8th Sep 2022 13:05
(Alliance News) - Mpac Group PLC shares fell on Thursday midday after the company reported a loss in its first half.
Shares in the Tadcaster, England-based packaging and automation company were trading 4.2% lower to 241.85 pence each in London.
The company swung to a pretax loss of GBP400,000 in the first half of 2022 compared to a profit of GBP2.8 million a year before.
Cost of sales rose by 36% to GBP39.9 million from GBP29.4 million.
More positively, revenue rose 14% to GBP50.6 million from GBP44.2 million in the same period last year.
"We have made good progress in delivering on our existing customer commitments and managing short-term operational challenges. Consequently, revenue has grown but at lower margins due to cost inflationary pressures and ongoing disruption to global supply chains, in particular, relating to the sourcing of critical, customer-specified electronic components," Chief Executive Tony Steels said.
The company believes that it is on track to meet its revised market expectations although it will not pay an interim dividend. No dividends were paid in 2021 either.
Inflationary pressures reduced the company's margins while it also faced supply chain disruption. It expects supply chain challenges to continue for the remainder of 2022 but is attempting to mitigate these factors by "securing alternative sources of electronic component supply", for example.
Looking forward, MPac noted that it is "on target" to launch the newly developed continuous motion carton try at trade shows in America in the third quarter of 2022. This will allow customers in the biscuit market to replace existing plastic tray packaging with cardboard alternatives.
It also drew attention to the commercial framework agreement with FREYR Battery, a Norwegian developer of battery capacity, which, if concluded, presents "an opportunity to be at the forefront of a growing new market."
By Chris Dorrell; [email protected]
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