Defence uncertainty hurts MS

The Doncaster-based group, which makes guns for naval destroyer ships, blamed budget constraints and uncertainty in the global defence sector.

MSI’s executive chairman Michael Bell said that while its defence division has substantial orders for future years and a considerable pipeline of new business prospects, the delay in prospects becoming orders means revenues will be below last year’s.

He said that given the highly geared nature of the business, interim and full-year results will be appreciably less than last year’s.

The group said that its forgings and petrol station superstructures divisions are trading well and prospects look good.

It added that its balance sheet is robust with substantial net cash and short-term deposits.

Mr Bell said that in the light of this and the directors’ confidence in the company’s future business prospects, the group will maintain its dividend this year.

The group’s pre-tax profits fell by 40 per cent to £5.01m, on sales down by 2.5 per cent to £54.49m, in the year to April 27.

MSI also announced plans to step down from the main market to AIM, saying the smaller market will give it greater flexibility.

The group said that AIM will simplify administration and regulation while also allowing it to be more flexible on corporate transactions.

The company will ask shareholders for their approval before it goes ahead with the move at a general meeting in Doncaster on October 24.