UK – UK-based packaging and automation company Mpac has reported that its revenue for the first half (H1) of fiscal 2022 (FY22) was US$58.64 million (£50.6m), up by 14% fromUS$51.23 million (£44.2m) a year earlier.
The company’s revenue growth for the 26 weeks to 30 June was driven by a 17% increase in original equipment and a 6% rise in service revenue.
Mpac’s H1 order intake amounted to US$38.01 million (£32.8m), down by 36% from H1 2021, primarily because of customers placing orders earlier than anticipated in the fourth quarter (Q4) of 2021 for lead times.
Its underlying profit before tax dropped from US$5.45 million (£4.7m) to US$1.27 million (£1.1m) year-on-year, while its underlying earnings per share also declined to £0.04 from £0.18 in H1 2021.
Mpac’s net cash for H1 was US$11.01 million (£9.5m), against US$12.98 million (£11.2m) in the prior-year period. Its cash balances were affected by the timing of project order intakes and related working capital cycles.
Mpac chief executive Tony Steels said: “We have made good progress in delivering on our existing customer commitments and managing short-term operational challenges.
“Consequently, revenue has grown but at lower margins due to cost inflationary pressures and ongoing disruption to global supply chains, in particular, relating to the sourcing of critical, customer-specified electronic components.”
The company believes that it is on track to meet its revised market expectations although it will not pay an interim dividend. No dividends were paid in 2021 either.
Mpac believes that the momentum it built in previous years will allow it to recover its growth path as issues develop in the supply chain.
Inflationary pressures reduced the company’s margins while it also faced supply chain disruption.
It expects supply chain challenges to continue for the remainder of 2022 but is attempting to mitigate these factors by ‘securing alternative sources of electronic component supply’.
Looking forward, MPac noted that it is “on target” to launch the newly developed continuous motion carton try at trade shows in America in the third quarter of 2022.
This will allow customers in the biscuit market to replace existing plastic tray packaging with cardboard alternatives.
It also drew attention to the commercial framework agreement with FREYR Battery, a Norwegian developer of battery capacity, which, if concluded, presents ‘an opportunity to be at the forefront of a growing new market.’
Steel concluded: “Our order book and prospect pipeline remain robust in our resilient end markets, demonstrated by securing contracts from new customers and making progress towards concluding a commercial agreement for the supply of battery cell automation solutions to FREYR, which gives us further confidence that the strategic objectives will deliver long term revenue growth.”
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