The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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New research report from Equity Development: https://www.equitydevelopment.co.uk/research/first-half-fy-23-results-orders-continue-to-grow
For the six months to 30 June 2023, Mpac Group reported revenue of £52.8m (+4%YoY) and a closing order book of £77.5m, compared to £67.2m at FY22 year end, with order intake of £62.4m (H1 22: £32.8m). The net debt position at December 2022 of £4.7m reverted to H1 net cash of £2.2m; we estimate c£2.5m net cash for the full year.
As the combination of order uptake cashflow progress demonstrates, the Group has re-established momentum; trading remains in line with management expectations. Reported H1 EPS was (2.2p)/share; on an adjusted basis 6.8p/share (H1 22: 3.6p).
Mpac reports progress on schedule in completing the Customer Qualification Plant (CQP) project for FREYR Battery in Norway, according to required specifications. Full commissioning is expected in H2.
At the January trading update, we raised our FY23 revenue outlook from £103.6m to £104.7m, and (adj.) EBITDA to £9.6m. After reviewing H1 performance, notably the strength of order inflow, we raise our FY 23 revenue outlook again to £106.6m (+2%). Our fair value for Mpac remains 485p/share, indicative of a FY24 EV/EBITDA multiple of 3.2x.
Link to report here: https://www.equitydevelopment.co.uk/research/trading-update-h1-meets-expectations
In a Trading Update for the first half to 30 June 2023, Mpac reports that trading was in line with management expectations, reiterating - as stated at the AGM in May - that performance remains second half weighted, supported by the strength of the order book and projects underway. The Group closed H1 with a strong balance sheet and positive net cash.
Mpac notes that order intake for the year to date is significantly ahead at £62.4m compared to £32.8m a year earlier, with the H1 closing order book at £78.4m, +25%YoY above the start of FY23 (£62.7m). The performance of (higher margin) Service operations has also been strong, whilst the Group is able to report that supply chain issues that impacted completion of Original Equipment projects have now largely eased. This adds confidence for second half performance and a return to normalised margins: our FY23 gross margin outlook is 28.9%, for FY24 31.3% (FY19: 29.3%; FY20: 29.0%). We expect net debt of £4.7m to revert towards a positive FY23 net cash position of £7.5m.
On site commissioning of the assembly line at FREYR’s Battery Customer Qualification Plant in Norway continues.
Our FY24 outlook remains 11%YoY revenue growth and 35.0%YoY growth in (adj.) EBITDA with fair value for Mpac seen at 485p/share, indicative of a FY24 EV/EBITDA multiple of 7.9x.
Am calling the bottom here.
"second-half weighted". Well, there's a surprise!
Link to research report with audio summary: https://www.equitydevelopment.co.uk/research/agm-statement-momentum-maintained
In a statement accompanying the AGM, Mpac Group reports that the positive momentum of Q4 22 has been maintained, with order intake and quotation activity significantly ahead year-on-year. As expected, pressure on working capital has eased - the completion of orders and shipment of equipment means that Q1 23 closed with a positive net cash position, which is expected to be maintained in H1.
This is a clear validation of the steps undertaken in the latter part of FY22 and a strong positive indicator for the current year. We note that Mpac expects trading to be second-half weighted, with the order book sufficient to meet revenue expectations. The positive momentum reported should continue.
The core message of this AGM statement is that Mpac continues to focus on its key markets, notably Healthcare and Food & Beverage, where the shortage of key components in FY22 constrained the ability to deliver, and where there is now evidence of healthy demand.
Our fair value for Mpac remains 485p/share, indicative of a FY24 EV/EBITDA multiple of 7.9x.
Sentiment is not great but this is quite clearly too cheap. Easy recovery buy IMO.
Lots of interest to us in this:
https://www.forbes.com/sites/alanohnsman/2023/03/30/a-nordic-upstart-aims-to-leapfrog-tesla-and-other-battery-rivals-with-a-lower-cost-high-tech-cell/
Looks like the qualification plant has opened, which is good news. 24M gets a good mention, though we don’t. But having worked with 24M for years we are in a good position, I think, for all these plants.
