Q2 2026 Mpac Group PLC Earnings Call

September 15, 2026

Speaker #2: Good afternoon and welcome to the MPAC Group PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode, questions encouraged can be submitted at any time via the Q&A tab situated on the right-hand corner of your screen.

[Analyst]: Good afternoon, and welcome to the Mpac Group PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, could be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Adam Holland, CEO. Good afternoon, sir.

Operator: Good afternoon, and welcome to the Mpac Group PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, could be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Adam Holland, CEO. Good afternoon, sir.

Speaker #2: Please just simply type in your questions and press send. The company may not be in. Responses whereas appropriate to do so. Before we begin, I'd like to submit the following poll.

Speaker #2: And now I'd like to hand you over to Adam Holland, CEO. Good afternoon, sir.

Speaker #3: Hi, Charlie. Thank you very much. So, over the next 30 or 40 minutes or so, Duncan and I are going to tell you a little bit about MPAC.

Adam Holland: Hi, Charlie. Thank you very much. Over the next 30 or 40 minutes or so, Duncan and I are going to tell you a little bit about Mpac. Duncan's going to talk you through the H1 results. I'll give you an update on the progress we've made on delivering our strategy in the first half of the year, and then we'll finish with an outlook and a look ahead. Look, the last 18 months have been absolutely dominated by the impact of tariffs, geopolitical uncertainty, a slowdown in customer decision-making, and heightened margin pressure. You probably recall the work that we did last year to take costs out of our business. We delivered record gross margins last year, and this year, those cost-saving actions have contributed over GBP 2 million in reduction of administration costs in the first half of this year.

Speaker #3: Duncan's going to talk you through the half-form results. I'll give you an update on the progress we've made on delivering our strategy in the first half of the year, and then we'll finish with an outlook and a look ahead.

Speaker #3: Look, the last 18 months have been absolutely dominated by the impact of tariffs, geopolitical uncertainty, a slowdown in customer decision-making, and heightened margin pressure.

Speaker #3: You probably recall the work that we did last year to take costs out of our business. We delivered record gross margins last year, and this year those cost-saving actions have contributed over $2 million in reduction of administration costs in the first half of this year.

Speaker #3: Those actions and the decisions that we've taken in the market this year have led to half-one performance with the order intake up 43% on the same period last year, order book up just under 6% on the same period last year, revenues broadly flat, and underlying operating profits have fallen; however, we've worked very hard on our order book under real margin pressure.

Adam Holland: Those actions, and the decisions that we've taken in the market this year, have led to H1 performance with the order intake up 43% on the same period last year. Order book up just under 6% on the same period last year. Revenue is broadly flat, and underlying operating profits have fallen. However, we've worked very hard on our order book under real margin pressure. The other feature of the first half of this year, we announced back on 8 June that we took the decision to sell the Lambert business. Lambert was a bespoke automation business really focused on product assembly. It's not core to our group strategy. We completed that sale in July, and after GBP 16 million of proceeds, our net debt at the end of August was GBP 43 million.

Speaker #3: Now, the other feature of the first half of this year—we announced back on the 8th of June that we took the decision to sell the Lambert business.

Speaker #3: Lambert was a bespoke automation business, really focused on product assembly. It's not core to our group's strategy, and we completed that sale in July.

Speaker #3: And after 16 million pounds of proceeds and net debt at the end of August, it was 43 million pounds for the bulk of the conversation today.

Adam Holland: For the bulk of the conversation today, we are going to focus on the continuing operations of the business, and we will present any data on a like-for-like basis except where we flag otherwise. In summary, order intake up, revenue flat, the order book is stable. We are seeing margin pressure. We are responding with disciplined management actions on cost. The outlook for the full year is maintained under difficult market conditions. Next chart, please. We will skip the photos. Very good. Okay, let us come on to talk a bit about Mpac. We will start with the pie chart in the top right-hand corner of your screens now. About half of what we do in our business today supports customers in the food and beverage sector. About a third, it supports customers in healthcare, and the remaining 20% supports other consumer packaged goods customers in a variety of other sub-sectors.

Speaker #3: We're going to focus on the continuing operations of the business, and we'll present any data on a like-for-like basis, except where we flag otherwise.

Speaker #3: So in summary, order intake up, revenue flat, the order book stable. We're seeing margin pressure. We're responding with disciplined management actions on cost. The outlook for the full year is maintained, under difficult market conditions.

Speaker #3: Next chart, please. We'll skip the photos. Very good. Okay. So let's come on to talk a bit about MPAC. We'll start with the pie chart in the top right-hand corner of your screens now.

Speaker #3: About half of what we do in our business today supports customers in the food and beverage sector. About a third supports customers in healthcare.

Adam Holland: About half of what we do in our business today supports customers in the food and beverage sector. About a third, it supports customers in healthcare, and the remaining 20% supports other consumer packaged goods customers in a variety of other sub-sectors. The group comprises four businesses today. Boston Conveyor & Automation, providing robotic handling, wash down, kind of raw food conveying upstream of the Langen and the Switchback businesses, which offer secondary packaging machines out of the Mississauga and Deakin businesses in Canada and the Netherlands respectively. Those secondary packaging machines take the output of BCA's raw food handling involved in putting products into cartons, into cardboard cartons, or taking those cartons and putting them into larger corrugated cardboard cases.

Speaker #3: And the remaining 20% supports other consumer packaged goods customers in a variety of other sub-sectors. The group comprises four businesses today. Boston Conveyors and Automation, providing robotic handling, washdown, kind of raw food conveying, upstream of the Langen and the Switchback businesses, which offer secondary packaging machines, out of the Mrs. Saga and Beacon businesses in Canada and the Netherlands, respectively.

Adam Holland: The group comprises four businesses today. Boston Conveyor & Automation, providing robotic handling, wash down, kind of raw food conveying upstream of the Langen and the Switchback businesses, which offer secondary packaging machines out of the Mississauga and Deakin businesses in Canada and the Netherlands respectively. Those secondary packaging machines take the output of BCA's raw food handling involved in putting products into cartons, into cardboard cartons, or taking those cartons and putting them into larger corrugated cardboard cases. Then we come to the CSi business, Case Conveying and Palletizing, taking those cases through a factory to palletize and stack those cases onto wooden pallets, wrap them, label them for onward distribution. The CSi business operates out of Raamsdonksveer in the Netherlands. We have two facilities in Romania, Mexico, and field service and sales teams around the world, including in Singapore.

Speaker #3: So those secondary packaging machines take the output of BCA's kind of raw food handling, involved in putting products into cartons, into cardboard cartons, or taking those cartons and putting them into larger corrugated cardboard cases.

Speaker #3: And then we come to the CSI business. Case conveying and palletizing, taking those cases through a factory, to palletize with the then stack those cases onto wooden pallets and wrap them, label them, put on with distribution.

Adam Holland: Then we come to the CSi business, Case Conveying and Palletizing, taking those cases through a factory to palletize and stack those cases onto wooden pallets, wrap them, label them for onward distribution. The CSi business operates out of Raamsdonksveer in the Netherlands. We have two facilities in Romania, Mexico, and field service and sales teams around the world, including in Singapore. Last year, we also opened an engineering center in KL, in Malaysia. That team is building and supporting engineering activities across the rest of the group. Today, we are about 850 people. Nearly 600 are engineers and designers supporting customers in those sectors we talked about earlier.

Speaker #3: The CSI business operates out of Ram's Donk Sphere in the Netherlands. We have two facilities in Romania, Mexico, and field service and sales teams around the world, including in Singapore.

