Shares in Mpac Group PLC plunged on Monday as it expects profit for 2022 to be significantly below market expectations, as a result of supply chain disruption and cost inflationary pressures affecting its operational efficiencies and margins.

Shares in the Coventry, England-based packaging company were 32% lower at 259.70 pence each on Monday morning in London.

Initially, Mpac said it had made progress in the first half of 2022 despite a tough trading environment, ending the period with a strong order book. As a result, the company expects revenue to come in line with expectations, and be ahead of the same period a year prior.

However, Mpac noted an increase in macroeconomic uncertainty and volatility in the global supply chain.

This has affected both the timing of customers’ order placement and Mpac’s ability to operate, in particular the sourcing of critical, customer specified components. The company said these issues have become more prevalent, with extended lead times and cost inflationary pressures.

As a result, Mpac now expects profit for 2022 to be significantly below market expectations.

’’Over the recent past Mpac has created a business model which enables the group to flex with changing circumstances, however the unprecedented nature of the supply chain disruption will impact our full year results. I am confident our experienced management team will resolve the short-term challenges with the mitigation plans already in place, alongside the sound operational foundations established by implementing the One Mpac business model. We remain confident in the long-term prospects for the group,‘ said Chief Executive Tony Steels.

Mpac will post its interim results on September 8.

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