Mpac Share Discussion Threads

[castleford tiger] 13/2/2020 15:04

market cap 66m
cash 19 m
net value 47m
profit circa 7m

What a laugh........ 15x just doubles the price.

I am 100% sure this is going that far on what we know.

Further bolt on companies could and should add another 2.5/3.5m a year making us over 10m pa
Then we have a market cap of 150m or 2.5 times today =to 875p a share

tiger

ps we are looking at several companies ( I am told unofficially ) so DYOR

Tiger

[investorsiba] 13/2/2020 12:29

What basis do you say that on

[john09] 13/2/2020 12:27

Next leg up imminent imho

[fizzypop] 12/2/2020 09:14

WheelieDealer
@wheeliedealer
·
8h
It seems nuts but the numbers are the numbers. Even after the strong gains, #MPAC on Forward P/e 9.7 then 10.5 - and that's before stripping out cash. It could double and still be on a fwd p/e under 20. In this highly valued Market it wouldn't shock me but sticking to 600p target

[fuji99] 12/2/2020 07:43

To conclude about SOMERO, I woudn't have a company depending on the weather conditions in my portfolio - Because each times it rains or it snows, I wouldn't have any sleep - "The record rainfall seen in the US has delayed project starts which in turn has slowed the pace of equipment purchased by our customers, the impact of which was seen through historically strong trading months of March and April. Whilst there was an improvement in trading to end the month of May, and although the Company expects weather conditions and therefore trading in the US will improve throughout the rest of 2019, the Board now does not expect the Company to fully recapture the shortfall caused by this extended period of poor weather in the current financial year. "

[fuji99] 12/2/2020 07:37

Knowing how conservative the board is, you have also to read between the lines on the positives of the outlook in particular this:"order book and future prospects remain strong" ... - " Outlook - - It has been a positive start to the year with the sound foundations established in 2018 flowing through into 2019, resulting in an improved financial performance. Additionally, an increase in the number of repeat projects and in operational efficiencies generated incremental margins and consequently the expected results for the full year 2019 are above current market expectations. The order book and future prospects remain strong, underpinned by long term growth factors in our target markets."

[dan_the_epic] 11/2/2020 22:42

I myself made the point about growth!! I don't even own SOM. MPAC is in a much bigger market.

But there are enough growth hiccups for MPAC to trip over if it wishes. These are from the last few results alone. The second one is interesting because it shows the business can be lumpy. The good news is it sounds like there won't be a lump down this year as they've signed over stuff to cover for it. But you can't hide from this for now being a highly operationally geared, and lumpy business.

1. "General market uncertainty has increased with global FMCG companies under pressure to eliminate plastic in consumer products leading to investment delays whilst they develop new solutions. Order intake is also variable and sensitive to geo-political events and recent signs of slowing growth resulting in delayed investment decisions."

2. "In addition, further major development projects have commenced which are forecast to be completed in 2019."

3. "We faced a challenging first half of the year with slower than anticipated order intake and two legacy contract issues, which the management took swift action to resolve and we are now confident that we are back on track to achieve our strategic aims"



Back to a very valid point made recently. The cash flow here ain't great! I just don't think this is as obviously undervalued as many are making out. A PE of 10 even with the net cash looks fair to me given the pension deficit, the big cash drain associated with that, lumpy revenue profile (illustrated in big profit beats and misses), low margin, limited track record.

[tongostl] 11/2/2020 20:13

Som is primarily in the construction sector with VERY limited growth. Mpac is a way more versatile outfit with a much bigger sea to fish from. There is no point comparing the two.

Mpac has upgraded it's current forcasts atleast twice already this year so where is the indication it's going to slow down?

[fuji99] 11/2/2020 20:06

@Dan - You are comparing a laser guided equipment manufacturer for builders with a very versatile and fast packaging machines manufacturer for a variety of industries. Mpac is keeping upgrading its numbers while Som has just recovered from bad weather effects in the States (its share price shows it). In terms of potential, Som depends on the health of the economy wordwide while packaging for food manufacturers or pharmaceutical companies is a non-stop and around the clock process - This is why Mpac keeps upgrading its projections. So if you want to promote Som, I wouldn't buy a tooling manufacturer for builders while the world economy is stagnating with the construction industry almost frozen. So a simple blip would affect Som while Mpac is riding the waves head high under any weather. Watch this space, just till the 4th of March.

[dan_the_epic] 11/2/2020 19:59

£17.7m which is pretty dead in line with MPAC

[castleford tiger] 11/2/2020 19:56

Dan

How much cash?

[onjohn] 11/2/2020 17:59

Mpac tesults 2 weeks away

[dan_the_epic] 11/2/2020 17:41

Well for starters SOM has proper pricing power! Look at that 30% margin against 10% here.

Services is 12% (my guess) of SOM revenue. MPAC its 16%. Big deal.

"Last years exceptional performance is already being matched so far this year as the bod have already stated."

Have they actually said that? Seriously? The RNS wording is quite precise. An improved outlook for 2020. That reads to me as improved v their last update before that which was the half year report, which said...

"Therefore, the Board anticipates that, while the results for 2019 will be above current market expectations, primarily as a result of an increased number of repeat projects and by operational efficiencies, the medium-term economic outlook, driven by macro-economic factors, is less certain."

Great. Maybe no big drop off this year now... Does that mean MPAC are matching 2019? No?




