policies
in place, such as, employee Whistleblowing and Anti-Bribery and Corruption, to assist in setting a culture of ethical
behaviour throughout the Group.
Corporate governance
The Board aims to ensure that good governance is maintained and that management operates the business in a
responsible manner to a high standard of conduct.
As an AIM quoted company, the Company has adopted as far as practical for a group of its size, the April 2018 QCA
Corporate Governance Code. The Company describes how it complies with the code and provides details of where it
does not comply on pages 66 to 68 .
Shareholders
The composition of the Company’s shareholders is predominantly directors, private investors, and one long-standing
institutional investor. The AGM is the primary mechanism for the Board to engage with the shareholders, together
with the publication of unaudited half year results, the publication of the full year audited Annual Report, and the
inclusion of other regulatory announcements on the Company’s website.
By order of the Board,
Shelley Ashcroft
Company Secretary
25th June 2024
Statement of directors’ responsibilities
M S I N T E R N A T I O N A L p l c
13
The directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable United Kingdom law and regulations. Company law requires the directors to prepare such financial
statements for each financial year. Under that law, the directors have prepared Group financial statements under
UK adopted International Accounting Standards. The directors have elected to prepare Parent Company financial
statements under UK adopted International Accounting Standards.
Under company law the directors must not approve the financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group
for that period. In preparing those financial statements, the directors are required to:
G
select suitable accounting policies and then apply them consistently;
G
make judgements and accounting estimates that are reasonable and prudent;
G
state whether UK adopted International Accounting Standards have been followed, subject to any
material departures disclosed and explained in the financial statements;
G
prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Parent Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Group and Parent Company’s transactions and disclose with reasonable accuracy at any time the financial position
of the Group and Parent Company and to enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the Group and Parent Company and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included
on the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of
financial statements may differ from the legislation in other jurisdictions.
The directors confirm that:
G
so far as each director is aware, there is no relevant audit information of which the company’s auditor
is unaware;
G
the directors have taken all the steps that they as directors in order to make themselves aware of any
relevant audit information and to establish that the company’s auditor is aware of that information.
To the best of the directors knowledge:
G
the Group financial statements, prepared in accordance with UK adopted International Accounting
Standards give a true and fair view of the assets, liabilities, financial position and profit or loss of the
company and the undertakings included in the consolidation taken as a whole; and
G
the Strategic report and Directors’ report include a fair review of the development and performance of
the business and the position of the company and the undertakings included in the consolidation taken
as a whole, together with a description of the principal risks and uncertainties that they face.
The Statement of directors’ responsibilities was approved by the Board on 25th June 2024.
By order of the Board:
Michael O’Connell
Group Finance Director
25th June 2024
Independent auditor’s report to the members of MS INTERNATIONAL plc
M S I N T E R N A T I O N A L p l c
14
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of MS INTERNATIONAL plc (the ‘parent company’) and its subsidiaries
(the ‘Group’) for the year ended 30 April 2024, which comprise the Consolidated income statement, Consolidated
statement of comprehensive income, the Consolidated and Company statements of changes in equity, the
Consolidated and company statements of financial position, the Consolidated and company cash flow statement, and
notes to the financial statements, including a summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law and UK-adopted international accounting
standards and, as regards the parent company financial statements, as applied in accordance with the provisions of
the Companies Act 2006.
In our opinion:
G
the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s
affairs as at 30 April 2024 and of the Group’s profit for the year then ended;
G
the Group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
G
the parent company financial statements have been properly prepared in accordance with UK-adopted
international accounting standards as applied in accordance with the provisions of the Companies Act 2006; and
G
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit
of the financial statements’ section of our report. We are independent of the group and the parent company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the group’s and the parent company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures
in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions
are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause
the group or the parent company to cease to continue as a going concern.
Our evaluation of the directors’ assessment of the group’s and the parent company’s ability to continue to adopt the
going concern basis of accounting included challenging the underlying data and key assumptions used by the
directors to make their going concern assessment, evaluating their plan for future actions in relation to that
assessment and challenging the position of the business to assess their ability to meet obligations in a worst-case
scenario. The worst-case scenario analysis corroborated the directors’ assessment that there is no material
uncertainty in relation to going concern. Our evaluation comprised the following procedures:
G
Obtaining management’s base case cash flow forecasts covering the period to 31 October 2025, and assessing
how these cash flows forecasts were compiled;
G
Assessing revenue growth and cost inflation assumptions, determining their appropriateness by applying
relevant sensitivities to the underlying assumptions and challenging those assumptions;
G
Assessing the accuracy of management’s past forecasting by comparing their forecasts for the last two years
to the actual results and considering the potential impact on the base case cash flow forecast;
G
Assessing worst-case scenario sensitivities to determine the potential impact of possible changes in the
assumptions regarding business performance and position. We evaluated the impact of no new business being
secured on the level of forecast recurring revenue and on the overall performance and position of the business,
including the impact on forecast cash headroom. We considered whether the assumptions are consistent with
our understanding of the business derived from other detailed audit work undertaken;
G
We confirmed the cash held by the group at 30 April 2024 and compared this to the cash requirements indicated
in management’s forecasts, noting that the balance held is significantly higher than forecasted costs;
G
Assessing the Group’s orderbook and corroborating to underlying contracts to verify the accuracy of the
orderbook;
G
Assessing the impact and feasibility of the mitigating factors available to management in respect of the ability
to restrict cash impact, including the level of available facilities; and
G
Assessing the adequacy of related disclosures within the annual report.
Conclusions relating to going concern (continued)
In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the group’s and the
parent company’s business model including effects arising from macro-economic uncertainties such as the cost of living
crisis and rising interest rates, we assessed and challenged the reasonableness of estimates made by the directors and
the related disclosures and analysed how those risks might affect the group’s and the parent company’s financial
resources or ability to continue operations over the going concern period.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group’s and the parent company’s ability
to continue as a going concern for a period of at least twelve months from when the financial statements are authorised
for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Our approach to the audit
Independent auditor’s report to the members of MS INTERNATIONAL plc
Continued
15
M S I N T E R N A T I O N A L p l c
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud)
that we identified. These matters included those that had the greatest
effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Overview of our audit approach
Overall materiality:
Group: £1,367,000, which represents 10% of the Group’s forecast profit before tax at the
planning stage of the audit.
Parent company: £810,000, which represents 2.5% of the parent company’s net assets at
the planning stage of the audit.
Key audit matters were identified as:
G
Defence revenue recognition (same as prior year)
The key audit matter relating to revenue recognition has been amended from the key
audit matter identified in our audit report for the year ended 30 April 2023 to remove the
risk related to Petrol Station Superstructure revenues due to their lower significance to
the Group revenues in the current year.
Our auditor’s report for the year ended 30 April 2023 included one other key audit matter
that has not been reported as a key audit matter in our current year’s report. This related
to significant contract cancellations within the defence stream and has not been included
due to a lack of similar contract cancellations in the period.
Scoping has been determined to ensure appropriate coverage of the significant risks as
well as coverage of the key results in the financial statements; specifically, we performed
the following audit work:
G
Group revenue: 79%
G
Group total assets: 88%
G
Group profit before tax: 84%
We performed an audit of the financial information of three components using component
materiality (full-scope audit) and an audit of one or more account balances, classes of
transactions or disclosures of the component (specific scope audit) for two components.
We then performed specified audit procedures on one component.
We performed analytical procedures at Group level (analytical procedures) on the
financial information of all the remaining Group components and performed tests on
material balances where appropriate.
Independent auditor’s report to the members of MS INTERNATIONAL plc
Continued
M S I N T E R N A T I O N A L p l c
16
Key audit matters (continued)
In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.
Key Audit Matter - Group
Defence revenue recognition
We identified Defence revenue recognition
as one of the most significant assessed risks
of material misstatement due to fraud.
Defence revenue is a major driver of the
business and the most significant revenue
stream for the group financial statements in
the current year. There is judgement around
the
appropriate
method
of
revenue
recognition and the assessment as to
whether revenue should be recognised over
time or at a point in time.
The group generates total revenues of
£109.6m, £67.2m of which can be attributed
to the Defence division with £62.3m being
recognised at a point in time and £4.9m
being recognised over time.
There is a fraud risk that revenue
recognised on significant contracts signed in
the
year
may
not
be
appropriately
accounted
for
in
accordance
with
International
Financial
Reporting
Standards (‘IFRS’) 15 ‘Revenue from
Contracts with Customers’ (especially for
the
identification
of
performance
obligations, the allocation of transaction
price to these performance obligations and
the assessment of whether control has
passed).
For revenues recognised at a point in time,
there is a risk that revenue may be
inappropriately recognised in the last
month of the year and that this might be
material as contracts are significant in size.
How the matter was addressed in the audit - Group and parent
In responding to the key audit matter, we performed the following
audit procedures:
G
Understood the design, and assessed the implementation
effectiveness, of controls for the recording of revenue.
G
Assessed the revenue recognition policies for compliance with
IFRS 15 and consistency with previous years.
G
Inspected the revenue recorded in the year for adherence to the
policy adopted and assessed the adequacy of the disclosures
made.
G
Obtained management’s assessment of new significant
contracts signed in the year, including information from
management’s accounting specialists where relevant, to assess
the application of IFRS 15 to these contracts and the
conclusions reached.
G
Selected a sample of contracts identified in line with our risk
assessment and:
– Obtained management’s assessment of the revenue
recognition under the contract and assessed for compliance
with IFRS;
– Challenged management on their IFRS 15 application and
corroborated key judgements to supporting documentation;
– Obtained the signed contract and supporting information
to support the occurrence of revenue including sales invoices,
customer orders and delivery information; and
– Assessed the clauses in the contract to understand any
penalties which may have been incurred and require
provision.
G
Assessed revenue recognised in the last month of the year to
ensure it is reflected in the appropriate accounting period
including selecting a sample of the revenue recognised in the
last month of the year.
G
Assessed the disclosures in the financial statements for
appropriateness in accordance with IFRS 15
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M S I N T E R N A T I O N A L p l c
17
Relevant disclosures in the Annual Report and
Accounts 2024
G
Financial statements: Note 2, Accounting
policies and Note 3, Revenue
Independent auditor’s report to the members of MS INTERNATIONAL plc
Continued
Our results
Based on the work we have undertaken we have not found any
material misstatements in contract revenue recognition.
Key audit matters (continued)
Key Audit Matter - Group
How the matter was addressed in the audit - Group and
parent
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Materiality threshold
Significant judgements made by
auditor
in
determining
the
materiality
£1,367,000 (2023: £640,000), which
represents 10% of forecast profit
before tax at the planning stage of
the audit.
The range of component materialities
used across the group was £486,000
to £648,000.
In determining materiality, we made
the following significant judgements:
G
The selection of an appropriate
benchmark; and
G
The selection of an appropriate
percentage to apply to that
benchmark.
Profit before tax is considered to be
the most appropriate benchmark
because it is the most relevant
performance
measure
to
the
stakeholders of the Group and is
presented in the result highlights on
page 2.
Materiality for the current year is
higher than materiality determined
for the year ended 30 April 2023 due
to a change in benchmark from
revenue
to
profit
before
tax,
combined with an increase in the
Group’s performance.
Revenue was used as the benchmark
for determining materiality in the
prior year due to historic volatility in
profit before tax for the Group. For
2024, we assessed profit before tax to
be an appropriate benchmark as
volatility has reduced and is forecast
to remain so.
£810,000 (2023: £408,000) which
represents 2.5% of the parent
company’s net assets at the
planning stage of the audit.
In determining materiality, we
made the following significant
judgements:
G
The selection of an appropriate
benchmark; and
G
The selection of an appropriate
percentage to apply to that
benchmark.
The parent company’s net assets
balance is considered the most
appropriate benchmark because it
is the most relevant measure of a
company that is primarily a
holding company.
Materiality for the current year is
higher
than
materiality
determined for the year ended 30
April 2023 due to a 0.5% increase
in the percentage applied to the
net assets benchmark, combined
with an increase in the Company’s
performance.
222222222222222222222222222222222222222222222222
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of
identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in
forming the opinion in the auditor’s report.
Materiality was determined as follows:
Materiality measure
Materiality for financial
statements as a whole
Group
We define materiality as the magnitude of misstatement in the financial
statements that, individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the users of these financial
statements. We use materiality in determining the nature, timing and
extent of our audit work..
Parent
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M S I N T E R N A T I O N A L p l c
18
Independent auditor’s report to the members of MS INTERNATIONAL plc
Continued
Performance materiality
threshold
Significant judgements made by
auditor
in
determining
the
performance materiality
£1,025,000
(2023:
£480,000),
which is 75% (2023: 75%) of
financial statement materiality.
In
determining
performance
materiality, we considered the
following significant factors:
G
The strength of the control
environment based on our
assessment of the design and
implementation effectiveness
of relevant controls; and
G
The nature, size and volume
of misstatements identified in
the previous audit. .
£608,000 (2023: £306,000), which
is 75% (2023: 75%) of financial
statement materiality.
In
determining
performance
materiality, we considered the
following significant factors:
G
The strength of the control
environment based on our
assessment of the design and
implementation effectiveness
of relevant controls; and
G
The nature, size and volume
of misstatements identified in
the previous audit.
222222222222222222222222222222222222222222222222
Materiality measure
Performance materiality used to
drive the extent of our testing
Group
We set performance materiality at an amount less than materiality for the
financial statements as a whole to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole.
Parent
222222222222222222222222222222222222222222222222
Specific materiality threshold
We determined a lower level of
specific
materiality
for
the
following areas:
G
Directors’ remuneration; and
G
Identified
related
party
transactions outside of the
normal course of business.
We determined a lower level of
specific
materiality
for
the
following areas:
G
Directors’ remuneration; and
G
Identified
related
party
transactions outside of the
normal course of business.
222222222222222222222222222222222222222222222222
Specific materiality
We determine specific materiality for one or more particular classes of
transactions, account balances or disclosures for which misstatements of
lesser amounts than materiality for the financial statements as a whole
could reasonably be expected to influence the economic decisions of users
taken on the basis of the financial statements.
222222222222222222222222222222222222222222222222
Threshold for communication
£68,000 (2023: £32,000), which
represents
5%
of
financial
statement
materiality,
and
misstatements
below
that
threshold that, in our view,
warrant reporting on qualitative
grounds.
£41,000 (2023: £20,400), which
represents
5%
of
financial
statement
materiality,
and
misstatements
below
that
threshold that, in our view,
warrant reporting on qualitative
grounds.
Communication of misstatements
to the audit committee
We determine a threshold for reporting unadjusted differences to the audit
committee.
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The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for
potential uncorrected misstatements.
Overall materiality – Group
Overall materiality – Parent company
Our application of materiality (continued)
M S I N T E R N A T I O N A L p l c
19
Independent auditor’s report to the members of MS INTERNATIONAL plc
Continued
FSM: Financial statement materiality, PM: Performance materiality, RoM: Range of component materiality at tested
components, TfC: Threshold for communication to the audit committee
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding of the Group’s and the parent company’s business
and in particular matters related to:
Understanding the group, its components, and their environments, including group-wide controls
G
the engagement team obtained an understanding of the Group and its environment, including group-wide
controls, and assessed the risks of material misstatement at the group level;
G
the engagement team obtained an understanding of the individual components, including component-specific
controls, and assessed the risks of material misstatement at the group level - to facilitate this, planning
discussions were held between the engagement team and the Group’s management team; and
G
the engagement team performed walkthrough procedures on key areas of focus to understand the controls and
assess the design and implementation effectiveness of these.
Identifying significant components
G
the engagement team identified significant components, based on their significance to key performance and
position measures within the financial information of the Group; and
G
the engagement team did not identify any significant components based on qualitative factors, such as specific
uses or concerns over specific components.
Type of work to be performed on financial information of parent and other components (including how it
addressed the key audit matters)
G
the engagement team performed full-scope audit procedures on the financial statements of the three
significant components, being MSI-Defence Systems Ltd, Global-MSI plc and MSI-Forks Ltd.;
G
the engagement team performed an audit of one or more classes of transactions and account balances on two
components, being MSI-Defence Systems US LLC and the parent company;
G
the engagement team performed specified audit procedures on one component which included significant
risks or material balances, being MS INTERNATIONAL Estates Ltd; and
G
the remaining eight components were subject to analytical procedures
No of
% coverage
% coverage
% coverage
Audit approach
components
revenue profit before tax
of total assets
Full-scope audit
3 (2023: 2)
70 (2023: 59)
76 (2023: 90)
69 (2023: 42)
Audit of one or more classes of transaction
2 (2023: 3)
9 (2023: 25)
8 (2023: - )
6 (2023: 4)
Specified audit procedures
1 (2023: 2)
– (2023: -)
– (2023: -)
13 (2023: 28)
Analytical procedures
8 (2023: 6)
21 (2023: 16)
16 (2023: 10)
12 (2023: 26)
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22222
222222
222222
222222
Total
14 (2023: 13)
100 (2023:100)
100 (2023: 100)
100 (2023:100)
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22222
222222
222222
222222
Our application of materiality (continued)
Independent auditor’s report to the members of MS INTERNATIONAL plc
Continued
20
M S I N T E R N A T I O N A L p l c
An overview of the scope of our audit (continued)
Changes in approach from previous periods
G
We have performed procedures on specific classes of transactions and balances on MSI-Defence Systems US
LLC due to its increased contribution and associated risk to the group financial statements which has not
previously been subject to audit procedures;
G
We have performed analytical procedures for the following components in the period due to their reduced
relative contribution to the group compared to the prior period in which specific transactions were subject to
procedures: Petrol Sign Ltd, MSI-Forks LLC and MSI-Sign Group B.V.
Other information
The other information comprises the information included in the annual report, other than the financial statements
and our auditor’s report thereon. The directors are responsible for the other information contained within the annual
report. Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
G
the information given in the strategic report and the report of the directors for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
G
the strategic report and the report of the directors have been prepared in accordance with applicable legal
requirements.
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
G
adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
G
the parent company financial statements are not in agreement with the accounting records and returns; or
G
certain disclosures of directors’ remuneration specified by law are not made; or
G
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, set out on page 13, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative but to do so.
21
Independent auditor’s report to the members of MS INTERNATIONAL plc
Continued
M S I N T E R N A T I O N A L p l c
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below:
G
We obtained an understanding of the legal and regulatory frameworks applicable to the Group and parent
company, and the industry in which it operates which include UK export and firearms legislation. We
determined that the laws and regulations most significant to the financial statements are UK-adopted
international accounting standards (for the Group and the Parent Company), the Companies Act 2006 and
relevant tax regulations;
G
We corroborated our understanding of the legal and regulatory framework applicable to the entity by
discussing relevant frameworks with Group and component management, by seeking and obtaining
correspondence with relevant parties, and by reviewing Board minutes;
G
We assessed the susceptibility of the Group's and the parent company’s financial statements to material
misstatement, including how fraud might occur, by evaluating management's incentives and opportunities
for manipulation of the financial statements. This included the evaluation of the risk of management
override of controls. We determined that the principal risks were in relation to:
– Journal entries that were posted by senior finance personnel;
– Material transactions crediting the consolidated statement of profit or loss in the final quarter;
– Material post-close journal entries; and
– Judgements and estimates made by management relating to significant accounting estimates.
G
We assessed whether laws and regulations in relation to the transport of restricted goods have been complied
with for a sample of revenue items;
G
Audit procedures performed by the engagement team included:
– evaluating the design and implementation effectiveness of the processes and controls established to
address the risks related to irregularities and fraud;
– journal entry testing, in particular those journals determined to be in respect of our principal risks
documented above; and
– challenging assumptions and judgements made by management in its significant accounting estimates.
