REG - Mpac Group PLC - Full Year Results
19/03/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240319:nRSS3140Ha&default-theme=true
RNS Number : 3140H Mpac Group PLC 19 March 2024
19 March 2024
AIM: MPAC
Mpac Group plc
("Mpac", "the Company" or "the Group")
Full Year Results for the 12 months to 31 December 2023
FY23 in line with market expectations and positive outlook for FY24
Mpac Group, the global packaging and automation solutions Group, today announces its results for the 12 months to 31 December 2023 ("FY23").
The Group has delivered a strong trading performance for FY23 in line with
market expectations, with significantly increased revenue and profit, aided by
the normalisation of margins throughout the year and record order intake.
Financial Highlights
£'m FY23 FY22 Change
Order intake 118.5 83.8 +41%
Closing order book 72.5 67.2 +8%
Total revenue 114.2 97.7 +17%
- Service revenue 31.8 23.1 +38%
- Original Equipment revenue 82.4 74.6 +10%
Statutory profit before tax 4.7 0.2
Basic earnings/(loss) per share 13.1p (2.2)p
Underlying* profit before tax 7.1 3.5 +103%
Underlying* earnings per share 26.2p 13.3p +97%
Net cash/(debt) 2.1 (4.7)
*Non-underlying items include pension costs, acquisition-related items and
reorganisation costs
Operational and Strategic highlights
· Strong financial performance, aided by the normalisation of margins
through 2023, returning the Group to revenue and profit growth, and positive
net cash.
· Good progress broadening the Group customer base - 37% of Original
Equipment orders won came from new customers, including new global strategic
accounts with potential for future orders over many years.
· Significant growth in Services, now representing 28% of Group
revenue, increased from 24% prior year.
· Leadership team strengthened, with new Managing Director appointments
in the UK and US, new Operations, Supply Chain and Service Directors in the
Americas, and new Group appointments in HR and Global Strategic Accounts.
· Integration of the Switchback business completed, with the deployment
of Group ERP system in the US.
· Clean Energy sector continues to develop well, commissioning the
Freyr Customer Qualification Plant in Norway, starting pre-engineering work
for Freyr's Giga America and for Ilika's SiSTEM pilot line in the UK.
· New five-year product roadmap launched, setting out the Group's
priorities for innovation to deliver future growth.
Current trading and outlook
· The Group has started 2024 positively and trading is in line with
expectations.
· Order intake is encouraging, and we have a healthy and diverse
pipeline of prospects which means we are well positioned for the year ahead.
Adam Holland, Chief Executive, commented:
"I am delighted to present my first full year report as Chief Executive of
Mpac Group plc, announcing performance in line with expectations. In 2023, the
Group built momentum, reporting a substantial increase in revenue and profit
in H2 2023 over the first half of the year. Since joining the Group, I have
said on many occasions that Mpac is defined by Mpac people. I have been
impressed by the capability and dedication of Mpac people to serve our
customers and to deliver on our commitments. It is due to their hard work and
expertise that we can report record levels of order intake in 2023 and to
start 2024 with a strong and diverse order book providing good coverage of
future revenues."
Mpac Group plc Tel: +44(0)24 7642 1100
Adam Holland, Chief Executive
Will Wilkins, Group Finance Director
Shore Capital (Nominated Adviser & Broker) Tel: +44(0)20 7408 4050
Advisory
Patrick Castle
Iain Sexton
Broking
Henry Willcocks
Liberum (Joint Broker) Tel: +44 (0) 20 3100 2000
Edward Mansfield
Will King
Anake Singh
Hudson Sandler Tel: +44 (0) 20 7796 4133
Nick Lyon
Nick Moore
OPERATING REVIEW
Adam Holland
Introduction
In my first full year with Mpac, and as Chief Executive since May 2023, my
focus has been on our customers, our people and our strategy.
Meeting with new and existing customers, the impact that Mpac can have on
production in our customers' facilities is immediately apparent. Our
equipment sits at the heart of our customers' operations, assembling and
packaging the products that their businesses produce. From the smallest
business introducing automation for the first time, to the largest
multinational blue chip corporation rolling out the latest factory expansion,
Mpac's performance is critical to the value that our customers create. Our
expertise, depth of understanding and customer insight is what sets us apart.
Our focus on our customers in 2023 resulted in an uptick in Service
performance, an increase in new equipment opportunities and record levels of
order intake, providing the Group with a solid pipeline and a strong and
diverse order book going into 2024.