SOM v MPAC is a very valid tug of war. The only thing MPAC has going for it is that it MIGHT growth faster. Or it's just very lumpy and 2019 was a peak year....Almost everything else is + for SOM. And SOM is on 10x earnings with loads of cash.

[tongostl] 11/2/2020 17:29

Very much worth a watch

[tongostl] 11/2/2020 16:19

Comparing somero to mpac is like comparing apples and carrots, two very different companys in very different sectors which have two very different external drivers. Mpac's change in performance is due to a change in management and it's services operations starting to bare fruit. The servicing operations are the best part about this outfit because that's where the repeat business is, this offers a much clearer and certain view on projecting revenue/profit.

Last years exceptional performance is already being matched so far this year as the bod have already stated. I can't see why growth would do anything now other than keep on moving north with the recent purchase of Lambert, and not to mention organic growth is already a factor as stated recently by the CEO.

[fuji99] 11/2/2020 14:18

Investorsiba - Any "inconsistency" - if any - is in the quantification of the growth acceleration. Mpac is growing very fast.
This is proven by beating every previous forecast.
To me, this means each time a forecast is beaten, an upgrade is required.
IMO up to the results, the share price will run to at least 450p.
Then the sky is the limit and every analyst has to upgrade original targets because after a few years, turnover will go up 4 or 5 times its capitalisation.

[investorsiba] 11/2/2020 13:22

Fuji I think he's saying earnings are inconsistent to be highly rated

[fuji99] 11/2/2020 13:18

I think many do not understand the speed of growth of this company. Thus why updates are in series. Those who know the outcome have already bought and continue to buy before they miss the last boat, I mean opportunity, because PI's will have to chase it at prices in the mid £4+ very soon.

[dan_the_epic] 11/2/2020 12:40

Ramp to the 5, squared.

One year this profit warns, the next year it profit beats.

Good luck to MPAC matching last year's superb performance. It's going to be bloody tough. Nobody has a clue where the normal performance of this business now is. It could be 35p earnings, it could be 20p earnings, it could be 45p earnings.

when that is the case, you don't start talking about a pe of 15. That's crazy. And there ARE huge pension cash outflows each year. The poster earlier was right. it is way more expensive on cash

Is this a better business than Somero enterprises? No. What does Somero trade on being another lumpy and unpredictable equipment manufacturer? 10x and it has a ton of cash and it doesnt have pension costs

This aint cheap. At best it is already at the right value

[arregius] 11/2/2020 12:26

How do they know the cash generation? I think mpac didnt update on cash or Am I wrong?

[tongostl] 11/2/2020 12:07

Nonsense, a cash adjusted PE of 5.5 requires a target price of 330p?! Nonsense! Double it and we are still not at fair value.

If ptp comes in at £7.5M, and last year's ptp was -£7.6m, that's a swing of over £15m!! Just imagine if the company can continue such growth in profits, we could be heading for serious big bucks further down the line. This really is a superb company in so many ways.

[fuji99] 11/2/2020 11:11

Here it is: "On the upgrade"

Simon Thompson

Mpac (MPAC:268p), a small-cap niche packaging engineering business supplying customers in the pharmaceutical, healthcare, nutrition and beverage industries, has prompted analysts to push through their fifth earnings upgrade since the annual results in March last year ('Mpac’s massive earnings upgrades', 5 Mar 2019).

Mpac supplies its blue-chip client base with high-speed, cutting-edge packaging machinery and equipment in a global market growing by 4 to 6 per cent a year, and one where demand is being underpinned by the need for large original equipment manufacturer (OEM) customers to improve efficiency and lower costs and wastage in their production lines. Mpac earns more than 80 per cent of annual revenues outside the UK, so it is benefiting from strong global trends including the migration to smart technologies, which is accelerating growth rates as large companies adopt artificial intelligence-enabled equipment and robotics in their production facilities and warehouses.

Mpac’s order intake (especially in the US and healthcare segment), profit margins and cash generation are all ahead of analysts' full-year expectations even though they had already lifted forecasts at the time of the 2019 half-year results (‘Mpac delivers fourth earnings upgrade this year’, 9 Sep 2019). Paul Hill at Equity Development now expects Mpac’s 2019 pre-tax profits to rise from £1.4m to £7.5m, representing a £500,000 upgrade, on revenue up by more than half to £89m, buoyed by a surge in operating profit margin from 2.4 to 8.4 per cent – the margin expansion highlighting the operating leverage of the business given its relatively fixed cost base.

On this basis, expect 2019 earnings per share (EPS) to soar from 4.5p to 33.7p, implying the shares are rated on a lowly price/earnings (PE) ratio of eight, or half the sector average, a valuation that can no longer be justified by Mpac’s legacy pension scheme liabilities. Moreover, expect closing net funds of around £17.8m (88p a share), or 80 per cent higher than at the end of the first half, cash generation being buoyed by an unwinding of working capital, the better-than-expected profit contribution and receipt of customer deposits.

Mpac’s shares are up around 70 per cent since I included them, at 156p, in my market-beating 2018 Bargain Shares Portfolio and smashed through my 250p target price following the latest earnings upgrade. However, the shares still only trade on a cash-adjusted PE ratio of 5.5 and I now feel that a fair value of 330p is more appropriate. Strong buy.

[arregius] 11/2/2020 11:09

Cant read it

[fuji99] 11/2/2020 10:51

Interesting IC reports (Strong Buy):