G
These audit procedures were designed to provide reasonable assurance that the financial statements were
free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the
risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently
more difficult than detecting those that result from error, as fraud may involve collusion, deliberate
concealment, forgery, or intentional misrepresentations. Also, the further removed non-compliance with laws
and regulations is from events and transactions reflected in the financial statements, the less likely we
would become aware of it.
G
The engagement partner’s assessment of the appropriateness of the collective competence and capabilities
of the engagement team included consideration of the engagement team’s:
– understanding of, and practical experience with, audit engagements of a similar nature and complexity
through appropriate training and participation;
– knowledge of the industry in which the Group and parent company operate; and
– understanding of the legal and regulatory requirements specific to the Group and the parent company.
G
We issued engagement team communications in respect of potential non-compliance with laws and
regulations and fraud.
Independent auditor’s report to the members of MS INTERNATIONAL plc
Continued
22
M S I N T E R N A T I O N A L p l c
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Mark Overfield BSc FCA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Leeds
25th June 2024
Auditor’s responsibilities for the audit of the financial statements (continued)
Consolidated income statement
For the year ended 30th April 2024
M S I N T E R N A T I O N A L p l c
23
2024
2023
Continuing operations
Notes
Total
Total
£’000
£’000
Revenue
3/4
109,576
83,956
Cost of sales
(75,708)
(60,556)
2222222222222222222222222222222222222
2222
2222
Gross profit
33,868
23,400
Distribution costs
(4,092)
(3,402)
Administrative expenses
(16,232)
(14,748)
Derivative gains
6
1,207
–
2222222222222222222222222222222222222
2222
2222
(19,117)
(18,150)
2222222222222222222222222222222222222
2222
2222
Group operating profit
4/5
14,751
5,250
Share of net loss of joint venture
16
–
(36)
Interest received
8
1,244
134
Interest paid
8
(104)
(134)
Other finance costs - pensions
8
(179)
(136)
961
(136)
2222222222222222222222222222222222222
2222
2222
Profit before taxation
15,712
5,078
Taxation
9
(4,212)
(963)
2222222222222222222222222222222222222
2222
2222
Profit for the year attributable to equity holders of the parent
11,500
4,115
2222222222222222222222222222222222222
2222
2222
Basic earnings per share
10
71.0p
25.6p
Diluted earnings per share
10
67.5p
24.2p
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2222
2222
Consolidated statement of comprehensive income
For the year ended 30th April 2024
2024
2023
Notes
Total
Total
£’000
£’000
Profit for the year attributable to equity holders of the parent
11,500
4,115
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2222
2222
Exchange differences on retranslation of foreign operations
(287)
97
2222222222222222222222222222222222222
2222
2222
Net other comprehensive (loss)/gain to be reclassified to profit or loss
in subsequent years
(287)
97
2222222222222222222222222222222222222
2222
2222
Remeasurement gains/(losses) on defined benefit pension scheme
24
3,270
(35)
Deferred tax on remeasurement on defined benefit pension scheme
9
(817)
9
Deferred tax on revaluation surplus on land and buildings
9
–
(252)
2222222222222222222222222222222222222
2222
2222
Net other comprehensive income/(loss) not being reclassified to profit or loss
in subsequent years
2,453
(278)
2222222222222222222222222222222222222
2222
2222
Total comprehensive income for the year attributable to equity holders of the parent
13,666
3,934
2222222222222222222222222222222222222
2222
2222
Consolidated and company statement of changes in equity
For the year ended 30th April 2024
M S I N T E R N A T I O N A L p l c
24
Capital
Currrency
Total
Share redemption
Other Revaluation
Special translation
Treasury
Retainedshareholders’
capital
reserve
reserves
reserve
reserve
reserve
shares
earnings
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
(note 23)
–
–
–
–
–
–
408
(408)
–
Dividends paid (note 11)
–
–
–
–
–
–
–
(1,520)
(1,520)
Transactions with owners
recognised directly in equity
–
–
–
–
–
–
408
(1,842)
(1,434)
222222222222
222
222 222
222
222
222
222
222
222
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
(note 23)
–
–
–
–
–
–
(1,676)
–
(1,676)
Exercise of share options
(note 23)
–
–
–
–
–
–
355
(40)
315
Deferred tax on share option
expense
–
–
–
–
–
–
–
(38)
(38)
Dividends paid (note 11)
–
–
–
–
–
–
–
(2,610)
(2,610)
Transactions with owners
recognised directly in equity
–
–
–
–
–
–
(1,321)
(2,623)
(3,944)
222222222222
222
222 222
222
222
222
222
222
222
At 30th April 2024
1,784
957
2,815
9,923
1,629
(607)
(3,702)
37,998
50,797
222222222222
222
222 222
222
222
222
222
222
222
(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
(note 23)
–
–
–
–
–
–
408
(408)
–
Dividends paid (note 11)
–
–
–
–
–
–
–
(1,520)
(1,520)
Transactions with owners
recognised directly in equity
–
–
–
–
–
–
408
(1,842)
(1,434)
222222222222
222
222 222
222
222
222
222
222
222
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
(note 23)
–
–
–
–
–
–
(1,676)
–
(1,676)
Exercise of share options
(note 23)
–
–
–
–
–
–
355
(40)
315
Dividends paid (note 11)
–
–
–
–
–
–
–
(2,610)
(2,610)
Transactions with owners
recognised directly in equity
–
–
–
–
–
–
(1,321)
(2,585)
(3,906)
222222222222
222
222 222
222
222
222
222
222
222
At 30th April 2024
1,784
957
7,620
–
1,629
–
(3,702)
20,704
28,992
222222222222
222
222 222
222
222
222
222
222
222
Consolidated and company statements of financial position
At 30th April 2024
M S I N T E R N A T I O N A L p l c
25
Group
Company
2024
2023
2024
2023
Notes
£’000
£’000
£’000
£’000
ASSETS
Non-current assets
Property, plant and equipment
12
27,953
24,886
1,389
1,161
Right-of-use assets
13
760
1,162
6,099
4,571
Intangible assets
14
2,448
2,396
–
–
Investments in subsidiaries
15
–
–
15,669
15,669
Investment in joint venture
16
–
–
–
–
Deferred income tax asset
17
16
1,677
–
1,216
Derivative asset
6
309
–
309
–
22222222222222222222222222
2222
2222
2222
2222
31,486
30,121
23,466
22,617
22222222222222222222222222
2222
2222
2222
2222
Current assets
Inventories
18
25,250
24,764
1,823
2,765
Derivative asset
6
898
–
898
–
Trade and other receivables
19
28,304
9,031
11,529
14,344
Contract assets
26
100
144
–
–
Cash and cash equivalents
20
35,509
12,336
9,936
8,016
Restricted cash held in Escrow
20
7,170
2,917
–
–
22222222222222222222222222
2222
2222
2222
2222
97,231
49,192
24,186
25,125
22222222222222222222222222
2222
2222
2222
2222
TOTAL ASSETS
128,717
79,313
47,652
47,742
22222222222222222222222222
2222
2222
2222
2222
EQUITY AND LIABILITIES
Equity
Share capital
22
1,784
1,784
1,784
1,784
Capital redemption reserve
23
957
957
957
957
Other reserves
23
2,815
2,815
7,620
7,620
Revaluation reserve
23
9,923
9,923
–
–
Special reserve
23
1,629
1,629
1,629
1,629
Currency translation reserve
23
(607)
(320)
–
–
Treasury shares
23
(3,702)
(2,381)
(3,702)
(2,381)
Retained earnings
37,998
26,668
20,704
18,321
22222222222222222222222222
2222
2222
2222
2222
TOTAL EQUITY SHAREHOLDERS’ FUNDS
50,797
41,075
28,992
27,930
22222222222222222222222222
2222
2222
2222
2222
Non-current liabilities
Defined benefit pension liability
24
–
4,216
–
4,216
Contract liabilities
27
10,019
–
–
–
Deferred income tax liability
17
3,132
2,943
163
–
Lease liabilities
13
422
829
5,771
4,388
22222222222222222222222222
2222
2222
2222
2222
13,573
7,988
5,934
8,604
22222222222222222222222222
2222
2222
2222
2222
Current liabilities
Trade and other payables
25
21,349
15,286
10,312
9,933
Contract liabilities
27
42,616
14,585
1,784
856
Lease liabilities
13
382
379
630
419
22222222222222222222222222
2222
2222
2222
2222
64,347
30,250
12,726
11,208
22222222222222222222222222
2222
2222
2222
2222
TOTAL EQUITY AND LIABILITIES
128,717
79,313
47,652
47,742
22222222222222222222222222
2222
2222
2222
2222
No profit and loss account is presented for the Company, as permitted by section 408 of the Companies Act 2006. The
Company's profit for the financial year amounted to £2,753,000 (2023 – £305,000).
The financial statements on page 23 to 64 of MS INTERNATIONAL plc, registered number 00653735, were approved
by the Board of Directors on 25th June 2024 and signed on its behalf by:
Michael Bell
Michael O’Connell
Executive Chairman
Finance Director
Consolidated and company cash flow statements
For the year ended 30th April 2024
M S I N T E R N A T I O N A L p l c
26
Group
Company
2024
2023
2024
2023
Note
£’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
12/13
2,144
2,044
1,273
965
Amortisation charge
14
61
239
–
–
Impairment of goodwill
14
–
390
–
–
Impairment of investment
15
–
–
–
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
16
–
36
–
–
Profit on disposal of joint venture
16
(9)
–
–
–
Finance (income)/costs
8
(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
6
(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
24
(1,125)
(675)
(1,125)
(675)
22222222222222222222222222
2222
2222
2222
2222
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)
22222222222222222222222222
2222
2222
2222
2222
Net cash inflow/(outflow) from operating activities
36,602
(397)
4,215
4,984
22222222222222222222222222
2222
2222
2222
2222
Investing activities
Dividends received from subsidiaries
–
–
3,224
2,439
Purchase of property, plant and equipment
12
(4,898)
(1,971)
(832)
(705)
Purchase of intangible assets
14
(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
20/21
(4,253)
(1,759)
–
–
22222222222222222222222222
2222
2222
2222
2222
Net cash (outflow)/inflow from investing activities
(8,979)
(3,493)
2,493
1,854
22222222222222222222222222
2222
2222
2222
2222
Financing activities
Buy back of own shares
23
(1,676)
–
(1,676)
–
Money received from the exercise of share options
23
315
–
315
–
Lease payments
(409)
(415)
(817)
(560)
Dividends paid
11
(2,610)
(1,520)
(2,610)
(1,520)
22222222222222222222222222
2222
2222
2222
2222
Net cash outflow from financing activities
(4,380)
(1,935)
(4,788)
(2,080)
22222222222222222222222222
2222
2222
2222
2222
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
–
–
22222222222222222222222222
2222
2222
2222
2222
Closing cash and cash equivalents
20
35,509
12,336
9,936
8,016
22222222222222222222222222
2222
2222
2222
2222
1
Authorisation of financial statements and statement of compliance with UK adopted International
Accounting Standards
MS INTERNATIONAL plc (the ‘Company’) is a public limited company incorporated and domiciled in England and
Wales. The Company’s ordinary shares are traded on the Alternative Investment Market (AIM) market of the
London Stock Exchange.
The financial statements of the Company and its subsidiaries (together referred to as the ‘Group’) for the year ended
30th April 2024 were authorised for issue by the Board of Directors on 25th June 2024 and the statements of
financial position were signed on the Board’s behalf by Michael Bell and Michael O’Connell.
The Group’s and Company’s financial statements for the year ended 30th April 2024 have been prepared in
accordance with UK adopted International Accounting Standards.
222222222222222222222222222222222222222222222222
2
Accounting policies
Basis of preparation
The consolidated financial statements are presented in pounds sterling and all values are rounded to the nearest
thousand (£’000) except where otherwise indicated.
The principal accounting policies have been applied consistently to all years presented in these Group financial
statements, unless otherwise stated. The consolidated financial statements have been prepared on a going concern
basis.
Going concern
The financial statements have been prepared on a going concern basis. The Group’s business activities, together with
factors likely to affect its future development, performance, and position are set out in the Chairman’s statement and
Strategic report on pages 3 to 5 and 8 to 12.
At 30th April 2024, the Group held cash and cash equivalents of £35.51m with a further £7.17m of restricted cash
held in an Escrow account maturing in greater than 90 days. The Group also has a number of large long-term
contracts and a healthy order book. As such, the directors are satisfied that the Group has sufficient liquidity to meet
both its current liabilities and future working capital requirements.
The performance of the Group is dependent on a number of external factors and the wider economic environment.
The increase in inflation, the cost and supply of raw materials, and soaring energy prices are among the biggest
challenges and uncertainties facing the Group. However, management remain vigilant and are regularly monitoring
the impact of these external factors in order to mitigate any impact upon the business.
Forecasts have been prepared up to 31st October 2025, which the directors believe reflect a reasonable expectation,
based on the information available at the date of signing these financial statements. The forecasts have been
assessed for the potential impact of possible sensitivities, including a 10% fall in the forecasted revenue across the
Group and a 10% increase in material prices. In all scenarios the Group has sufficient headroom to be able to
continue to meet its liabilities as they fall due.
In addition, management have carried out reverse stress tests to 31st October 2025 under various scenarios, all of
which are considered severe but implausible by management. In all tested scenarios, the Group would continue as
a going concern throughout the assessment period.
As a result, in making the going concern assessment the directors consider there to be no material uncertainties that
could cast significant doubt on the Group’s ability to continue to operate as a going concern. They believe that the
Group has sufficient financial resources with a healthy orderbook to continue operating for the foreseeable future,
being at least to 31st October 2025. As a result, the directors continue to adopt the going concern basis of accounting
in preparation of these financial statements.
Critical accounting estimates and assumptions
In preparation of the financial statements, the Group’s management are required to make estimates, judgements
and assumptions that affect the reported amounts of amount of assets, liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and any other factors considered to be
relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed
on an ongoing basis and any revisions are recognised in the period in which they are revised.
Notes to the financial statements
For the period ended 30th April 2024
M S I N T E R N A T I O N A L p l c
27
2
Accounting policies (continued)
Critical accounting estimates and assumptions (continued)
The following estimates and judgements have a risk of causing material adjustments to the amounts recognised in
these financial statements:
Judgements
(a) Contract revenue
Judgement is required in determining the recognition of revenue either at a point in time or over
time. Where contracts contain multiple performance obligations, revenue is measured over time
only if the group’s performance does not create an asset with an alternative use to the Group or
if the customer simultaneously receives and consumes the benefits provided by the group’s
performance as the group performs. The majority of contracts within the Group do not meet this
criteria and therefore revenue recognition is judged to be at a point in time (note 3). This
assessment is detailed further in the accounting policy for revenue.
b) Capitalisation of development costs
Development costs are expensed to the consolidated income statement as incurred where they do
not meet the criteria for capitalisation. Judgement is required in determining if and when costs
directly attributable to a project’s development phase should be capitalised, particularly when
assessing the point at which an asset will generate probable future economic benefits (see note 5).
(c) Share-based payments
Judgement is required in determining the most appropriate valuation model for a grant of equity
instruments, depending on the terms and conditions of the grant. Management are also required
to use judgement in determining the most appropriate inputs to the valuation model including
expected life of the option, volatility and dividend yield (note 32).
Estimates
(a) Pension
Measurement of defined benefits obligations requires estimation of future changes in salaries and
inflation, as well as mortality rates and the selection of a suitable discount rate (see note 24).
(b) Impairment of non-financial assets
The Group’s impairment test for intangible assets with indefinite useful lives and goodwill is
based on the higher of the fair value less costs to sell and a value-in-use calculation. The fair
value less costs to sell calculation is based on available data from binding sales transactions in
an arm’s length transaction on similar assets or observable market prices less incremental costs
for disposing of the asset. The value-in-use calculation is based on a discounted cash flow model
(see note 14).
(c) Leased assets
Leased assets and liabilities are measured at the present value of total lease payments,
discounted using the interest rate implicit in the lease, or if that cannot be determined, the
Group’s incremental borrowing rate. Management is therefore required to make an estimate to
determine the discount rate for each individual lease (see note 13).
(d) Fair value of derivative instruments
Derivative financial instruments are initially recognised at fair value on the date the derivative
contract is entered into and are subsequently remeasured at their fair value at the reporting date.
An estimation of the changes in marking the outstanding forward currency forward contracts to
fair value is required (note 6).
(e) Inventory provisions
The level of inventory provisions carried within the financial statements is reviewed annually.
The recoverability of the cost of the inventory is assessed by considering the nature and condition
of the inventory, as well as applying assumptions about the future saleability or usage of items.
The level of inventory provisions is disclosed in note 18 to the financial statements.
(f) Valuation of land and buildings
Land and buildings are held at fair value less depreciation and impairment. Fair value is an area
of judgement as it is based on periodic valuations by external independent valuers, which are
determined from market-based evidence (see note 12).
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
28
2
Accounting policies (continued)
Critical accounting estimates and assumptions (continued)
Estimates (continued)
(g) Warranty provision
Provisions for the expected cost of warranty obligations are measured at the Directors’ best
estimate of the expenditure required to settle the obligation at the balance sheet date. In
determining the most appropriate warranty prevision the Group makes use of management
experience, historic precedents, and contract specific considerations (note 26).
222222222222222222222222222222222222222222222222
Basis of consolidation
The Group financial statements incorporate the results of MS INTERNATIONAL plc and the results of its subsidiary
undertakings. Subsidiaries are those entities over which the Company has control. The Company holds, directly or
indirectly, 100% of the share capital and 100% of the voting rights of all subsidiaries. All subsidiaries have a
reporting date of 30th April.
All intra-group balances, transactions, income and expenses, and profits and losses resulting from intra-group
transactions that are recognised in assets, are eliminated in full on consolidation.
Subsidiaries are fully consolidated from the effective date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
222222222222222222222222222222222222222222222222
Exemption from audit
For the year ended 30th April 2024, MS INTERNATIONAL plc has provided a parental guarantee for MS
INTERNATIONAL Estates Ltd (company number 11218853). MS INTERNATIONAL Estates Ltd is entitled to
exemption from audit under section 479A if the Company’s Act 2006 relating to subsidiary companies.
222222222222222222222222222222222222222222222222
The Company’s investments in subsidiaries
In its separate financial statements the Company’s investments in subsidiaries are carried at cost less provision for
impairment.
222222222222222222222222222222222222222222222222
Investment in joint venture
Joint ventures are entities over which the Group has joint control. Investments in joint ventures are accounted for
using the equity method. Under the equity method of accounting, interest in joint ventures is initially recognised at
cost, and the carrying amount is subsequently increased or decreased to recognise the Group’s share of the profit or
loss of the joint venture after the date of acquisition.
222222222222222222222222222222222222222222222222
Foreign currency translation
The consolidated financial statements are presented in pounds sterling, which is the Company’s functional and
presentational currency. Each entity in the Group determines its own functional currency and the items included in
the financial statements of each entity are measured using that functional currency. Transactions in foreign
currencies are initially recorded at the functional currency rate ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling
at the statement of financial position date. All differences are taken to the income statement. Non-monetary items
measured at fair value in foreign currency are translated using the exchange rates at the date when the fair value
was determined.
The functional currencies of the Group’s overseas subsidiaries are the US Dollar, the Euro, the Polish Zloty, the
Brazilian Real and the Argentinean Peso. The assets and liabilities of the overseas subsidiaries are translated into
the presentational currency of the Group at the rate of exchange ruling at the statement of financial position date
and their income statements are translated at the weighted average exchange rates for the year. The exchange
differences arising on the translation are taken directly to a separate component of equity. On disposal of a foreign
entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is
recognised in the income statement.