Speaker #3: Now, last year, we also opened an engineering center in KL in Malaysia. That team is building and supporting engineering activities across the rest of the group.

Adam Holland: Last year, we also opened an engineering center in KL, in Malaysia. That team is building and supporting engineering activities across the rest of the group. Today, we are about 850 people. Nearly 600 are engineers and designers supporting customers in those sectors we talked about earlier. I will bring to life the kinds of customers that we operate with in those sectors as we come through the remaining charts. Next chart, please. The way our group works, this is the cycle of business that we work through: consultation, design and build, installation, monitoring, and optimizing. The bulk of our work, about 70% to 75% of our revenues, come from designing, building, and installing original equipment into our customers' factories for them to produce products and package them.

Speaker #3: Today, we're about 850 people. Nearly 600 are engineers and designers supporting customers in those sectors we talked about earlier. I'll bring to life the kinds of customers that we operate with in those sectors as we go through the remaining charts.

Adam Holland: I will bring to life the kinds of customers that we operate with in those sectors as we come through the remaining charts. Next chart, please. The way our group works, this is the cycle of business that we work through: consultation, design and build, installation, monitoring, and optimizing. The bulk of our work, about 70% to 75% of our revenues, come from designing, building, and installing original equipment into our customers' factories for them to produce products and package them. The monitoring and optimizing, the service piece of our business makes up about 25% to 30% of our business.

Speaker #3: Next chart, please. The way our group works, this is the cycle of business that we work through: consultation, design and build, installation, monitoring, and optimising.

Speaker #3: The bulk of our work—about 70 to 75 percent of our revenues—comes from designing, building, and installing original equipment into our customers' factories, for them to produce products and package them.

Speaker #3: The monitoring and optimizing—the service piece of our business—makes up about 25% to 30% of our business. Consultation, that tiny little wedge at the top right-hand corner of the chart here, is a very, very small part of our revenue.

Adam Holland: The monitoring and optimizing, the service piece of our business makes up about 25% to 30% of our business. Consultation, that tiny little wedge at the top right-hand corner of the chart here, it is a very, very small part of our revenue, almost negligible really. But it is a really important part of the sales cycle. It is where we win new customers, it is how we retain our existing customers, working with them ahead of decisions to place capital equipment out for tender to help them optimize not just the way that the machinery works, but often actually looking at the way their packaging is designed, and sometimes even the product itself, to make it easier to flow through factories. Next chart, please. Now we operate in an attractive market. It is attractive in four ways. First is it is large. It is a very large market.

Adam Holland: Consultation, that tiny little wedge at the top right-hand corner of the chart here, it is a very, very small part of our revenue, almost negligible really. But it is a really important part of the sales cycle. It is where we win new customers, it is how we retain our existing customers, working with them ahead of decisions to place capital equipment out for tender to help them optimize not just the way that the machinery works, but often actually looking at the way their packaging is designed, and sometimes even the product itself, to make it easier to flow through factories. Next chart, please. Now we operate in an attractive market. It is attractive in four ways. First is it is large. It is a very large market.

Speaker #3: Almost negligible, really. But it's a really important part of the sales cycle. It's where we win new customers, it's how we retain our existing customers, working with them ahead of decisions to place capital equipment out for tender.

Speaker #3: To help them optimize not just the way that the machinery works, but often actually looking at the way they're packaging is designed, and sometimes even the product itself.

Speaker #3: To make it easier to flow through factories. Next chart, please. Now, we operate in an attractive market. It's attractive in four ways. First, it's large.

Speaker #3: It's a very large market. Every year, about 60 billion dollars' worth of packaging machinery is bought by our customers somewhere on the planet. The competition that we come up against every day is fragmented.

Adam Holland: Every year, about $60 billion worth of packaging machinery is bought by our customers somewhere on the planet. The competition that we come up against every day is fragmented. There are a large number of competitors. Some of them are much smaller than Mpac. Perhaps they only operate in one particular region in the world, or with a particular specialist piece of machinery that just does one task. Some are very, very big, multi-billion revenues. Some of those larger competitors have grown to the scale they are by acquiring some of the smaller businesses along the way, and we have done the same. We have seen quite a lot of activity in M&A over the recent months. Given the market pressures that we can see, I think that is perhaps understandable.

Speaker #3: There are a large number of competitors. Some of them are much smaller than MPAC; perhaps they are only operating in one particular region in the world, or with a particular specialist piece of machinery that just does one task.

Speaker #3: Some are very, very big. Multi-billion revenues and some of those larger competitors have grown to the scale they are by acquiring some of the smaller businesses along the way.

Speaker #3: And we've done the same. And we've seen quite a lot of activity in M&A over the recent months. And given the market pressures that we can see, I think that's perhaps understandable.

Speaker #3: Now, we're able to compete against even the largest of those competitors. Because our customers often make decisions on a technical basis. Reliability and the performance of equipment is absolutely key to customer decision-making.

Adam Holland: Now we are able to compete against even the largest of those competitors because our customers often make decisions on a technical basis. Reliability and the performance of equipment is absolutely key to customer decision-making. Pricing is always important, but we are able to compete with those large behemoths in the industry because of the capability of our people, frankly. The people are everything. In Mpac, we often say Mpac is Mpac people. Our production lines keep operating 24 hours a day, seven days a week, 365 days a year, and sometimes in factories where there are virtually no people present. In our business, when the people go home at the end of the day, we stop work. Our people designing, building, installing and service support to our equipment in the field. It is our people.

Speaker #3: Pricing is always important. But we are able to compete with those large BMOs in the industry because of the capability of our people, frankly.

Speaker #3: And the people are everything. In MPAC, we often say MPAC is MPAC people. Our production lines keep operating 24 hours a day. Seven days a week, 365 days a year.

Speaker #3: And sometimes in factories where there are virtually no people present. In our business, when the people go home at the end of the day, we stop work.

Speaker #3: Our people designing, designing, building, installing, and service support to our equipment in the field, it's our people. When I talk to investors and listen to why our investors are interested in us, four things come out.

Adam Holland: When I talk to investors and listen to why our investors are interested in us, four things come out. We talked a bit about the growth opportunities, the scale of the market. We are typically in growing markets. Over the midterm, market growth is around about 4% year-on-year. Obviously, of course, it has been challenging over the last 18 months, and we will talk about that as we get into H1 results. But over the midterm, it is a large and growing market. Our projects tend to have fairly long life cycles. That gives us a relatively long revenue coverage. So coming into the H2 of this year, you can see on the chart there 78% revenue coverage from our order book over the H2 revenues, and that is up on the prior year.

Speaker #3: We talked a bit about the growth opportunities and the scale of the market. We are typically in growing markets. Over the mid-term, market growth is around 4% year on year because, of course, it's been challenging over the last 18 months.

Speaker #3: And we'll talk about that as we get into half-year results. But over the mid-term, it's a large and growing market. Our projects tend to have fairly long life cycles.

Speaker #3: And that gives us a relatively long revenue coverage. So, coming into the second half of this year, you can see on the chart that there is 78% revenue coverage from our order book over the second half revenues.

Speaker #3: And that's up on the prior year. And a good proportion of the book and bill will still to go this year will come from short cycle service business, which we can rely on.

Adam Holland: A good proportion of the book and bill will still to go this year will come from short cycle service business, which we can rely on. It has been a very resilient business, come rain or shine. In the H1 of this year, services made up about 23% of our total revenue. That is up a couple of percentage points on the H1 last year, and I am really pleased with the progress that particularly the acquired businesses have made, the businesses we bought in 2024, to drive service revenues. Our service revenues are demonstrably robust. We continue to work towards a goal of 30% of our revenue coming from services in the future. Now, return on capital employed, ROCE, took a hit in the H1 of this year under really quite intense margin pressure, down a couple of percentage points from the same time last year.

