The birth of a new decade spawns an abundance of investment opportunities, not least due to the seismic shift towards ‘Industry 4.0’ (see below). Indeed, despite lacklustre global manufacturing PMIs, this migration towards smart-technologies, improved product quality, lower cost and e-commerce is triggering one of the biggest upgrade cycles in the history of supply chain management, data analysis and system integration.
What’s more, the pace of change is accelerating, with cutting edge AI-enabled equipment, infrastructure and robotics being deployed in all sorts of factories, warehouses and distribution centres across the world.
One business benefitting from this trend is MPAC, which provides the required expertise in high speed production, packaging & automation machines, along with turn-key / remote diagnostics services (c. 20% turnover).
So much so, that this morning the company said it had enjoyed a strong Q4, especially in terms of order intake (US & Healthcare), project execution, profit margin (re 22.5% EBITDA drop through rate) and cashflow (H1 working capital unwind & receipt of customer deposits) – all ahead of expectations. Consequently we have raised our 2019 sales, EBIT and yearend net cash forecasts to £89m (vs £87m B4), £7.5m (£7.0m) and £17.8m (£11.0m & £9.6m Jun’19) respectively (see below) – the latter representing 88p/share.