222222222222222222222222222222222222222222222222
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Such cost
includes costs directly attributable to making the asset capable of operating as intended.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
29
Land and buildings are recognised initially at cost and thereafter carried at fair value less depreciation and
impairment charged subsequent to the date of the revaluation. Fair value is based on periodic valuations by an
external independent valuer and is determined from market-based evidence by appraisal. Valuations are performed
frequently enough to ensure that the fair value of a revalued asset does not differ materially from its carrying
amount.
Any revaluation surplus is credited to the revaluation reserve in equity except to the extent that it reverses a
decrease in the carrying value of the same asset previously recognised in profit or loss, in which case the increase is
recognised in the income statement. A revaluation deficit is recognised in the income statement, except to the extent
of any existing surplus in respect of that asset in the revaluation reserve.
Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount
of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal any revaluation
reserve relating to the particular asset being sold is transferred to retained earnings.
Depreciation is provided on all property, plant and equipment, other than freehold land, at rates calculated to write
off the cost, less estimated residual value based on prices prevailing at the statement of financial position date, of
each asset evenly over its expected useful life as follows:
Property other than freehold land – over 50 years
Plant and equipment – over 3 to 10 years
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable.
222222222222222222222222222222222222222222222222
Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-
controlling interest in the acquiree. The choice of measurement of non-controlling interest, either at fair value or at
the proportionate share of the acquiree’s identifiable net assets is determined on a transaction by transaction basis.
Acquisition costs incurred are expensed and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances, and pertinent
conditions as at the acquisition date.
Goodwill is initially measured at cost being the excess of the aggregate of the acquisition-date fair value of the
consideration transferred and the amount recognised for the non-controlling interest (and where the business
combination is achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in
the acquiree) over the net identifiable amounts of the assets acquired and the liabilities assumed in exchange for the
business combination. Assets acquired and liabilities assumed in transactions separate to the business
combinations, such as the settlement of pre-existing relationships or post-acquisition remuneration arrangements
are accounted for separately from the business combination in accordance with their nature and applicable IFRSs.
Identifiable intangible assets, meeting either the contractual-legal or separability criterion are recognised separately
from goodwill. Contingent liabilities representing a present obligation are recognised if the acquisition-date fair
value can be measured reliably.
If the aggregate of the acquisition-date fair value of the consideration transferred and the amount recognised for the
non-controlling interest (and where the business combination is achieved in stages, the acquisition-date fair value
of the acquirer’s previously held equity interest in the acquiree) is lower than the fair value of the assets, liabilities
and contingent liabilities and the fair value of any pre-existing interest held in the business acquired, the difference
is recognised in the income statement.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of
the group’s cash-generating units (or groups of cash-generating units) that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each unit
or group of units to which goodwill is allocated shall represent the lowest level within the entity at which the
goodwill is monitored for internal management purposes and not be larger than an operating segment before
aggregation.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
30
2
Accounting policies (continued)
Property, plant and equipment (continued)
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the
goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured
based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.
222222222222222222222222222222222222222222222222
Intangible assets
Intangible assets acquired separately are measured at cost on initial recognition. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and impairment losses. Internally generated
intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in the
income statement in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed
to be either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. The amortisation
period and the amortisation method are reviewed at each financial year end. Changes in the expected useful life or
the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing
the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
The useful economic lives of each intangible asset with finite lives are as follows:
Tradename – over 10 to 20 years
Design database – over 10 years
Non-compete agreement – over 3 years
Customer relationships – over 8 to 10 years
Order backlog – over 1 year
Development costs – over 5 years
Software costs – over 3 to 5 years
Goodwill arising on acquisition of subsidiaries is the only intangible asset with an indefinite useful life.
For impairment assessment purposes, intangible assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment
and others are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are
expected to benefit from synergies of a related business combination and represent the lowest level within the Group
at which management monitors goodwill.
Impairment losses are recognised at the amount by which the asset or cash-generating unit’s carrying amount
exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset
is derecognised.
222222222222222222222222222222222222222222222222
Leased assets
For any new contracts entered into, the Group considers whether a contract is, or contains, a lease. A lease is defined
as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time
in exchange for consideration. New leases are then recognised in the Consolidated statement of financial position as
a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by
the Group.
Lease liabilities are measured at the present value of the lease payments unpaid at the recognition date, discounted
using the interest rate implicit in the lease, or, if that rate cannot be determined, the Group’s incremental borrowing
rate. Lease payments include fixed payments, variable lease payments that are based on an index or rate, less any
lease incentives receivable. Following initial measurement, the liability will be reduced for payments made and
increased for interest. Interest will be charged to profit or loss as an interest expense.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
31
2
Accounting policies (continued)
Business combinations (continued)
The liability will be remeasured to reflect any reassessment of or modification to the lease contract when applicable.
When the lease liability is remeasured, the corresponding adjustment is also reflected in the right-of-use asset, or
profit and loss if the right-of-use asset is already reduced to zero.
Right-of-use assets are measured at cost, which comprises the following:
G
the amount of the initial measurement of lease liability,
G
any lease payments (net of any incentives received) made in advance of the lease commencement date,
G
any initial direct costs incurred,
G
an estimate of any costs to dismantle or remove the asset at the end of the lease.
The Group depreciates the right-of-use asset on a straight-line basis from the lease commencement date to the
earlier of the useful economic life or the end of the lease term.
Payments associated with short-term leases, defined as a lease with a term of 12 months or less, and leases of low-
value assets are recognised on a straight-line basis as an expense in profit or loss.
222222222222222222222222222222222222222222222222
Derivative financial instruments
Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered
into and are subsequently remeasured at their fair value including remeasurement at the reporting date. The Group
has decided not to apply hedge accounting with respect to forward exchange contracts and as a result changes in the
fair values are recognised immediately within the Consolidated income statement within the Derivative gains or
losses line.
222222222222222222222222222222222222222222222222
Research and development
Costs relating to research are charged to the income statement as incurred.
Costs that are directly attributable to a project’s development phase are recognised as intangible assets, provided
they meet the following recognition requirements:
G
the development costs can be measured reliably.
G
the project is technically and commercially feasible.
G
the Group intends to and has sufficient resources to complete the project.
G
the Group has the ability to use or sell the asset.
G
the asset will generate probable future economic benefits.
Development costs not meeting these criteria for capitalisation are expensed as incurred.
222222222222222222222222222222222222222222222222
Inventories
Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its
present location and condition is accounted for as follows:
G
Raw materials — purchase cost on a first-in, first-out basis.
G
Finished goods and work in progress — cost of direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs necessary
to make the sale.
Contract costs relating to non-prototype research and development expenditure are capitalised within work in
progress when the costs are expected to be recovered.
222222222222222222222222222222222222222222222222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
32
2
Accounting policies (continued)
Leased assets (continued)
Trade and other receivables
Trade receivables, which generally have 30 day terms, are recognised and carried at original invoice amount less an
allowance for any uncollectable amounts based on expected credit losses. These are the expected shortfalls in
contractual cash flows, considering the potential for default at any point during the lifetime of the receivable. The
Group uses its historical experience, external indicators and forward looking information to make this assessment.
Trade receivables are classified as financial assets measured as amortised cost.
222222222222222222222222222222222222222222222222
Treasury shares
Own shares held by the Company and Group are classified in equity and are recognised at cost. No gain or loss is
recognised on the purchase, sale, issue, or cancellation of the Group’s own equity instruments.
222222222222222222222222222222222222222222222222
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank, on short-term deposit, and
in hand.
For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding overdrafts which are repayable on demand.
222222222222222222222222222222222222222222222222
Restricted cash held in Escrow
Cash held in Escrow provides security to both Lloyds Bank plc and Barclays Bank plc in respect of any guarantees,
indemnities, and performance bonds given by the Group in the ordinary course of business. In the statement of
financial position amounts not maturing within 90 days of the deposit date are separately disclosed in restricted cash
held in Escrow.
222222222222222222222222222222222222222222222222
Trade and other payables
Trade and other payables are initially regarded at their fair value and thereafter at amortised cost using the effective
interest rate method. Trade payables are classified as financial liabilities at amortised cost.
222222222222222222222222222222222222222222222222
Warranty provisions
Provisions for the expected cost of warranty obligations are recognised in the Consolidated income statement when
it becomes probable that the Group will be required to settle that obligation. Warranty related provisions are
measured at the Directors’ best estimate of the expenditure required to settle the obligation at the balance sheet
date.
222222222222222222222222222222222222222222222222
Pension schemes
The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method,
which attributes entitlement to benefits to the current period (to determine current service cost) and to the current
and prior periods (to determine the present value of defined benefit obligation) and is based on actuarial advice. Past
service costs are recognised in the income statement immediately. When a settlement (eliminating all obligations for
benefits already accrued) or a curtailment (reducing future obligations as a result of a material reduction in the
scheme membership or a reduction in future entitlement) occurs the obligation and related plan assets are
remeasured using current actuarial assumptions and the resultant gain or loss recognised in the income statement
during the period in which the settlement or curtailment occurs.
The interest element of the defined benefit cost represents the change in present value of scheme obligations
resulting from the passage of time, and is determined by applying the discount rate to the opening present value of
the benefit obligation, taking into account material changes in the obligation during the year. Remeasurement gains
and losses are recognised in full in the Consolidated income statement and expensed in the period in which they
occur. Actual gains/losses less amount included in net interest costs are included in other comprehensive income.
The defined benefit pension asset or liability in the statement of financial position comprises the total for each plan
of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds)
less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market
price information and in the case of quoted securities is the published bid price. The value of a net pension benefit
asset is restricted to the sum of the present value of any amount the Group expects to recover by way of refunds from
the plan or reductions in the future contributions.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
33
2
Accounting policies (continued)
The value of a net pension liability is restricted to the sum of the present value of contracted deficit reduction
contributions. Where the present value of contracted deficit reduction contributions exceeds the net pension liability,
the surplus is recognised as a further liability within the financial statements in accordance with IFRIC 14.
Contributions to defined contribution schemes are recognised in the income statement in the year in which they
become payable.
222222222222222222222222222222222222222222222222
Equity settled share-based payments
The Group issues equity-settled share based payments to certain employees. The Group measures the cost of equity-
settled transactions with employees by reference to the fair value of the equity instruments at the date at which they
are granted. The cost is recognised as an expense over the vesting period on a straight line basis, ending on the date
on which the relevant employees become fully entitled to the award. Judgement is required in determining the most
appropriate valuation model for a grant of equity instruments, depending on the terms and conditions of the grant.
Management are also required to use judgement in determining the most appropriate inputs to the valuation model
including expected life of the option, volatility and dividend yield.
The cost of equity settled share-based payments is charged to the income statement with the corresponding credit
applied to equity.
222222222222222222222222222222222222222222222222
Cash settled share-based payments
Cash settled share-based payments result in the recognition of a liability, which is an obligation to make a payment
in cash, based on the price of the underlying equity instrument. As the cash settled share-based payments awarded
carry no market based vesting criteria or non-vesting criteria, the value of the awards at each respective valuation
date equals the share price prevailing at that date, adjusted for any dividend leakage (on a compounded basis) over
their expected life. The fair value of recognised liability is remeasured at each reporting date and the full amount is
remeasured from vesting date to settlement date. Remeasurements are recognised immediately to the extent that
they relate to past services and recognition is spread over the remaining vesting period to the extent they relate to
future services.
The cost of cash settled share-based payments is charged to the income statement with the corresponding credit
applied to liabilities.
222222222222222222222222222222222222222222222222
Revenue
Revenue is attributable to the principal activities of the four divisions within the Group:
G
The design and manufacture of defence and security equipment (‘Defence and Security’).
G
The manufacture of fork-arms and open die forgings (‘Forgings’).
G
The design, manufacture, construction, and maintenance of petrol station superstructures (‘Petrol
Station Superstructures’).
G
The design, manufacture, installation, and service of corporate branding, including media facades,
way-finding signage, public illumination, creative lighting solutions, and the complete appearance of
petrol station superstructures and forecourts (‘Corporate Branding’).
To determine whether to recognise revenue, the Group follows the five steps required when applying IFRS 15:
1.
Identify the contract with the customer.
2.
Identify the separate performance obligations specified within each contract.
3.
Determine the transaction price specified within each contract.
4.
Allocate the transaction price to the performance obligation identified.
5.
Recognise revenue once the performance obligation have been satisfied.
Revenue is recognised either at a point in time or over time depending on when the performance obligations are
satisfied.
The Group recognises contract liabilities (progress payments) for consideration received in respect of unsatisfied
performance obligations and reports these within current and non-current liabilities in the Statement of financial
position.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
34
2
Accounting policies (continued)
Pension schemes (continued)
‘Defence and Security’
The ‘Defence and Security’ division enters into contracts with its customers to provide defence equipment and related
services. The division undertakes to manufacture, pack and supply equipment as well as provide onsite
commissioning, firing trials and training services where required. As a result, contracts contain multiple
performance obligations that are either recognised at a point in time or over time.
Upon signing a contract, the contract is assessed to identify each performance obligation. Revenue is recognised as
performance obligations are satisfied, which is when control of goods and services has transferred to the customer.
Performance obligations, and therefore revenue, are satisfied over time if one of the following criteria is satisfied:
G
the customer simultaneously creates or enhances the benefits provided by the Group’s performance
obligations as it performs;
G
the Groups performance creates or enhances an asset that a customer controls as the asset is created
or enhanced; or
G
the Group’s performance does not create an asset with an alternative use to the Group and it has an
enforceable right to payment for performance completed to date.
If none of the above criteria for recognising revenue over time are met, the performance obligation is satisfied at a
point in time.
The division provides warranties to its customers to give them assurance that its products and services will function
in line with specifications determined within the contract. As warranties within these contracts represent an
assurance type warranty, they are therefore not accounted for as a separate performance obligation.
Occasionally revenue is recognised in accordance with a bill-and-hold arrangement when requested by the customer.
Under these instances revenue is recognised before delivery of the goods when the following criteria are met:
G
the buyer requests a bill-and-hold arrangement
G
the goods must be ready for physical transfer to the customer and must be separately identified as
belonging to the customer
G
the goods cannot be used or directed to another customer.
As part of the contracts entered into, customers may make payments to the division in advance of the goods being
delivered. These are classified as contract liabilities, which are only recognised as revenue once the performance
obligation has been satisfied. Where the contract is denominated in foreign currency, contract liabilities are
translated at the rate prevailing on the date of receipt and are recognised in revenue at this rate.
‘Forgings’
Revenue from the sale of fork-arms and open die forgings is recognised at a point in time upon delivery of the
products, either when or as the ‘Forgings’ division transfers control of the products to the customer. Customers are
invoiced once control of the product has transferred to the customer.
‘Petrol Station Superstructures’
The ‘Petrol Station Superstructures’ division enters into contracts with its customers to provide petrol station
superstructures. The contracts contain a single performance obligation for the delivery of the product.
The division assesses each contract to determine whether revenue should be recognised at a point in time when the
product is delivered to the customer, or recognised over time when the contracts stipulate that the division is entitled
to reward for performance to date. In order to establish the entitlement for performance to date, the division
considers if it has an enforceable right to payment for performance completed to date and the division’s performance
to date does not create an asset with an alternative use to the Group. The majority of contracts have revenue which
is measured at a point in time.
As part of the contracts entered into, customers may make payments to the division in advance of the delivery of the
product. These are classified as contract liabilities, which are only recognised as revenue once the performance
obligation has been satisfied.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
35
2
Accounting policies (continued)
Revenue (continued)
‘Corporate Branding’
The ‘Corporate Branding’ division enters into contracts with its customers to perform the re-imaging of corporate
branding and signage for various industries. Additional engagements include the repair and maintenance of images
on petrol station forecourts.
Control of the goods does not pass to the customer until either the goods are delivered to site for material only
projects, or upon completion of the installation for materials and installation projects. Accordingly, revenue is
recognised at the point in time when this occurs.
As part of some of the contracts entered into, customers may make payments to the division in advance of the goods
being delivered. These are classified as contract liabilities and are only recognised as revenue once the performance
obligation has been satisfied.
222222222222222222222222222222222222222222222222
Taxes
Income tax is charged or credited directly to other comprehensive income or equity if it relates to items that are
credited or charged to, respectively, other comprehensive income or equity. Otherwise income tax is recognised in the
income statement.
222222222222222222222222222222222222222222222222
Current tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the statement of financial position date.
222222222222222222222222222222222222222222222222
Deferred income tax
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements, with the following exceptions:
G
where the temporary difference arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss;
G
in respect of taxable temporary differences associated with investments in subsidiaries, associates and
joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future; and
G
deferred income tax assets are recognised only to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, carried forward tax credits or tax
losses can be utilised;
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected
to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively
enacted at the statement of financial position date. Increases/decreases in deferred income tax assets and liabilities
arising from changes to tax rates enacted or substantively enacted at the statement of financial position date are
recognised immediately in the Consolidated income statement or the Consolidated statement of comprehensive
income.
222222222222222222222222222222222222222222222222
Dividends payable
Dividends are recognised when they become legally payable. In the case of interim dividends this is when paid. In
the case of final dividends this is when approved by the shareholders at the AGM.
222222222222222222222222222222222222222222222222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
36
2
Accounting policies (continued)
Revenue (continued)
Earnings per share
Basic earnings per share is calculated by dividing:
G
the profit for the year attributable to the equity holders of the parent
G
by the weighted average number of ordinary shares in issue, excluding the weighted average number
of shares held in the ESOT and the weighted average number of treasury shares.
Diluted earnings per share is calculated by dividing:
G
the profit for the year attributable to the equity holders of the parent, less the share option expense
G
by the weighted average number of ordinary shares in issue adjusted for the dilutive potential ordinary
shares, excluding the weighted average number of shares held in the ESOT and the weighted average
number of treasury shares.
222222222222222222222222222222222222222222222222
Standards, amendments and Interpretations to existing Standards that are not yet effective and have not been
adopted early by the Group
At the date of authorisation of these financial statements, there are no new, but not yet effective, standards,
amendments to existing standards, or interpretations that have been published by the IASB that will have a
material impact on these financial statements.
222222222222222222222222222222222222222222222222
3
Revenue
The Group’s revenue disaggregated by pattern of revenue recognition and category is as follows:
2024
2023
£’000
£’000
Revenue recognised at a point in time
104,638
81,816
Revenue recognised over time
4,938
2,140
2222222222222222222222222222222222222
2222
2222
Total revenue
109,576
83,956
2222222222222222222222222222222222222
2222
2222
During the year the Group recognised £9,797,000 (2023 – £14,562,000) of revenue that was included in the contract
liability balance at 30th April 2023 (note 27).
222222222222222222222222222222222222222222222222
4
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.
The principal activities of the trading divisions are described in the Strategic report.
