Mpac Group – the transformational 2024-year points to a very much higher share price, shares 402p, TP 850p

29.04.2025

Today’s results from Mpac Group (LON:MPAC), the Tadcaster-based global packaging and automation solutions group, were much as expected.

The year to end December 2024 reported total revenues up 7.2% at £122.4m (£114.2m), while its underlying pre-tax profits were 49.3% better at £10.6m (£7.1m), lifting earnings 34.4% to 35.2p (26.2p) per share.

Management Comment

CEO Adam Holland stated that:

"I am delighted to announce 2024 full-year performance in line with expectations, delivering record levels of revenue, significantly improved operational performance, and a record opening order book for 2025.  

We continue to place customers at the centre of everything that we do. 

Our equipment sits at the heart of our customers' operations, assembling and packaging the products that their businesses produce. 

Our increasingly broad product offering, specialist engineering expertise, and global operations and service footprint means that we are better placed than ever before to support customers' needs globally. 

We will continue to monitor the economic position closely, but at this time we are on track to meet full-year expectations."

Broker’s Views

Sanjay Vidyarthi, at Panmure Liberum, rates the group’s shares as a Buy, with a Target Price of 800p.

He states that:

“Mpac has had a transformational year and it is encouraging to see that the acquisitions are being integrated in line with expectations.

We think the market had feared that difficult market conditions for Food & Beverage customers, combined with the tariff situation could lead to pressure on trading for Mpac.

However, the great geographic and customer diversity of the group offers some mitigation and there is increasing flexibility in Mpac’s production capability.

We think that the strength of the order book in FY25E to date is encouraging and unchanged EBIT guidance is reassuring.”

Robin Speakman and Akhil Patel at Shore Capital Markets derive a 700p a share valuation for the stock.

For the current year, to end-December 2025, they estimate revenues of £218.0m (£122.4m), with adjusted pre-tax profits of £17.8m (£10.6m), lifting earnings to 44.4p (35.2p) per share.

They state that:

“Mpac is now a significantly larger, more resilient and higher quality business, offering a complete product/service proposition strengthening its market position.

In our view, Mpac fundamentally presents a defensive profile operating in resilient/inelastic end markets, leveraging secular growth drivers in automation with any tariffs/cycle market impacts set to be overcome through scale and diversification.”

Analysts Mike Jeremy and Rachel Hayes, at Equity Development, have a valuation of 865p out on the group’s shares.

They state that:

“The strength of the year-end order book provides visibility for our FY25 outlook, and we see acquisitions combining to offset US-specific trade risks. 

We have raised our FY25 (adj.) EBIT outlook by 17.0% (£17.4m) reflecting the improvement in underlying profitability. 

This highlights Mpac’s lowly rating; based on FY25 EDE earnings, an EV/EBITDA of 3.8x is at a significant discount to a peer group average of 9.3x, and 6.7x EV/EBITDA at our Fair Value of 865p/share.”

My View

This £120m-capitalised group’s shares trade on less than 10 times its 2025 estimated earnings – which is very cheap for a business with such substantial growth potential, and expansion both organically and through acquisition.

They are now trading around 402p and could so easily move strongly ahead in due course.

(Profile 19.12.19 @ 182p set a Target Price of 235p*) 

(Asterisk * denote that Target Price has been achieved since Profile publication)