Speaker #3: It's been a very resilient business. Come rain or shine. In the first half of this year, services made up about 23% of our total revenue.

Speaker #3: That's up a couple of percentage points on the first half last year. And I'm really pleased with the progress, particularly the acquired businesses have made.

Speaker #3: The businesses we bought in 2024 to drive service revenues. Our service revenues are demonstrably robust. And we continue to work towards a goal of 30% of our revenue coming from services in the future.

Speaker #3: Now, return on capital employed at Rocky took a hit in the first half of this year, under really quite intense margin pressure—down a couple of percentage points from the same time last year.

Adam Holland: Now, return on capital employed, ROCE, took a hit in the H1 of this year under really quite intense margin pressure, down a couple of percentage points from the same time last year. You can see on the chart just under 12% there. We've got our sights firmly set on getting back to better than 15% ROCE in years to come. So that's the midterm target. Next chart, please. I've presented a version of this chart multiple times now. I think in every H1 and full year presentation, we've shown how we've got on with broadening our key accounts. We continue to make good progress broadening our customer base within our target sectors in the H1 of this year. That's really important for existing customers, not just those new customers that we win.

Speaker #3: You can see on the chart, just under 12% there. But we've got our sights firmly set on getting back to better than 15%, Rocky, in years to come.

Adam Holland: You can see on the chart just under 12% there. We've got our sights firmly set on getting back to better than 15% ROCE in years to come. So that's the midterm target. Next chart, please. I've presented a version of this chart multiple times now. I think in every H1 and full year presentation, we've shown how we've got on with broadening our key accounts. We continue to make good progress broadening our customer base within our target sectors in the H1 of this year. That's really important for existing customers, not just those new customers that we win. But existing customers want access to the same engineers that designed their equipment perhaps 10 years ago.

Speaker #3: So that's the mid-term target. Next chart, please. I've presented a version of this chart multiple times now, I think in every half-year and four-year presentation, we've shown how we've gone on with broadening our key accounts.

Speaker #3: And we continue to make good progress, broadening our customer base within our target sectors in the first half of this year. Now, that's really important for existing customers, not just those new customers that we win.

Speaker #3: But existing customers want access to the same engineers who designed their equipment perhaps 10 years ago. They want to know that those designers are secure within our business, happy, and thriving.

Adam Holland: But existing customers want access to the same engineers that designed their equipment perhaps 10 years ago. They want to know that those designers are secure within our business, happy and thriving, and available to support them on the same machine in perhaps 10 years' time. The best way of retaining engineers is to keep them highly utilized on projects. So broadening out our customer base and working with a larger group of customers keeps our engineers happy. Happy engineers are busy engineers. So we work very hard on that. In the H1 of this year, I'm delighted that we secured 48 original equipment orders with 34 different customers. By value, 37% of those were new to the group. Of that 37%, GBP 7.9 million, nearly GBP 8 million were strategic customers.

Adam Holland: They want to know that those designers are secure within our business, happy and thriving, and available to support them on the same machine in perhaps 10 years' time. The best way of retaining engineers is to keep them highly utilized on projects. So broadening out our customer base and working with a larger group of customers keeps our engineers happy. Happy engineers are busy engineers. So we work very hard on that. In the H1 of this year, I'm delighted that we secured 48 original equipment orders with 34 different customers. By value, 37% of those were new to the group. Of that 37%, GBP 7.9 million, nearly GBP 8 million were strategic customers. What I mean by that is they're customers who have the scale to place multiple orders with us in the future.

Speaker #3: And available to support them on the same machine in perhaps 10 years' time. And the best way of retaining engineers is to give them highly utilized on projects.

Speaker #3: So broadening out our customer base and working with the larger group of customers keeps our engineers happy, happy engineers are busy engineers. So we work very hard on that.

Speaker #3: In the first half of this year, I'm delighted that we secured 48 original equipment orders with 34 different customers. By value, 37% of those were new to the Group.

Speaker #3: And of that 37%, 7.9 million pounds, nearly 8 million pounds were strategic customers. Now, what I mean by that is their customers who have the scale to place multiple orders with us in the future.

Adam Holland: What I mean by that is they're customers who have the scale to place multiple orders with us in the future. As long as we do a good job on those first orders, will come back time and time again as they expand their operations and build new plants in the future. You can see from the scale of that how important it is to our group. Nearly 13% of our original equipment orders in the H1 came from those new strategic customers. So it gives you a sense of how important this activity is. In fact, we've got a case study of one of our original equipment projects on the next slide, so perhaps we'll go to that now. I'm going to get a bit techy on you for a moment, and humor me. I get very excited by the capability of our equipment.

Speaker #3: As long as we do a good job on those first orders, they'll come back time and time again as they expand their operations and build new plants in the future.

Adam Holland: As long as we do a good job on those first orders, will come back time and time again as they expand their operations and build new plants in the future. You can see from the scale of that how important it is to our group. Nearly 13% of our original equipment orders in the H1 came from those new strategic customers. So it gives you a sense of how important this activity is. In fact, we've got a case study of one of our original equipment projects on the next slide, so perhaps we'll go to that now. I'm going to get a bit techy on you for a moment, and humor me. I get very excited by the capability of our equipment.

Speaker #3: And you can see from the scale of that how important it is to our group. Nearly 13% of our original equipment orders in the first half came from those new strategic customers.

Speaker #3: So it gives you a sense of how important this activity is. In fact, we've got a case study of one of our original equipment projects on their next slide.

Speaker #3: So perhaps we'll go to that now. So I'm going to get a bit techy on you for a moment. And humor me. I get very excited by the capability of our equipment.

Speaker #3: In May this year, the CSI business was selected by one of the world's largest snack food producers for a large project that they are working on to automate on a new greenfield site in a development in Mexico.

Adam Holland: In May this year, the CSi business was selected by one of the world's largest snack food producers for a large project that they are working on to automate on a new greenfield site in a development in Querétaro, Mexico. That facility will take seven bakery lines through a total of 1 kilometer of case conveyors and buffer decks that the CSi business will provide into four high-speed C5000 layer palletizers. Those palletizers take those cases, those cardboard corrugated cases, and stack them onto pallets up to a height of 2.3 meters. Imagine how large that is and the weight of that equipment. The palletizers then pass them on to wrappers, which wrap them, label them, and deliver out of that facility a pallet loaded with cases every 15 seconds.

Speaker #3: That facility will take seven bakery lines through a total of one kilometer of case conveyors and buffer decks that the CSI business will provide.

Speaker #3: Into four high-speed 25,000 layer palletizers. Now, those palletizers take those cases, those cardboard corrugated cases, and stack them onto pallets up to a height of 2.3 meters.

Speaker #3: Imagine how large that is and the weight of that equipment. The palletizers then pass them onto wrappers, which wrap them, label them, and deliver out of that facility a pallet loaded with cases every 15 seconds.

Speaker #3: And we'll do that 24 hours a day, seven days a week, 365 days a year, with all the service support to achieve that critical performance.

Adam Holland: will do that 24 hours a day, seven days a week, 365 days a year, with all the service support to achieve that in that critical performance. I think it is incredible. The customer selected CSi because of the innovative design. Easy for me to say. Those seven production lines, they feed those four central palletizers, and actually we then go through three wrappers. Any pallet can go to any one of three wrappers, and that really clever design means a much, much smaller footprint within the factory than other layouts could have achieved. There is a real operational logic to the way the design has been set out, with empty pallets in one area of the factory, full pallets located in a different part of the facility. Really easy for operators to understand how this system is performing.