‘Defence and
‘Petrol Station
‘Corporate
Security’
‘Forgings’
Superstructures’
Branding’
Total
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)
22222222222
222 222 222 222 222 222 222 222 222 222
Revenue from external customers
67,228 32,433 17,627 23,266 16,046 16,020
8,675 12,237 109,576 83,956
22222222222
222 222 222 222 222 222 222 222 222 222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
37
2
Accounting policies (continued)
4
Segment information (continued)
‘Defence and
‘Petrol Station
‘Corporate
Security’
‘Forgings’
Superstructures’
Branding’
Total
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
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)
22222222222
222 222
Profit before taxation
15,712
5,078
Taxation
(4,212)
(963)
22222222222
222 222
Profit for the year
11,500
4,115
22222222222
222 222
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
22222222222
222 222
Total assets
128,717 79,313
22222222222
222 222
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
22222222222
222 222
Total liabilities
77,920 38,238
22222222222
222 222
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
22222222222
222 222 222 222 222 222 222 222 222 222
* 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.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
38
4
Segment information (continued)
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
South
Kingdom
Europe
USA
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
22222222222
222 222 222 222 222 222 222 222 222 222
Revenue disaggregated by destination 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%
222222222222222222222222
2222
2222
2222
222
Total revenue
109,576
100%
83,956
100%
222222222222222222222222
2222
2222
2222
222
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).
222222222222222222222222222222222222222222222222
5
Group operating profit
2024
2023
Profit before taxation is stated after charging/(crediting):
£’000
£’000
Depreciation of tangible assets – owned assets
1,773
1,668
Depreciation of right-of-use assets
371
376
Amortisation of intangible assets
61
239
Impairment of intangible assets
–
390
Profit on disposal of property, plant and equipment
(215)
(107)
Profit on disposal of joint venture
(9)
–
Short-term and low value leases
112
105
Foreign exchange gains
(166)
(423)
Exchange gain relating to derivative assets
(1,207)
–
Cost of inventories recognised as an expense
64,594
43,027
Research and development costs
1,174
1,908
Defined benefit pension expense
359
371
Equity settled share-based payment expense
65
30
Cash settled share-based payment provision
134
–
Fees payable to the Group’s auditor and associates:
For the audit of the Group’s financial statements
125
100
For the audit of the Group’s subsidiary companies’ financial statements
105
95
For audit related services
29
18
Total administrative expenses are included within Group operating profit.
222222222222222222222222222222222222222222222222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
39
6
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 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.
Group and Company
Average
Change in
US Dollar
Sterling forward rate
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
222222222222222222222222
2222
2222
2222
222
Total
74,000
60,102
1.2312
1,207
222222222222222222222222
2222
2222
2222
222
7
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
222222222222222222222222
2222
2222
2222
222
455
454
134
140
222222222222222222222222
2222
2222
2222
222
(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
222222222222222222222222
2222
2222
2222
222
28,530
25,574
10,374
8,690
222222222222222222222222
2222
2222
2222
222
(b)
Directors’ emoluments
2024
2023
£’000
£’000
Aggregate directors’ emoluments (note 31)
3,517
2,072
Pension contributions
115
65
Gain on exercise of share options (note 32)
1,043
1,042
2222222222222222222222222222222222222
2222
2222
4,675
3,179
2222222222222222222222222222222222222
2222
2222
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.
Directors’ emoluments are considered further within the Directors’ remuneration report presented on pages 76 to 78.
222222222222222222222222222222222222222222222222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
40
8
Finance income and expense
2024
2023
£’000
£’000
Bank interest income
1,244
134
2222222222222222222222222222222222222
2222
2222
Finance income
1,244
134
2222222222222222222222222222222222222
2222
2222
Bank overdraft interest
(60)
(81)
Interest on leases (note 13)
(37)
(51)
Other interest
(7)
(2)
2222222222222222222222222222222222222
2222
2222
Interest paid
(104)
(134)
Pension scheme interest (note 24)
(179)
(136)
2222222222222222222222222222222222222
2222
2222
Finance expense
(283)
(270)
2222222222222222222222222222222222222
2222
2222
Net finance income/(expense)
961
(136)
2222222222222222222222222222222222222
2222
2222
9
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)
2222222222222222222222222222222222222
2222
2222
Group current tax expense
3,223
1,095
2222222222222222222222222222222222222
2222
2222
Deferred tax (note 17)
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)
2222222222222222222222222222222222222
2222
2222
Group deferred tax expense/(credit)
989
(132)
2222222222222222222222222222222222222
2222
2222
Total tax expense on profit
4,212
963
2222222222222222222222222222222222222
2222
2222
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
2222222222222222222222222222222222222
2222
2222
Deferred tax expense in the Consolidated statement of comprehensive income
817
243
2222222222222222222222222222222222222
2222
2222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
41
9
Taxation (continued)
(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
2222222222222222222222222222222222222
2222
2222
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)
2222222222222222222222222222222222222
2222
2222
Total taxation expense for the year
4,212
963
2222222222222222222222222222222222222
2222
2222
(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%.
222222222222222222222222222222222222222222222222
10
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
£’000
£’000
Number of ordinary shares in issue at start of the year
17,841,073
17,841,073
Cancellation of ordinary shares during the year
–
–
2222222222222222222222222222222222222
2222
2222
Number of ordinary shares in issue at the end of the year
17,841,073
17,841,073
2222222222222222222222222222222222222
2222
2222
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)
2222222222222222222222222222222222222
2222
2222
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
2222222222222222222222222222222222222
2222
2222
Weighted average diluted shares
17,031,391
17,026,456
2222222222222222222222222222222222222
2222
2222
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
2222222222222222222222222222222222222
2222
2222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
42
11
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
222222222222222222222222222222222222222222222222
2,610
1,520
222222222222222222222222222222222222222222222222
Proposed for approval by shareholders at the AGM:
Final dividend for 2024: 16.5p (2023 – 13p)
2,679
2,123
222222222222222222222222222222222222222222222222
12
Property, plant and equipment
(a)
Group
Freehold
Plant and
property
equipment
Total
£’000
£’000
£’000
Cost or valuation
At 30th April 2022
21,368
16,106
37,474
Additions
421
1,550
1,971
Disposals
–
(488)
(488)
Exchange differences
141
130
271
2222222222222222222222222222222
2222
2222
2222
At 30th April 2023
21,930
17,298
39,228
2222222222222222222222222222222
2222
2222
2222
Additions
1,405
3,493
4,898
Disposals
–
(676)
(676)
Exchange differences
52
(25)
27
2222222222222222222222222222222
2222
2222
2222
At 30th April 2024
23,387
20,090
43,477
2222222222222222222222222222222
2222
2222
2222
Accumulated depreciation
At 30th April 2022
–
12,937
12,937
Depreciation charge for the year
400
1,268
1,668
Disposals
–
(358)
(358)
Exchange differences
(5)
100
95
2222222222222222222222222222222
2222
2222
2222
At 30th April 2023
395
13,947
14,342
2222222222222222222222222222222
2222
2222
2222
Depreciation charge for the year
408
1,365
1,773
Disposals
–
(578)
(578)
Exchange differences
2
(15)
(13)
2222222222222222222222222222222
2222
2222
2222
At 30th April 2024
805
14,719
15,524
2222222222222222222222222222222
2222
2222
2222
Net book value at 30th April 2024
22,582
5,371
27,953
2222222222222222222222222222222
2222
2222
2222
Net book value at 30th April 2023
21,535
3,351
24,886
2222222222222222222222222222222
2222
2222
2222
Analysis of cost or valuation
At professional valuation
21,561
–
21,561
At cost
1,826
20,090
21,916
2222222222222222222222222222222
2222
2222
2222
At 30th April 2024
23,387
20,090
43,477
2222222222222222222222222222222
2222
2222
2222
Analysis of cost or valuation
At professional valuation
21,509
–
21,509
At cost
421
17,298
17,719
2222222222222222222222222222222
2222
2222
2222
At 30th April 2023
21,930
17,298
39,228
2222222222222222222222222222222
2222
2222
2222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
43
12
Property, plant and equipment (continued)
(b)
Company
Plant and
equipment
Total
£’000
£’000
Cost or valuation
At 30th April 2022
8,444
8,444
Additions
705
705
Disposals
(243)
(243)
2222222222222222222222222222222222222
2222
2222
At 30th April 2023
8,906
8,906
2222222222222222222222222222222222222
2222
2222
Additions
832
832
Disposals
(262)
(262)
2222222222222222222222222222222222222
2222
2222
At 30th April 2024
9,476
9,476
2222222222222222222222222222222222222
2222
2222
Accumulated depreciation
At 30th April 2022
7,427
7,427
Depreciation charge for the year
508
508
Disposals
(190)
(190)
2222222222222222222222222222222222222
2222
2222
At 30th April 2023
7,745
7,745
2222222222222222222222222222222222222
2222
2222
Depreciation charge for the year
596
596
Disposals
(254)
(254)
2222222222222222222222222222222222222
2222
2222
At 30th April 2024
8,087
8,087
2222222222222222222222222222222222222
2222
2222
Net book value at 30th April 2024
1,389
1,389
2222222222222222222222222222222222222
2222
2222
Net book value at 30th April 2023
1,161
1,161
2222222222222222222222222222222222222
2222
2222
Analysis of cost or valuation
At professional valuation
–
–
At cost
9,476
9,476
2222222222222222222222222222222222222
2222
2222
At 30th April 2024
9,476
9,476
2222222222222222222222222222222222222
2222
2222
Analysis of cost or valuation
At professional valuation
–
–
At cost
8,906
8,906
2222222222222222222222222222222222222
2222
2222
At 30th April 2023
8,906
8,906
2222222222222222222222222222222222222
2222
2222
(c)
Within the Group depreciation has not been charged on freehold land which is included at a book value of
£5,888,000 (2023 - £5,870,000) at 30th April 2024. The Company does not hold any freehold land.
(d)
The last formal valuation of the Group’s land and buildings, which consists of manufacturing and office
facilities in the UK, the USA and Poland, was carried out in April 2022 by Dove Haigh Phillips (UK), Real
Estate & Appraisal Services Inc (USA), and KonSolid-Nieruchomosci (Poland). Management determined that
these constitute one class of asset under IFRS 13 (designated as level 3 fair value assets), based on the nature,
characteristics and risks of the properties.
The properties in the UK were valued on the basis of an existing use value in accordance with the Appraisal
and Valuation Standards (5th Edition) published by the Royal Institution of Chartered Surveyors. The Polish
property was valued based on the income approach, converting anticipated future benefits in the form of
rental income into present value. The US property was valued on an income and market value basis. For all
properties, there is no difference between current use and highest and best use.
During the year management have made an assessment of the Group’s land and buildings and believe that
carrying value is materially accurate so no adjustments to reflect the fair value are required.
If land and buildings were valued using the cost method, carrying amounts would be £15,338,000 (2023 -
£14,109,000) at 30th April 2024.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
44
13
Leases
(a)
Right-of-use assets
Group
Freehold
Plant and
property
equipment
Total
£’000
£’000
£’000
Cost or valuation
At 30th April 2022
2,218
10
2,228
Additions
–
–
–
Disposals
–
(10)
(10)
Exchange differences
94
–
94
2222222222222222222222222222222
2222
2222
222
At 30th April 2023
2,312
–
2,312
2222222222222222222222222222222
2222
2222
222
Additions
–
–
–
Disposals
–
–
–
Exchange differences
(69)
–
(69)
2222222222222222222222222222222
2222
2222
222
At 30th April 2024
2,243
–
2,243
2222222222222222222222222222222
2222
2222
222
Accumulated depreciation
At 30th April 2022
741
8
749
Depreciation charge for the year
374
2
376
Disposals
–
(10)
(10)
Exchange differences
35
–
35
2222222222222222222222222222222
2222
2222
222
At 30th April 2023
1,150
–
1,150
2222222222222222222222222222222
2222
2222
222
Depreciation charge for the year
371
–
371
Disposals
–
–
–
Exchange differences
(38)
–
(38)
2222222222222222222222222222222
2222
2222
222
At 30th April 2024
1,483
–
1,483
2222222222222222222222222222222
2222
2222
222
2222222222222222222222222222222
2222
2222
222
Net book value at 30th April 2024
760
–
760
2222222222222222222222222222222
2222
2222
222
Net book value at 30th April 2023
1,162
–
1,162
2222222222222222222222222222222
2222
2222
222
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
45
13
Leases (continued)
(a)
Right-of-use assets (continued)
Company
Freehold
Plant and
property
equipment
Total
£’000
£’000
£’000
Cost or valuation
At 30th April 2022
6,400
–
6,400
Additions
–
–
–
2222222222222222222222222222222
2222
2222
222
At 30th April 2023
6,400
–
6,400
2222222222222222222222222222222
2222
2222
222
Additions
2,205
–
2,205
2222222222222222222222222222222
2222
2222
222
At 30th April 2024
8,605
–
8,605
2222222222222222222222222222222
2222
2222
222
Accumulated depreciation
At 30th April 2022
1,371
–
1,371
Depreciation charge for the year
458
–
458
2222222222222222222222222222222
2222
2222
222
At 30th April 2023
1,829
–
1,829
2222222222222222222222222222222
2222
2222
222
Depreciation charge for the year
677
–
677
2222222222222222222222222222222
2222
2222
222
At 30th April 2024
2,506
–
2,506
2222222222222222222222222222222
2222
2222
222
2222222222222222222222222222222
2222
2222
222
Net book value at 30th April 2024
6,099
–
6,099
2222222222222222222222222222222
2222
2222
222
Net book value at 30th April 2023
4,571
–
4,571
2222222222222222222222222222222
2222
2222
222
(b)
Lease liabilities
Group
The Group has entered into commercial leases on certain properties. The remaining duration of these leases are from
1 year up to 3 years (2023 - 1 to 4 years) from the Statement of financial position date.
The future minimum lease payments are as follows:
Within
One to
one year
five years
Total
£’000
£’000
£’000
At 30th April, 2024
Lease payments
405
432
837
Finance charges
(23)
(10)
(33)
2222222222222222222222222222222
2222
2222
222
Net present values
382
422
804
2222222222222222222222222222222
2222
2222
222
At 30th April 2023
Lease payments
417
863
1,280
Finance charges
(38)
(34)
(72)
2222222222222222222222222222222
2222
2222
222
Net present values
379
829
1,208
2222222222222222222222222222222
2222
2222
222
The Group has elected not to recognise a lease liability for short-term or low value leases. Payments for such leases
are expensed to profit or loss on a straight-line basis.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
46
13
Leases (continued)
(b)
Lease liabilities (continued)
Group (continued)
Lease expenses have been charged to the Consolidated income statement as follows:
2024
2023
£’000
£’000
Expenses relating to lease payments not classified as a lease liability:
Short-term leases
94
70
Leases of low value assets
18
35
2222222222222222222222222222222222222
2222
2222
Total
112
105
2222222222222222222222222222222222222
2222
2222
Expenses relating to lease payments classified a lease liability:
Depreciation on right-of-use assets
371
376
Interest on leases (note 8)
37
51
2222222222222222222222222222222222222
2222
2222
408
427
2222222222222222222222222222222222222
2222
2222
Company
The Company has entered into three property leases with ‘MS INTERNATIONAL Estates Ltd’. The remaining
duration of these leases is 9 years (2023 – 10 years).
The future minimum lease payments are as follows:
Within
One to
After
one year
five years
five years
Total
£’000
£’000
£’000
£’000
At 30th April, 2024
Lease payments
817
3,267
3,267
7,351
Finance charges
(187)
(553)
(210)
(950)
222222222222222222222222
2222
2222
2222
222
Net present values
630
2,714
3,057
6,401
222222222222222222222222
2222
2222
2222
222
At 30th April 2023
Lease payments
560
2,240
2,800
5,600
Finance charges
(141)
(434)
(218)
(793)
222222222222222222222222
2222
2222
2222
222
Net present values
419
1,806
2,582
4,807
222222222222222222222222
2222
2222
2222
222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
47
14
Intangible assets
Group
Non-
Trade
Design
complete
Customer
Order Development
Software
Goodwill
name
database
agreement relationships
backlog
costs
costs
Group
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cost
At 30th April 2022
3,025
1,036
1,370
49
2,567
318
279
384
9,028
Additions
–
–
–
–
–
–
–
–
–
Exchange differences
33
8
–
2
75
10
–
–
128
222222222222
222
222
222
222
222
222
222
222
222
At 30th April 2023
3,058
1,044
1,370
51
2,642
328
279
384
9,156
Additions
–
–
–
–
–
–
142
–
142
Exchange differences
(21)
(5)
–
(2)
(48)
(6)
(29)
–
(111)
222222222222
222
222
222
222
222
222
222
222
222
At 30th April 2024
3,037
1,039
1,370
49
2,594
322
392
384
9,187
222222222222
222
222
222
222
222
222
222
222
222
Amortisation
At 30th April 2022
961
632
1,370
49
2,077
318
279
340
6,026
Amortisation
during the year
–
61
–
–
160
–
–
18
239
Impairment
–
39
–
–
351
–
–
–
390
Exchange differences
33
6
–
2
54
10
–
–
105
222222222222
222
222
222
222
222
222
222
222
222
At 30th April 2023
994
738
1,370
51
2,642
328
279
358
6,760
Amortisation
during the year
–
43
–
–
–
–
–
18
61
Exchange differences
(21)
(5)
–
(2)
(48)
(6)
–
–
(82)
222222222222
222
222
222
222
222
222
222
222
222
At 30th April 2024
973
776
1,370
49
2,594
322
279
376
6,739
222222222222
222
222
222
222
222
222
222
222
222
Net book value at
30th April 2024
2,064
263
–
–
–
–
113
8
2,448
222222222222
222
222
222
222
222
222
222
222
222
Net book value at
30th April 2023
2,064
306
–
–
–
–
–
26
2,396
222222222222
222
222
222
222
222
222
222
222
222
Goodwill acquired through business combinations and licences has been allocated for impairment testing purposes
to the ‘Petrol Station Superstructures’ division and the ‘Corporate Branding’ division, which are both operating
segments.
Impairment testing
Goodwill considered significant in comparison to the Group’s total carrying amount of such assets has been allocated
to cash-generating units or groups of cash-generating units as follows:
Goodwill
Goodwill
2024
2023
£’000
£’000
‘Petrol Station Superstructures’ division
2,064
2,064
‘Corporate Branding’ division
–
–
2222222222222222222222222222222222222
2222
2222
2,064
2,064
2222222222222222222222222222222222222
2222
2222
The performance of the ‘Petrol Station Superstructures’ division is the lowest level at which goodwill is monitored
for internal management purposes.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
48
14
Intangible assets (continued)
Impairment testing (continued)
At the reporting date, value-in-use was determined by discounting the future cash flows generated from the
continuing operations of the divisions over the next 5 years and was based on the following key assumptions, which
are consistent with the prior year:
G
Detailed 2 year management forecast.
G
A growth in cashflows estimated for 2 years, and a growth rate of 2% assumed from year 3.
G
Cash flows were discounted at a rate of 12.2%.
The growth rates used in the value-in-use calculation reflect management’s expectations for the business based upon
previous experience and taking into consideration recent sales wins.
Based on the above assumptions, the value-in-use calculated at the reporting date for the ‘Petrol Station
Superstructures’ division did not indicate the need for impairment and no reasonably possible changes in any of the
key assumptions used would cause the carrying value of the unit to exceed its recoverable amount.
Company
There were no intangible assets (2023 – £nil) included in the Company statement of financial position.
222222222222222222222222222222222222222222222222
15
Investment in subsidiary undertakings
Principal subsidiary undertakings are set out on pages 79 and 80.
Net book
Company
Cost Impairment
value
At 30th April 2022
20,088
(1,962)
18,126
Impairment of ‘MSI-Sign Group B.V.’
–
(2,438)
(2,438)
Impairment of ‘MSI-Sign Group GmbH’
–
(19)
(19)
222222222222222222222222222222
2222
2222
2222
At 30th April 2023
20,088
(4,419)
15,669
Impairment
–
–
–
222222222222222222222222222222
2222
2222
2222
At 30th April 2024
20,088
(4,419)
15,669
222222222222222222222222222222
2222
2222
2222
16
Investment in joint venture
During the year ‘MSI-Sign Group B.V.’ divested of its investment in the joint venture ‘Consorzio Archigia-Petrol
Sign’, a company registered in Italy. The Group previously held a 50% shareholding with 50% of the voting rights in
‘Consorzio Archigia-Petrolsign’. The Group made a profit on disposal of the joint venture of £9,000, which has been
recognised within administrative expenses within the Consolidated income statement.