During 2023 I visited each of the Mpac operating sites and was fortunate
enough to spend time with very nearly every member of the global team. As a
project-based business, our people are critical to our success. From our
most recent apprentices to our most experienced colleagues, the dedication and
focus that our people bring to Mpac is outstanding. It is particularly
encouraging to see engineering hours increasing through the year as we bring
new people into the Group, complete training, and deploy them to project
activities. These activities, along with the actions that drive employee
engagement and retention, have been essential in supporting the growth
delivered in 2023, and setting the path for future years.
As part of my onboarding with the Group, and with the support of the Board,
this year we also critically assessed the Group's strategy. The strategy has
delivered growth since 2016 and continues to provide a solid foundation for
future growth today. In 2022 the Group was impacted by short-term
operational issues which affected semiconductor supply chains globally, but
performance in 2023 has demonstrated that the Group's fundamentals are
sound. Maintaining a clear and stable strategy helps our teams to focus on
what is important, finding new ways to deliver on firm objectives. In 2023
we saw an acceleration in growth, as we started to implement new ways of
delivering strategic change, focusing on accessing the opportunities in the
attractive markets in which we operate.
Operationally, the Group delivered a strong performance in 2023, growing
Original Equipment ("OE") and Service order intake and revenue whilst
improving margins, and making good progress with the unwinding of working
capital. Mpac operates in large, resilient markets and has a significant
opportunity to increase market share. By remaining focused on executing the
long-term strategy of developing order intake growth, improving margins
through the development of our Service business, and increased operational
efficiencies, the Group will continue to deliver profitable growth.
The scale of the opportunity with our customers in attractive growth markets
is clear. The Board and I are excited about the next growth phase for the
Group, and we remain well placed to deliver on our long-term strategy.
Strategic update
Under our stable Group strategy, we have adopted an updated set of strategic
initiatives, linked to a new five-year financial plan under which we seek to
deliver double digit annual growth from the Group's existing businesses and
achieve a sustainable double digit return on sales. A key element of our
growth strategy is to focus on extending our customer base with new global
blue chip key accounts and in 2023 Mpac was successful in securing orders from
several of the newly targeted global customers, thereby providing a strong
platform for future growth. These blue chip customers chose Mpac due to the
quality of our engineered solutions, our ability to provide flexible
automation and packaging solutions and our global support infrastructure.
Our strategy remains focused on our core markets, but with a broadening
customer base, an extended product portfolio and a well-executed Service
offering.
Our updated strategy focuses on the following five pillars to drive growth:
Going for Growth - Offering customers automation and packaging solutions in
our target markets, growing our capacity to support customers and supporting
the development of our commercial team with a new programme: Sales Excellence.
Outstanding Customer Service - Deployment of new business tools to support our
Service teams, thereby growing our global field service capacity. We provide
our customers with a comprehensive portfolio of service products to ensure
they maximise their return on investment.
Operational Excellence - Focusing on project execution, including project
management, engineering, operations and supply chain processes, supported by
integrated resource planning to drive shorter project lead times and
on-time-in-full delivery.
Innovation - A comprehensive programme to extend our product, including
packaging technology and further development of our battery cell assembly
capabilities.
People - Increasing employee engagement, talent acquisition, development and
retention.
Going for Growth
Our ambition is to broadly double revenue from our existing businesses over
our five-year strategic planning period. Our addressable end market is
substantial, resilient to wider macro-economic cycles and growing. The
Group's objective is to deliver sustainable growth in our key end markets,
capturing market share by increasing the number of touch points with our
customers and the amount of time that we spend with them. In response to these
objectives, we have increased the size of our commercial team and appointed
additional experienced senior leaders. Furthermore, in 2023 we invested
extensively in brand awareness and marketing, exhibiting at the flagship
Interpack (Europe) and Pack Expo (US) trade shows and launching our first SEO
programme to drive online presence. In 2024 we will continue to expand our
commercial teams and introduce a comprehensive sales excellence programme to
optimise our prospect pipeline and conversion rate.
