(Alliance News) - Mpac Group PLC said Thursday its underlying profit for 2020 will come in ahead of market expectations.
Shares in the high-speed packaging firm were 9.9% higher in London on Thursday ahead of midday at 452.76 pence each.
In 2019, the company recorded underlying pretax profit of GBP7.5 million.
Mpac said the good results are due to its better-than-expected margins in the fourth quarter driven by sector mix.
"Trading continues to be resilient, as Mpac serves essential healthcare, food, and beverage markets, deploying digital technology to mitigate travel restrictions despite the continued headwinds from the pandemic," the company added.
On top of this, Mpac noted the integration of Switchback into the firm has been successful with trading performance at Switchback ahead of management expectations.
Mpac bought Switchback Group Inc, a US-based supplier of packaging machinery and automation solutions to the food, beverage and healthcare markets, back in September. Initial cash consideration was USD13.0 million, plus up to USD2.0 million in earn-outs.
Mpac's order book going into 2021 stood at GBP55.5 million, flat on a year before, and noted no orders have been cancelled due to Covid-19.
"The board constantly monitors the impact of the pandemic on Mpac. Our customers remain active and we continue to win original equipment and service orders with robust demand, particularly in the healthcare sector and in the Americas region," the company said.
"The board has maintained strong cost control discipline to secure margins, while focusing investment on a 'Fast Recovery' plan to ensure that Mpac is agile and well positioned to take advantage of opportunities when the market returns to higher levels of activity."
Chief Executive Tony Steels said the firm's order book give him confidence for 2021. "I am confident that we will be able to report a robust financial performance for 2020 and a positive outlook for 2021 which is testament to the fundamental strengths of the group."
By Paul McGowan; paulmcgowan@alliancenews.com
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Mpac Group Plc (MPAC)