Group
£’000
At 30th April 2022
34
Equity accounted share of net losses
(36)
Exchange differences
2
222222222222222222222222222222222222222222
2222
At 30th April 2023
–
Equity accounted share of net losses
–
222222222222222222222222222222222222222222
2222
At 30th April 2024
–
222222222222222222222222222222222222222222
2222
Prior to the disposal, the Group made sales to ‘Consorzio Archigia-Petrolsign’ of £37,000 (2023 - £1,082,000).
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
49
17
Deferred income tax
(a)
Deferred income tax in the Consolidated income statement
The deferred income tax included in the Consolidated income statement is:
2024
2023
£’000
£’000
Taxation deferred by capital allowances
393
317
Taxation on other temporary differences
70
(277)
Taxation on losses carried forward
140
(121)
Taxation on intangibles
20
(144)
Taxation on defined benefits pension
237
105
Taxation on revaluation
(3)
(2)
Adjustments in respect of prior year
132
(2)
Adjustment in respect of change in rate
–
(8)
2222222222222222222222222222222222222
2222
2222
Deferred income tax expense/(credit) (note 9)
989
(132)
2222222222222222222222222222222222222
2222
2222
(b)
Deferred income tax assets
The deferred income tax assets included in the Consolidated and Company statements of financial position are:
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Taxation deferred by capital allowances
–
90
–
90
Taxation on other temporary differences
16
412
–
72
Taxation on losses carried forward
–
121
–
–
Taxation on pension liability
–
1,054
–
1,054
222222222222222222222222
2222
2222
2222
222
Deferred tax asset
16
1,677
–
1,216
222222222222222222222222
2222
2222
2222
222
The movements on the deferred income tax asset are:
Group
Taxation
Taxation on
Taxation on
deferred by
other
losses
Taxation on
capital
temporary
carried
pension
allowances
differences
forward
liability
Total
£’000
£’000
£’000
£’000
£’000
At 30th April 2022
183
119
–
1,133
1,435
Included in the Consolidated
income statement
(93)
293
121
(88)
233
Included in the Consolidated statement
of comprehensive income
–
–
–
9
9
2222222222222222222
2222
2222
2222
222
2222
At 30th April 2023
90
412
121
1,054
1,677
Reclass to deferred tax liability
(90)
(411)
–
–
(501)
Deferred tax included in the
Consolidated income statement
–
16
(121)
(237)
(342)
Deferred tax included in the Consolidated
statement of comprehensive income
–
–
–
(817)
(817)
Exchange differences on retranslation
included in the Consolidated statement
of comprehensive income
–
(1)
–
–
(1)
2222222222222222222
2222
2222
2222
222
2222
At 30th April 2024
–
16
–
–
16
2222222222222222222
2222
2222
2222
222
2222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
50
17
Deferred income tax (continued)
(b)
Deferred income tax assets (continued)
Company
Taxation
Taxation on
deferred by
other
Taxation on
capital
temporary
pension
allowances
differences
liability
Total
£’000
£’000
£’000
£’000
At 30th April 2022
183
58
1,133
1,374
Deferred tax included in the Consolidated
income statement
(93 )
14
(88)
(167)
Deferred tax included in the Consolidated
statement of comprehensive income
–
–
9
9
222222222222222222222222
2222
2222
2222
222
At 30th April 2023
90
72
1,054
1,216
Reclass to deferred tax liability
(90)
(72)
–
(162)
Deferred tax included in the Consolidated
income statement
–
–
(237)
(237)
Deferred tax included in the Consolidated
statement of comprehensive income
–
–
(817)
(817)
222222222222222222222222
2222
2222
2222
222
At 30th April 2024
–
–
–
–
222222222222222222222222
2222
2222
2222
222
(c)
Deferred income tax liabilities
The deferred tax liabilities included in the Consolidated and Company statements of financial position are:
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Taxation deferred by capital allowances
1,134
795
(33)
–
Taxation on other temporary differences
(171)
–
196
–
Taxation on intangible assets
66
45
–
–
Taxation on buildings revaluation
2,103
2,103
–
–
222222222222222222222222
2222
2222
2222
222
Deferred tax liability
3,132
2,943
163
–
222222222222222222222222
2222
2222
2222
222
The movements on the deferred income tax liability are:
Taxation
Taxation
Taxation
Taxation
deferred by
on other
on
on
capital
temporary
intangible
buildings
Group
allowances
differences
assets
revaluation
Total
£’000
£’000
£’000
£’000
£’000
At 30th April 2022
549
–
184
1,845
2,578
Deferred tax included in the
Consolidated income statement
246
–
(143)
(2)
101
Deferred tax included in the
Consolidated statement of comprehensive
income
–
–
–
252
252
Exchange differences on retranslation
included in the Consolidated statement of
comprehensive income
–
–
4
8
12
2222222222222222222222
2222
2222
2222
2222
222
At 30th April 2023
795
–
45
2,103
2,943
Reclass from deferred tax asset
(90)
(411)
–
–
(501)
Deferred tax included in the Consolidated
income statement
429
202
19
(3)
647
Deferred tax included in the Consolidated
statement of comprehensive income
–
38
–
–
38
Exchange differences on retranslation
included in the Consolidated statement of
comprehensive income
–
–
2
3
5
2222222222222222222222
2222
2222
2222
2222
222
At 30th April 2024
1,134
(171)
66
2,103
3,132
2222222222222222222222
2222
2222
2222
2222
222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
51
17
Deferred income tax (continued)
(b)
Deferred income tax liabilities (continued)
Company
Taxation
Taxation on
deferred by
other
capital
temporary
allowances
differences
Total
At 30th April 2023
–
–
–
Reclass from deferred tax asset
(90)
(72)
(162)
Deferred tax included in the Consolidated income statement
57
268
325
222222222222222222222222222222
2222
2222
2222
At 30th April 2024
(33)
196
163
222222222222222222222222222222
2222
2222
2222
Deferred income taxation has been provided at the rate at the reporting date of 25%.
18
Inventories
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Raw materials
13,771
8,172
593
1,678
Work in progress
9,001
16,306
1,151
1,009
Finished goods
2,478
286
79
78
222222222222222222222222
2222
2222
2222
222
25,250
24,764
1,823
2,765
222222222222222222222222
2222
2222
2222
222
Details of the Group and Company’s inventory provisions are as follows:
Group
Company
£’000
£’000
At 30th April 2022
562
4
Inventory provision accrued during the year
13
21
Exchange differences
6
–
2222222222222222222222222222222222222
2222
2222
At 30th April 2023
581
25
Inventory provision accrued during the year
188
40
Exchange differences
(1)
–
2222222222222222222222222222222222222
2222
2222
At 30th April 2024
768
65
2222222222222222222222222222222222222
2222
2222
19
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
–
–
222222222222222222222222
2222
2222
2222
222
28,304
9,031
11,529
14,344
222222222222222222222222
2222
2222
2222
222
(*) 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).
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
52
19
Trade and other receivables (continued)
(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
–
–
222222222222222222222222
2222
2222
2222
222
14,705
6,931
2,690
2,756
222222222222222222222222
2222
2222
2222
222
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
5
–
> 90 days
663
–
–
(26)
222222222222222222222222
2222
2222
2222
222
Total
14,705
6,931
2,690
2,756
222222222222222222222222
2222
2222
2222
222
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:
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
2222222222222222222222222222222222222
2222
2222
8,502
11,356
2222222222222222222222222222222222222
2222
2222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
53
20
Cash and cash equivalents
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 – maturing in
more than 90 days
7,170
2,917
–
-
222222222222222222222222
2222
2222
2222
222
Total cash
42,679
15,253
9,936
8,016
222222222222222222222222
2222
2222
2222
222
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 totalling £7,170,000 (2023 – £360,000) 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.
222222222222222222222222222222222222222222222222
21
Net funds
(a)
Analysis of net funds
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Cash and cash equivalents (note 20)
35,509
12,336
9,936
8,016
Restricted cash held in Escrow (note 20)
7,170
2,917
–
-
Lease liabilities (note 13)
(804)
(1,208)
(6,401)
(4,807)
222222222222222222222222
2222
2222
2222
222
41,875
14,045
3,535
3,209
222222222222222222222222
2222
2222
2222
222
(b)
Group movement in net funds
Cash
Restricted
and cash
cash held
Lease
equivalents
in escrow
liabilities
(note 20)
(note 20)
(note 13)
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 (note 8)
–
–
(51)
(51)
222222222222222222222222
2222
2222
2222
2222
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 (note 8)
–
–
(37)
(37)
222222222222222222222222
2222
2222
2222
2222
At 30th April 2024
35,509
7,170
(804)
41,875
222222222222222222222222
2222
2222
2222
2222
(c)
Company movement in net funds
Cash
and cash
Lease
equivalents
liabilities
(note 20)
(note 13)
Total
At 30th April 2022
3,258
(5,214)
(1,956)
Cash flows
4,758
560
5,318
Interest
–
(153)
(153)
22222222222222222222222222222
2222
2222
2222
At 30th April 2023
8,016
(4,807)
3,209
Cash flows
1,920
817
2,737
New leases (note 13)
–
(2,205)
(2,205)
Interest
–
(206)
(206)
22222222222222222222222222222
2222
2222
2222
At 30th April 2024
9,936
(6,401)
3,535
22222222222222222222222222222
2222
2222
2222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
54
22
Issued capital
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Ordinary shares at 10p each
Authorised – 35,000,000 (2023 – 35,000,000)
3,500
3,500
3,500
3,500
Allotted, issued and fully paid – 17,841,073
(2023 – 17,841,073)
1,784
1,784
1,784
1,784
The balance classified as share capital includes the nominal value on issue of the Company’s equity share
capital, comprising 10p ordinary shares.
222222222222222222222222222222222222222222222222
23
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 shares reserve is detailed as follows:
2024
2023
£’000
£’000
Employee Share Ownership Trust (a)
37
100
Shares in treasury (b)
3,665
2,281
2222222222222222222222222222222222222
2222
2222
3,702
2,381
2222222222222222222222222222222222222
2222
2222
(a)
The Employee Share Ownership Trust (“ESOT”)
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.
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
55
23
Reserves (continued)
Treasury shares (continued)
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
–
–
2222222222222222222222222222222222222
2222
2222
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)
2222222222222222222222222222222222222
2222
2222
ESOT shares at 30th April 2024
91,048
37
2222222222222222222222222222222222222
2222
2222
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)
2222222222222222222222222222222222222
2222
2222
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)
2222222222222222222222222222222222222
2222
2222
Treasury shares at 30th April 2024
1,516,327
3,665
2222222222222222222222222222222222222
2222
2222
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.
222222222222222222222222222222222222222222222222
24
Pension liability
The Company operates an employee defined benefits scheme called the MS INTERNATIONAL plc Retirement and
Death Benefits Scheme (the Scheme). IAS 19 requires disclosure of certain information about the Scheme as follows:
G
Until 5th April 1997 the Scheme provided defined benefits and these liabilities remain in respect of
service prior to 6th April 1997. From 6th April 1997 until 31st May 2007 the Scheme provided future
service benefits on a defined contribution basis.
G
From 1st June 2007 the Company has operated a defined contributions scheme for its UK employees
which is administered by a UK pension provider.
G
The last formal valuation of the Scheme was performed at 5th April 2023 by a professionally qualified
actuary.
G
In the Interim Actuarial Report at 5th April 2024, the past service liabilities on a Technical Provisions
basis were £20.61m (2023 – £23.033m) and the market value of the assets was £20.656m (2023 –
£20.099m), giving a past service surplus of £0.046m (2023 – deficit of £2.934m).
G
The Company directly pays the expenses of the Scheme. The total pension scheme expenses incurred
by the Company during the year were £359,000 (2023 – £371,000).
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
56
G
Deficit reduction contributions paid into the Scheme by the Company were £900,000 per annum. The
deficit reduction contributions are paid on a quarterly basis with the first having been paid on or after
1st July 2021 and the last being due for payment on or before 1st April 2028. However, due to the
improved funding of the Scheme on a Technical Provisions basis, the last quarterly deficit
contribution was made in April 2024. Therefore, the current Schedule of Contributions requires no
further deficit reduction payments to be made. The total deficit reduction payments made in the year
were £1,125,000 (2023 – £675,000). The deficit reduction payments to be made in the upcoming year
will be £nil.
G
At 30th April 2024 the present value of the contracted future deficit reduction contributions was £nil
(2023 – £4,216,000), which was less than the net scheme surplus of £596,000 (2023 – deficit
£1,349,000). As the Company does not have an unconditional right to the economic benefits arising
from this surplus, a liability of £nil (2023 – £2,867,000) has been recognised within the financial
statements in accordance with IFRIC 14.
Members contributions are paid in line with this Scheme’s documentation over the accounting period and the
Company has no further payment obligations once the contributions have been made.
The Company’s policy for recognising remeasurement gains and losses is to recognise them immediately through the
Statement of comprehensive income.
Assumptions
2024
2023
Discount rate at year-end
5.25%
4.90%
Pension increases – RPI inflation
3.35%
3.25%
Pension increases – CPI inflation
2.65%
2.45%
Future salary increases
3.85%
3.75%
Life expectancy for male currently aged 65
20.7 years
21.2 years
Life expectancy for female currently aged 65
23.2 years
23.6 years
222222222222222222222222222222222222222222222222
G
Discount rate – The discount rate of 5.25% is based on the Aon GBP Single Agency AA (corporates)
curve, as was the case in the prior year. A 0.5% reduction in the discount rate would lead to an
increase in past service liabilities of around £0.85m (2023 – £1.05m).
G
Inflation assumptions – The RPI inflation assumption of 3.80% per annum was based on an underlying
'break even' RPI assumption of 3.55%, derived consistently to the discount rate using the Aon UK
Government Gilt Prices Only (GPO) curve with an inflation premium (IRP) of 0.25% per annum. The
CPI inflation assumption of 2.45% was derived by assuming an RPI-CPI gap of 0.8% based on Aon's
best estimate assumption. A 0.5% decrease in the inflation assumptions would lead to a decrease in
past service liabilities of around £0.19m (2023 – £0.29m).
G
Future salary increases – The assumption is 0.5% per annum above RPI inflation, which is consistent
with prior years. Members living around 1 year longer than expected would lead to an increase in past
service liabilities of around £0.69m (2023 – £0.70m).
In relation to the other assumptions there is no sensitivity analysis as small changes in these assumptions will not
have a material impact.
The average duration of the scheme is 9 years (2023 – 10 years).
222222222222222222222222222222222222222222222222
Statement of financial position
2024
2023
£’000
£’000
Present value of obligations
(19,562)
(21,260)
Fair value of plan assets
20,158
19,911
Liability arising from IFRIC 14
–
(2,867)
Surplus restriction
(596)
–
2222222222222222222222222222222222222
2222
2222
Net liability
–
(4,216)
2222222222222222222222222222222222222
2222
2222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
57
24
Pension liability (continued)
Income statement
2024
2023
£’000
£’000
Interest on net liabilities (note 8)
179
136
Administration expenses
359
371
2222222222222222222222222222222222222
2222
2222
Total income statement cost
538
507
2222222222222222222222222222222222222
2222
2222
Change in defined benefit obligation
2024
2023
£’000
£’000
Opening defined benefit obligation
(21,260)
(26,164)
Interest expense
(1,006)
(789)
Actuarial gains/(losses) on liabilities arising from experience
346
(404)
Actuarial gains on liabilities arising from changes in demographic assumptions
–
–
Actuarial gains on scheme liabilities arising from changes in financial assumptions
862
4,646
Net benefits paid
1,496
1,451
2222222222222222222222222222222222222
2222
2222
Defined benefit obligation
(19,562)
(21,260
2222222222222222222222222222222222222
2222
2222
Change in fair value of plan assets
2024
2023
£’000
£’000
Opening fair value of plan assets
19,911
22,570
Interest income on assets
966
688
Remeasurement losses on scheme assets
(348)
(2,571)
Deficit reduction contributions by employer
1,125
675
Net benefits paid
(1,496)
(1,451)
2222222222222222222222222222222222222
2222
2222
Fair value of plan assets
20,158
19,911
2222222222222222222222222222222222222
2222
2222
Statement of other comprehensive income
2024
2023
£’000
£’000
Return on plan assets below that recognised in net interest
(348)
(2,571)
Remeasurement gains
1,208
4,242
Change due to irrecoverable surplus
(596)
–
Remeasurement gain/(loss) arising from IFRIC 14 liability
3,006
(1,706)
2222222222222222222222222222222222222
2222
2222
Total remeasurement gains/(losses) credited to Statement of other
comprehensive income
3,270
(35)
2222222222222222222222222222222222222
2222
2222
2024
2023
£’000
£’000
Expected deficit reduction contributions into the Scheme during
next accounting year:
–
1,125
2222222222222222222222222222222222222
2222
2222
Breakdown of plan assets
Plan
Asset
assets
allocation
Breakdown of assets at 30th April, 2024
£’000
Fixed interest government bonds
13,567
68.0%
Index linked government bonds
3,797
19.0%
Bond fund
1,279
6.0%
LDI
1,279
6.0%
Cash/other
236
1.0%
2222222222222222222222222222222222222
2222
2222
20,158
100%
2222222222222222222222222222222222222
2222
2222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
58
24
Pension liability (continued)
Plan
Asset
assets
allocation
Breakdown of assets at 30th April 2023
£’000
Growth Fund
10,230
51.0%
Credit Investment Fund
3,966
20.0%
Bond fund
2,811
14.0%
Equities – UK market
1,465
8.0%
LDI
1,380
7.0%
Cash/other
59
0.0%
2222222222222222222222222222222222222
2222
2222
19,911
100%
2222222222222222222222222222222222222
2222
2222
The Scheme exposes the company to some risks, the most significant of which are:
G
Asset volatility – the defined benefit obligation is calculated using a discount rate related to corporate
bond yields. If the assets of the scheme underperform against the yield, this will create a deficit. The
scheme holds a significant proportion of growth assets which, although are expected to outperform
corporate bonds in the long-term, create volatility and risk in the short-term. The allocation to growth
assets is monitored to ensure it remains appropriate.
G
Changes in bond yields – a decrease in the bond yields will increase the value placed on the scheme’s
defined benefit obligations for accounting purposes, although this may be partially offset by an
increase in the value of the scheme’s bond holdings.
G
Inflation risk – a proportion of the scheme’s defined benefit obligation is linked to inflation, and higher
inflation leads to a higher obligation. However, in most cases there are caps on the level of inflationary
increases to protect against extreme inflation. Most of the assets are either unaffected by or only
loosely correlated with inflation, meaning that an increase in inflation will also increase the deficit.
Given the duration and age profile of the scheme, the exposure to inflationary risk is relatively small.
G
Life expectancy – the majority of the scheme’s obligations are to provide benefits for the lifetime of the
member, so increases in life expectancy will result in an increase in the obligation.
25
Trade and other payables
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Trade payables
6,240
8,460
2,385
3,654
Amounts owed to subsidiary undertakings
–
–
4,036
3,259
Amounts owed to joint venture
–
9
–
–
Accruals
11,781
4,802
2,876
1,925
Warranty provision (note 26)
1,317
474
–
–
Cash settled share-based payments
134
–
134
–
Other payables
1,372
524
608
399
Income tax payable
505
1,017
274
696
222222222222222222222222
2222
2222
2222
222
21,349
15,286
10,313
9,933
222222222222222222222222
2222
2222
2222
222
In the Company the amounts due to subsidiary undertakings are repayable on demand and are not charged interest.