Our opportunity in Clean Energy remains a focus for the Group. In July 2021,
the Group signed a contract with FREYR Battery ("FREYR"), a developer of
clean, next-generation battery cell production capacity, incorporating 24M
Technologies (''24M'') battery platform technology, for the supply of casting
and unit cell assembly equipment to the battery cell production line at
FREYR's Customer Qualification Plant in Norway. The equipment supplied by Mpac
will support FREYR in achieving its ambitious plans for a more sustainable
future through semi-solid lithium-ion technology. Mpac brings production
equipment, services and know-how in the automation of production processes,
applied in this project to industrialise the battery cell production. In
June 2023, we were awarded a pre-engineering order to begin work to scope the
requirements for Gigafactory production lines for FREYR. In October 2023 we
were also awarded an engineering contract for Ilika plc, to support their work
on scaling up solid-state lithium-ion technology, further cementing our
position in the Clean Energy sector. The Group continues to work closely and
collaboratively with FREYR, 24M, Ilika and others in the development of
battery cell production capability.
Outstanding Customer Service
We have made excellent progress in growing our Service business, supported by
expanding the field service and technical resources located in the regions
where our customers operate. Our goal remains to generate a sustainable 30% of
Group revenue from these services and we are well on track to meet this target
after a very strong 2023. We will continue to help our customers meet their
operational needs by developing the experience and capacity of our Service
team, aided by the deployment of Service business tools to both enhance our
customers' experience and to provide business intelligence. The development
of digital service products with advanced engineering, information management,
connected services and machine insights underpins our offering and ensures
that our customers can fully embrace Industry 4.0.
Operational Excellence
Our strategic objective remains consistent: building an increasingly flexible
organisation which can respond with agility to our customers' needs,
leveraging our global resources. Our global ERP and business systems
blueprint, already implemented in our facilities in the Netherlands, Canada
and the UK, was successfully rolled out to our facility in the US in H1 2023
and provides the Group with a single, fully flexible, operating model. The
updated strategic plan for operational excellence will now focus on project
execution, with programmes for our project managers, engineering, and
operations teams. The goal is to further leverage our resources to reduce
lead times and maximise utilisation between the facilities.
Innovation
In 2023 we made significant progress in the development of our battery cell
assembly capabilities and introduced to the market the concept of our first
top load robotic cartoner, which will provide Mpac with access to a
significant additional market segment. The next phase of our innovation
roadmap will complete this launch, followed by a comprehensive and ambitious
programme to extend our cartoning and end of line product offering.
People
Our employees are critical to the success of our Group. In 2023 we elevated
our focus on people with the appointment of a senior HR leader, furthering our
attention on development, talent acquisition, retention, and engagement.
During 2023 we also added HR managerial bandwidth, and are proud to have
completed the second year of our Mpac Leadership Academy. The 17 graduates
from two cohorts of Mpac Academy now extend the pool of future leaders
available to the Group.
Environmental, Social & Governance
We are fully committed to improving our Environmental, Social & Governance
(''ESG'') performance in all areas, meeting our own needs without compromising
the ability of future generations to meet theirs. Sustainability is also
increasingly important to our customers. Our engineered automation and
packaging solutions provide customers with sustainable and environmentally
sound equipment that support the global megatrends of reduction in packaging,
particularly single-use plastics, reducing waste and energy use, and
increasing overall equipment effectiveness. Our end-to-end capabilities help
our customers to achieve their sustainability goals.
Our approach to our people and the communities in which we operate as well as
governance considerations, will be set out in our 2023 ESG report to be
published in the first half of 2024.
Acquisition strategy and update
The Board continues to seek out and evaluate potential acquisition
opportunities. Our focus is to identify businesses that will enhance our
customer proposition in automation and packaging solutions by extending our
product range and our access to a broader range of customers in our key market
sectors. The Company will provide updates on acquisitions when appropriate to
do so.
Outlook
Full year 2023 order intake was the highest ever for Mpac and the Group built
momentum throughout 2023, reporting a substantial increase in revenue and
profitability over the prior year. This momentum has continued into 2024, with
trading in line with expectations. The Group ended the year in a net cash
position, aided by working capital improvements which are expected to continue
in FY24. Our balance sheet remains healthy and provides us with the ability to
invest in the Group for growth.
We have an expanding order book and prospect pipeline from our existing and
target blue chip customers and an exciting new product development roadmap to
launch in the coming years. Under our new strategic and five-year plans we
are seeking to deliver OE and Service growth at improved margins, doubling
revenue from our existing businesses by the end of the strategic period. The
Board believes the Group's long-term prospects are strong and that the Group
is well positioned to meet its strategic objectives.
