In its Trading Update for the six months ended 30 June 2021 Mpac reports that the upturn seen in H2 2020 has accelerated with H1’21 order intake well above that a year earlier - which had suffered the impact of COVID-19. The update highlights:
- Strong performance in the Americas, enhanced by the successful integration of Switchback Group, which continues to trade ahead of management expectations, and an expanded regional presence.
- A second half order book which is ahead of the opening level of £55.5m. This underpins our full year revenue outlook of £95.0m.
- Implementation of unified business processes providing the basis for streamlined operations and a platform for sustained growth.
This places Mpac on a prospective FY21 EV/EBITDA of 8.3x and PE of 14.8x delivering a ROE of 14.2%. The medium-term outlook to FY23 indicates revenue CAGR at a healthy 8.6% and EBITDA CAGR of 14.4% placing Mpac on an attractive +3 year forward EV/EBITDA of 6.9x.
All of this leads us to conclude a fair value for Mpac shares of 600p.