222222222222222222222222222222222222222222222222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
59
24
Pension liability (continued)
Breakdown of plan assets (continued)
26
Provisions
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Warranty provision
1,317
474
–
–
222222222222222222222222
2222
2222
2222
222
1,317
474
–
–
222222222222222222222222
2222
2222
2222
222
Warranty provisions are measured at management’s best estimate of the expenditure required to settle the warranty
obligation at the the balance sheet date.
A reconciliation of the movements in warranty provisions during the year is shown below:
Group
Company
£’000
£’000
Warranty provision as at 30th April 2023
474
–
Recognised during the year
846
–
Exchange differences
(3)
–
2222222222222222222222222222222222222
2222
2222
Warranty provision as at 30th April 2024
1,317
–
2222222222222222222222222222222222222
2222
2222
27
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)
–
–
–
222222222222222222222222
2222
2222
2222
222
Net contract liabilities
(52,535)
(14,441)
(1,784)
(856)
222222222222222222222222
2222
2222
2222
222
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)
–
2222222222222222222222222222222222222
2222
2222
Contract liabilities as at 30th April 2024
52,635
1,784
2222222222222222222222222222222222222
2222
2222
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
–
2222222222222222222222222222222222222
2222
2222
Total
52,635
1,784
2222222222222222222222222222222222222
2222
2222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
60
28
Financial instruments
Management of financial risks
The major financial risks faced by the Group and Company are funding risks, interest rate risks, currency risks, and
credit risks.
Funding risk
At the reporting date the Group had a cash and cash equivalents balance of £35,509,000 with a further £7,170,000
of restricted cash held in Escrow (2023 – £12,336,000 with £2,917,000 in Escrow). The Company had a cash and cash
equivalents balance of £9,936,000 (2023 – £8,016,000).
Interest rate risk
Although not currently in use, the Group has available for use a multicurrency bank overdraft facility at a floating
rate of interest, based on the base rate of each respective currency. The Group’s cash position is monitored daily by
the Board to ensure the risk of requiring the overdraft facility is minimised.
This position is monitored daily by the Board to ensure any risk is minimised. The Group has also secured favourable
interest rates on positive cash balances, which are also linked to respective base rates. The Board believe that the
main interest rate risk relates to not maximising interest income on cash balances.
Management has secured favourable interest rates on positive cash balances, which are also linked to the respective
base rates, and have worked to optimise bank interest income across the Group (note 8). The Board believe that the
main interest rate risk to the Group is the risk of not fully maximising interest income on positive balances.
If interest rates had been 0.5% higher/lower and all other variables were held constant, there would have been
£125,000 impact on the profit before tax (2023 – £6,500).
Foreign currency risk
The Group and Company buy and sell in multiple currencies, mainly Euros and US Dollars and as a result have an
exposure to foreign currencies.
This exposure is minimised by the following:
(1)
invoicing in sterling where practicable.
(2)
hedging currency received against foreign currency purchases, where appropriate.
(3)
where the group is unhedged and surplus currency is generated, foreign exchange contracts are taken
out to minimise currency exposures.
Currency exposures
The table below shows the Group’s currency exposures i.e., those transactional exposures that give rise to the net
currency gains and losses recognised in the income statement. Such exposures comprise the monetary assets and
monetary liabilities of the Group that are not denominated in the operating (or "functional") currency of the
operating unit involved.
As at 30th April 2024 these currency exposures are as follows:-
Group
Sterling
US Dollar
Euro
Others
Total
£’000
£’000
£’000
£’000
£’000
2024
Cash and cash equivalents
8
18,035
1,838
19
19,900
Trade and other receivables
–
1
525
–
526
Trade and other payables
–
(1,058)
(592)
–
(1,650)
22222222222222222222
2222
2222
2222
2222
222
Total
8
16,978
1,771
19
18,776
22222222222222222222
2222
2222
2222
2222
222
2023
Cash and cash equivalents
8
2,938
1,851
32
4,829
Trade and other receivables
–
–
1,107
–
1,107
Trade and other payables
–
(172)
(1,112)
(3)
(1,287)
22222222222222222222
2222
2222
2222
2222
222
Total
8
2,766
1,846
29
4,649
22222222222222222222
2222
2222
2222
2222
222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
61
28
Financial instruments (continued)
Currency exposures (continued)
Company
Sterling
US Dollar
Euro
Others
Total
£’000
£’000
£’000
£’000
£’000
2024
Cash and cash equivalents
–
(311)
447
–
136
Trade and other receivables
–
1,536
3,175
–
4,711
Trade and other payables
–
(2,966)
(316)
–
(3,282)
22222222222222222222
2222
2222
2222
2222
222
Total
–
(1,741)
3,306
–
1,565
22222222222222222222
2222
2222
2222
2222
222
2023
Cash and cash equivalents
–
1,204
912
13
2,129
Trade and other receivables
–
2,356
5,552
–
7,908
Trade and other payables
–
(2,179)
(1,106)
–
(3,285)
22222222222222222222
2222
2222
2222
2222
222
Total
–
1,381
5,358
13
6,752
22222222222222222222
2222
2222
2222
2222
222
The Group and Company’s exposure to a 5% exchange rate fluctuation on its foreign currency monetary assets and
liabilities would be as follows:
Sterling
US Dollar
Euro
Others
Total
£’000
£’000
£’000
£’000
£’000
Group
–
809
79
2
890
Company
–
(83)
152
–
69
22222222222222222222
2222
2222
2222
2222
222
Fair values
No significant differences exist between the book value and the fair value of the financial assets and liabilities as at
30th April 2024 and 30th April 2023.
Credit risk
There are no significant concentrations of credit risk within the Group or Company. The maximum credit risk
exposure relating to financial assets is represented by carrying values at the Statement of financial position date.
The Group and Company have established procedures to minimise the risk of default by trade debtors including
credit checks undertaken before a customer is accepted and credit insurance where available and appropriate.
Historically these procedures have proved effective in minimising the level of impaired and past due receivables.
The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables
as these items do not have a significant financing component. In measuring the expected credit losses, the trade
receivables have been assessed on a collective basis as they possess shared credit risk characteristics. The expected
loss rates are based on the payment profile for sales over the recent reporting periods as well as the corresponding
historical credit losses during that period.
Trade receivables and contract assets are written off (i.e. derecognised) when there is no reasonable expectation of
recovery.
Detailed credit risks disclosure for trade receivables and contract assets has not been included as it is immaterial.
222222222222222222222222222222222222222222222222
29
Capital commitments
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Contracted but not provided in the financial statements
591
–
–
–
222222222222222222222222222222222222222222222222
30
Contingent liabilities
The Group is contingently liable in respect of guarantees, indemnities, and performance bonds given in the ordinary
course of business amounting to £7,170,000 at 30th April 2024 (2023 – £360,000). The cash held in Escrow of
£7,170,000 (2023 – £360,000) provides security to both Lloyds Bank plc and Barclays Bank plc in respect of these
guarantees, indemnities and performance bonds.
222222222222222222222222222222222222222222222222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
62
31
Related party transactions
The following transactions took place, during the year, between the Company and other subsidiaries in the Group.
Purchases of goods and services £1,232,000 (2023 – £1,285,000)
Sales of goods and services £5,152,000 (2023 – £5,585,000)
The following balances between the Company and other subsidiaries in the Group are included in the Company
statement of financial position as at 30th April 2024.
Amounts owed to the Company £8,502,000 (2023 – £11,356,000)
Amounts owed by the Company £4,036,000 (2023 – £3,259,000)
Key management personnel (main board directors) compensation.
Group
Company
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Short-term employee benefits
3,517
2,072
3,379
1,934
Pension contributions
115
65
115
65
Social security costs
475
232
458
213
Gain on exercise of share options (note 32)
1,043
1,042
899
1,042
Cash settled share-based payment provision
134
–
134
–
Equity settled share-based payment expense
15
13
12
11
22222222222222222222222222
2222
2222
2222
222
See Directors’ remuneration report on pages 76 to 78
5,299
3,424
4,997
3,265
22222222222222222222222222
2222
2222
2222
222
During the year Michael Bell utilised his company credit card for personal expenses. All transactions have been
reimbursed at the year end with the balance on the account being nil. During the year, the maximum amount on his
balance was £73,000.
222222222222222222222222222222222222222222222222
32
Share-based payments
(a)
Equity settled share-based payments
During the year, a total of 122,700 (2023 – 20,000) share options have been granted to executive directors, non-
executive directors, and employees under the MS INTERNATIONAL plc Company Share Option Plan. These options
are exercisable in three equal amounts at three, four and five years after the date of grant and are not subject to any
share price performance conditions. Of the options, 4,800 have been granted at an exercise price of £6.24 and the
remaining 117,900 have been granted at an exercise price of £7.20 per share (2023 – £3).
Share options totalling 324,007 (2023 – 250,000) have been exercised during the period. This includes 100,000 (2023
– 250,000) options exercised under the MS INTERNATIONAL plc Long Term Incentive Plan at an exercise price of
£0 (2023 – £0) per share, and a further 224,007 (2023 – nil) options exercised under the MS INTERNATIONAL Plc
Company Share Option Scheme at an exercise price of £1.41 per share.
170,007 (2023 – 250,000) of the options were satisfied by transferring shares from treasury and the remaining
154,000 (2023 – nil) options were satisfied by transferring shares from The Employee Share Ownership Trust
("ESOT").
The contractual life of all of the options is 10 years and there are no cash settlement alternatives. The weighted
average remaining contractual life is 6.44 years (2023 – 7.03 years).
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
63
32
Share-based payments (continued)
(a)
Equity settled share-based payments (continued)
The following tables illustrate the number and weighted average exercise prices (WAEP) of share options during the
year:
Long Term
Company Share
Incentive Plan
Option Plan
Total
Number
WAEP
Number
WAEP
Number
WAEP
Outstanding at 30th April 2022
500,000
£0.00
1,000,000
£1.41
1,500,000
£0.94
Granted in year
–
–
20,000
£3.00
20,000
£3.00
Exercised in year
(250,000 )
£0.00
–
–
(250,000 )
£0.00
22222222222222222
2222
2222
2222
2222
2222
2222
Outstanding at 30th April 2023
250,000
£0.00
1,020,000
£1.44
1,270,000
£1.16
Granted in year
–
–
122,700
£7.16
122,700
£7.16
Exercised in year
(100,000 )
£0.00
(224,007 )
£1.41
(324,007 )
£0.97
22222222222222222
2222
2222
2222
2222
2222
2222
Outstanding at 30th April 2024
150,000
£0.00
918,693
£2.21
1,068,693
£1.90
22222222222222222
2222
2222
2222
2222
2222
2222
The Group recognised a total charge of £65,000 (2023 – £86,000) in relation to equity-settled share-based payment
transactions. At 30th April 2024 there were 150,000 (2023 – 250,000) and 442,677 (2023 – 333,345) share options
exercisable in the LTIP and CSOP share option schemes respectively.
The fair value of awards granted under these share plans are determined using the Black Scholes and Monte Carlo
valuation models. The fair value of share options and the assumptions used are shown in the table below:
Company
Company
Long Term
Share Option
Share Option
Incentive Plan
Plan - type 1
Plan - type 2
Valuation model
Monte Carlo
Monte Carlo
Black Scholes
Number of shares remaining under option
150,000
382,761
535,932
Fair value
£0.06
£0.09
£0.12 to £1.97
Share price at grant
£1.38
£1.38
£1.38 to £7.28
Exercise price
£0.00
£1.41
£1.41 to £7.20
Dividend yield
5.9%
5.9%
2.5% to 5.9%
Expected volatility
25%
25%
26% to 31%
Expected life
6.0 years
5.0 years
3.0 – 5.0 years
Risk-free interest rate
0.06%
0.09%
0.04% to 4.38%
The weighted average fair value of options outstanding at the end of the year is £0.29 (2023 – £0.10).
(b)
Cash settled share-based payments
In October 2023 the Group has granted a phantom award in respect of 100,000 notional options, exercisable at nil
value, to one non-executive director. The phantom award will be cash settled in reference to the share price on the
date of exercise. The vesting of the phantom option is subject to continued service and will only vest in the event of
a future change of control in the Company. The awards will lapse if they have not vested within 10 years of grant.
At the reporting date the phantom award has been measured at fair value with reference to the prevailing share
price at that date, adjusted for dividend leakage over the expected life of the award. The aggregate charge period
has been measured at 3 years with an expense of £134,000, being in relation to the six months of service since the
date of grant, charged to the Consolidated income statement within the year.
222222222222222222222222222222222222222222222222
33
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and
healthy capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To
maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital
to shareholders or issue new shares. No changes were made to the objectives, policies or processes during the years
ended 30th April 2024 and 30th April 2023.
Capital comprises equity attributable to the equity holders of the parent company £50,797,000 (2023 – £41,075,000).
222222222222222222222222222222222222222222222222
Notes to the financial statements
Continued
M S I N T E R N A T I O N A L p l c
64
CONSOLIDATED INCOME STATEMENT
2024
2023
2022
2021
2020
£’000
£’000
£’000
£’000
£’000
Group revenue
109,576
83,956
74,524
61,539
61,153
22222222222222222222
2222
2222
2222
2222
2222
Group operating profit/(loss)
14,751
5,250
6,187
1,786
(3,119)
Share of joint venture (loss)/profit
–
(36)
–
28
–
Finance income/(expense)
961
(136)
(220)
(222)
(134)
22222222222222222222
2222
2222
2222
2222
2222
Profit/(loss) before taxation
15,712
5,078
5,967
1,592
(3,253)
Taxation
(4,212)
(963)
(1,035)
(415)
762
22222222222222222222
2222
2222
2222
2222
2222
Profit/(loss) for the year
11,500
4,115
4,932
1,177
(2,491)
22222222222222222222
2222
2222
2222
2222
2222
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Assets employed:
Intangible assets
2,448
2,396
3,002
3,558
4,140
Property, plant and equipment
27,953
24,886
24,537
19,113
20,111
Right-of-use assets
760
1,162
1,479
530
1,214
Investments
–
–
34
36
–
Derivative asset
309
–
–
–
–
Other net current (liabilities)/assets
(9,795)
3,689
(2,706)
(8,334)
(2,240)
Cash, cash equivalents, and restricted cash
42,679
15,253
19,250
23,555
16,125
22222222222222222222
2222
2222
2222
2222
2222
Current net assets employed
64,354
47,386
45,596
38,458
39,350
22222222222222222222
2222
2222
2222
2222
2222
Financed by:
Ordinary share capital
1,784
1,784
1,784
1,784
1,840
Reserves
49,013
39,291
36,791
29,252
28,288
22222222222222222222
2222
2222
2222
2222
2222
Shareholders’ funds
50,797
41,075
38,575
31,036
30,128
Net non-current liabilities
13,557
6,311
7,021
7,422
9,222
22222222222222222222
2222
2222
2222
2222
2222
64,354
47,386
45,596
38,458
39,350
22222222222222222222
2222
2222
2222
2222
2222
Summary of Group results 2020 – 2024
M S I N T E R N A T I O N A L p l c
65
As an AIM quoted company MSI INTERNATIONAL plc, under AIM Rule 26, is required to adopt a recognised
corporate governance code, describe how it complies with that code and provide details of where it does not comply
with its chosen corporate governance code.
MS INTERNATIONAL plc has chosen to adopt as far as practical for a Group of its size the April 2018 QCA
Corporate Governance Code with effect from 28th September 2018. The Chairman assumes principal responsibility
for corporate governance.
The Board
The Board is responsible for ensuring that MS INTERNATIONAL plc has the strategy, people, structure, and culture
in place to deliver value over the medium to long-term to shareholders and other stakeholders of the Group and is
committed to high standards of governance, as is appropriate for a company of its size and structure.
The Board is chaired by the Executive Chairman Michael Bell, who has no other significant commitments and is
responsible for the operation, strategic focus, and direction of the business. The executive directors include Michael
O’Connell and Nicholas Bell. There are two non-executive directors, Roger Lane-Smith and David Hansell, with
Roger Lane-Smith being designated as Senior Independent Director.
The two non-executive directors devote sufficient time to fulfil their responsibilities to the Company. The Board has
considered their length of service as directors and employees and has determined that in terms of interest,
experience, and judgement they all remain independent. Consequently, the Board considers itself to be compliant
with the QCA code in having two or more independent non-executive directors.
The Board meets at least quarterly throughout the year to direct and assess the overall strategy and operating
performance of the Group. All directors have full and timely access to all relevant information to allow them to carry
out their responsibilities. Executive directors, except for Company business trips and holidays, meet on a daily basis
when possible. Additionally, each of the divisional operations have monthly review meetings which are attended by
the Executive Chairman and the Group Financial Director.
The Board is supported by an Audit Committee and a Remuneration Committee. Roger Lane-Smith and David
Hansell are members of both committees, with Roger Lane-Smith serving as Chairman.
The Audit Committee normally meets two or three times a year and has the responsibility for reviewing the interim
statements, the annual report, and the effectiveness of the system of internal controls with the Group’s external
auditor. The external auditor has direct access to the Committee without the executive directors being present. The
ultimate responsibility for reviewing and approving the Group financial statements remains with the Board.
The Remuneration Committee, which meets as required, has the responsibility for making recommendations to the
Board on the remuneration packages, including share option schemes and bonuses, of each of the executive directors.
Due to the size of the Group there is no Nominations Committee. The Chairman discusses the appointment or
replacement of directors with the Board as a whole. The Board are aware of the age profile of the directors, and this
is under review.
The number of meetings and members attendance of Board and Committee meetings during the financial year ended
30th April 2024 was as follows:
Audit
Remuneration
Board
Committee
Committee
Number of meetings in the year
6
3
1
2222222222222222222222222222222222222
Attended by:
Michael Bell
6
–
–
Michael O’Connell
6
3
–
Nicholas Bell
6
–
–
Roger Lane-Smith
4
3
1
David Hansell
4
3
1
Board experience, skills, and evaluation
Due to the size of the Group, and the nature of its operations and strategic demands, there is no formal Board
performance evaluation process in place. However, the Chairman periodically meets with the executive and non-
executive directors to ensure they are committed, their respective contributions are effective and productive and,
where relevant, they have maintained their independence.
Corporate governance statement
M S I N T E R N A T I O N A L p l c
66
Board experience, skills, and evaluation (continued)
The Board has considered its structure and composition and believes it to be appropriate having taken into account
the nature and characteristics of the Group.
As the directors have all served the Group as employees and directors over many years, the Board believes it is not
necessary to give any further details of their experience other than that shown in the list of directors and the Notice
of Annual General Meeting.
In the opinion of the Board, the directors as a whole have the appropriate balance of skills and experience necessary
to ensure that the Group is managed for the long-term benefit of all stakeholders.
Internal control systems
The Board is responsible for establishing and maintaining the Group’s system of internal control. Internal control
systems are designed to meet the particular needs of the operating company concerned bearing in mind the resources
available and the risks to which it is exposed, and by their nature can provide reasonable but not absolute assurance
against material misstatement or loss. The key procedures which the directors have established with a view to
providing effective internal control are set out below.
The Board has overall responsibility for the Group and there is a formal schedule of matters specifically reserved for
decisions by the Board which covers the key areas of the Group’s affairs, including dividend policy, acquisitions and
divestment policy, approval of budgets, capital expenditure, major buying and selling contracts and general treasury
and risk management policies. There is a clearly decentralised structure which delegates authority, responsibility,
and accountability, including responsibility for internal financial controls, to management of the operating
companies.
