Mpact (MPT) is a large producer of paper and plastics packaging in Southern Africa. It recycles paper and cardboard and makes corrugated cardboard containers for a variety of industries, as well as polystyrene trays for the food industry. It has 20 manufacturing operations, with South African sales accounting for 86% of its business. It employs over 5,000 people.
The business is impacted by the general level of consumer spending (which has been depressed because of COVID-19 and was improving at least until the advent of the Ukraine crisis) as well as weather considerations, which affect the demand for corrugated containers for fruit and other agricultural products, especially in the Cape. Like many businesses in the current environment, Mpact has been working to preserve cash, but it has benefited from a switch to local suppliers during the pandemic.
In its results for the six months to 30th June 2024, the company reported revenue slightly down at R6,17bn and headline earnings per share (HEPS) of 144,6c compared with 211,6c in the previous period. The company's net asset value (NAV) increased 9% to 3411c per share. The company said, "The uncertain socio-political environment leading up to the national elections, high levels of loadshedding that continued until the end of March, high inflation and interest rates all contributed to weak consumer and business sentiment."
In a trading statement for the year to 31st December 2024, the company estimated that HEPS for continuing operations would be between 23,3% and 30% lower than in the previous period. The company said, "The Group experienced a challenging trading environment for most of the 2024 financial year, despite positive sentiment emerging from the May 2024 election outcome and reduced loadshedding since April 2024."
The share fell from a high of R51 in April 2016 to levels around R8 in March 2020 but has since recovered to 2812c. At the current level, it is on an earnings multiple of 6,31 - which looks cheap.
Technically, the share looks like it may be entering a new upward trend, but it has been moving sideways since August 2022. On 1st August 2024, the company announced that it had sold its Versapak business for R267,7m. On 3rd February 2024, the company announced that its shares would be traded on the A2X with effect from 11th February 2024.
The business is impacted by the general level of consumer spending (which has been depressed because of COVID-19 and was improving at least until the advent of the Ukraine crisis) as well as weather considerations, which affect the demand for corrugated containers for fruit and other agricultural products, especially in the Cape. Like many businesses in the current environment, Mpact has been working to preserve cash, but it has benefited from a switch to local suppliers during the pandemic.
In its results for the six months to 30th June 2024, the company reported revenue slightly down at R6,17bn and headline earnings per share (HEPS) of 144,6c compared with 211,6c in the previous period. The company's net asset value (NAV) increased 9% to 3411c per share. The company said, "The uncertain socio-political environment leading up to the national elections, high levels of loadshedding that continued until the end of March, high inflation and interest rates all contributed to weak consumer and business sentiment."
In a trading statement for the year to 31st December 2024, the company estimated that HEPS for continuing operations would be between 23,3% and 30% lower than in the previous period. The company said, "The Group experienced a challenging trading environment for most of the 2024 financial year, despite positive sentiment emerging from the May 2024 election outcome and reduced loadshedding since April 2024."
The share fell from a high of R51 in April 2016 to levels around R8 in March 2020 but has since recovered to 2812c. At the current level, it is on an earnings multiple of 6,31 - which looks cheap.
Technically, the share looks like it may be entering a new upward trend, but it has been moving sideways since August 2022. On 1st August 2024, the company announced that it had sold its Versapak business for R267,7m. On 3rd February 2024, the company announced that its shares would be traded on the A2X with effect from 11th February 2024.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.