40% top line growth, plus £22m cash pile
Molins is a technology-led service provider of high speed packaging equipment and machinery with circa 300 employees. The group comprises two complementary subsidiaries: the largest, Langen (c. 75%-80% revenues) is a designer & manufacturer of cartoning machines, case packers, end-of-line and robotic packaging solutions, as well as a provider of turnkey projects involving design/integration of packaging systems.By refocusing solely on packaging machinery, the group this morning posted impressive growth, with H1 revenues up 40% to £25.2m (vs £18.2m LY), or 29% at constant currency. Driven by standout performances from EMEA (+58% to £9.5m) and AsiaPac (+210% to £5.6m), offset by a slight decline in the Americas (-1% to £10.3m), albeit vs tough comparatives.
Better still, proforma net funds, including the above Tobacco proceeds (£27.3m net costs/taxes, and £23.1m post a £2.7m UK pension contribution with £1.5m held in escrow), ended the period at £22m (or 109p/share). With another £5.9m scheduled to come in by November after June’s disposal of a property in Canada.
With regards to M&A, the Board are actively seeking for complementary and value accretive targets. Ideally comprising specialist know-how and/or solutions capability, within Primary (ie touching product) and Secondary (outer-layer) Packaging covering the rapidly expanding Pharma, Healthcare, FMCG and Beverage sectors.
Despite a spectacular recent rerating of the shares, our sum-of-the-parts remains unchanged at 180p/share. This is based on a range of industry multiples, a 12% discount rate and assuming corporate overheads (incl PPF levy) are streamlined if suitable acquisitions are not made.
Mpac Group is focused on its Packaging Machinery business, Mpac Langen, which designs, precision engineers and manufactures packaging solutions, machinery and high specification automation, secondary packaging equipment and end-of-line robotics and at-line instrumentation and testing solutions as well as providing solutions including the design and integration of packaging systems.
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