Mpac Group Delivers Strong Revenue & Profit Growth in Challenging 2025, Cautions on Near-Term Outlook

Mpac’s FY25: Bigger, leaner, and still in line with expectations

Mpac Group has posted a robust FY25 despite a tricky market. Revenue jumped 42% to £174.1m and underlying operating profit rose 51% to £18.1m, helped by the first full year from 2024’s acquisitions of CSi Palletising and Boston Conveyor & Automation. Margins nudged up as management took out costs and tightened execution.

Underneath the bonnet, the company is getting more efficient, but the near-term trading backdrop remains foggy. Customers are delaying big-ticket kit, competition on price has intensified, and the order book finished lower than last year. Management expects another second-half weighted year.

Key numbers investors should know

Metric	FY25	FY24	Change
Order intake (new orders signed)	£150.9m	£119.7m	+26%
Closing order book	£90.0m	£118.5m	-24%
Revenue	£174.1m	£122.4m	+42%
Underlying operating profit	£18.1m	£12.0m	+51%
Underlying return on sales (ROS – operating margin)	10.4%	9.8%	+0.6pp
Underlying profit before tax	£13.5m	£10.6m	+27%
Underlying EPS	35.9p	35.2p	+2%
Statutory profit before tax	£(7.7)m	£3.4m	n/a
Basic EPS	(31.8)p	6.0p	n/a
Net cash/(debt) excluding leases	£(47.9)m	£(37.5)m	£(10.4)m

Jargon buster: “Underlying” excludes one-off items like restructuring and acquisition-related costs. “Order intake” is the value of new contracts won. “ROS” is operating margin.

Why underlying was up but statutory was down

Mpac booked £21.2m of non-underlying charges, mainly from the closure of the Cleveland site and related impairments of goodwill, other intangibles and fixed assets. These are painful but tidy up the footprint post-acquisitions. Strip them out and the core trading picture improved year on year.

Order book stabilised in H2, but still lighter year-on-year

After a soft first half, management says the order book stabilised in H2 as quote conversion picked up. Even so, the year closed at £90.0m, down 24%. For 2026, the order book currently covers about 66% of forecast revenue, but new order intake has been affected by geopolitical uncertainty and customers pushing out decisions.

Price competition in Original Equipment – the big machines – has increased as market volumes softened. Mpac is offsetting some of that pressure through the cost cuts delivered in H2 2025 and additional actions taken in Q1 2026.

Integration is doing the heavy lifting on margins

CSi and BCA have been embedded at pace. Highlights include:

• First Langen cartoners built in CSi’s Romanian operation, lowering the cost base.
• US facilities consolidated post-BCA, boosting efficiency and realising cost synergies.
• Field service and parts in the US consolidated into a Boston hub.
• New engineering office in Kuala Lumpur, adding flexible global design capacity.

Gross margin improved by 6.2 percentage points and underlying net margin reached 10.4%, reflecting these actions.

Service resilience and sector mix

Service – the aftermarket parts, upgrades and support business – grew 29% to £40.3m and represented 23% of Group revenue. Management’s long-term target remains 30%. In the short term the mix was diluted by the larger OE contribution from acquisitions.

By sector, Food & Beverage led at £88.0m (51% of revenue), Healthcare delivered £52.9m (30%), and Other was £33.2m (19%). Regionally, EMEA surged to £93.4m, the Americas were £72.2m, while Asia was £8.5m as decision cycles lengthened.

Cash, working capital and covenants

Working capital rose to £13.5m, reflecting the timing of late-year prospects and project phasing. Year-end cash was £9.6m with £57.5m of borrowings drawn – equivalent to £47.9m net debt excluding leases. On a “net funds” basis including leases, the position was £(58.9)m.

Mpac says it remains comfortably within banking covenants. Facilities are committed until September 2027, and the covenants have been aligned to a conservative 2026 trading view. Cash collection and working capital reduction are key focus areas, but the timing depends on OE order intake.

Pension de-risking removes a major overhang

The UK defined benefit scheme completed a £249m buy-in with Aviva, effectively transferring risk to the insurer. On wind-up, c.£5.0m of surplus cash is expected to be returned to the company. The UK scheme showed a £7.6m IAS 19 surplus at year end, and the US schemes had a £1.4m deficit.

Innovation pipeline still humming

Mpac kept investing, but with discipline. The Horizon top-load cartoner won a Red Dot design award, the new Brisa side-load cartoner secured first orders, and the Group booked initial orders for its Rewind digital system while expanding Cube Connect deployments. There is also a first project using Beckhoff Xplanar due to complete in 2026.

No dividend, Board strengthened

The Board is prioritising investment and balance sheet management over payouts, so no interim or final dividend for 2025. Three new non-executive directors joined to support the Group’s growth ambitions.

Outlook: second-half weighted again, with known unknowns

Management says FY26 trading is in line with full-year market expectations, but – as in prior years – weighted to H2. The difficult bit is timing: the impact of Middle East tensions and wider geopolitical uncertainty on customer capex decisions is hard to predict. Service remains resilient, and the prospect pipeline has grown in Q1 2026, but order conversion is the swing factor.

What I like vs what I’m watching

Positives

• Strong FY25 execution: revenue up 42% and underlying operating profit up 51% despite softer markets.
• Integration benefits visible: site consolidation, Romania builds and US hub all support margin and cash.
• Service momentum: up 29% with a clear runway toward the 30% target over time.
• Pension buy-in de-risks the balance sheet and a c.£5.0m cash inflow is expected at wind-up.

Watch-outs

• Order book down 24% year-on-year and price competition is pressuring gross margins.
• Working capital elevated at £13.5m and net debt higher – improvements hinge on new OE orders landing on time.
• No dividend as funds are directed to growth and debt management.

My take

Mpac did the hard yards in 2025: integrate, cut costs, protect margins, and keep innovating. The statutory loss is largely a function of clean-up costs and impairments from footprint actions, not a collapse in core trading. On the flip side, the lighter order book and fiercer pricing underline that 2026 will require more graft before the cycle turns.

If order conversion improves and Service keeps compounding, the enlarged platform looks well placed to benefit when customers start committing capital again. For now, it is about execution, cash discipline, and proving that the synergy and innovation stories translate into sustained margin and cash flow progress.