Mpac Group Plc - Operating Update and Notice of Results
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Mpac Group plc
(''Mpac'', "Company" or "Group")
COVID-19 and operating update and notice of results
Mpac Group plc, a global leader in 'Make, Pack, Monitor and Service' high speed packaging and automation solutions issues a COVID-19 and operating update ahead of the release, on 3 September 2020, of its unaudited results for the six months ended 30 June 2020.
During the pandemic, the health and wellbeing of our employees and their families has been and continues to be our primary concern. The creativity and flexibility of our dedicated employees alongside the use of digital technology, remote working, social distancing practices and the use of PPE ensured that our facilities were made COVID-secure early in the outbreak. The responsiveness of our employees and the implementation of these measures ensured that Mpac was able to keep all sites open and continue to provide essential support for our customers in the critical Pharmaceutical, Healthcare, Food and Beverage sectors.
Global travel restrictions have had an impact on the timing of new original equipment orders, project execution and on-site service revenues. However, this impact has been partially mitigated through the ingenuity of our employees in the use of digital technology which contributed to deliver service revenue growth over the prior year.
Pleasingly, our customers remain active and we continue to win original equipment and service orders with noticeable resilience in the Healthcare sector and in the Americas region. In addition, as global travel restrictions ease, we anticipate customer visits and levels of qualified opportunities will increase during the second half of the year. Our order book going into the second half of 2020 of £45.4m remains strong (30 June 2019: £39.9m) and to date, no orders have been cancelled due to COVID-19.
The Board continues to monitor the impact of the pandemic on Mpac and, whilst it remains difficult to predict its duration and scale, all appropriate measures have been put in place to reduce operating costs and a 'Fast Recovery' plan has been implemented to ensure that Mpac is well positioned to take advantage of opportunities when the market returns to normal levels of activity. This plan includes the launch of a new website, a virtual exhibition for customers to demonstrate the range of newly developed products and offering customers digital solutions for remote machine acceptance and servicing.
The Board has successfully taken measures during the outbreak to preserve cash, focus on working capital management, deferral of discretionary spend and accessing government support where available. These measures have contributed to a closing cash position at 30 June 2020 of £23.0m (31 December 2019: £18.9m). Mpac has a strong balance sheet, is well financed, remains bank debt free and has access to a £10m secured committed revolving facility which remains undrawn. Debtor days remain at pre COVID levels. We have modelled and stress tested our liquidity assumptions as a result of COVID-19 and we remain well positioned to meet from existing resources our liquidity requirements beyond 2020.
Tony Steels, Chief Executive, commented:
"The health and wellbeing of our employees and their families remains our primary concern. We made our facilities COVID-19 secure which allowed our sites to remain operational and we continue to provide a first-class service to our customers in the critical sectors of Pharmaceutical, Healthcare and Food and Beverage. A fast recovery plan has been developed to ensure we have a competitive advantage based on our innovative packaging and automation solutions, 'thinking digital' and focussing on our on- site service offering once travel restrictions allow.''