Adam Holland
Chief Executive
FINANCIAL REVIEW
Will Wilkins
Revenue and operating results
Group revenue of £114.2m (2022: £97.7m) represents an increase of 17%
compared to the previous year. OE revenue increased by 10% to £82.4m (2022:
£74.6m), underpinned largely by growth in EMEA and Asia. Services revenue
grew by 38% to £31.8m (2022: £23.1m), driven predominantly by growth in the
Americas and EMEA, assisted by the first service projects in the Clean Energy
sector. The rate of revenue growth in all regions benefited from the reduction
in supply chain lead times and more consistent supplies of key electronic
components.
Overall order intake for the Group grew by 41% to £118.5m (2022: £83.8m),
due primarily to the reversal of prior deferrals in customer investment
decision making in the light of a more positive global economic outlook. We
made good progress with the closing 2023 order book which increased to £72.5m
(2022: £67.2m). The value of the closing order book continues to provide good
coverage over the forecast 2024 revenue. We remain vigilant to project
execution risk and the operational efficiency of the business.
As anticipated, revenue and profit before tax in H2 2023 were substantially
above H1 2023, aided by the normalisation of margins through 2023 with full
year underlying operating profit of £7.8m (2022: £3.9m), a 100% increase on
2022 and in line with market guidance.
Underlying profit before tax for the year of £7.1m (2022: £3.5m), net of
third party interest charges of £0.7m (2022: £0.4m), was 103% up on 2022 and
in line with revised market guidance.
The extension of project build times in 2022 was partially reversed during
2023, leading to lower working capital and significantly improved cash
generation during the year.
Individual OE contracts, and to a lesser extent the Service contracts, can be
sizeable. Accordingly, a few significant orders can have a disproportionate
impact on the growth rates seen in individual sectors and regions from year to
year.
Original Equipment
OE order intake of £86.3m (2022: £57.2m) was 51% above the prior year due to
customer orders being delayed from 2022 and the growing confidence in the
markets we serve. OE revenues of £82.4m (2022: £74.6m) were 10% ahead of the
prior year.
OE revenue generated in the Americas region was level with the prior year at
£40.8m (2022: £40.9m).
In EMEA, OE revenue in the year was £34.0m (2022: £27.8m), a growth of 22%
due primarily to a recovery in the performance of our traditional markets of
Healthcare, Food and Beverages offsetting the lower revenue from Clean Energy.
OE revenue in Asia was £7.6m (2022: £5.9m).
Service
Order intake for the Service division was 21% above 2022 at £32.2m (2022:
£26.6m). Service revenue of £31.8m (2022: £23.1m) was 38% above the prior
year.
Service revenue in the Americas showed strong growth at £15.9m compared to
£11.9m in 2022, with the increase being driven largely by the healthcare and
food & beverage sectors. EMEA revenue in the year was £13.8m compared to
£9.7m in 2022, driven by the commencement of service for the Clean Energy
sector and an appealing product proposal in the key markets of Healthcare and
Food & Beverage. Asia revenue in the year was £2.1m compared to £1.5m in
2022.
Operating results
Gross profit was £31.6m (2022: £24.4m) and underlying selling, distribution
and administration costs were £23.8m (2022: £20.5m).
Underlying operating profit was £7.8m (2022: £3.9m). Underlying profit after
tax was £5.3m (2022: £2.7m) and statutory profit for the year was £2.7m
(2022: loss of £0.4m).
Non-underlying items merit separate presentation in the consolidated income
statement to allow a better understanding of the Group's financial
performance, by facilitating comparisons with prior periods and assessments of
trends in financial performance. Pension costs, acquisition-related items,
reorganisation costs and property transactions are considered non-underlying
items as they are not representative of the core trading activities of the
Group and are not included in the underlying profit before tax measure
reviewed by key stakeholders.
Net financing income was £0.8m (2022: £0.2m). Tax on underlying profit
before tax was £1.8m (2022: £0.8m). The tax charge on the Group's profit
before tax was £2.0m (2022: £0.6m).
Reconciliation of underlying profit before tax to profit before tax
2023 2023 2022 2022
£m £m £m £m
Underlying profit before tax 7.1 3.5
Non-underlying items
Defined benefit pension scheme - other costs and interest 0.4 (0.8)
Acquisition costs - (0.3)
Reorganisation costs (1.2) (0.6)
Acquired intangible asset amortisation (1.6) (1.6)
Non-underlying items total (2.4) (3.3)
Profit before tax 4.7 0.2
Dividends
Having considered the opportunities for investment in the growth of the Group,
the Board has decided that it is not appropriate to pay a final dividend. No
interim dividend was paid in 2023. Future dividend payments will be considered
by the Board in the context of future growth opportunities and when the Board
believes it is prudent to do so.
