Under-the-radar engineer MS International (MSI:AIM) is one of this morning’s big movers, gaining 20.5% to 171p as it reports improving conditions in its Defence and Petrol Station divisions.

The stock, which has no analyst coverage, has been in retreat since 2011 when it traded higher than 300p. MSI could now be ready to turn the corner from an operational perspective on the back of a major contract win and an acquisition.

‘I am pleased to announce there has been a much improved performance during the second half of the year,’ says chairman Michael Bell in a full-year results statement.

MSI - Comparison Line Chart (Rebased to first)

First half losses in MSI’s Defence unit because of higher research and development spend were turned around in the six months to 2 May, its financial year-end. Constrained defence spending by governments led to a 15% decline in revenue.

Prospects look much better for 2015/16. A £12 million-plus contract to provide maintenance and support for Royal Navy equipment is a particular highlight.

Bell also flags disposals of petrol forecourt operations by major oil companies as a catalyst for its Petrol Station Superstructures division which helps construct and maintain sites.

MSI has bought Netherlands-based Petrol Sign for €3.4 million (£2.4 million) in a bid to expand its Petrol activities across western Europe.

Demand for metal forging services in MSI’s Doncaster facility remains steady, Bell adds.

Fully diluted earnings per share for the year was 8.2p, placing the stock on a price-to-earnings ratio of 21.

Free cash flow per share was much stronger at 25.3p a share, because of a large working capital inflow related to progress payments on project work and capital expenditure which was lower than depreciation.

MSI has a solid balance sheet with no debt and £17.1 million in cash. However, it does have a defined benefit pension scheme which has a deficit of £6.9 million.

Tangible book value per share at the year-end is 148p.

Issue Date: 18 Jun 2015