REG - Mpac Group PLC - Trading Update and Notice of Results

MPACAnnouncement

11/07/2022 07:00

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RNS Number : 9175R  Mpac Group PLC  11 July 2022

11 July 2022

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018

 

Mpac Group plc

(''Mpac'' or "Group")

 

Trading update and notice of results

 

Mpac Group plc, a global leader in high-speed packaging and automation
solutions, issues a trading update ahead of the release of its unaudited
results for the six months ended 30 June 2022.

 

Mpac has continued to make progress during the first half of the financial
year despite a challenging trading environment, ending the period with a
strong order book, ahead of the previous year, and with a very encouraging
prospects pipeline. The Group expects to report revenue that is ahead of last
year and in line with its expectations in respect of the six months ended 30
June 2022.

 

As previously announced, there has been increasing macro-economic uncertainty
and unprecedented volatility in the global supply chain. This has impacted
both the timing of customers' order placement and is causing operational
challenges, in particular relating to the sourcing of critical, customer
specified electronic components. The Group continues to respond dynamically to
meet its customers' expectations, including investing in inventory and work in
progress to ensure we remain a reliable partner to our customers.  However,
these challenges have become more acute in recent months resulting in extended
lead times and cost inflationary pressures which are impacting the Group's
operational efficiencies and margins. Consequently, the Group now expects that
profit in respect of FY22 will be significantly below current market
expectations.

Supply chain and operational challenges are likely to continue for the
remainder of 2022, before easing in 2023. In the meantime, the Group has been
proactive in implementing mitigation measures which include securing
alternative sources of electronic component supply, increased focus on
reliable planning data from our recently implemented ERP system, close
management of our supply chain and implementing cost savings initiatives.

Beyond these short-term operational challenges, the longer-term outlook for
the business remains positive.  We carry forward a strong prospect pipeline
and order book, concentrated on companies in our core, resilient, end markets
of Healthcare and Food and Beverage and the balance sheet remains strong
providing us with the ability to invest in the Group for growth over the
medium term and beyond.

Tony Steels, Chief Executive, commented:

 

''Over the recent past Mpac has created a business model which enables the
Group to flex with changing circumstances, however the unprecedented nature of
the supply chain disruption will impact our full year results.  I am
confident our experienced management team will resolve the short-term
challenges with the mitigation plans already in place, alongside the sound
operational foundations established by implementing the One Mpac business
model. We remain confident in the long-term prospects for the Group.''

The Group expects to announce its unaudited results for the six months ended
30 June 2022 on 8 September 2022.

 

For further information, please contact:

 Mpac Group plc                                  Tel: +44(0)24 7642 1100

 Tony Steels, 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
 Hudson Sandler                                  Tel: +44(0)20 7796 4133

 Nick Lyon

 Nick Moore

 

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