Cash, treasury and funding activities
Cash at the end of the year was £11.0m (2022: £4.2m) with £8.0m of
borrowings drawn at both the 2023 and 2022 year ends. Net cash inflow before
reorganisation was £13.1m (2022: outflow of £12.8m) after a decrease in
working capital of £4.7m (2022: outflow of £17.7m) and defined benefit
pension payments of £2.3m (2022: £2.1m). Reorganisation costs of £0.8m
(2022: £0.8m) were paid in the year. Net taxation payments were £1.1m (2022:
£0.4m). Capital expenditure on property, plant and equipment was £1.1m
(2022: £1.0m), and capitalised product development expenditure was £1.5m
(2022: £1.4m). Net current assets at the end of the year were £15.1m (2022:
£12.2m) and net assets at the year end were £64.0m (2022: £62.2m).
The Group entered into a three-year funding agreement with HSBC in 2022, which
provides the Group with a £20.0m revolving credit facility (''Facility'') to
support future growth. The Facility also provides several other opportunities
to proactively manage the Group's cash and ensure that the Group is well
placed to react to opportunities, both organic and acquisition related, as
they arise. The Group utilised £8.0m of the Facility in the year.
There were no significant changes during 2023 in the financial risks,
principally currency risks and interest rate movements, to which the business
is exposed, and the Group treasury policy has remained unchanged. The Group
does not trade in financial instruments and enters into derivatives (mainly
forward foreign exchange contracts) solely for the purpose of minimising
currency exposures on sales or purchases in currencies other than the
functional currencies of its various operations.
Working Capital
The global supply chain issues experienced in 2022 began to ease in early
2023, though supply chain lead times remain extended compared to earlier
years, with the consequent extension of the Group's working capital cycle. The
improvements in supply chain management led to £4.7m of cash being generated
from working capital movements in the year, compared to a £17.7m outflow of
funds into working capital in 2022. Further improvements in working capital
levels are anticipated throughout 2024.
Pension schemes
The Group is responsible for defined benefit pension schemes in the UK and the
US, in which there are no active members.
The IAS 19 valuation of the UK scheme's assets and liabilities was undertaken
as at 31 December 2023 and was based on the information used for the funding
valuation work as at 30 June 2021, updated to reflect both conditions at the
2023 year end and the specific requirements of IAS 19. The smaller US defined
benefit schemes were valued as at 31 December 2023, using actuarial data as of
1 January 2023, updated for conditions existing at the year end. Under IAS 19
the Group has elected to recognise all actuarial gains and losses outside of
the income statement.
The IAS 19 valuation of the UK scheme resulted in a net surplus at the end of
the year of £32.2m (2022: £31.5m) which is included within the Group's
assets. The value of the scheme's assets at 31 December 2023 was £309.0m
(2022: £311.2m) and the value of the scheme's liabilities was £276.8m (2022:
£279.7m). Despite the continuing volatility in financial markets around the
world in 2023, the scheme's protection strategies, notably its use of
Liability Driven Investments, ensured that the surplus was protected.
The IAS 19 valuations of the US pension schemes showed an aggregated net
deficit of £1.8m (2022: £2.1m) with total assets of £7.7m (2022: £8.1m).
During the year the Company made payments to the UK defined benefit scheme of
£2.0m (2022: £2.0m).
The UK scheme's triennial valuation as at 30 June 2021 reported a deficit of
£28.4m. The contributions are £2.0m per year, increasing at 2.1% per year,
with a recovery period of four years and six months. The scheme deficit on a
triennial valuation basis had reduced ahead of this projection at 31 December
2023.
Equity
Group equity at 31 December 2023 was £64.0m (2022: £62.2m). The movement
arises mainly from the profit for the year of £2.7m, a net actuarial loss in
respect of the Group's defined benefit pension schemes of £1.7m and changes
in the fair value of cash flow hedges of £0.8m; all figures are stated net of
tax where applicable.