Mpac, the specialist international business providing high speed packaging machines and complementary services, hosted an Investor Presentation covering their Full Year Results for the period ending 31st December 2022.
Tony Steels (CEO), Adam Holland (current COO and incoming CEO) and Will Wilkins (Group Finance Director) discussed the current strength of their order book, the steps they have taken to mitigate key supply chain challenges, and the timeline for the FREYR opportunity. The team answered a wide range of investor questions and discussed some key illustrative case studies.
The presentation has been divided into chapters for ease of viewing:
00:03 - Introduction from Tony Steels (CEO) and Adam Holland (incoming CEO)
03:33 - Summary of progress made, FY22 overview
07:52 - Mpac overview, business model & strategy
18:11 - Case Studies
22:57 - Financial highlights
38:16 - Questions & Answers
Link to full video recording: https://www.equitydevelopment.co.uk/research/mpac-group-fy-results-investor-presentation-video-24-march-2023
Not much to get excited about.
A long old haul from here - share price could be in the doldrums for a while.
Link: https://www.equitydevelopment.co.uk/research/fy22-results-show-a-platform-for-growth
FY22 results show a platform for growth - For the year to 31 December 2022, Mpac Group reported revenue of £97.7m, +3.6%YoY, EBITDA (adj.) of £6.8m, ahead of our outlook, -39.3%YoY, and PBT of £3.5m. Service revenue grew 14.4%YoY to 23.6% of the total. The year-end closing order book was £67.2m (FY21: £78.4m). Net debt was £4.7m, which we expect to revert to a £7.5m net cash position in FY23
Orders underpin FY23 earnings visibility - The FY22 closing order book was £67.2m with order intake at £83.8m, compared to £83.9m in FY20 and £117.9m in FY21. By FY24 we expect a return to top line growth of above 10%YoY and EBITDA growth of above 30%YoY, with revenue from Service approaching 30% of total.
Supply chain pressure eases - As expected, Mpac required additional working capital in order to meet customer expectations and offset the impact of supply chain disruption. This amounted to £17.8m (our estimate: £18.7m), including inventory build to £9.6m. We forecast this to unwind as the backlog of projects completes in H1 23; Mpac reports that contract assets – projects awaiting final factory sign-off – peaked in Q4 22 as the supply of key electrical components improved, allowing project completion prior to shipment. Cashflow was also constrained by the timing of customer deposits carried over into FY23. We expect working capital to improve to above £3m, and FY22 net debt of £4.7m to revert towards an estimated 31 Dec 2023 net cash position of £7.5m. Mpac continued to progress development of casting and unit cell assembly equipment for the battery cell production line at FREYR’s Battery Customer Qualification Plant in Norway. Agreed changes resulted in a revised plan for delivery in Q1 23, and commissioning in Q2 23.
Appointment of new CEO - Tony Steels, who has led the Group since 2016, has announced his retirement. COO Adam Holland will become CEO post-AGM on 17 May. Adam joined Mpac in late 2022 having held senior positions worldwide at JCB, Siemens AG and Rolls-Royce.
Fair value remains 485p - Following the January 16th Trading Update we raised our FY23 revenue outlook from £103.6m to £104.7m, (adj.) EBITDA by 13% to £9.6m, and our FY24 revenue outlook from £113.4m to £115.8m, with (adj.) EBITDA from £12.9m to £13.0m (see note here). We retain these estimates. Our fair value for Mpac remains 485p/share, indicative of a FY24 EV/EBITDA multiple of 7.9x.
Sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/mpac-fypresentation-24march2023
Mpac, the specialist international business providing high speed packaging machines and complimentary services, will be conducting an Investor Presentation covering their Full Year Results for the period ending 31st December 2022.
The online presentation will be hosted by Tony Steels, CEO, and Will Wilkins, Group Finance Director.
This event will take place at 11.00am on Friday 24th March.
The webinar is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end.
May be Simply walls street repetitive view that iits overvalued lol.
Interesting shift in direction, I’m back in profit. Has someone leaked some news?
No, other than to say that the recent downward spiral is no more- lol.
A sharp 10% rise first thing yesterday morning, and up another 10% since then!
TR1s could be a-coming....
