Storms ebb and flow, but you can’t keep powerful economic forces like ‘automation’ down for long. Take President Trump’s Liberation Day tariffs, which were introduced on 2nd April and have seriously rattled global supply chains.

However following the initial seismic shock, corporate capex budgets appear now to have stabilised, especially after Congress passed the ‘Big Beautiful Tax Bill’ in July - offering lucrative tax benefits for building new manufacturing plants and reshoring production.

These incentives should ultimately provide a lift for Mpac Group  too - a ‘One Stop Shop’ for all things high-speed packaging and factory automation. Indeed this seems to already be happening, since today’s 1st half results reassuringly reiterated FY'25 guidance. Underpinned by an orderbook that has nudged up from £91.7m in June (£118.5m 1st Jan) to £93m in August. Not only providing robust visibility over H2 revenues & profit margins, but also suggesting that US manufacturing is tentatively getting its mojo back.

Elsewhere, quality management have an uncanny knack of turning a problem into an opportunity. You see, due to order intake materially slowing in Q2’25 particularly in the US, the Board reacted decisively by cutting the cost base and consolidating production sites (eg Cleveland). In turn ideally right-sizing Mpac Group for when conditions improve.

In terms of the H1’25 numbers, turnover, adjusted EBIT margin, PBT and EPS came in at £84.7m (-19.5% LFL), 8.9% (7.5% LY) £5.0m & 12.1p (-20%) respectively. Similarly net debt (ex IFRS16) closed June at £43.2m & £45.0m in August reflecting working capital expansion (re WIP), but is anticipated to fall to around the Dec’24 levels (£37.5m) by yearend.

Elsewhere, all three H2’24 acquisitions - CSi palletising (€56m), Boston Conveyor & Automation ($17m) and SIGA Vision – were also said to be performing ‘in line’ with plan and have been successfully integrated.

CEO Adam Holland commenting: "As we announced in July, the impact of US trade tariffs, falling consumer confidence, and growing economic uncertainty impacted order intake in H1'25 resulting in our customers deferring capital investment decisions, particularly in the Americas. The proactive steps that we announced in July to accelerate the consolidation of our operational footprint in the US and to simplify our business in response to challenging conditions sets a direction of travel that will position the Group for future growth when markets fully recover. Order intake during Q3 has been in line with our revised expectations, and we remain on track to meet guidance for the full year."

Lastly wrt valuation, hashtag#MPAC (at 290p) trades on compelling EV/EBITDA & PE multiples of 5.8x & 8.8x. Based on Panmure Liberum’s FY25 estimates for adjusted EBITDA, PBT & EPS of £23.0m, £13.5m and 33.1p – with a 550p target price.