Latest news with #MpacGroup
Daily Mail
01-07-2025
- Business
- Daily Mail
Shares in UK packaging firm plunge as US tariffs spark sales warning
Mpac Group shares nosedived on Tuesday morning after the firm warned annual turnover is set to fall 'significantly' below forecasts, following a slowdown in orders. The London-listed packaging automation company told shareholders US trade tariffs and subdued consumer confidence has driven customers to reduce spending and defer capital investments. It said original equipment orders in its core business had 'slowed materially' during the second quarter. MPAC expects its order book will total £118.5million at the end of June, compared to about £90million in December last year, with the Americas region being especially affected. As order intake in the second quarter drives much of second-half sales flow, Mpac now believes its full-year revenue will 'fall significantly below the board's previous expectations'. The AIM-listed company's shares plummeted 26.2 per cent to 317.5p in early trading. In early April, US President Donald Trump imposed a baseline 10 per cent tariff on most imported goods and a 25 per cent levy on many cars and vehicle parts. The tariffs have led to many businesses warning of cost increases or lower demand, while others are making redundancies or cutting back capital spending. Due to weaker market conditions in the US, Mpac intends to close its facility in Cleveland, Ohio, and transfer production to its base in Boston, Massachusetts. Mpac also intends to scale back capacity at its site in Mississauga, Canada. The Yorkshire-based firm states expects the restructuring to result in approximately £11.5million in non-cash impairment charges. Adam Holland, chief executive of Mpac Group, 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. 'The actions we take today to simplify our business in response to challenging conditions sets a direction of travel that will position the group for future growth when markets recover.' Despite the problems resulting from tariffs, Mpac said its first-half revenue was in line with the board's forecasts. It credited this to a bumper January order book and short-cycle service business, as well as a strong performance from companies acquired last year. Mpac further revealed that it had agreed to a 'buy-in' transaction for its UK-defined benefit pension scheme with Aviva, which will acquire a bulk annuity insurance policy for £249million. Bulk purchase annuities are a form of pension de-risking strategy whereby firms transfer their pension obligations to insurers. Analysts at Equity Development said: 'Despite the current difficulties in industrial markets evident in this external setback, it is worth noting Mpac's transformational change in recent times. '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 future growth.'
Yahoo
27-05-2025
- Business
- Yahoo
Investors in Mpac Group (LON:MPAC) have seen notable returns of 65% over the past five years
While Mpac Group plc (LON:MPAC) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 15% in the last quarter. But that doesn't change the fact that the returns over the last five years have been respectable. It's good to see the share price is up 65% in that time, better than its market return of 54%. So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. Mpac Group's earnings per share are down 31% per year, despite strong share price performance over five years. This means it's unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics. In contrast revenue growth of 8.4% per year is probably viewed as evidence that Mpac Group is growing, a real positive. In that case, the company may be sacrificing current earnings per share to drive growth. The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers). Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time. Investors in Mpac Group had a tough year, with a total loss of 18%, against a market gain of about 6.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 11%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 4 warning signs we've spotted with Mpac Group (including 1 which is significant) . We will like Mpac Group better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
02-05-2025
- Business
- Yahoo
Mpac Group Full Year 2024 Earnings: Misses Expectations
Revenue: UK£122.4m (up 7.2% from FY 2023). Net income: UK£1.40m (down 48% from FY 2023). Profit margin: 1.1% (down from 2.4% in FY 2023). EPS: UK£0.062 (down from UK£0.13 in FY 2023). Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue missed analyst estimates by 3.7%. Earnings per share (EPS) also missed analyst estimates by 60%. Looking ahead, revenue is forecast to grow 20% p.a. on average during the next 3 years, compared to a 4.8% growth forecast for the Machinery industry in the United Kingdom. Performance of the British Machinery industry. The company's shares are down 7.4% from a week ago. You still need to take note of risks, for example - Mpac Group has 3 warning signs (and 1 which is potentially serious) we think you should know about. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
05-03-2025
- Business
- Yahoo
Does This Valuation Of Mpac Group plc (LON:MPAC) Imply Investors Are Overpaying?
Mpac Group's estimated fair value is UK£3.54 based on 2 Stage Free Cash Flow to Equity Current share price of UK£4.68 suggests Mpac Group is potentially 32% overvalued Analyst price target for MPAC is UK£8.33, which is 135% above our fair value estimate In this article we are going to estimate the intrinsic value of Mpac Group plc (LON:MPAC) by taking the expected future cash flows and discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. See our latest analysis for Mpac Group We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (£, Millions) UK£16.7m UK£11.3m UK£8.61m UK£7.21m UK£6.45m UK£6.01m UK£5.77m UK£5.65m UK£5.60m UK£5.61m Growth Rate Estimate Source Analyst x3 Analyst x3 Est @ -24.10% Est @ -16.18% Est @ -10.64% Est @ -6.75% Est @ -4.04% Est @ -2.14% Est @ -0.81% Est @ 0.13% Present Value (£, Millions) Discounted @ 7.8% UK£15.5 UK£9.8 UK£6.9 UK£5.3 UK£4.4 UK£3.8 UK£3.4 UK£3.1 UK£2.8 UK£2.6 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = UK£58m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.3%. We discount the terminal cash flows to today's value at a cost of equity of 7.8%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = UK£5.6m× (1 + 2.3%) ÷ (7.8%– 2.3%) = UK£104m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= UK£104m÷ ( 1 + 7.8%)10= UK£49m The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is UK£106m. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of UK£4.7, the company appears potentially overvalued at the time of writing. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Mpac Group as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.8%, which is based on a levered beta of 1.078. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Strength Debt is well covered by earnings. Weakness Expensive based on P/E ratio and estimated fair value. Shareholders have been diluted in the past year. Opportunity Annual earnings are forecast to grow faster than the British market. Threat Debt is not well covered by operating cash flow. Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Can we work out why the company is trading at a premium to intrinsic value? For Mpac Group, there are three fundamental factors you should further research: Risks: Every company has them, and we've spotted 1 warning sign for Mpac Group you should know about. Future Earnings: How does MPAC's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every British stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