Responsibility levels and delegation of authority and authorisation levels throughout the Group are set out in the
Group’s corporate accounting and procedures manual.
There is a comprehensive system for reporting financial results. Monthly accounts are prepared on a timely basis.
They include income statement, balance sheet, cash flow and capital expenditure reporting with comparisons to
budget and forecast. The budget is prepared annually and revised forecasts are provided monthly.
There is an investment evaluation process to ensure Board approval for all major capital expenditure commitments.
There is also a contract evaluation process to ensure directors approval for all major sales contracts.
QCA Code
Details of how the Company has addressed the ten principles of the QCA Code in compliance with AIM Rule 26 are
set out below:
1
Establish a strategy and business model which promotes long-term value for shareholders
The Group’s long-term strategy is to invest in people, products, and processes to seek continuous improvement
in its four diverse operating divisions: ‘Defence’, ‘Forgings’, ‘Petrol Station Superstructures’ and ‘Corporate
Branding’, each holding a leading position in its specialist market.
2
Seek to understand and meet shareholder needs and expectations
The shareholding structure of the Company is set out on the ‘Securities’ page on the Company’s website:
msiplc.com/securities. The composition of the shareholders, including the directors, is currently primarily
weighted towards private investors, with a significant institutional shareholder.
The AGM is the main forum for dialogue and discussion with private investors and the Board. The directors
routinely attend the AGM and are available to answer any questions raised by shareholders. Shareholders
can engage with the Company between AGMs by contacting the Company Secretary, Shelley Ashcroft
(shelley.ashcroft@msiplc.com). The Board also contacts significant institutional investors as and when
appropriate.
3
Take into account wider stakeholder needs and expectations
The Group is aware of its corporate social responsibilities and the need to maintain effective relationships
with all of the stakeholders in the business including shareholders, employees, customers, suppliers and
regulatory authorities. The Group’s operations, processes, and procedures are monitored and adapted to take
account of changing stakeholder relationships whilst maintaining focus on the Board’s strategic objective of
delivering value over the medium to long-term for the benefit of all stakeholders.
The Board aims to do what is in the best interests of the Company and seeks to maintain the highest
standards of integrity in the conduct of the Group’s operations.
Corporate governance statement
Continued
M S I N T E R N A T I O N A L p l c
67
3
Take into account wider stakeholder needs and expectations (continued)
The requirement for regular disclosure of directors’ other interests and compliance to share dealing
regulations all require high standards of behaviour.
The Group’s employment policies, such as Whistleblowing and Anti-Bribery and Corruption assist in setting
a culture of ethical behaviour throughout the Group.
Through the various procedures and processes the Group has adopted, each diverse operating division
ensures full compliance with the health and safety and environmental legislation applicable to each division.
4
Embed effective risk management, considering both opportunities and threats, throughout the
organisation
The Board reviews the effectiveness of the system of internal controls, and together with operational
management, identifies and evaluates the critical business and financial risks of the Group. These risks are
reviewed continually by both the directors and operational and divisional management. Where appropriate,
action is taken to manage risks facing the business.
The Group’s corporate governance environment and its embedded procedures and systems will be updated
and adapted to future changes in stakeholder relationships when considered appropriate by the Board.
5
Maintain the Board as a well-functioning, balanced team led by the chair
Details of how the Board functions and its members are included in the ‘The Board’ section of this Corporate
Governance statement.
The Board is supported by an Audit Committee and a Remuneration Committee, both chaired by Roger Lane-
Smith. David Hansell, a non-executive director, also serves on both the Audit Committee and the
Remuneration Committee. The Board as a whole operates as the Nominations Committee as and when
required.
6
Ensure that between them the directors have the necessary up-to-date experience, skills, and
capabilities
Details of the directors’ experience, skills and capabilities can be found in the ‘Board experience, skills, and
evaluation’ section of this Corporate Governance report.
7
Evaluate board performance based on clear and relevant objectives, seeking continuous
improvement
While there is no formal evaluation process in place, the Chairman periodically meets with executive and
non-executive directors to discuss their performance and ensure that their respective contributions remain
effective.
8
Promote a corporate culture that is based on ethical values and behaviours
The Group’s four operating divisions hold leading positions within their specialist markets and have long-
standing reputations as being highly competent and professional organisations with innovation and quality
being integral to this. This reputation has been established over many years through leadership and the
reinforcement of ethical principles by directors, managers, and employees.
9
Maintain governance structures and processes that are fit for purpose and support good decision
making by the Board
The Board maintains corporate governance policies and processes that are appropriate to the size and
structure of the Group. The responsibility for corporate governance rests with the Board as a whole, with the
Chairman assuming principal responsibility. The effectiveness of policies and processes are reviewed and
adapted as necessary.
10
Communicate how the company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Board communicates its corporate governance policies through the Annual Report and through the
Group website (www.msiplc.com).
The AGM is the main forum for dialogue and discussion with private investors and the Board. The Notice of
Annual General Meeting is sent to shareholders at least 21 days before the meeting and all of the directors
routinely attend the AGM and are available to answer any questions raised by shareholders. The results of
each AGM are published on the website and by way of an RNS when the meeting has concluded. Copies of
notice of meetings and Annual Reports from the last five years are kept on the Company’s website.
Shareholders can engage with the Company between AGMs by contacting the Company Secretary, Shelley
Ashcroft (shelley.ashcroft@msiplc.com). The Board also contacts significant institutional investors as and
when appropriate.
Corporate governance statement
Continued
M S I N T E R N A T I O N A L p l c
68
QCA Code (continued)
Committee governance
Roger Lane-Smith and David Hansell were members of the Audit Committee throughout the year under review, with
Roger Lane-Smith serving as Chairman. Both have considerable experience in senior financial and commercial
operational roles with extensive knowledge of the Group’s operations, related financial risks and internal control.
The committee meets three times a year. The meetings are held with the external auditor at which representatives
of the Group’s financial management team are present.
Key responsibilities
The committee is required to:
G
Monitor the integrity of the Group’s financial statements and external announcements of both the
interim and full year results;
G
Advise on the clarity of disclosures and information contained in the Annual Report and accounts;
G
In conjunction with the Group’s Executive Board and external auditor, ensure compliance with
applicable accounting standards and the consistency of methodologies applied;
G
Review the adequacy and effectiveness of the Group’s internal control and risk management systems;
G
Oversee the relationship with the external auditors, review their performance and independence, and
advise the Board on their appointment and remuneration.
The Audit Committee has undertaken the following during the year under review:
Internal control and risk management
The Audit Committee has worked with the Board in the continued evaluation of the critical business and financial
risks of the Group and where appropriate supported actions to manage the risks facing the business.
External audit
The services performed by Grant Thornton UK LLP relate only to the Group’s external audit and the review of the
Group’s Interim Report. All other non-audit work is performed by independent accountancy firms which will enhance
the Group’s governance.
The Audit Committee has reviewed the services provided and work undertaken by Grant Thornton UK LLP and is
satisfied with their performance in carrying out and completing the external audit.
There is no formal policy in respect of the rotation of the external auditor. This will be reviewed and taken into
consideration if the AIM listed company rules are changed so that the rotation of the external auditor becomes a
requirement.
Significant reporting issues and judgements
The Audit Committee considered whether the 2024 Annual Report is fair, balanced, and understandable and whether
it provides the necessary information for shareholders and other stakeholders to assess the Group’s financial
performance, business model and strategy.
The committee was satisfied that, as a whole, the 2024 Annual Report met these requirements.
The key issues and accounting policies considered by the Audit Committee in relation to the 2024 Annual Report
were:
G
The revenue recognition of contract accounting.
G
Pension scheme accounting
G
Management override of controls
The Audit Committee has assessed these specific issues and is satisfied that the methodologies adopted in the
Annual Report are appropriate and satisfy the relevant IFRS standards.
Roger Lane-Smith
Chairman
Audit Committee
25th June 2024
Audit Committee report
M S I N T E R N A T I O N A L p l c
69
Committee governance
Roger Lane-Smith and David Hansell were members of the Remuneration Committee throughout the year under
review, with Roger-Lane Smith serving as Chairman. Both have considerable experience in senior financial and
commercial operational roles with extensive knowledge of the Group’s operations.
The committee meets as required, with only one meeting being held during the financial year.
Key responsibilities
The committee has the responsibility for making recommendations to the Board on the remuneration packages,
including share option schemes and bonuses, of each executive director.
Review of directors’ remuneration packages
The Remuneration Committee believes that the current basic salaries and bonus award system for the executive
directors remain appropriate, and no changes were proposed.
The Remuneration Committee has approved the award of bonuses in line with the executive directors’ bonus scheme
rules. Total bonus to be paid to the executive directors for the year ended 30th April 2024 amounts to £1,664,000.
Share options
There are currently two share options plans in place in which the executive directors hold share options: MS
INTERNATIONAL plc Long Term Incentive Plan (LTIP) and MS INTERNATIONAL plc Company Share Option
Plan (CSOP).
In April 2020 two executive directors were granted a combined total of 500,000 shares at an exercise price of £nil
under the LTIP scheme. These options are exercisable in two equal amounts at two and three years after the date
of grant, subject to meeting a share price performance target of £3 per share for 90 consecutive days, which was
achieved on 13th November 2022. Following the exercise of 250,000 LTIP shares in the prior year, a further 100,000
were exercised during the year ended 30th April 2024. At the reporting date, 150,000 LTIP shares are still
outstanding, all of which are currently exercisable.
In April 2020 three executive directors were granted a total of 60,000 tax advantaged share options and 190,000
non-tax advantaged share options under the CSOP scheme at a price of £1.41. The options are exercisable in three
equal instalments at three, four and five years after the date of grant. The non-tax advantaged share options were
subject to meeting a share price target of £2 per share for 90 consecutive days, which was achieved on 29th October
2021. The tax advantaged share options were not subject to share price performance targets. During the year, 38,335
CSOP share options were exercised by three executive directors, of which 20,001 were tax-advantaged and 18,334
were non-tax advantaged.
In October 2023 12,450 tax advantaged CSOP share options were granted to three executive directors at a price of
£7.20 per share. These options are not subject to a share price performance target and are exercisable in three equal
instalments at three, four and five years after the date of grant. At the reporting date a total of 224,115 CSOP shares
were outstanding, of which 128,335 were exercisable.
Roger Lane-Smith
Chairman
Remuneration Committee
25th June 2024
Remuneration Committee report
M S I N T E R N A T I O N A L p l c
70
The directors present their report together with the Group financial statements for the year ended 30th April 2024.
The directors present their Corporate governance statement on pages 66 to 68 of this report.
222222222222222222222222222222222222222222222222
1
Principal activities and business review
The principal activities of the divisions within the Group are:
G
‘Defence and Security’: the design and manufacture of defence equipment.
G
‘Forgings’: the manufacture of fork-arms and open die forgings
G
‘Petrol Station Superstructures’: the design, manufacture, and construction of petrol station
superstructures
G
‘Corporate Branding’: the design, manufacture, installation, and service of corporate branding,
including media facades, way-finding signage, public illumination, creative lighting solutions, and the
complete appearance of petrol station superstructures and forecourts.
The Group has subsidiary companies in overseas locations but the Company does not have any overseas branches.
A review of the Group’s trading, performance and future prospects are contained in the Chairman’s statement and
Strategic report on pages 3 to 5 and pages 8 to 12.
222222222222222222222222222222222222222222222222
2
Results and dividends
The profit for the year attributable to shareholders amounted to £11,500,000 (2023 – £4,115,000). The directors
recommend a final dividend of 16.5p pence per share (2023 – 13 pence per share), making a total of 19.5p pence per
share (2023 – 15 pence per share).
222222222222222222222222222222222222222222222222
3
Going concern
The financial statements have been prepared on a going concern basis. The Group’s business activities, together
with factors likely to affect its future development, performance, and position are set out in the Chairman’s
statement and Strategic report on pages 3 to 5 and pages 8 to 12.
At 30th April 2024, the Group held cash and cash equivalents of £35.51m with a further £7.17m of restricted cash
held in an Escrow account maturing in greater than 90 days. The Group also has a number of large long-term
contracts and a healthy order book. As such, the directors are satisfied that the Group has sufficient liquidity to
meet both its current liabilities and future working capital requirements.
The performance of the Group is dependent on a number of external factors and the wider economic environment.
The increase in inflation, the cost and supply of raw materials, and soaring energy prices are among the biggest
challenges and uncertainties facing the Group. However, management remain vigilant and are regularly monitoring
the impact of these external factors in order to mitigate any impact upon the business.
Forecasts have been prepared up to 31st October 2025, which the directors believe reflect a reasonable expectation,
based on the information available at the date of signing these financial statements. The forecasts have been
assessed for the potential impact of possible sensitivities, including a 10% fall in the forecasted revenue across the
Group and a 10% increase in material prices. In all scenarios the Group has sufficient headroom to be able to
continue to meet its liabilities as they fall due.
In addition, management have carried out reverse stress tests to 31st October 2025 under various scenarios, all of
which are considered severe but implausible by management. In all tested scenarios, the Group would continue as
a going concern throughout the assessment period.
As a result, in making the going concern assessment the directors consider there to be no material uncertainties
that could cast significant doubt on the Group’s ability to continue to operate as a going concern. They believe that
the Group has sufficient financial resources with a healthy orderbook to continue operating for the foreseeable
future, being at least to 31st October 2025. As a result, the directors continue to adopt the going concern basis of
accounting in preparation of these financial statements.
222222222222222222222222222222222222222222222222
4
Financial risk management and exposure
The main financial risks faced by the Group include currency risks, funding risks, interest rate risks, and credit
risks. Details of these exposures can be found in note 28 to the financial statements.
222222222222222222222222222222222222222222222222
Report of the directors
M S I N T E R N A T I O N A L p l c
71
5
Research and development
During the year the Group has incurred research and development costs of £1,174,000 (2023 – £1,908,000).
222222222222222222222222222222222222222222222222
6
Post balance sheet events
There are no material post balance sheet events to note.
222222222222222222222222222222222222222222222222
7
Directors
The names of the directors of the Company at 25th June 2024 are shown on page 6.
All of the directors served throughout the year and up to the date of this report.
222222222222222222222222222222222222222222222222
8
Substantial interests in shares
The directors had been advised of the following notifiable interests:-
% of share capital held
% of share capital held
at 30th April, 2024
at 25th June 2024
Michael Bell
17.7%
17.7%
Ms Adrienne Bell
17.5%
17.5%
Michael O’Connell
10.2%
10.2%
Stonehage Fleming Investment Management
10.0%
9.9%
David Pyle
9.9%
9.9%
Apart from these, the directors have not been formally notified of any other notifiable shareholdings in excess of 3%
of share capital held on 25th June 2024.
222222222222222222222222222222222222222222222222
9
Employee involvement
The directors have continued their commitment to the development of employee involvement and communication
throughout the Group.
Regular meetings are held with employees to provide and discuss information of concern to them as employees,
including financial and economic factors affecting the performance of the Company in which they are employed.
222222222222222222222222222222222222222222222222
10
Employment of disabled persons
The policy of the Group is to offer the same opportunities to disabled people as to all others in respect of recruitment
and career advancement. Full and fair consideration is given to applications for employment made by disabled
persons having regard to their particular aptitudes and abilities. Appropriate training is arranged for disabled
persons, including retraining for alternative work of employees who may become disabled, to promote their career
development within the organisation.
222222222222222222222222222222222222222222222222
11
Carbon and energy reporting
As an AIM listed company, MS INTERNATIONAL plc has to report on its UK energy usage and carbon emissions.
This includes all companies within the Group that reside in the United Kingdom.
Energy consumption in the UK includes electricity, natural gas, LPG, production gases, and fuel for transport
directly purchased by the Group within the UK.
The total UK energy use for the base year, being the year ended 30th April 2023, and the financial year ended 30th
April 2024 were collated in kilowatt hours and converted to tCO₂e using government 2022 standard conversion
factors published on 22nd June 2022. In the year ended 30th April 2023 6.67m kilowatt hours were consumed within
the UK, which is the equivalent of 1,401 tonnes of CO₂ emissions. In the year ended 30th April 2024 the number of
kilowatt hours consumed within the UK has reduced by 1.40m to 5.27m. Similarly, there has also been an overall
reduction in CO₂ emissions of 282 tonnes during the year to 1,119 tonnes of CO₂ emissions. This is mainly as a
result of reductions in the use of natural gas and electricity of 123 tonne and 95 tonne respectively.
The Company has adopted CO₂ tonnes consumed per £ of UK sales as its key energy intensity ratio. The ratio has
reduced from 24.36 CO₂ tonnes per £1m of UK sales in the year ended 30th April 2023 to 12.13 CO₂ tonnes per £1m
of UK sales in the year ended 30th April 2024.
Report of the directors
Continued
M S I N T E R N A T I O N A L p l c
72
As a result of ongoing energy reduction plans and efficiency improvements, consumption measured in tCO₂e has
reduced by 20.1%, despite an increase in UK sales of 60.3%. This reduction in consumption has largely been due to
projects undertaken at both the Doncaster and Norwich sites. At both the Doncaster and Norwich sites solar panels
have been installed sites and are now fully operational, allowing the factories to draw on green energy during sunlight
hours with any surpluses being fed back into the National Grid. At the Doncaster site the roof of the main office
building has been replaced and the heating system replaced with a heat recovery system, both of which have improved
the building’s thermal efficiency. Additionally, there has been improvements to factory processes that have reduced
energy consumption, for example, installing timers or foot pedals on machines to turn them off when out of use.
At the Norwich site, there has been a significant increase in manufacturing capacity following the opening of a new
production facility, which has ultimately increased overall consumption at the site. However, ongoing projects to
improve the energy efficiency in the buildings have continued, including the replacement of sodium halide and
fluorescent lighting with LED lighting, the replacement of inefficient air-conditioning units, and the installation of
infra-red PIR sensors to lighting. Across both sites the use of video conferencing has reduced the number of journeys
taken.
The planned energy saving projects for the year commencing 1st May 2024 include improved electricity monitoring
which will allow the Company to identify energy output and highlight energy saving opportunities. In the ‘Forgings’
division the monitoring of gas and electricity while forging will allow the Company to identify how and when would
be best to forge. In addition, hybrid and fully electric vehicles will continue to be purchased to replace existing
company owned vehicles where practical.
222222222222222222222222222222222222222222222222
12
Additional information for shareholders
On 7th July 2023 the company purchased 290,000 of its ordinary shares of 10p each from the MS INTERNATIONAL
Retirement and Death Benefits Scheme at a price of £5.725 per share for a total consideration of £1,676,000. During
the year, the Company satisfied 170,007 share options exercised by certain employees by way of transfer from the
Company’s treasury share holding for a total consideration of £315,000. Further details can be found in Note 23 to
the Accounts.
The following provides the additional information required for shareholders as a result of the implementation of the
Takeover Directive into UK Law.
At 25th June 2024 the Company’s issued share capital comprised:
% of total
Number
£’000
share
Ordinary shares of 10p each
17,841,073
1,784
100.0
Ordinary shares of 10p each held in treasury
1,516,327
139
8.5
Ordinary shares of 10p each not held in treasury
16,324,746
1,645
91.5
The above figure (16,324,746 ordinary shares of 10p) is the number of ordinary shares to be used as a denominator
for the calculation of a shareholder’s interest for the determination of any notification requirement in respect of their
interest(s) or change of interest(s).
The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer
of securities and for voting rights.
