Mpac Group shares nosedived on Tuesday morning after the firm warned annual turnover is set to fall ‘significantly’ below forecasts, following a slowdown in orders.
The London-listed packaging automation company told shareholders US trade tariffs and subdued consumer confidence has driven customers to reduce spending and defer capital investments.
It said original equipment orders in its core business had ‘slowed materially’ during the second quarter.
MPAC expects its order book will total £118.5million at the end of June, compared to about £90million in December last year, with the Americas region being especially affected.
As order intake in the second quarter drives much of second-half sales flow, Mpac now believes its full-year revenue will ‘fall significantly below the board’s previous expectations’.
The AIM-listed company’s shares plummeted 26.2 per cent to 317.5p in early trading.
Empty box: Packaging automation company Mpac Group noted that original equipment orders in its core business had ‘slowed materially’ during the second quarter
In early April, US President Donald Trump imposed a baseline 10 per cent tariff on most imported goods and a 25 per cent levy on many cars and vehicle parts.
The tariffs have led to many businesses warning of cost increases or lower demand, while others are making redundancies or cutting back capital spending.
Due to weaker market conditions in the US, Mpac intends to close its facility in Cleveland, Ohio, and transfer production to its base in Boston, Massachusetts.
Mpac also intends to scale back capacity at its site in Mississauga, Canada.
The Yorkshire-based firm states expects the restructuring to result in approximately £11.5million in non-cash impairment charges.
Adam Holland, chief executive of Mpac Group, said: ‘During the later part of the first half of 2025, we have seen the impact of US trade tariffs, falling consumer confidence, and growing economic uncertainty.
‘The actions we take today to simplify our business in response to challenging conditions sets a direction of travel that will position the group for future growth when markets recover.’
Despite the problems resulting from tariffs, Mpac said its first-half revenue was in line with the board’s forecasts.
It credited this to a bumper January order book and short-cycle service business, as well as a strong performance from companies acquired last year.
Mpac further revealed that it had agreed to a ‘buy-in’ transaction for its UK-defined benefit pension scheme with Aviva, which will acquire a bulk annuity insurance policy for £249million.
Bulk purchase annuities are a form of pension de-risking strategy whereby firms transfer their pension obligations to insurers.
Analysts at Equity Development said: ‘Despite the current difficulties in industrial markets evident in this external setback, it is worth noting Mpac’s transformational change in recent times.
‘With a broadened and innovative product offering, specialist engineering expertise, and a firm focus on operational excellence and increasing market share, Mpac remains well placed to drive future growth.’
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