MSI shares soar as profits hit record high

ENGINEERING group MS International said annual profits doubled to a record high, sending its shares soaring by 29 per cent.

The Doncaster-based group, which has three divisions spanning defence, forgings and petrol station forecourts, said pre-tax profits in the year to the end April hit £6.7m. Revenues increased by a third to £54.2m as all three divisions bounced back from the recession.

“These results represent a group record, comfortably surpassing the previous peak performance achieved in the year to May 2008,” said executive chairman Michael Bell.

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“This outcome is a significant positive step in restoring the group’s record of delivering a year-on-year upward trajectory in trading performance, which was the norm prior to the global economic downturn.”

MSI grew its cash pile to £9.9m from £9.8m a year earlier. That was despite spending £3.53m on buying the other half of Global-MSI, its forecourt businesses.

Mr Bell spent £290,000 in April on buying 150,000 shares in the company at 194p each. He now holds 26 per cent of the company but yesterday said he plans to retain the shares as a long-term investment.

Shares in MSI yesterday closed up 62.5p at 277.5p.

The group hiked its final dividend by 45 per cent to 5.5p per share from 3.8p a year ago.

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The group’s defence business, which MSI said was unaffected by the recession, performed “admirably”. It started the year with a large order book, which MSI said posed a challenge “as it immediately tested the fortitude of our much enhanced manufacturing facilities and systems, designed to facilitate this planned increase in activity”.

Defence ended the year with an 18 per cent increase in sales, which Mr Bell said reflected a significant expansion in direct export sales.

The group earns about 60 per cent of its revenues from exports. It said orders for delivery this year include the first direct sales of its 30mm naval gun systems to the United States Navy.

MSI’s forgings division, which supplies fork arms for fork-lift trucks, was buoyed by an increase in orders in the second half, after a tough two years of “extraordinarily low demand”. Mr Bell said it believes this division may be moving into a period of “more sustainable recovery”, and current orders are double those a year ago.

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Its forecourt arm struggled during the recession as the appetite for new petrol stations in the UK and Europe waned. Mr Bell said this problem was exacerbated by the long spell of severe winter weather, which hit its construction projects.

However, he said this hiatus allowed the group to merge its operations into its Doncaster site, where it has combined design, project management and manufacturing. This in turn boosted the division’s efficiency, he added, and it has now become a “highly productive and competitive business”, helping it earn nominated supplier status on a number of projects.

The division offers design and build services, and holds the original construction drawings for the bulk of the UK’s petrol station canopy estate.

“Clearly, the world economic climate remains uncertain and although there has been some recovery, it still remains a long way short of the pre-recession heights,” said Mr Bell.

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“Maintaining general economic momentum in the coming months of the summer holiday period will be critical if the revival is to continue without interruption. As a business, we must remain vigilant and be prepared for the possibility of some unsettled times ahead.

“Overall, much has been accomplished in a difficult time. The group is in good shape and the board is optimistic.”

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