I am almost tempted to think that the recent downward spiral is associated with the FREYR contract being conflated with the difficulties at Britishvolt. Are there any other ideas?
Agree, but the share price has taken a severe beating over the past 12 months and I wonder if, valuation-wise, those good times will come back any time soon for a 'techy' company like this. Plus, as you say, we have the misfortune of being listed here in London... that's not changing. I hold shares... with decreasing relish tbh... but I'm still hanging on in the hope of organic growth (i.e. some contract wins like the FREYR battery one).
This seems to be an under appreciated company. In my view it a rare thing, a British tech play on automation that is under valued here but would have a much bigger market cap in the US or even in Japan perhaps! Either way, when the economy recovers this should be surging back.
Link to note: https://www.equitydevelopment.co.uk/research/trading-update-fy22-in-line-and-fy23-encouraging
In a Trading Update today, Mpac Group reports performance for the year to 31 December 2022 in line with expectations, with a strong FY22 closing order book; the outlook for FY23 is “encouraging”. We have raised our FY22 (adj.) EBITDA outlook by 8% and FY23 by 13%.
Reflecting resilient demand in the core Healthcare and Food & Beverage segments, order intake in the second half of FY22 was significantly above first half levels, leading to a healthy year-end closing order book of £69.0m (H1 22: £62.6m). In addition, Service order intake and contribution to revenue continued to grow. Mpac adds that, inclusive of modified specifications, the development and installation of the clean energy project for FREYR remains on track for completion in Q2 23.
Mpac was required to adjust its operations to meet the impact of the worldwide disruption of supply chains and related macro-economic factors. The response was good management of components sourcing and stock levels, in addition to alternative routes of sourcing. This resulted in the ability to better meet customers’ expectations and, in H2, improve profitability. The exercise required additional working capital – in areas such as inventory build - and adapting to lengthened project build timing, for which we estimate Mpac has ample balance sheet resources. We expect the pressure on working capital to unwind in H1 23, with estimated FY22 year-end net debt of £4.2m reverting towards an estimated 31 December 2023 net cash position of £5.3m.
Our fair value for Mpac remains 485p/share, indicative of a FY24 EV/EBITDA multiple of 7.9x compared to 4.6x at current EV.
Mpac, the specialist international business providing high speed packaging machines and complimentary services, conducted an Investor Presentation webinar covering their Interim Results to the period ending 30th June 2022.
Tony Steels, CEO, and Will Wilkins, Group Finance Director took investors through the highlights of their Half Year results, provided a strategic overview and touched on some interesting case studies. The team gave viewers a detailed financial review and answered a range of audience questions. The full video has been divided into chapters for ease of viewing.
You can view the whole video recording below, divided into chapters:
0:00:03 corporate video
0:00:49 Introduction, Half Year summary, Mpac overview
0:08:40 Strategy overview
0:18:41 Case Studies
0:23:39 Sustainability vision
0:24:25 Financial review
0:37:48 Outlook & Conclusion
0:39:18 Questions & Answers
Link to full video: https://www.equitydevelopment.co.uk/research/investor-presentation-interim-results
Mpac Group has announced that it has signed a framework agreement with FREYR Battery, for an initial three-year period, for the exclusive supply of casting and unit cell assembly equipment to FREYR’s battery cell production line at FREYR’s Giga Arctic plant in Mo I Rana, Norway. This is an important step towards the commercialisation at scale of Mpac’s technology at the start of FREYR Battery’s major investment in next-generation clean energy provision, and a clear validation of Mpac’s commitment to this new market vertical.
As indicated by the 3-year agreement announced today, Mpac will seek long-term partnerships in this rapidly-growing segment of the clean energy sector, using its expertise to add production (and battery-size) scale, and with this achieve cost reductions for its clients.
At this stage our outlook to FY24 remains unchanged, but we are sensitive to updates in this rapidly-developing addition to Mpacs core markets. Our fair value for Mpac is 485p/share, indicative of a FY24 EV/EBITDA multiple of 6.7x.
Link to full report: https://www.equitydevelopment.co.uk/research/freyr-3-year-supply-agreement
"Mpac Group plc, a global leader in high-speed packaging and automation solutions, announces that it has signed a framework agreement with FREYR Battery ("FREYR"), for an initial three-year period, for the exclusive supply of the casting and unit cell assembly equipment to the battery cell production line at FREYR's Giga Arctic factory in Norway.
