When the tough get going
Successful businesses ‘never let a crisis go to waste’. Indeed since an otherwise strong Q1’20 was interrupted by COVID-19, Mpac has further streamlined operations, accelerated R&D and launched new remote equipment diagnostic/acceptance testing, virtual reality & other ‘Industry 4.0’ services.Sure these initiatives haven’t yet had time to fully feed through into the numbers, especially given access to some client sites has been restricted during the lockdowns. However “no orders have been cancelled†due to the pandemic, new contracts are being signed, the backlog stands at a healthy £45.4m (vs £39.9m LY & £52.2m Dec’19), H1’20 aftermarket sales were up YoY (£7.6m LY) and net cash closed June at £22.1m (or 110p/share, post £0.9m preference shares vs £18.0m Dec’19) thanks to tight working capital management (re debtor days at pre CV19 levels).
The latter providing both ample liquidity to weather the most extreme of scenarios, and optionality (re M&A) if rivals ever become available at attractive prices.
Profitable & cash positive in H1’20
Conditions haven’t yet returned to pre-crisis levels and a handful of shipments were delayed in the first half. Hence our finger-in-the-air ‘guesstimate’, is that overall H1’20 revenues declined between 20%-25% (H1’19 £45.8m, previous record), delivering adjusted EBIT margins of 5% (vs 10% LY).
Going forward we believe H2 will be stronger than H1, underpinned by a robust orderbook and “resilience†within the US & Healthcare sector (see below) - provided of course the global economy continues to reopen. Elsewhere, Europe, Asia & the UK are on an upwards trajectory too, with Food & Beverage not far behind.
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.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.