MS International - Return on net tangible assets

PUBLISHED: 05 Jul 2018 @ 21:25 | Comments (0) |

Generating a good return on net tangible assets is an important determinant of returns to shareholders over a span of years, so today I’ll examine the returns MS International (LSE:MSI) over the last seven years to try to gauge likely future returns.

£’000s Year end April	2018	2017	2016
INCOME STATEMENT
Profit after tax	3,386	1,498	1,584
Amortisation charge this year for accounting goodwill following acquisitions	0	0	0
Exceptional items distorting profits (positive or negative)	0	0	0
Profit for shareholders	3,386	1,498	1,584


CURRENT ASSETS AND LIABILITIES
Inventories	11,666	10,145	7,043
Receivables	14,617	11,393	8,996
Cash needed for operations (assumed)	1,000	1,000	1,000
Other current assets	1,241	1,142	902
Payables	-28,052	-25,464	-15,253
Short-term debt	0	-0	-0
Other current liabilities	-643	-123	-154
Working capital for operations	-171	-1,907	2,534

Surplus cash (assumed)	14,866	14,210	11,758

NON-CURRENT ASSETS AND LIABILITIES
Property, Plant and Equipment	20,766	19,099	15,955
Goodwill in BS	2,780	2,749	2,700
Previously written-off acquired goodwill – add back	0	0	0
Other acquired intangible assets in BS	0	0	0
Previously written-off other acquired intangibles – add back	0	0	0
Long-term debt	0	0	0
Other non-current liabilities	0	0	0
Net non-current assets for operations	23,546	21,848	18,655

OTHER ITEMS TO CONSIDER
Defined benefit pension deficit	6,421	7,485	7,644
Internally generated intangible assets capitalised to BS	2,113	2,552	2,971
Investments (in shares, bonds, etc.)	0	0	0
Operating lease non-cancellable commitments	993	998	1,138
Preference share capital	0	0	0
Minority interests in profit	0	0	0
Minority interests in net assets	0	0	0

Return on net tangible assets, RONTA = Profit for shareholders ÷ Average net tangible assets over the year (beginning BS and end BS averaged).

Return on net assets, RONA = Profit for shareholders ÷ Average net assets over the year (includes internally generated intangible assets capitalised)

£’000s	2018	2017	2016	2015
Profit	3,386	1,498	1,584	1,353

WC – averaged	-1039	314	1,544	1,625
Net non-current assets – averaged	22,697	20,252	17,641	16,904
Totals to Net tang. assets – averaged	21,658	20,566	19,185	18,529
RONTA	15.6%

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