Speaker #3: I think it's incredible. Now, the customer selected CSI because of the innovative design—easy for me to say—the seven production lines, they feed those four central palletizers, and actually, we then go through three wrappers.

Speaker #3: Any pallet can go to any one of three wrappers. And that really clever design means a much, much smaller footprint within the factory than other layouts could have achieved.

Speaker #3: And there's a real operational logic to the way the design's been set out, with empty pallets in one area of the factory, full pallets located in a different part of the facility—really easy for operators to understand how the system is performing.

Speaker #3: And not least, we have installed more than 250 million dollars of equipment in factories across Mexico alone. So we've got an absolutely superb parts and service team operating out of Carretero, and it's a really exciting project for us.

Adam Holland: not least, we have installed more than $250 million of equipment in factories across Mexico alone. So we have got an absolutely superb parts and service team operating out of Querétaro. It is a really exciting project for us. We continue to work on this and on the pipeline of future projects with the same customer that we are looking to secure in the future, and of course, that is really interesting to all of us. But before I get too far into the future, perhaps we should deal with the recent past. I am going to hand over to Duncan to handle the H1 results.

Speaker #3: We're continuing to work on this and on the pipeline of future projects with the same customer that we're looking to secure in the future.

Speaker #3: And of course, that is really interesting to all of us. But before I get too far into the future, perhaps we should deal with the recent past.

Speaker #3: I'm going to hand over to Duncan to do the first half results.

Speaker #1: Thank you, Adam. And good afternoon, everybody. I'm really pleased to be presenting the H1 2026 financial results in this my first results presentation as CFO of the group.

Duncan Tyler: Thank you, Adam, and good afternoon, everybody. I am really pleased to be presenting the H1 2026 financial results in this, my first results presentation as CFO of the group. As Adam has already covered, the trading environment in the H1 of the year was challenging, with global geopolitical and macroeconomic headwinds impacting on the timing and the levels of demand from customers. We took further mitigating actions at the beginning of H1 to reduce the cost base on the back of similar measures taken in the middle part of 2025 to consolidate our US footprint. We also successfully exited the lease of the facility we had in Cleveland, Ohio, avoiding the remaining lease obligation of approximately GBP 1 million, and also improved liquidity through the agreement to sell the Lambert business, which we announced in early June of this year.

Speaker #1: As Adam has already covered, the trading environment in the first half of the year was challenging, with global geopolitical and macroeconomic headwinds impacting the timing and levels of demand from customers.

Speaker #1: We took further mitigating actions at the beginning of H1 to reduce the cost base on the back of similar measures taken in the middle part of 2025 to consolidate our US footprint.

Speaker #1: We also successfully exited the lease of the facility we had in Cleveland, Ohio, avoiding the remaining lease obligation of approximately one million pounds. And also improved liquidity through the agreement to sell the Lambert business, which we announced in early June this year.

Speaker #1: So I'll now turn to the financial highlights, which are presented on a continuing basis and therefore exclude the Lambert business. Order intake was 78 million in the first half of the year, 43% up on the same period 2025.

Duncan Tyler: I will now turn to the financial highlights, which are presented on a continuing basis, and therefore exclude the Lambert business. Order intake was GBP 78 million in the H1 of the year, 43% up on the same period, 2025. It is worth referencing that that 2025 period was impacted by early pronouncements on US tariffs. Revenue in the period was GBP 70 million. It is worth also referencing that the order book coming into 2026 was approximately GBP 20 million lower than we entered 2025. So lower order book, partly compensated by the strong order intake in the period. The order book at the end of June is GBP 80.5 million. So further stabilization of that order book, but slightly up on the same point in 2025 and up slightly from the position at the start of 2026. As Adam has already mentioned, it provides good coverage, 78% coverage on our H2 revenues.

Speaker #1: It's worth referencing that that 2025 period was impacted by early pronouncements on US tariffs. Revenue in the period was 70. It's worth also referencing that the order book coming into 2026 was approximately 20 million lower than we entered 2025.

Speaker #1: So, lower order book, partly compensated by the strong order intake in the period. The order book at the end of June is £80.5 million.

Speaker #1: So further stabilization of that order book but slightly up on the same point in 2025. And an up slightly from the position at the start of 2026.

Speaker #1: And as Adam has already mentioned, it provides good coverage—78% coverage—on our H2 revenues. That's a further level of coverage and comfort than we would have had at the same point in 2025.

Duncan Tyler: As Adam has already mentioned, it provides good coverage, 78% coverage on our H2 revenues. That's a further level of coverage and comfort that they would have had at the same point in 2025. We have an order book where we understand the margins, and we look forward to delivering that in the H2 of the year. Probably the main story of the H1 is that we did see a drop in gross profit margins, 30% versus 37% in the prior period. Two factors really at play in that reduction in margin. The first one is that the lower levels of activity in the marketplace have translated through into greater pricing pressure. We're having to fight harder to win orders from customers.

Duncan Tyler: That's a further level of coverage and comfort that they would have had at the same point in 2025. We have an order book where we understand the margins, and we look forward to delivering that in the H2 of the year. Probably the main story of the H1 is that we did see a drop in gross profit margins, 30% versus 37% in the prior period. Two factors really at play in that reduction in margin. The first one is that the lower levels of activity in the marketplace have translated through into greater pricing pressure. We're having to fight harder to win orders from customers.

Speaker #1: We have an order book where we understand the margins and we look forward to delivering that in the second half of the year. Probably the main story of the first half is that we did see a drop in gross profit margins, 30% versus 37% in the prior period.

Speaker #1: Two factors really at play in that reduction in margin. The first one is that the lower levels of activity in the marketplace have translated through into greater pricing pressure.

Speaker #1: We're having to fight harder to win orders and customers. But also the fact that that order intake is lower than we perhaps would ordinarily have expected the timing of orders means that we are not seeing quite the level of balanced level of loading we would like to see across our facilities.

Duncan Tyler: The timing of orders means that we are not seeing quite the balanced level of loading we would like to see across our facilities, and that's weighed heavily on the margin in the H1 of the year. We took action, as Adam already mentioned, to reduce the cost base. That hasn't translated all the way through to the bottom line, so we still see the headwinds from the gross margin deterioration, and we're reporting underlying PBT of GBP 2.1 million in the H1 of the year. Underlying EPS is 5.7 pence. I'll touch on net debt and working capital in a subsequent slide. Next chart, please. Touching briefly on sales in the period, GBP 54.5 million came from original equipment, GBP 16.5 million from our services business.

Speaker #1: And that's weighed heavily on the margin in the first half of the year. We took action, as Adam already mentioned, to reduce the cost base, that hasn't translated through all the way through to the bottom line.

Speaker #1: So we still see the headwinds from the gross margin deterioration, and we're reporting underlying PBT of £2.1 million in the first half of the year.

Speaker #1: Underlying EPS is 5.7 pence. I'll touch on net debt and working capital in a subsequent slide. Next chart, please. Touching briefly on sales in the period, 54.5 million came from original equipment, 16 and a half from our services business.

Speaker #1: Services business showed really good positive momentum in the first half of the year. And the businesses we acquired in 2024, CSI and BCA, made really good positive progress.

Duncan Tyler: Services business showed really good positive momentum in the H1 of the year, and the businesses we acquired in 2024, CSi and BCA, made really good positive progress. As Adam's already touched on, that's moved our group service revenues as a percentage of sales from 21% up to nearer 23% in this H1 of the year, moving towards our medium-range target of 30% for the group. Touching on a few items in the bridge, the underlying PBT bridge, you'll notice a GBP 4.7 million deterioration, which is from the 6.6 percentage points reduction in gross margin. We've managed to mitigate some of that through nearly GBP 2 million of overhead cost savings. So significant management action in 2025 and the start of 2026 to try and mitigate some of that reduction in margin.