FREYR is a developer of clean, next-generation battery cell production capacity, incorporating 24M Technologies (''24M'') SemiSolid lithium-ion battery platform technology. Mpac was prequalified to participate in the competitive tender for the framework agreement following several years of cooperation with 24M on industrialising and scaling battery cell assembly. Mpac will leverage 24M's innovative battery casting technology and in-house expertise and experience in automation and mass production systems to construct and install the equipment."
This is BIG - IMHO. Freyr is big: “We believe this is one of the largest industrial investments in Norway in the post-war period. Some say it is the biggest,” Freyr CEO Tom Einar Jensen told NRK..... - see my post July '21 below.
https://www.energy-storage.news/norways-freyr-battery-signs-us3-billion-off-take-deal-with-energy-storage-industry-customer/
$3 billion deals going on - and MPAC is involved in it through exclusive deals. And it's not foot-in-the-door, it's "come in and take your coat off": ""Mpac has a proven track record in delivering complex industrial machinery, and after careful assessment, we believe that they have the best technical solution for our Giga Arctic project," says Einar Kilde, EVP Project Execution, FREYR. "Our collaboration began with our CQP, where we learned that our two companies are well-aligned in our ambitions for speed and scale in producing clean and sustainable battery solutions.""
Re the CQP: "Previously Mpac was awarded the contract to design and build the development line for FREYR's Customer Qualification Plant (CQP) in July 2021 and this project remains on schedule for shipment in December 2022."
Mpac, the specialist international business providing high speed packaging machines and complimentary services, will be conducting an Investor Presentation webinar covering their Interim Results to the period ending 30th June 2022.
The online presentation will be hosted by Tony Steels, CEO, and Will Wilkins, Group Finance Director.
This event will now take place at 10.00am on Tuesday 20th September (note - was previously Monday 19th September - the date was moved in light of the Queen's funeral bank holiday).
The webinar is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end. You can sign up at this link: https://www.equitydevelopment.co.uk/news-and-events/mpac-fypresentation-19sept2022
Please note that in light of the Queen's funeral bank holiday on this day, the investor presentation with Mpac has been moved back to 20th September at 10am - the link to register is still the same: https://www.equitydevelopment.co.uk/news-and-events/mpac-fypresentation-19sept2022
First half FY 22 results mirrored the July trading update with revenue of £50.6m +14.5%YoY close to our revised estimate of £49.5m, and a closing order book at £62.6m (H1 21 £62.0m), which remained firm. Inflationary pressures and supply chain disruption remain features, however the Group continued to implement mitigating processes. We also note positive discussions with FREYR Battery towards a framework agreement for the installation of battery cell automation lines.
The underlying direction of travel for the markets Mpac targets remains unchanged. Spurred by the challenges of introducing environmentally friendly processes and packaging, and reducing plastic content and waste, Mpac’s target Healthcare and Food & Beverage verticals continue to require the innovative packaging and automation systems solutions in which the Group specialises. Mpac’s diversification into the new clean energy market provides a timely addition to the demand picture and offers the prospect of commercialised processes and solutions for wider application.
Our outlook, revised at the time of the July trading update, remains unchanged: for the current year: revenue of £96.0m, and EBITDA (adj.) of £6.1m, indicative of an EV/EBITDA multiple of 6.6x.
Our fair value for Mpac remains 485p/share, indicative of a FY24 EV/EBITDA multiple of 6.7x.
Full details in our new report published this morning: https://www.equitydevelopment.co.uk/research/staying-the-course
Mpac: Interim Results Investor Presentation - 19th September 2022
Mpac, the specialist international business providing high speed packaging machines and complimentary services, will be conducting an Investor Presentation webinar covering their Interim Results to the period ending 30th June 2022.
The online presentation will be hosted by Tony Steels, CEO, and Will Wilkins, Group Finance Director.
This event will take place at 10.00am on Monday 19th September.
The webinar is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end.
Sign up here to register: https://www.equitydevelopment.co.uk/news-and-events/mpac-fypresentation-19sept2022