Bolt-on acquisitions boost H1 results at Mpac, shares jump

(Sharecast News) - Mpac swung to a statutory loss in the first half due to restructuring charges, but shares rose strongly on Tuesday after the packaging and automation solutions company reported a big improvement in underlying results, along with the appointment of three new business veterans to the board. Revenues surged 41.2% year-on-year to £84.7m in the six months to 30 June, as acquisitions made during the second half of last year made a material contribution to the top line, offsetting lower revenues from existing businesses due to tariff-related uncertainty.

Mpac made three significant acquisitions during 2024 - Netherlands-based CSi Palletising, US outfit Boston Conveyor & Automation and UK-based SIGA Vision - all of which are "performing well and in line with expectations", the company said.

The company closed the period with an order book of £91.7m, up 18.3% on last year, with acquired businesses contributing £26.5m, while existing business units saw a 36.9% reduction in order intake to £37.7m.

Underlying pre-tax profit was up 25% at £5.0m. However, after taking a £11.5m hit from consolidating its operational footprint in the US to mitigate the impact of trade tariffs, falling consumer confidence and macro uncertainty - which saw customers defer capital investment decisions - the company reported a statutory pre-tax loss of £9.4m, compared with a £3.3m profit a year earlier.

"The proactive steps that we announced in July to accelerate the consolidation of our operational footprint in the US and to simplify our business in response to challenging conditions sets a direction of travel that will position the Group for future growth when markets fully recover," said chief executive Adam Holland.

Mpac also announced on Tuesday a trio of new veterans appointed to the board: Kier Group CFO Simon Kesterton, Senior CEO David Squires and De La Rue non-exec chair Clive Whiley have all been appointed as independent non-exec directors.

"Collectively and individually these appointments bring a wealth of experience in listed companies operating in many different countries and business environments," said Mpac chair Andrew Kitchingman. "All are highly respected business leaders with proven track records and will provide a wealth of experience to support Mpac in delivering future growth."

Shares were up 7.4% at 314p by 1150 BST.