Ordinary shares
On a show of hands at a general meeting of the Company every holder of ordinary shares present in person and
entitled to vote shall have one vote and on a poll, every member present in person or by proxy and entitled to vote
shall have one vote for every ordinary share held. The notice of the general meeting specifies deadlines for exercising
voting rights either by proxy notice or present in person or by proxy in relation to resolutions to be passed at general
meeting. All proxy votes are counted and the numbers for, against or withheld in relation to each resolution are
announced at the Annual General Meeting.
There are no restrictions on the transfer of ordinary shares in the Company other than:
G
Certain restrictions may from time to time be imposed by laws and regulations (for example, insider
trading laws and market requirements relating to close periods); and;
G
Pursuant to the Listing Rules of the Financial Services Authority whereby certain employees of the
Company require the approval of the Company to deal in the Company’s securities.
Report of the directors
Continued
M S I N T E R N A T I O N A L p l c
73
11
Carbon and energy reporting (continued)
12
Additional information for shareholders (continued)
Ordinary shares (continued)
The Company’s Articles of Association may only be amended by a special resolution at a general meeting of the
shareholders. Directors are reappointed by ordinary resolution at a general meeting of the shareholders. The Board
can appoint a director but anyone so appointed must be elected by an ordinary resolution at the next general meeting.
Any director, other than the Chairman, who has held office for more than three years since their last appointment
must offer themselves up for re-election at the annual general meeting.
Company share schemes
The Employee Share Ownership Trust holds 0.56% of the issued share capital of the Company (excluding treasury
shares) in trust for the benefit of employees of the Group and their dependants. The voting rights in relation to these
shares are exercised by the trustee.
Change of control
The Company is not party to any agreements which take effect, alter or terminate upon a change of control of the
Company following a takeover bid.
There are no agreements between the Company and its directors or employees providing for compensation for loss
of office or employment (whether through resignation, purported redundancy or otherwise) that occurs because of a
takeover bid.
222222222222222222222222222222222222222222222222
13
Special business at the Annual General Meeting
Resolution 9: Purchase by the Company of its own shares
Resolution 9, which will be proposed as a special resolution renews a similar authority given at last year’s AGM. If
passed, it will allow the Company to purchase up to 1,632,475 ordinary shares in the market (which represents
approximately 10 per cent of the issued ordinary share capital of the Company excluding treasury shares) as at 25th
June 2024. The minimum and maximum prices for such a purchase are set out in the resolution. If given, this
authority will expire at the conclusion of the Company’s next AGM or on 25th October 2025 whichever is the earlier.
It is the directors’ intention to renew this authority each year.
The directors have no current intention to exercise the authority sought under resolution 9 to make market
purchases.
The Company is permitted to hold shares in treasury as an alternative to cancelling them. Shares held in treasury
may be subsequently cancelled, or sold for cash or used to satisfy options under the Company’s share schemes. While
held in treasury, the shares are not entitled to receive any dividends or dividend equivalents (apart from any issue
of bonus shares) and have no voting rights. The directors believe it is appropriate for the Company to have the option
to hold its own shares in treasury, if, at a future date, the directors exercise this authority in order to provide the
Company with additional flexibility in the management of its capital base. The directors will have regard to
institutional shareholder guidelines which may be in force at the time of such purchase, holding or re-sale of shares
held in treasury. At 25th June 2024, the Company holds 1,516,327 ordinary shares of 10p each in treasury which
represents 8.5% of the total number of ordinary shares of 10p each issued.
Resolution 10: Notice period for general meetings
Resolution 10 will be proposed as a special resolution to allow the Company to call general meetings (other than an
AGM) on 14 clear days notice.
Changes made to the 2006 Act by the Companies (Shareholders’ Rights) Regulations 2009 increase the notice period
required for general meetings of the Company to 21 days unless shareholders approve a shorter notice period, which
cannot however be less than 14 clear days. AGMs will continue to be held on at least 21 clear days notice.
Before the Regulations came into force, the Company was able to call general meetings other than an AGM on 14
clear days notice without obtaining shareholder approval. Resolution 10 seeks such approval in order to preserve
this flexibility. The shorter notice period would not however be used as a matter of routine for such meetings, but
only where it is merited by the business of the meeting and is considered to be in the interests of shareholders as a
whole. If given, the approval will be effective until the Company’s next annual general meeting, when it is intended
that a similar resolution will be proposed.
Note that the changes to the 2006 Act mean that, in order to be able to call a general meeting on less than 21 clear
days notice, the Company must make a means of electronic voting available to all shareholders for that meeting.
222222222222222222222222222222222222222222222222
M S I N T E R N A T I O N A L p l c
74
Report of the directors
Continued
14
Auditors
Resolutions to reappoint the auditor, Grant Thornton UK LLP, and authorise the directors to determine the
remuneration of the auditor, will be proposed at the Annual General Meeting.
222222222222222222222222222222222222222222222222
15
Directors’ indemnities
Directors’ and officers’ insurance is in place for all directors to provide cover for their reasonable actions on behalf
of the Group. No further directors’ indemnities are in place.
222222222222222222222222222222222222222222222222
15
Directors’ statement as to disclosure of information to auditors
The directors who were members of the Board at the time of approving the Report of the directors are listed on
page 6. Having made enquiries of fellow directors and of the Company’s auditors, each of the directors confirms that:
G
to the best of each director’s knowledge and belief, there is no information relevant to the preparation
of their report of which the Company’s auditors are unaware; and
G
each director has taken all the steps a director might reasonably be expected to have taken to be aware
of relevant audit information and to establish that the Company’s auditors are aware of that
information.
222222222222222222222222222222222222222222222222
16
We confirm that to the best of our knowledge:
G
the financial statements, prepared in accordance with UK adopted International Accounting
Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation taken as a whole; and
G
the business review, together with the Chairman’s statement, includes a fair review of the
development and performance of the business and the position of the Company and the undertakings
included in the consolidation taken as a whole, together with a description of the principal risks and
uncertainties that they face.
By order of the Board,
Shelley Ashcroft
Company Secretary
25th June 2024
Report of the directors
Continued
M S I N T E R N A T I O N A L p l c
75
Policy on remuneration of executive directors
The Remuneration Committee currently comprises Roger Lane-Smith and David Hansell. It aims to ensure that
remuneration packages and service contracts are competitive and are designed to retain, attract, and motivate
executive directors of the right calibre.
The salary for each director is determined by the Remuneration Committee by reference to a range of factors
including experience appropriate to the Group, length of service, and salary rates for similar jobs in comparative
companies. In view of the size and nature of the Group and the continuing need to optimise subordinate
management structures particular emphasis is given to the advantages which flow from the long-term continuity of
the executive directors. The contracts of service are reviewed from time to time and consideration given to whether
any amendment is appropriate. The Remuneration Committee has not sought any external advice during the year.
The main components of the remuneration package for the executive directors are as follows:-
Basic salary
Salaries for executive directors are reviewed annually by the Remuneration
Committee and were last amended in November 2022, with increases being in
effect from 1st May 2022.
Performance related annual bonus
An annual bonus is paid to executive directors upon the achievement of
profitability targets. Total bonus payments achieved for the year ended 30th
April 2024 amounted to 123.3% (2023 – 23.8%) of total executive basic
salaries.
The Remuneration Committee consider the £1,207,000 gain recognised in the
Consolidated income statement for the gain on derivative instruments be
outside of the definition of “usual working and management expenses and
outgoings” as set out in clause 1.2 of the executive directors’ bonus scheme.
Consequently, the bonus for the directors for the year ended 30th April 2024
has been based on an adjusted Group profit before impairment and taxation of
£14,505,000
Share options
Executive directors are eligible to participate in the MS INTERNATIONAL plc
Long Term Incentive Plan (LTIP) and the MS INTERNATIONAL plc Company
Share Option Plan (CSOP). The Remuneration Committee is responsible for
granting options.
In April 2020 500,000 share options were granted to two executive directors
under the terms of the LTIP share scheme at an exercise price of £nil per share
and 250,000 share options were granted to three executive directors under the
terms of the CSOP share scheme at an exercise price of £1.41 per share.
In October 2023 a further 12,450 share options were granted to three
executive directors under the terms of the CSOP scheme at an exercise price
of £7.20 per share.
As at 30th April 2024 there were 150,000 LTIP share options outstanding and
224,115 CSOP share options outstanding.
Pension contributions
Pension contributions are calculated as a percentage of basic pay and bonus
only. The executive directors have full discretion as to how they choose to
invest their pension contributions. All pension contributions for executive
directors over the age of 65 ceased from 30th April 2015.
Other benefits
Other benefits are provided in the form of company cars, death in service
benefit cover, and medical and disability insurance.
Non-executive directors
The level of the non-executive directors’ remuneration has been determined by the Board as an annual fee and is
paid monthly. The Board takes into account any proposals made by the Remuneration Committee in determining
the annual fee for non-executive directors. There are no formal service contracts between the Company and any of
the non-executive directors.
In October 2023 the Group has granted a phantom award in respect of 100,000 notional options, exercisable at nil
value, to Roger Lane-Smith. The Company has granted this award to Roger Lane-Smith to reflect his significant
contribution to the Board, and the Company’s progress and international development, and in order to retain and
incentivise future service to the Company. The phantom award will be cash settled in reference to the share price
on the date of exercise. The vesting of the phantom option is subject to continued service and will only vest in the
event of a future change of control in the Company. The awards will lapse if they have not vested within 10 years of
grant.
Directors’ remuneration report
Information not subject to audit
M S I N T E R N A T I O N A L p l c
76
Emoluments of directors
Directors’ remuneration in respect of the year to 30th April, 2023.
Basic salary and fees
Additional salary
Other benefits
Bonus
Total
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
£
£
£
£
£
£
£
£
£
£
222222222222222222222222222222222222222222222222
Michael Bell
600,000
600,000
–
–
63,409
67,238
831,980
160,979 1,495,389
828,217
222222222222222222222222222222222222222222222222
Michael O’Connell
400,000
400,000
–
–
11,008
10,929
415,990
80,489
826,998
491,418
222222222222222222222222222222222222222222222222
Nicholas Bell
350,000
350,000
–
–
8,802
7,676
415,990
80,489
774,792
438,165
222222222222222222222222222222222222222222222222
David Hansell
75,000
75,000
138,700
138,700
1,480
881
–
–
215,180
214,581
222222222222222222222222222222222222222222222222
Roger Lane-Smith
100,000
100,000
105,000
–
–
–
–
–
205,000
100,000
222222222222222222222222222222222222222222222222
Total
1,525,0001,525,000
243,700
138,700
84,699
86,724 1,663,960
321,957 3,517,359 2,072,38
222222222222222222222222222222222222222222222222
In addition to their roles as non-executive directors, David Hansell and Roger Lane-Smith have carried out additional
executive services during the year for the ‘Defence’ division and Group respectively. Their remuneration during the
year for these services is shown as additional salary.
Other benefits represent the provision of company cars, death in service benefit, and medical and disability insurance.
Pension contributions
2024
2023
Total
Total
£
£
222222222222222222222222222222222222222222222222
Michael Bell
–
–
222222222222222222222222222222222222222222222222
Michael O’Connell
–
–
222222222222222222222222222222222222222222222222
Nicholas Bell
114,899
64,573
222222222222222222222222222222222222222222222222
Roger Lane-Smith
–
–
222222222222222222222222222222222222222222222222
David Hansell
–
–
222222222222222222222222222222222222222222222222
Total
114,899
64,573
222222222222222222222222222222222222222222222222
Share options
(a)
Equity settled share options
The directors have the following outstanding interests in share options granted in the Long Term Incentive Plan and
Company Share Option Plan:
Long Term Incentive Plan
Company Share Option Plan
Total
Exercise
Number
Number
Exercise
Number
Number
Number
Number
Director
Date granted
Price
Outstanding
exercisable
Price
Outstanding
exercisable
WAEP
Outstanding
exercisable
Michael Bell
30th April 2020
£nil
100,000
100,000
£1.41
93,333
60,001
£0.68
193,333
160,001
31st October 2023
–
–
–
£7.20
4,150
–
£7.20
4,150
–
222222222222222222222222222222222222222222222222
Michael O’Connell
30th April 2020
£nil
50,000
50,000
£1.41
68,333
43,334
£0.81
118,333
93,334
31st October 2023
–
–
–
£7.20
4,150
–
£7.20
4,150
–
222222222222222222222222222222222222222222222222
Nicholas Bell
30th April 2020
–
–
–
£1.41
49,999
25,000
£1.41
49,999
25,000
31st October 2023
–
–
–
£7.20
4,150
–
£7.20
4,150
–
222222222222222222222222222222222222222222222222
David Hansell *
30th April 2020
–
–
–
£1.41
50,000
25,001
£1.41
50,000
25,001
31st October 2023
–
–
–
£7.20
4,150
–
£7.20
4,150
–
222222222222222222222222222222222222222222222222
Total
£nil
150,000
150,000
£1.76
278,265
153,336
£1.14
428,265
303,336
222222222222222222222222222222222222222222222222
* in relation to his additional executive duties carried out on behalf of the ‘Defence’ division.
All outstanding share options granted under the Long Term Incentive Plan (“LTIP”) are fully exercisable after
meeting the share price performance target of £3 per share for 90 consecutive days on 13th November 2022. In
October 2023 100,000 (2023 – 150,000) LTIP share options were exercised at an exercise price of £nil, leaving a
further 150,000 (2023 – 250,000) LTIP options outstanding.
M S I N T E R N A T I O N A L p l c
77
Directors’ remuneration report
Continued
Information subject to audit
Directors’ share options (continued)
(a)
Equity settled share options (continued)
The share options granted under the Company Share Option Plan (“CSOP”) are either tax-advantaged or non-tax
advantaged, with the later being subject to a share price performance target of £2 per share which was achieved on
29th October 2021. During the year 63,335 (2023 – nil) CSOP share options were exercised by the directors at a price
of £1.41 per share and a further 16,600 (2023 – nil) were granted on 31st October 2023 at a price of £7.20 per share.
A total 428,265 (2023 – 350,000) CSOP share options remain outstanding at 30th April 2024, of which 153,336 (2023
– 108,337) are exercisable.
(b)
Cash settled share options
The directors have the following outstanding interests in cash settled share options.
Exercise
Number
Number
Director
Date granted
Price
granted
exercisable
Roger Lane-Smith
31st October 2023
£nil
100,000
–
222222222222222222222222222222222222222222222222
Total
£nil
100,000
–
222222222222222222222222222222222222222222222222
The vesting of the cash settled share options is subject to continued service and the options will only vest in the event
of a future change of control in the Company. The awards will lapse if they have not vested within 10 years of grant.
QCA code
The Remuneration Committee is of the opinion that the disclosures required by the code are contained within this
report.
By order of the Board,
Shelley Ashcroft
Company Secretary
25th June 2024
Directors’ remuneration report
Continued
Information subject to audit
M S I N T E R N A T I O N A L p l c
78
(1)
Principal operating subsidiaries by division
Company
Registered address
Description
Country of incorporation
‘Defence and Security’
MSI-Defence Systems Ltd.
Salhouse Road,
Design, manufacture and service
England & Wales
Norwich,
of defence equipment.
NR7 9AY
England
MSI-Defence Systems
1298 Galleria Boulevard,
Design, manufacture and service
USA
US LLC
Rock Hill,
of defence equipment.
SC 29730
USA
‘Forgings’
MSI-Forks Ltd.
Balby Carr Bank,
Manufacture of fork-arms for
England & Wales
Doncaster,
the fork lift truck, construction,
DN4 8DH
agricultural and quarrying
England
equipment industries.
MSI-Quality Forgings Ltd.
Balby Carr Bank,
Manufacture of open die forgings.
England & Wales
Doncaster,
DN4 8DH
England
MSI-Forks LLC
1298 Galleria Boulevard,
Manufacture of fork-arms for
USA
Rock Hill,
the fork lift truck, construction,
SC 29730
agricultural and quarrying
USA
equipment industries.
MSI-Forks Garfos
Rua Professor Campos
Manufacture of fork-arms for
Brazil
Industriais Ltda.
de Oliveira,
the fork lift truck, construction,
310
agricultural and quarrying
São Paulo
equipment industries.
Brazil
‘Petrol Station Superstructures’
Global-MSI plc
Balby Carr Bank,
Design, manufacture and
England & Wales
Doncaster
construction of petrol station
DN4 8DH
superstructures.
England
Global-MSI Sp. z o.o.
Ul. Działowskiego 13,
Design, manufacture and
Poland
30-339 Krakow
construction of petrol station
Poland
superstructures.
‘Corporate Branding’
MSI-Sign Group B.V.
De Hoef 8
The design, manufacture,
The Netherlands
5311 GH Gameren
installation and service of
The Netherlands
corporate branding, including
media facades, way-finding
signage, public illumination,
creative lighting solutions and
the complete appearance of
petrol station superstructures.
MSI-Sign Group GmbH
Wohlenbergstrasse 6
Design, restyling, production
Germany
30179 Hannover,
and installation of the complete
Germany
appearance of petrol station
superstructures and forecourts.
Petrol Sign Ltd.
Balby Carr Bank,
Design, restyling, production
England & Wales
Doncaster
and installation of the complete
DN4 8DH
appearance of petrol station
England
superstructures and forecourts.
List of subsidiaries
M S I N T E R N A T I O N A L p l c
79
Design, manufacture and service
of defence equipment.
Design, manufacture and service
of defence equipment.
Manufacture of fork-arms for the
fork lift truck, construction,
agricultural
and
quarrying
equipment industries.
Manufacture of open die forgings.
Manufacture of fork-arms for the
fork lift truck, construction,
agricultural
and
quarrying
equipment industries.
Manufacture of fork-arms for the
fork lift truck, construction,
agricultural
and
quarrying
equipment industries.
Design,
manufacture
and
construction of petrol station
superstructures.
Design,
manufacture
and
construction of petrol station
superstructures.
The
design,
manufacture,
installation
and
service
of
corporate branding, including
media
facades,
way-finding
signage,
public
illumination,
creative lighting solutions and the
complete appearance of petrol
station superstructures.
Design, restyling, production and
installation
of
the
complete
appearance of petrol station
superstructures and forecourts.
Design, restyling, production and
installation
of
the
complete
appearance of petrol station
superstructures and forecourts.
(1)
Principal operating subsidiaries by division (continued)
‘Estates’
MS INTERNATIONAL
Balby Carr Bank,
Property holding company of the
England & Wales
Estates Ltd.
Doncaster
Group’s UK properties.
DN4 8DH
England
MS INTERNATIONAL
1298 Galleria Boulevard,
Property holding company of the
USA
Estates LLC
Rock Hill,
Group’s USA property.
SC 29730
USA
NOTES
1.
100% of the ordinary shares are held in all cases.
(2)
Non-trading subsidiaries
Conder Ltd.
Global-MSI (Overseas) Ltd.
M D M Investments Ltd.
Mechforge Ltd.
MS INTERNATIONAL Inc
MSI – Petrol Sign Ltd.
Petrol Sign – MSI Ltd.
NOTES
1.
100% of the ordinary share capital of each entity is held in all cases.
2.
All non-trading companies are registered in England and Wales with the exception of MS INTERNATIOANAL Inc, which is
registered in the USA.
3.
All companies are dormant and non-operating, with the exception of MDM Investments Ltd, which is the trustee company of
the MS INTERNATIONAL plc Retirement and Death Benefits Scheme and MS INTERNATIONAL Inc, which is a holding
company for the trading companies within the USA.
List of subsidiaries
Continued
M S I N T E R N A T I O N A L p l c
80