Will Wilkins
Group Finance Director
CONSOLIDATED INCOME STATEMENT
2023 2022
Non-underlying Non-underlying
(note 3) (note 3)
Underlying £m Total Underlying £m Total
Note £m £m £m £m
Revenue 2 114.2 - 114.2 97.7 - 97.7
Cost of sales (82.6) - (82.6) (73.3) - (73.3)
Gross profit 31.6 - 31.6 24.4 - 24.4
Distribution expenses (8.8) - (8.8) (8.1) - (8.1)
Administrative expenses (14.6) (3.9) (18.5) (11.9) (3.9) (15.8)
Other operating expenses (0.4) - (0.4) (0.5) - (0.5)
Operating profit 2, 3 7.8 (3.9) 3.9 3.9 (3.9) -
Financial income - 1.5 1.5 - 0.6 0.6
Financial expenses (0.7) - (0.7) (0.4) - (0.4)
Net financing (expense)/income
(0.7) 1.5 0.8 (0.4) 0.6 0.2
Profit before tax 7.1 (2.4) 4.7 3.5 (3.3) 0.2
Taxation (1.8) (0.2) (2.0) (0.8) 0.2 (0.6)
Profit for the period 5.3 (2.6) 2.7 2.7 (3.1) (0.4)
Earnings/(loss) per ordinary share
Basic 5 13.1p (2.2)p
Diluted 5 13.1p (2.2)p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2023 2022
£m £m
Profit for the period 2.7 (0.4)
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Actuarial losses (1.7) (5.0)
Tax on items that will not be reclassified to profit or - 1.3
loss
(1.7) (3.7)
Items that may be reclassified subsequently to profit or loss
Currency translation movements arising on foreign currency net investments
(0.9) 2.1
Effective portion of changes in fair value of cash flow hedges
0.4 (1.3)
Reclassified to income statement from hedge reserve
1.3 -
0.8 0.8
Other comprehensive income/(expense) for the period (0.9) (2.9)
Total comprehensive income/(expense) for the period 1.8 (3.3)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital
Share Share Translation redemption Hedging Retained Total
capital premium reserve reserve reserve earnings equity
£m £m £m £m £m £m £m
Balance at 1 January 2022 5.0 26.0 0.3 3.9 (0.5) 30.7 65.4
Profit for the period - - - - - (0.4) (0.4)
Other comprehensive (expense)/income for the period
- - 2.1 - (1.3) (3.7) (2.9)
Total comprehensive (expense)/income for the period
- - 2.1 - (1.3) (4.1) (3.3)
Equity-settled share based transactions
Purchase of own shares - - - - - 0.1 0.1
0.1 - - - - (0.1) -
Total transactions with owners, recorded directly in equity 0.1 - - - - - 0.1
Balance at 31 December 2022 5.1 26.0 2.4 3.9 (1.8) 26.6 62.2
Profit for the period - - - - - 2.7 2.7
Other comprehensive (expense)/income for the period
- - (0.9) - 1.7 (1.7) (0.9)
Total comprehensive (expense)/income for the period
- - (0.9) - 1.7 1.0 1.8
Equity-settled share based transactions
Purchase of own shares - - - - - - -
- - - - - - -
Total transactions with owners, recorded directly in equity - - - - - - -
Balance at 31 December 2023 5.1 26.0 1.5 3.9 (0.1) 27.6 64.0
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2023 2022
Note £m £m
Non-current assets
Intangible assets 24.0 25.4
Property, plant and equipment 4.1 4.0
Investment property 0.8 0.8
Right of use assets 5.9 5.0
Employee benefits 4 32.2 31.5
Deferred tax assets 0.9 1.3
67.9 68.0
Current assets
Inventories 11.1 9.6
Trade and other receivables 46.8 47.3
Current tax assets 1.1 0.6
Cash and cash equivalents 11.0 4.2
70.0 61.7
Current liabilities
Lease liabilities (1.3) (1.4)
Trade and other payables (43.8) (39.0)
Current tax liabilities (0.9) (0.1)
Provisions (0.9) (1.0)
Interest-bearing loans and borrowings (8.0) (8.0)
(54.9) (49.5)
Net current assets 15.1 12.2
Total assets less current liabilities 83.0 80.2
Non-current liabilities
Interest-bearing loans and borrowings (0.9) (0.9)
Employee benefits 4 (1.8) (2.1)
Deferred tax liabilities (11.4) (11.1)
Lease liabilities (4.9) (3.9)
(19.0) (18.0)
Net assets 64.0 62.2
Equity
Issued capital 5.1 5.1
Share premium 26.0 26.0
Reserves 3.8 2.1
Retained earnings 29.1 29.0
Total equity 64.0 62.2
CONSOLIDATED STATEMENT OF CASH FLOW
