Mpac ends strong year in line with expectations

Packaging and automation technology company Mpac reported a “strong” financial year in a trading update on Wednesday, saying it expected to report revenue, underlying profit before tax and closing cash in line with market expectations.

The AIM-traded firm said order intake, revenue and underlying profit before tax all improved in the 12 months ended 31 December, underpinned by continued progress in delivering its 'One Mpac' strategy.

It said that performance was in spite of operational challenges caused by the global supply chain crisis, and the impact on labour availability due to the resurgence of Covid-19.

The company said the strong first half order intake continued through the second half, delivering full-year growth from “resilient” end markets including essential healthcare, and food and beverage.

It ended 2021 with a closing order book of about £77m, up from £55.5m year-on-year, providing “good coverage” of 2022 forecast revenue.

The board said that, along with its “healthy” prospect pipeline, meant the group had an “encouraging outlook” for the new 2022 financial year.

Following the announcement of the contract win with Freyr Battery in July, the group said it had made “good progress” in the development and build of the clean energy casting and unit cell assembly line.

The firm said the project remained on track to be completed in the third quarter of 2022.

Mpac said the strong financial performance in 2021 was underpinned by its continued progress in realising the financial benefits of its 'One Mpac' model.

It said it was focussed on executing its long-term strategy of developing original equipment order intake growth and improved margins through its digital services offering, together with increased operational efficiencies.

That, the directors said, had led to an improved financial performance and cash generation by operating a single entity business model.

“I am pleased to report Mpac made good progress and a robust financial performance for 2021, in line with market expectations, in which we reached a milestone by exceeding £100m of order intake for the year,” said chief executive officer Tony Steels.

“The positive first half performance has continued into the second half, and the group ended 2021 with both a strong closing order book and a healthy prospect pipeline, providing an encouraging outlook for 2022.”

Mpac said it would announce its results for the year ended 31 December in the week of 14 March.

At 1446 GMT, shares in Mpac Group were up 1.9% at 523.75p.