New chief executive Adam Holland of niche small-cap packaging engineering group Mpac (MPAC:190p), a specialist provider of automated packaging systems, was in a confident mood during our results call. He had every reason to be.
First-half order intake almost doubled to £62.4mn on the same period in 2022 to boost the order book by 15 per cent to £77.5mn since the start of the year. Holland highlights that £29mn of the order intake is from high-margin healthcare, a segment that delivered 40 per cent revenue growth in the first half. Drivers include work on automated packaging equipment for contact lenses, intraocular lenses that are surgically implanted and glucose management products.
The group’s resurgent higher-margin service revenue is worth flagging up, increasing from £10.3mn in the first half of 2022 to £17.6mn and now representing a third of total revenue. The growth reflects multiple factors, including a more proactive approach to delivering customer upgrades and retrofits on equipment, effectively carrying out health checks that generate new business.