On track despite absorbing forex hit
In Friday's AGM statement, Molins stated that "The Board's expectation of Group trading for the financial year to 31 December 2015 remains unchanged", notwithstanding the adverse impact of the relative strength of sterling against the euro. The first few months of the current financial year has seen strong Packaging Machinery sales on the back of new products, the performance of the Tobacco Machinery division continuing to stabilise (and "in line" with last year's performance), offsetting "more challenging" conditions in Scientific Services. Sequentially, 2015 is anticipated to be more H2 weighted than in 2014, albeit within normal seasonality levels. For the full year we have conservatively nudged down our 2015 adjusted EBIT by £100k to £3.6m, but still expect a 5.5p dividend (7.1% yield) given the comfortable >2x earnings cover and reducing net debt. The shares trade at a big discount to the sector peer group, and also to our share price target of 125p.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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