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.