Speaker #1: And as Adam has already touched on, that's moved our group service revenues as a percentage of sales from, yeah, from 21 up to nearer 23% in this first half of the year, moving towards our medium-range target of 30% for the group.

Speaker #1: Touching on a few items in the bridge, the underlying PBT bridge, you'll notice a 4.7 million deterioration, which is from the 6.6 percentage points reduction in gross margin.

Speaker #1: We've managed to mitigate some of that through nearly two million of overhead cost savings. So significant management action in 2025 and the start of 2026 to try and mitigate some of that reduction in margin.

Speaker #1: And it's important that we're clear that we have ensured that those actions that we maintain the core operational capability of the group so that when markets recover and we do think they will recover, that we can respond to that increased demand as a group.

Duncan Tyler: It's important that we're clear that we have ensured through those actions that we maintain the core operational capability of the group, so that when markets recover, and we do think they will recover, that we can respond to that increased demand as a group. Touching on a couple of the non-underlying items. As in previous periods, you'll notice that we have the amortization of acquired intangible fixed assets, and then some pension related items, admin costs on the pension scheme, and income on the pension surplus. There is a reorganization related credit, GBP 0.9 million, and that relates primarily to us exiting early the lease in Cleveland and saving the ongoing lease obligations.

Speaker #1: Touching on a couple of the non-underlying items, as in previous periods, you'll notice that we have the amortization of acquired intangible fixed assets. And then some pension-related items: admin costs on the pension scheme and income on the pension surplus.

Speaker #1: There is a reorganization-related credit 0.9 million, and that relates primarily to us exiting early the lease in Cleveland and saving the ongoing lease obligations.

Speaker #1: And then finally, you'll notice that we are reporting a £7.2 million loss associated with the sale of the Lambert business. That obviously didn't complete until after the period end, but we committed to that transaction and therefore we recognize the £7.2 million in the first half.

Duncan Tyler: Finally, you will notice that we are reporting a GBP 7.2 million loss associated with the sale of the Lambert business. That obviously did not complete until after the period end, but we have committed to that transaction, and therefore we recognize the GBP 7.2 million in the H1 of the year. Next chart, please. Just briefly touching on some of the key balance sheet items. Before I do so, it is worth just stating that the balance sheet items related to the Lambert business are held as two separate line items in the balance sheet, both assets held for sale and liabilities held for sale. That is how we are required to account for the business, having made the decision and entered into the transaction there before the period end. Also worth noting that the FY2025 balance sheet is as we originally reported, has not been restated.

Speaker #1: Of the year. Next chart, please. Just briefly touching on some of the key balance sheet items. Before I do so, it's worth just stating that the balance sheet items related to the Lambert business are held as two separate line items in the balance sheet, both assets held to sale and liabilities held to sale.

Speaker #1: That's how we are required to account for the business having made the decision and entered into the transaction before the period end. Also worth noting that the FY25 balance sheet, as we originally reported, has not been restated.

Speaker #1: Touching on the non-current assets, line item, you'll notice quite a significant reduction. That's associated with removing the goodwill and other intangible assets that we'd originally recognized on the acquisition of the Lambert business.

Duncan Tyler: Touching on the non-current asset line item, you will notice quite a significant reduction. That is associated with removing the goodwill and other intangible assets that we had originally recognized on the acquisition of the Lambert business. They get removed. What remains is GBP 96 million of intangible assets associated with the BCA and CSi acquisitions. Also worth remembering that there is a GBP 7.6 million pension surplus associated with the UK defined benefit scheme that is currently going through the buyout process. Inventories have reduced. Some of that reduction is associated with the sale of the Lambert business, but we have taken steps to reduce inventories in the continuing business by GBP 1.5 million. Net working capital at the end of the period was GBP 6.9 million. That is quite a significant reduction from the GBP 13.5 million at the end of 2025.

Speaker #1: They get removed. What remains is 96 million of intangible assets associated with the BCA and CSI acquisitions, also worth remembering that there's a 7.6 million pension surplus.

Speaker #1: Associated with the UK defined benefits scheme that is currently going through the buyout process. Inventories have reduced. Some of that reduction is associated with the sale of the Lambert business, but we have taken steps to reduce inventories in the continuing business by 1.5 million.

Speaker #1: Net working capital at the end of the period was £6.9 million. That's quite a significant reduction from the £13.5 million at the end of 2025.

Speaker #1: Significant proportion of that reduction is associated with the Lambert business, which had quite high levels of networking capital at the end of 2025. And finally, I'll just touch on net debt, which was 54 million.

Duncan Tyler: A significant proportion of that reduction is associated with the Lambert business, which had quite high levels of net working capital at the end of 2025. Finally, I will just touch on net debt, which was GBP 54 million at the end of June. That does not include the cash received from the sale of the Lambert business, which we received in the latter part of July to the position at the end of July, and as we have reported at the end of August, is a lower net debt position. That net debt number of GBP 54 million includes both our term loan, RCF, and vendor loans and deferred consideration associated with the CSi business we bought in 2024. Next chart, please. Talking, moving on to cash.

Speaker #1: At the end of June, that does not include the cash received from the sale of the Lambert business, which we received in the latter part of July. So, the position at the end of July and, as we've reported, at the end of August, is a lower net debt position.

Speaker #1: And that net debt number of 54 includes both our term loan RCF and vendor loans and deferred consideration associated with the CSI business we bought in 2024.

Speaker #1: Next chart, please. So talking moving on to cash, the first half of the year, there's been characterized by strong cash conversion in the ongoing business, 100% cash conversion.

Duncan Tyler: The H1 of the year has been characterized by strong cash conversion in the ongoing business, 100% cash conversion off the back of EBITDA of GBP 6 million, but offset by quite a significant cash outflow, nearly GBP 4 million from the Lambert business. That is a cash outflow that is mirrored by a similar cash outflow in 2025. We repaid GBP 3.5 million of borrowings in the period. That is GBP 2 million of term loan and GBP 1.5 million of deferred consideration, which was related to the CSi acquisition. We have a further GBP 1.5 million that will be paid in 2025, and that is where we continue to pay into the escrow account. The predominant amount of that is in relation to the UK defined benefit pension scheme. CapEx is GBP 1.4 million.

Speaker #1: Off the back of EBITDA of 6 million, but offset by quite a significant cash outflow, nearly 4 million from the Lambert business. That's a cash outflow that is mirrored by a similar cash outflow in 2025.

Speaker #1: We repaid £3.5 million of borrowings in the period: that's £2 million of term loan and £1.5 million of deferred consideration, which was related to the CSI acquisition.

Speaker #1: We have a further one and a half million that will be paid in 2025, and that's where we continue to pay into the escrow account, the predominant amount of that is in relation to the UK defined benefit pension scheme.

Speaker #1: Capex is 1.4 million. It's worth just noting that that investment in capex is actually 36% lower than it was on a reported basis, an H1 2025.

Duncan Tyler: It is worth just noting that that investment in CapEx is actually 36% lower than it was on a reported basis in H1 2025. The reduction is a result of the fact that the balance was related to the investment in the Lambert business in CapEx in 2025. Lease payments are as in previous years, and we have incurred GBP 3.3 million in respect to tax effects and interest. The group utilizes a term loan and RCF from HSBC. We have a very strong relationship with HSBC. They have been very supportive and encouraging of the group, and we have committed facilities with them through to the end of September 2027. We continue to operate within interest and leverage covenant levels. Next chart, please. Finally, I wanted to touch on the sale of the Lambert business.

