MSI Ms International Plc

Chairman's statement

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.

'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.

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 23^rd August 2024 to those shareholders on the register at the close of business on the 12th July 2024.

Michael Bell

25^th June 2024

Copies of this announcement are available from the Company's registered office at MS INTERNATIONAL plc, Balby Carr Bank, Doncaster, DN4 8DH, England. The Notice of AGM will be posted to shareholders on or before 3^rd July 2024. The full Annual Report and Accounts will be posted to shareholders no later than 19^th July 2024. They will be made available on the Company's website at www.msiplc.com and will be delivered to the Registrar of Companies after it has been laid before the Company's members at the Annual General Meeting to be held on 25^th July 2024 at The Holiday Inn, Warmsworth, Doncaster.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018.

The financial information set out above does not constitute the Company's statutory accounts for the periods ended 30^th April 2024 or 30th April 2023 but is derived from those accounts. Statutory accounts for 2023 have been delivered to the Registrar of Companies and those for 2024 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.