Mpac Group (LSE:MPAC) has announced the sale of its bespoke automation division, Mpac Lambert, including the SIGA Vision business, to Italy-based Mech.i. Tronic S.p.A. in a transaction valued at up to £20 million, while also warning that earnings for 2026 are expected to fall materially short of market forecasts.
The company said first-half margins are likely to be lower than those achieved in the corresponding period last year, reflecting a combination of delayed customer investment decisions, increased pricing pressure and reduced operational leverage. As a result, management expects underlying profit before tax for 2026 to be substantially below current market expectations.
To address the more challenging trading environment, Mpac has implemented additional measures aimed at improving efficiency and cash generation. These include actions to increase volumes, reduce overhead costs, align manufacturing capacity with demand levels and preserve liquidity. The company reported an order book of £98.8 million and said maintaining covenant headroom and strengthening cash flow remain key priorities.
Alongside these operational initiatives, Mpac has agreed to dispose of Mpac Lambert as part of a broader strategic focus on scalable, full-line packaging machinery solutions. The transaction includes an initial consideration of £16 million, with up to a further £4 million payable through earn-out arrangements, subject to regulatory approvals and other completion conditions.
Management expects the proceeds to significantly reduce net debt, which stood at £47.9 million, while sharpening the group’s strategic focus on its core packaging automation activities. The company believes the disposal will leave the business better positioned to benefit when customer investment activity recovers.
Mpac’s outlook remains challenged by weaker financial performance, including a net loss reported in 2025, negative operating and free cash flow, and higher leverage levels. Technical indicators also remain unfavourable, with the shares trading below key moving averages and momentum measures remaining weak. Valuation support is limited as earnings remain under pressure and the company does not currently offer a dividend yield.
More about Mpac Group PLC
Mpac Group plc is a global provider of high-speed packaging and automation solutions, designing and manufacturing precision machinery, production systems and end-of-line packaging equipment. Headquartered in Coventry, the company serves customers in the food, beverage and healthcare sectors across more than 80 countries through a portfolio of brands that includes BCA, Langen, Switchback and CSi. The group combines equipment sales with recurring service and support activities to provide integrated automation solutions worldwide.
Leave a Reply