Speaker #1: And the reduction is a result of the fact that the balance was related to the investment in the Lambert business in CapEx in 2025.

Speaker #1: Lease payments are as in previous years, and we've incurred £3.3 million in respect to tax effects and interest. The group utilizes a term loan and RCF from HSBC.

Speaker #1: We have a very strong relationship with HSBC. They've been very supportive and encouraging of the group, and we have committed to facilities with them through to the end of September 2027.

Speaker #1: We continue to operate within interest and leverage government levels. Next chart, please. Finally, I wanted to touch on the sale of the Lambert business.

Speaker #1: We announced it in early June, and the transaction completed towards the end of July with receipt of gross proceeds of £16 million. The sale, which was the result of a strategic review in the latter part of 2025, means the Group is now aligned around more scalable, fully aligned packaging machinery solutions.

Duncan Tyler: We announced it in early June, and the transaction completed towards the end of July with receipt of gross proceeds of GBP 16 million. The sale, which was a result of a strategic review of the latter part of 2025, means the group is now aligned around more scalable, full-aligned packaging machinery solutions. Since the acquisition, the Lambert business has been cash consuming through necessary investment in R&D and also working capital to the tune of over GBP 15 million since acquisition, including, as just previously discussed, almost GBP 4 million in the first half of 2026 alone. That significant capital investment has resulted in the one-off non-cash loss on sale of the business of GBP 7.2 million. The balance sheet has been strengthened by the sale of the Lambert business. We have improved liquidity, and we have reduced the working capital burden on the remainder of the group.

Speaker #1: Since the acquisition, the Lambert business has been cash consuming through necessary investment in R&D and also working capital to the tune of over 15 million pounds since acquisition, including there's just previously discussed almost 4 million pounds in the first half of 2026 alone.

Speaker #1: That's significant capital investment as a resulted in the one-off non-cash loss on sale of the business of 7.2 million. The balance sheet's been strengthened by the sale of the Lambert business.

Speaker #1: We've improved liquidity and we've reduced the working capital burden on the remainder of the group. Now hand back to Adam, who'll take us through an update on strategy and the outlook.

Duncan Tyler: I will now hand back to Adam, who will take us through an update on strategy and the outlook.

Speaker #2: Thank you, Duncan. I'm going to start by giving you a couple of examples of progress that we've made on strategy in the first half of this year.

Adam Holland: Thank you, Duncan. I am going to start by giving you a couple of examples of progress that we have made on strategy in the first half of this year. I said before that we were working very hard to move production into Romania. There are two sites in Romania that we acquired as part of the CSi acquisition in 2024. Since January this year, all electrical cabinet builds are now centralized in Romania for customers in EMEA and Asia Pacific, so flowing into other factories around the Mpac Group for assembly for those customers around the Europe, Middle East and Africa, and the Asia Pacific regions. That is a very significant change effective from January. Since April, all coated steel frames are now sourced or made by our business in Romania.

Speaker #2: And I said before that we were working very hard to move production into Romania those two sites in Romania that we acquired as part of the CSI acquisition in 2024.

Speaker #2: Now, since January, this year, all electrical cabinet builds and our centralized in Romania for customers in EMEA and APAC, so flowing into other factories around the MPAC group for assembly for those customers around the Europe, Middle East, and Africa and the Asia Pacific regions.

Speaker #2: So that's a very significant change effective from January. Since April, all coated steel frames are now sourced or made by our business in Romania.

Speaker #2: And in May this year, at the global Interpac trade show in Germany, we showed the world our first langan ostro cartoner built by the Romania team at CSI as well.

Adam Holland: In May this year at the global interpack trade show in Germany, we showed the world our first Langen Cartoner built by the Romania team at CSi as well. We have also now built the first of a new generation of B1-M Langen cartoning machines in Romania too for the US market. I think the team have made absolutely outstanding progress on standing up that capability in Romania. We are really excited about what is still to come, but more of that next time we speak. Next chart, please. The second case study is an example of customer-focused innovation and the impact that it can have on market access. in February, our BCA team in Boston was selected by one of the world's largest producers of protein foods to develop a new case conveyor and a new case packer.

Speaker #2: We have also now built the first of a new generation of B1M Langen cartoning machines in Romania, too, for the US market. I think the team have made absolutely outstanding progress on standing up that capability in Romania.

Speaker #2: We're really excited about what's still to come, but more of that next time we speak. Next chart, please. The second case study is an example of customer-focused innovation and the impact that it can have on market access.

Speaker #2: In February, our BCA team in Boston was selected by one of the world’s largest producers of protein foods to develop a new case conveyor and a new case package.

Speaker #2: The first time we've ever won an order with this strategic customer. And we won because of the incredible affinity operator interface. You can see it on your screen on the right-hand side.

Adam Holland: It is the first time we have ever won an order with this strategic customer, and we won because of the incredible Affinity operator interface. You can see it on your screen on the right-hand side. We developed it last year as part of our horizon new product development, and the customer saw it when we demonstrated it at the Pack Expo trade show in the US last year, and they loved it. It is designed around ease of use. The innovative screen is designed so you navigate it just like you would a big iPhone or an iPad. It does not take any training for an operator to get familiar with the screen and understand how to navigate through and operate the machine. It can be used with a variety of different controllers as well.

Speaker #2: We developed it last year as part of our Horizon new product development. And the customer saw it when we demonstrated it at the Pack Expo trade show in the US last year, and they loved it.

Speaker #2: It's designed around ease of use. The innovative screen is designed so you navigate it just like you would a big iPhone or iPad.

Speaker #2: It doesn't take any training for an operator to get familiar with the screen and understand how to navigate through and operate the machine. And it can be used with a variety of different controllers as well.

Speaker #2: So whatever the control system is in the background running the machine, we can still use the affinity interface for those customers despite the customer's preference on control system.

Adam Holland: Whatever the control system is in the background running the machine, we can still use the Affinity interface for those customers, despite the customer's preference on control system. For customers who are looking to minimize training for new operators, that is really important. Why might that be something that customers want? Well, perhaps the customer is dealing with high labor turnover in their factory, and they have to train new operators every Monday morning, or perhaps they have an aggressive growth plan. They are trying to ramp up production. They are recruiting rapidly into their organization, and new people are joining the team all the time. These factors matter enormously to our customers, and this was a key part of the decision-making in our selection for that project. But the customer also really appreciated our localized US assembly in Boston, Massachusetts, for this US application.

Speaker #2: So if a customer who are looking to minimize training for new operators, that's really important. And why might that be something that customers want?

Speaker #2: Well, perhaps a customer is dealing with high labor turnover in their factory, and they have to train new operators every Monday morning. Or perhaps they have an aggressive growth plan and are trying to ramp up production. They're recruiting rapidly into their organization, and new people are joining the team all the time.

Speaker #2: These factors matter enormously to our customers. And this was a key part of the decision making in our selection for that project. But the customer also really appreciated our localized US assembly in Boston, Massachusetts for this US application.

Speaker #2: Now, the scale of engineering and service support that the rest of the group could offer even to the smallest business in our group was something the customer highlighted.

