The Board is pleased to announce that the Group expects to report underlying profit before tax for the full year 2020 above market expectations, primarily as a result of better than expected margins in Q4 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.
On 9 September 2020, the Group reported the earnings accretive acquisition of Switchback Group, Inc (''Switchback''), a USA based supplier of packaging machinery and automation solutions to the food, beverage, and healthcare markets. The integration of Switchback into the wider Group has been successful with trading performance at Switchback ahead of management expectations and the first commercial synergies with other businesses within the Group have been secured.
Our order book going into 2021 of £55.5m remains strong (31 December 2019: £55.4m) and, to date, no orders have been cancelled due to COVID-19. The Group has a strong balance sheet, no bank debt, and has been cash generative in 2020.
The Board constantly monitors the impact of the pandemic on Mpac. O ur 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 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. This plan includes building the Mpac brand, virtual exhibitions for customers to demonstrate the range of newly developed products, investment in senior commercial leadership and offering customers digital solutions for remote machine acceptance and servicing.
Our full year results, for the year ended 31 December 2020, are scheduled to be announced in the week commencing 1 March 2021.
Tony Steels, Chief Executive, commented:
“Our employees have all responded tremendously during 2020, creating a COVID secure environment and deploying digital technologies to ensure our customer service levels remained excellent. Our pipeline of qualified opportunities and our closing order book give confidence for 2021. The acquisition of Switchback has further enhanced our presence in the Americas and the integration into the wider Group has been successful. 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.”