2023 2022
Note £m £m
Operating activities
Operating profit
Non-underlying items included in operating profit 3.9 -
Amortisation
Depreciation 3.9 3.9
Profit on the sale of property, plant and equipment
Other non-cash items 0.8 0.9
Pension payments
Working capital movements: 2.1 2.0
- (increase)/decrease in inventories
- decrease / (increase) in contract assets - -
- decrease/(increase) in trade and other receivables
- (decrease)/increase in trade and other payables - 0.2
- (decrease)/increase in provisions
- (decrease)/increase in contract liabilities (2.3) (2.1)
(1.7) (3.7)
1.7 (5.9)
(0.3) (6.3)
1.8 1.7
(0.1) 0.5
3.3 (4.0)
Cash flows from continuing operations before reorganisation 13.1 (12.8)
Acquisition and reorganisation costs paid
(0.8) (0.8)
Cash flows from operations 12.3 (13.6)
Taxation paid
(1.1) (0.4)
Cash flows from operating activities 11.2 (14.0)
Investing activities
Proceeds from sale of property, plant and equipment
Capitalised development expenditure - -
Acquisition of property, plant and equipment
Net cash flow on acquisition/payment of deferred consideration (1.5) (1.4)
(1.1) (1.0)
- (0.8)
Cash flows used in investing activities (2.6) (3.2)
Financing activities
Interest paid
Purchase of own shares (0.7) (0.3)
Proceeds from borrowings
Principal elements of lease payments - -
- 8.0
(1.1) (1.1)
Cash flows used in financing activities (1.8) 6.6
6
Net increase / (decrease) in cash and cash equivalents 6.8 (10.6)
Cash and cash equivalents at 1 January 4.2 14.5
Effect of exchange rate fluctuations on cash held - 0.3
Cash and cash equivalents at 31 December 2023 11.0 4.2
NOTES TO ANNOUNCEMENT
1. General information
The Group's financial statements have been prepared in accordance with
UK-adopted International Accounting Standards and with the requirements of the
Companies Act 2006. that were effective at 31 December 2023.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2023 or 2022. Statutory
accounts for 2022 have been delivered to the Registrar of Companies. The
auditors have reported on the 2023 and 2022 statutory accounts; their reports
were (i) unqualified, (ii) did not include references to any matters to which
the auditors drew attention by way of emphasis without qualifying their
reports and (iii) did not contain statements under section 498 (2) or (3) of
the Companies Act 2006.
2. Operating segments
Segment information
12 months to 31 Dec 2023 12 months to 31 Dec 2022
OE Service Total OE Service Total
£m £m £m £m £m £m
Revenue
Americas 40.8 15.9 56.7 40.9 11.9 52.8
EMEA 34.0 13.8 47.8 27.8 9.7 37.5
Asia Pacific 7.6 2.1 9.7 5.9 1.5 7.4
Total 82.4 31.8 114.2 74.6 23.1 97.7
Gross profit 31.6 24.4
Selling, distribution & administration (23.8) (20.5)
Underlying operating profit 7.8 3.9
Unallocated non-underlying items included in operating profit
(3.9) (3.9)
Operating profit 3.9 -
Net financing income 0.8 0.2
Profit before tax 4.7 0.2
Sector information
Revenue
(by customer sector)
2023 2023 2022 2022
£m % £m %
Food & Beverage 45.8 40 45.7 47
Healthcare 41.6 36 30.1 31
Clean Energy
9.1 8 11.1 11
Other
17.7 16 10.8 11
114.2 100 97.7 100
Geographical information
Revenue
(by location of customer)
2023 2023 2022 2022
£m % £m %
UK 18.4 16 9.2 9
Europe (excl. UK) 28.4 25 26.7 27
Africa & Middle East
1.1 1 1.6 2
USA
Americas (excl. USA) 49.8 44 45.8 47
Asia Pacific 6.8 6 7.0 7
9.7 8 7.4 8
114.2 100 97.7 100
3. Non-underlying items
2023 2022
£m £m
Acquisition costs - (0.3)
Reorganisation costs (1.2) (0.6)
Amortisation of acquired intangible assets (1.6) (1.6)
Defined benefit pension scheme administration costs and interest 0.4 (0.8)
Total non-underlying expense before tax (2.4) (3.3)
4. Employee benefits
The Group accounts for pensions under IAS 19 Employee benefits.
