Mpac Group remained operational throughout the Pandemic
(AIM:MPAC ) has said early action from the group to make the business COVID-secure early in the outbreak has allowed its sites to remain operational throughout.
The High speed packaging solutions company said its use of digital technology, remote working, social distancing practices and PPE had made its facilities secure early on.
As a result, the group was able to keep all sites open and continue to provide essential support for customers in the critical Pharmaceutical, Healthcare, Food and Beverage sectors.
The Board took measures during the outbreak to preserve cash which contributed to a closing cash position at 30 June 2020 of £23.0m (31 December 2019: £18.9m).
Mpac said it has a strong balance sheet, is well financed, remains bank debt free and has access to a £10 million secured committed revolving facility which remains undrawn.
Shares in MPAC Group were trading 9.63% higher at 267.5p on Wednesday morning.
While global travel restrictions have impacted the timing of new original equipment orders, project execution and on-site service revenues, Mpac said this was mitigated through digital technology which contributed to delivering service revenue growth over the prior year.
Its customers remain active and it said it continues to win original equipment and service orders ‘with noticeable resilience in the Healthcare sector and in the Americas region.’
Mpac said its order book going into the second half of 2020 remains strong at £45.4m (30 June 2019: £39.9m) and reported that no orders had been cancelled due to COVID-19.
As global travel restrictions ease, Mpac said it anticipates more customer visits and that the levels of qualified opportunities will increase during the second half of the year.
Meanwhile, a 'Fast Recovery' plan has been implemented to ensure the group is well positioned to take advantage of opportunities when the market returns to normal.
The plan will include a new website launch, a virtual exhibition for customers to demonstrate the range of newly developed products and a digital solution offering to customers for remote machine acceptance and servicing.
“A fast recovery plan has been developed to ensure we have a competitive advantage based on our innovative packaging and automation solutions, 'thinking digital' and focussing on our on- site service offering once travel restrictions allow.” said Tony Steels, CEO of Mpac.
Mpac added that it remains well positioned to meet its liquidity requirements beyond 2020.
The group’s debtor days remain at pre COVID levels which analysts at research firm, Equity Development, said will provide “ample liquidity to weather the most extreme of scenarios.”
Analysts said they believe H2 will be stronger than H1, underpinned by a robust orderbook and “resilience” within the US & Healthcare sector - provided the global economy continues to reopen.
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