Mpac Group – ‘Automation with a human touch’ – this global group is totally undervalued at 411p

24.04.2025

Next Monday morning, 28th April, we will see the announcement of the 2024 Final Results from the Mpac Group (LON:MPAC), which is a global leader in high-speed packaging and automation solutions. 

I expect the figures to be very good and for the business to point to even better times ahead.

Analysts are anticipating this group to more than double its profits over the next two years, making its shares at the current 411p an extremely attractive purchase.

The Business

This Tadcaster-based group has been helping businesses evolve to meet new challenges for over 100 years, having grown both organically and through several global acquisitions.

Now the business has facilities across the world, from the UK, to Europe, the USA & Canada, and out to Asia.

The £125m-capitalised group designs, builds and supports machines that assemble and package the products upon which millions of people around the world depend.

Through innovative technology and exceptional service, the group helps its customers to provide food and beverage, pharmaceuticals, health and personal care, consumer goods, and clean sustainable energy across the world.

Its expertise provides solutions for every part of product packaging, from cartoning equipment, carton packaging machines, vertical cartoners, case packer machines, box packing machines, automatic palletisers, tray forming machines, palletising equipment, palletising systems, and so much more. 

Management Comment

At the time of announcing its 2024 Trading Update in mid-January this year, CEO Adam Holland stated that:

“We are pleased with full year 2024 financial performance, which is in line with market expectations.

2024 has proved to be a transformational year for the Group, with the acquisitions of CSi, BCA and Siga Vision providing the platform for a step change in scale and profitability, accelerating our progress towards our strategic objectives.

The acquisitions materially diversify the Group's portfolio enabling the Group to provide a fuller line offering, as well as access to new customer relationships providing a platform for continued robust organic growth.

We would like to thank shareholders for their support of the acquisition of CSi and their ongoing support as we head into 2025.

We anticipate reporting for 2024 record levels of revenue, with underlying profit before tax breaking through the £10m mark for the first time. 

We start 2025 with a larger and more diverse order book from our resilient end markets providing a high level of coverage over forecast revenue, supporting delivery of our expectations for further growth in the year ahead.''

The Equity

There are some 30.07m shares in issue, of which professional investors are believed to hold some 30% of the equity.

Larger holders include Schroders Investment Management (15.17%), Charles Stanley Investment Management (6.08%), G Oury (3.64%), James Laverdiere (3.52%), Gresham House Asset Management (3.26%), Castlefield Investment Partners (1.14%), Unicorn Asset Management (0.98%), Canaccord Genuity Wealth (0.92%), D & F Financial Services (0.83%) and Avellemy (0.73%).

Analyst’s View

Robin Speakman and Akhil Patel, at Shore Capital Markets, are looking for the group to indicate a clear pathway to continued growth and shareholder value creation.

Their estimates for the year to end-December 2024 are for revenues of £122.5m (£114.2m) up 7.3%, while adjusted pre-tax profits could have risen 47.9% to £10.5m (£7.1m), with earnings per share of some 35.6p (25.9p), 37.5% higher.

For the year now underway, the analysts are looking for £218.0m of sales, £17.8m of profits and 44.2p of earnings per share.

The year to end-December 2026, they suggest, could see revenues of £233.0m, with £21.4m of profits and 52.4p per share of earnings.

In My View

This is a cracking business whose shares are totally under-rated.

They touched 590p towards the end of January, shortly after the 2024 Trading Update, now they are trading at around 411p – at which level the group’s shares look ready to respond to positive news on current business prospects.

Perhaps next Monday’s results statement could prove to be the catalyst to push them back over the 500p mark and then proceed higher still.