MS International PLC on Friday said profit grew in the first half of its current financial year despite a decline in revenue, as the group expects second-half earnings to grow following a number of large contracts.

The Doncaster, Yorkshire-based defence equipment manufacturer said pretax profit in the six months that ended October 31 was £8.8 million, rising 13% from £7.7 million last year.

The group swung to derivative gains of £788,000 from losses of £731,000 the year before, and finance income multiplied to £748,000 from £204,000.

Revenue sank 4.1% to £54.7 million from £57.0 million, but cost of sales were reduced by 7.2% to £36.2 million from £38.9 million.

MS International declared an interim dividend of 5 pence per share, up 50% from 3p last year.

Chair Michael Bell said: ‘I am pleased to report that good progress continues, and I remain even more optimistic about our ongoing performance and prospects than I was at this time last year. The step change in the development of our Defence & Security businesses has enabled us to engage in substantially larger international contracts, around the world, that extend over much longer periods and often involve phased delivery.

‘As a result of winning these large contracts, a substantial amount of ongoing work in the first half will not be recognised as revenue until either later this year or in following years, when the goods and services have transferred to the customer.

‘Timing of revenue will, therefore, be an increasingly significant feature going forward and, indeed, it has impacted the results for the first half. Nevertheless, the company is making remarkable advances, even if the half-year results do not fully reflect this.’

Shares in MS International were up 0.6% at 1,036.00 pence each in London on Friday morning.

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