Adam Holland: The scale of engineering and service support that the rest of the group could offer, even to the smallest business in our group, was something the customer highlighted. If you are one of the world's largest protein producers, it is really important that we have got the scale of service support and engineering support to keep pace. So that combination led to the win. As I say, it is the first order with this customer. It is really exciting. If I look ahead, the opportunities ahead are really exciting for us as well. Again, I am looking forward to giving you an update on that in future. Next chart, please. The pillars of our strategy for the group, these five pillars around going for growth, outstanding customer service, innovation, people, and operational excellence. We have had those as stable group strategy now since 2018.

Speaker #2: And if you're one of the world's largest protein producers, it's really important that we've got the scale of service support and engineering support to keep pace.

Speaker #2: So that combination led to the win. As I say, it's the first order with this customer. It's really exciting. If I look ahead, it's the opportunities ahead that's a really exciting for us as well.

Speaker #2: Again, I'm looking forward to giving you an update on that in the future. Next chart, please. So, the pillars of our strategy for the Group: these five pillars are going for growth, outstanding customer service, innovation, people, and operational excellence.

Speaker #2: We've had those as stable group strategy now since 2018. Under customer growth, we've touched on a few things. We also launched new websites for all of our brands during the first half of this year.

Adam Holland: Under customer growth, we have touched on a few things. We also launched new websites for all of our brands during H1 2024. We have a new corporate website too, and a common lead generation platform. I am really pleased with how the acquired businesses are performing on order intake in H1 2024. We have talked enough about that already, so I will not repeat. The other launch of a major new product in H1 2024, the Taros 4 layer palletizer. There were new iPal launches in H1 2024, too. We saw the first subscription renewals from customers using our digital service solutions, things like the Mpac Replay and Cube Connect systems. A lot under innovation. There is too much for us to cover in the time we have available today.

Speaker #2: We have a new corporate website too and a common lead generation platform. I'm really pleased with how the acquired businesses are performing on order intake in the first half of this year.

Speaker #2: We've talked enough about that already, so I won't repeat. The other launch of a major new product in the first half of this year, the Tairos 4 layer palletizer.

Speaker #2: They were new iPanel launches in the first half of this year too. We saw the first subscription renewals from customers using our digital service solutions, things like the MPAC replay and Cube Connect systems.

Speaker #2: So, a lot under innovation—too much for us to cover in the time we have available today. We also went live in June with our group ERP platform at BCA.

Adam Holland: We also went live in June with our group ERP platform at BCA. If you thought Duncan sounded pleased to be presenting his first report as CFO, imagine how pleased he was with the visual launch in Boston earlier this year. We also wrapped up obligations under the lease of the Cleveland facility. You might remember we consolidated operations in the Americas last year. We completed that consolidation with the exit of that lease in H1 2024, and that was the positive on the non-underlying exceptional items that Duncan referred to. Perhaps I should finish by focusing on people. People remain absolutely key to Mpac, and we have been investing in cross-training, not just increasing flexibility within each of our businesses, within each facility, but really importantly, increasing the flexibility between our facilities.

Speaker #2: And if you thought Duncan sounded pleased to be presenting his first reporter's CFO, imagine how pleased he was with the visual launch in Boston earlier this year.

Speaker #2: We also wrapped up obligations under the lease of the Cleveland facility. You might remember, we consolidated operations in the Americas last year. We completed that consolidation with the exit of that lease in the first half of this year.

Speaker #2: And that was the positive on the non-underlying exceptional items that Duncan referred to. And perhaps I should finish by focusing on people. People remain absolutely key to MPAC.

Speaker #2: And we've been investing in cross-training, not just increasing flexibility within each of our businesses and within each facility, but—really importantly—increasing the flexibility between our facilities.

Speaker #2: And I'm sure we're going to touch on that as we get into some of the Q&A later because it's central to how we've been able to perform in the first half of this year and what we see ahead.

Adam Holland: I am sure we are going to touch on that as we get into some of the Q&A later, because it is central to how we have been able to perform in H1 2024 and what we see ahead. Okay. I think it is probably enough on updates to strategy. We will move to a summary and outlook, and then I am going to hand over to questions. If there are questions that you still want to ask, put them into the chat box and we will do our best to answer them, either immediately on the chat or after the call. Look, to summarize, I am delighted to have seen the completion of the sale of the Lambert business. Really good to have got that across the line in H1 2024. But for me, H1 was characterized by five things.

Speaker #2: Okay, I think it's probably enough on updates of strategy. We'll move to a kind of summary and outlook, and then I'm going to hand over to questions.

Speaker #2: If there are questions that you still want to ask, put them into the chat box and we'll do our best to answer them either immediately on the chat or after the call.

Speaker #2: So look, to summarize, I am delighted to have seen the completion of the sale of the Lambert business. Really good to have got that across the line in the first half of the year.

Speaker #2: But for me, the first half was characterized by five things. Better order intake, up 43%, a stable order book, up just under 6%. Actually, another two and a half percent up since the end of June.

Adam Holland: Better order intake up 43%, a stable order book up just under 6%, actually another 2.5% up since the end of June. A resilient service business, really proving to be so. But we are seeing margin pressure. The last piece, the impact of those cost saving actions that we have taken. Duncan talked about GBP 2 million realized on the P&L in H1 2024. That takes some doing, and well done to the team on achieving that. Looking ahead, the full year, outlook unchanged. The pipeline of future projects continues to grow. It is larger now than ever before. It is filling faster than ever before. That is really encouraging when we look ahead. But I have to say, the timing of a full market recovery is still not clear.

Speaker #2: A resilient service business, really proving to be so. But we are seeing margin pressure. And the last piece, the impact of those cost saving actions that we've taken.

Speaker #2: Duncan talked about £2 million realized on the P&L in the first half of this year. That takes some doing, and well done to the team on achieving that.

Speaker #2: Now looking ahead, the full year, outlook unchanged. The pipeline, a future projects, continues to grow. It's larger now than ever before. It's filling faster than ever before.

Speaker #2: And that's really encouraging when we look ahead. But I have to say, the timing of a full market recovery is still not clear. We do not yet know the full impact of the recent tariffs between the US and Canada—the 50% tariffs announced in May and enacted in Q3.

Adam Holland: We do not yet know the full impact of the recent tariffs between the US and Canada, the 50% tariffs announced in May and enacted in Q3. I am really pleased with the way that the leadership team at Mpac are responding to those conditions and making really good decisions under challenging market conditions. I will pause there for questions. Thank you.

Speaker #2: But I am really pleased with the way that the leadership team at MPAC are responding to those conditions. I'm making really good decisions under challenging market conditions.

Speaker #2: I'll pause there for questions. Thank you.

Speaker #1: Thank you very much, Adam and Duncan for the presentation. We've got a few pre-submitted questions that we'll start with. Whilst people continue to submit their questions.

Operator: Thank you very much, Adam and Duncan, for the presentation. We have got a few pre-submitted questions that we will start with, whilst people continue to submit their questions. Duncan, one of the questions is around the deferral of the pension, and whether that is a concern. A deferred pension next year, and whether it is a concern.

[Company Representative] (Mpac Group): Thank you very much, Adam and Duncan, for the presentation. We have got a few pre-submitted questions that we will start with, whilst people continue to submit their questions. Duncan, one of the questions is around the deferral of the pension, and whether that is a concern. A deferred pension next year, and whether it is a concern.

Speaker #1: So Duncan, one of the questions is around the deferral of the pension and whether that's a concern—a deferral of the pension next year, and whether it's a concern.

Speaker #3: Thanks, Katie. I mean, the straightforward answer is there is no concern. The trustee continues to work with Aviva on the buyout process that requires significant resource effort and diligence on the part of the trustee.

