In a Trading Update for the six months to 30 June 2024, Mpac reports strong order intake of c.£60m and a closing first half order book of c.£71m. Consequently, the Group expects to post H1 24 revenue of c.£61m, significantly ahead year-on-year, being 16% above H1 23 (£52.8m).
A consequence of the strength of first half order intake is, as anticipated, an expansion of working capital, required to provision inventory for new projects. This is expected to unwind in the second half alongside the gathering pace of performance towards the close of the year. The estimated H1 revenue of c.£61m represents 50.8% of our FY24 target (£120m), whereas at the same stage in FY23 (£52.8m), H1 revenue represented 46.2% of the full year outcome (£114.2m).
Having raised both our estimates and fair value in March, we maintain our current outlook.
Despite a strong run, Mpac’s share price is currently trading at 5% below its one-year high and the outlook indicates that the Group continues to offer compelling value. Our Fair Value of 530p/share is indicative of a FY25 EV/EBITDA multiple of 7.1x and PE of 12.1x, respectively 33% and 28% below the market cap weighted average of a group of Mpac peers, on multiples of 10.6x EV/EBITDA and 16.9x PE.