The most recent formal actuarial valuation of the scheme was carried out as at
30 June 2021 using the projected unit credit method. The market value of the
scheme assets at that date was £431.4m and the funding level was 94% of
liabilities, which represented a deficit of £28.4m. The principal terms of
the deficit funding agreement between the Company and the Fund's Trustees,
which is effective until 31 December 2035, but is subject to reassessment
every three years are that the Company will continue to pay a sum of £2.0m
per annum to the scheme (increasing at 2.1 per cent. per annum) in deficit
recovery payments.
The funding agreement focuses the scheme and the company on achieving a
funding level which should permit the scheme to achieve risk transfer to an
alternative arrangement which the company would not be liable for the
performance of. Based on annual tests, once the funding level on a technical
provisions basis reaches 103%, contributions will be redirected to an escrow
account which can only be used by the scheme to either enable risk transfer or
remedy a future deficit arising and would be returned to the company should
risk transfer be achieved without the funds being required. Should the funding
level reach 110% of technical provisions (including the value of the escrow
account), contributions cease.
The deficit recovery period from 30 June 2021 was estimated to be four years
and six months, which is scheduled to be formally reassessed following the
completion of the actuarial valuation being carried out as at 30 June 2024.
Formal valuations of the USA defined benefit schemes were carried out as at 1
January 2023, and their assumptions, updated to reflect actual experience and
conditions at 31 December 2023 and modified as appropriate for the purposes of
IAS 19, have been applied.
Profit before tax includes charges in respect of the defined benefit pension
schemes' administration costs of £1.1m (2022: £1.4m) and a net financing
income on pension scheme balances of £1.5m (2022: £0.6m). In respect of
the UK scheme, the Group paid deficit recovery contributions of £2.0m (2022:
£2.0m). Contributions to the US scheme totalled £0.2m (2022: £0.2m)
Employee benefits include the net pension asset of the UK defined benefit
pension scheme of £32.2m (2022: £31.5m) and the net pension liability of the
USA defined benefit pension schemes of £1.8m (2022: £2.1m), all figures
before tax.
5. Earnings per share
Basic earnings per ordinary share is based upon the profit for the period of
£2.7m (2022: loss of £0.4m) and on a weighted average of 20,474,424 shares
in issue during the year (2022: 20,261,505). The weighted average number of
shares excludes shares held by the employee trust in respect of the Company's
long-term incentive arrangements.
Underlying earnings per ordinary share amounted to 26.2p for the year (2022:
13.3p) and is based on underlying profit for the period of £5.3m (2022:
£2.7m), which is calculated on profit before non-underlying items.
6. Reconciliation of net cash flow to movement in net funds
2023 2022
£m £m
Net increase / (decrease) in cash and cash equivalents 6.8 (10.6)
Change in net funds resulting from cash flows 6.8 (10.6)
Translation movements - 0.3
Movement in net funds in the period 6.8 (10.3)
Opening net funds (10.0) 7.6
Movement in interest bearing loans and borrowings - (8.0)
Movement in lease liabilities (0.9) 0.7
Closing net funds (4.1) (10.0)
7. Analysis of net funds
2023 2022
£m £m
Cash and cash equivalents - current assets 11.0 4.2
Interest-bearing loans and borrowings - current liabilities (8.0) (8.0)
Interest-bearing loans and borrowings - non-current liabilities (0.9) (0.9)
Lease liabilities (6.2) (5.3)
Closing net funds (4.1) (10.0)
8. Annual Report and Accounts
Shareholders will be notified, on or around 31 March 2024 of the availability
of the Annual Report and Accounts, together with the Company's Notice of
Annual General Meeting ("AGM"), via a Regulatory Information Service
announcement. Copies of the documents will be available on the Group's
website at www.mpac-group.com. Shareholders that have elected to receive a
hard copy of the Annual Report and Accounts, together with the Notice of AGM
will receive them shortly after. Details of arrangements for voting at the
AGM will also be notified to shareholders at the same time. The AGM will be
held at 12 noon on 15 May 2024 at the offices of Hudson Sandler LLP, 25
Charterhouse Square, London, EC1M 6AE.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR UWRWRSNUOAARRecent news on MPAC
See all newsRCS - Mpac Group PLC - SiSTEM pilot battery assembly line
AnnouncementRCS - Mpac Group PLC - Launch of ESG Report
AnnouncementREG - Mpac Group PLC - Grant of Options
AnnouncementREG - Mpac Group PLC - Notice of AGM
AnnouncementREG - Mpac Group PLC - Full Year Results
Announcement