First half FY 22 results mirrored the July trading update with revenue of £50.6m +14.5%YoY close to our revised estimate of £49.5m, and a closing order book at £62.6m (H1 21 £62.0m), which remained firm. Inflationary pressures and supply chain disruption remain features, however the Group continued to implement mitigating processes. We also note positive discussions with FREYR Battery towards a framework agreement for the installation of battery cell automation lines.
The underlying direction of travel for the markets Mpac targets remains unchanged. Spurred by the challenges of introducing environmentally friendly processes and packaging, and reducing plastic content and waste, Mpac’s target Healthcare and Food & Beverage verticals continue to require the innovative packaging and automation systems solutions in which the Group specialises. Mpac’s diversification into the new clean energy market provides a timely addition to the demand picture and offers the prospect of commercialised processes and solutions for wider application.
Our outlook, revised at the time of the July trading update, remains unchanged: for the current year: revenue of £96.0m, and EBITDA (adj.) of £6.1m, indicative of an EV/EBITDA multiple of 6.6x.
Our fair value for Mpac remains 485p/share, indicative of a FY24 EV/EBITDA multiple of 6.7x.
