Mpac Group PLC COVID-19, trading update and AGM (6108H)
26 March 2020 - 6:00PM
UK Regulatory
TIDMMPAC
RNS Number : 6108H
Mpac Group PLC
26 March 2020
26 March 2020
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No. 596/2014
Mpac Group plc
("Mpac", "Company" or "Group")
COVID-19, trading update and AGM
COVID-19 and trading update
Mpac Group plc, a global leader in 'Make, Pack, Monitor and
Service' high speed packaging and automation solutions issues an
update to the market on current year trading.
In the light of the rapidly evolving situation resulting from
the spread of COVID-19 and its development into a global pandemic,
Mpac today provides an update on the Group's current trading and
operations. Our priority remains the health, safety and well-being
of our employees and essential support for our customers.
The latest government travel restrictions in the regions of our
main sites, UK, Netherlands and Canada, and measures implemented
are being evaluated and are having an immediate impact, restricting
customer interaction and site-based work. However, Mpac remains
dedicated to the provision of equipment, spares and services for
customers in the critical sectors of Healthcare and Food and
Beverage and we are utilising increased remote working wherever
practical and possible.
The Board is continually monitoring the rapidly changing global
situation regarding the COVID-19 pandemic. Whilst it remains
difficult to predict the length and depth of the impact for the
full year at this stage, the Board anticipates that order intake
will be lower than expected due to reduced demand as a result of
customers deferring investment decisions and current projects being
delayed due to travel restrictions.
Given the fast moving and unprecedented nature of the current
crisis, we are unable to predict how long this lower level of order
activity will last and therefore the impact on the Group's
business. Accordingly, in the immediate term we are scrutinising
discretionary spend and investment plans, identifying and
implementing cost saving initiatives, whilst seeking to protect our
talented workforce and being careful not to compromise the
long-term prospects of the business. We are also evaluating
government support measures available in the jurisdictions in which
we operate.
Mpac has a strong balance sheet, is well financed and remains
debt free and is therefore very well positioned to navigate the
COVID-19 pandemic. The Group has c.GBP19m of cash and cash
generation in the first two months of the year was in line with
management's expectations. Additionally, the Group has access to a
GBP10m secured committed revolving facility which is currently
fully undrawn. Even in cautious downside scenarios which we have
modelled, and stress tested, we expect to have sufficient liquidity
from existing resources to meet our needs throughout 2020.
However, in light of the exceptional and open-ended uncertainty
caused by the Covid-19 pandemic and the still rapidly changing
environment, the Board has taken the prudent decision to no longer
recommend the final dividend for the year ending 31 December 2019,
as a further measure to protect the business and conserve cash
during this period. This decision comes after finalising the Notice
of Meeting in respect of the Annual General Meeting for 2020 which
is scheduled to be posted to Shareholders on 1 April 2020.
Therefore, the Board intends to withdraw Resolution number 2 in the
Notice of Annual General Meeting relating to the approval of a
proposed final dividend of 1.5p per Ordinary.
Annual General Meeting ("the Meeting")
The Company is planning to proceed with the Meeting, which will
be held at 12 noon on Wednesday 6 May 2020. However, the evolving
COVID-19 situation and the related Government guidelines will
clearly impact the ability of shareholders to attend the Meeting.
On this basis, the Board has concluded that it is appropriate for
shareholders not to attend in person this year and, instead, to
submit proxy votes. Details on submitting proxy votes are contained
in the Notice of Meeting. We always welcome questions from our
shareholders at the Annual General Meeting but this year, we would
rather shareholders submit their questions to the Board before the
Meeting, and we will ensure that answers to the questions are
placed on the Company's website. You can submit questions up until
5pm on 5 May 2020 by emailing them to cosec@mpac-group.com .
The situation in relation to COVID-19 continues to develop and
we will update shareholders on the Company's website
www.mpac-group.com and through the Regulatory News Service.
The Board remains confident in the ability of the management
teams across the Group to manage the business through difficult
times and to ensure that Mpac is well placed when the market
returns to normality.
For further information, please contact:
Mpac Group plc Tel: +44(0)24 7642 1100
Tony Steels, Chief Executive
Will Wilkins, Group Finance Director
Shore Capital (Nominated Adviser & Broker) Tel: +44(0)20 7468 7923
Patrick Castle
Edward Mansfield
Sarah Mather
Hudson Sandler Tel: +44(0)20 7796 4133
Nick Lyon
Nick Moore
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END
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