- Second quarter order book impacted
- Year-to-date shares down 43%
- Specialist engineering firm plans US consolidation
UK-based packaging and automation solutions company MPAC (MPAC:AIM) fell more than 25% after it warned second quarter revenue will be impacted by US tariff uncertainty.
The company said its original equipment order book had slowed ‘appreciably’ and is now seen at circa £90 million on 30 June versus £118.5 million on 31 December 2024.
As a result of slower market conditions, the company is going to use the opportunity to ‘accelerate its plans to consolidate its operational footprint in the US, optimising capacity and the cost base.’
MPAC will be closing its group facility in Cleveland Ohio and reducing its capacity in Mississauga Canada.
The company expects no impact to customers, and the restructuring actions will incur non-cash impairment charges of circa £11.5 million.
WHAT DID THE CEO SAY?
Adam Holland, CEO said: ‘During the later part of the first half of 2025 we have seen the impact of US trade tariffs, falling consumer confidence, and growing economic uncertainty.
‘Customers have increasingly chosen to defer capital investment decisions, with the Americas region being at the epicentre with other regions less impacted to date.
‘Despite resilient first half revenues, the slowdown in order intake through first half of 2025 means that we must take prompt action now, in anticipation of lower full year revenues and profit than previously expected.’
CHANGE AFOOT
Analysts at paid for research firm Equity Development were upbeat about the stock saying it is worth noting ‘MPAC’s transformational change in recent times.’
‘Encouragingly, MPAC has also announced a buy-in transaction with Aviva Life & Pensions UK Limited to purchase a bulk annuity insurance policy for £249 million. This covers all known pension liabilities, resulting in improved group cashflow and balance sheet.
‘With a broadened and innovative product offering, specialist engineering expertise, and a firm focus on operational excellence and increasing market share, MPAC remains well placed to drive growth in the future,’ insisted the analysts.