Duncan Tyler: Thanks, Katie. The straightforward answer is there is no concern. I think the trustee continues to work with Aviva on the buyout process that requires significant resource effort and diligence on the part of the trustee. That process will not be completed this year, which is the reason the escrow is not returned to the company this year. The company and the trustees continue to collaborate well as they always have done. It is clear that the escrow will come back to the company during 2027.

Speaker #3: That process will not be completed this year. Which is the reason the escrow isn't returned to the company this year. The company and the trustees continue to collaborate well as they always have done.

Speaker #3: But it is clear that the escrow will come back to the company during 2027.

Speaker #1: Thank you, Duncan. And Adam, if you could give some color on what has the change in your customer base been post Lambert sale?

Operator: Thank you, Duncan. Adam, if you could give some color on what has the change in your customer base been post-Lambert sale?

[Company Representative] (Mpac Group): Thank you, Duncan. Adam, if you could give some color on what has the change in your customer base been post-Lambert sale?

Speaker #2: Yes. It's probably a couple of things I want to say. So the first is around the Lambert customer base and the rest of the group.

Adam Holland: Yes. There's probably a couple of things I want to say. The first is around the Lambert customer base and the rest of the group. Lambert's focus on bespoke automation of a customer's assembly process. If you go to a factory and you walk the line from assembly through packaging and end of line and out to trucks, taking product to a port or an airport, wherever it might be, you might think that that's one joined-up line. But often that is not the case. There is often an air gap, and sometimes that air gap might be thousands of kilometers. Literally product being produced in one factory in one part of the world and then packaged in a completely different factory in a different part of the world. So a very significant air gap.

Speaker #2: Lambert's focus on bespoke automation of a customer's assembly process. If you go to a factory and you walk the line from assembly through packaging and end of line and out to trucks, taking product to a port or an airport, wherever it might be.

Speaker #2: You might think that that's one joined-up line. But often that is not the case. There's often an air gap. And sometimes that air gap might be thousands of kilometers literally product being produced in one factory in one part of the world and then packaged in a completely different factory in a different part of the world.

Speaker #2: And so a very significant air gap. And that is apparent to probably anyone who's been inside a factory and walked around. It's not true of every factory in the world.

Adam Holland: That is apparent to probably anyone who's been inside a factory and walked around. Now, that's not true of every factory in the world, but often true. For us, what we found is in the years that we've been operating the Lambert business alongside other businesses within the group, on average, one customer per year had any overlap between Lambert and the other businesses in our group. Very few of those projects ever actually involved work under the same roof. So very little synergy. For that reason, I'm not particularly concerned about dis-synergies in the divestment. Probably the other piece I want to touch on, though, is that a more significant change in the customer base, which is we're continuing to broaden our customer base. You'll have seen the chart we presented earlier just a few minutes ago, the whole range of different customers listed there.

Speaker #2: But often true. And for us, what we found is that in the years we've been operating the Lambert business alongside other businesses within the group, on average, one customer per year had any overlap between Lambert and the other businesses in our group.

Speaker #2: And very, very few of those projects ever actually involved work in the same under the same roof. So very, very little synergy. And for that reason, I'm not particularly concerned about dissynergies in the divestment.

Speaker #2: Probably the other piece I want to touch on there is that a more significant change in the customer base, which is we're continuing to broaden our customer base.

Speaker #2: You have seen the chart we've presented earlier just a few minutes ago. The whole range of different customers listed there. Some you'll certainly recognize blue tip multinational companies, with mega revenue turnovers and phenomenal history.

Adam Holland: Some you'll certainly recognize, blue-chip multinational companies with mega revenue turnovers and phenomenal history. Some businesses that you might not recognize, but actually in their own right are very large customers with significant revenues of their own. We've been working really hard to broaden out our customer base. I think that's really important. We're going to continue to do so, and that theme is going to continue.

Speaker #2: And some businesses that you might not recognize, but actually in their own right, a very large customers with significant revenues of their own. And we've been working really, really hard to broaden out our customer base I think that's really important.

Speaker #2: We're going to continue to do so. And that theme is going to continue.

Speaker #1: Thank you, Adam. Another question is on how you are managing tariffs, if you could touch on that.

Operator: Thank you, Adam. Another question is on how are you managing tariffs, if you could touch on that.

[Company Representative] (Mpac Group): Thank you, Adam. Another question is on how are you managing tariffs, if you could touch on that.

Speaker #2: Yeah. Perhaps I'm going to use this as an opportunity to talk about US and Canada. I think that's probably what this question had in mind.

Adam Holland: Yeah. Perhaps I am going to use this as an opportunity to talk about US and Canada. I think that is probably what this question had in mind. Look, the first thing is last year, we moved the spare parts facility from various businesses around the Americas into one location at Boston, in Boston, Massachusetts, inside the US. That obviously helps spare parts supply, not all of them, and we are working hard on those remaining supply chains for spare parts now to make sure that those are not exposed to tariffs if we can possibly avoid them. Duncan talked about the way that we are utilizing teams around the world, and I mentioned about flexibility between our operations. Well, let me put that all together for you.

Speaker #2: Look, the first thing is, last year we moved the parts—spare parts facility—from various businesses around the Americas into one location. It's at Boston, in Boston, Massachusetts, inside the US.

Speaker #2: And that obviously helps spare parts supply. Not all of them. And we're working hard on those remaining supply chains for spare parts now to make sure that those are not exposed to tariffs.

Speaker #2: If we can possibly avoid them. Duncan talked about the way that we're utilizing teams around the world. And I mentioned about flexibility between our operations.

Speaker #2: Well, let me put that all together for you. In the last few weeks, we have taken orders for customers in Europe that we will design and build in our facility in Canada.

Adam Holland: In the last few weeks, we have taken orders for customers in Europe that we will design and build in our facility in Canada and export from Canada into Europe. It is a way of ensuring that our Canadian expertise is highly utilized on projects where it is really applicable. We have won projects in the US that we will build in European factories and in Boston. That flexibility of being able to use different teams around the world on different projects in response to what is still a highly volatile tariff situation, it is changing all the time, I think is really important. If you had asked me the weekend before the 50% tariff came in, what I thought was going to happen, I would probably have echoed the lines that I was hearing in the press from Mark Carney and from Trump.

Speaker #2: And export from Canada into Europe. It's a way of ensuring that our Canadian expertise is highly utilized on projects where it's really applicable. And we have one project in the US that we will build in European factories.

Speaker #2: And in Boston. And so that flexibility of being able to use different teams around the world on different projects, in response to what is still a highly volatile tariff situation, is changing all the time.

Speaker #2: I think is really important. If you'd asked me the weekend before tariffs came in, the 50% tariff came in, what I thought was going to happen, I would probably have echoed that the lines that I was hearing in the press from Mark Carney and from Trump, that I don't think either of them expected at the start of that weekend that tariffs were going to happen.

Adam Holland: I do not think either of them expected at the start of that weekend that tariffs were going to happen. They thought they had a deal. They did not, and here we are with 50% tariffs. So we are responding to that and working our way through the implications. I also think I would say, if we look ahead, we are conscious of one thing for the future, and that is you cannot predict it. Will tariffs still be in place at 50% levels in a year's time, in 5 years' time, in 10 years' time, in a week's time? I do not know. So we are planning scenarios to respond to those as they might emerge.

Speaker #2: They thought they had a deal. They didn't. And here we are with 50% tariffs. So we're responding to that. And working our way through the implications.

Speaker #2: I also think I would say, if we look ahead, we are conscious of one thing for the future, and that is: you cannot predict it.

Speaker #2: Will tariffs still be in place at 50% levels in a year's time in five years' time, in 10 years' time, in a week's time?

Speaker #2: I don't know. So, we are planning scenarios to respond to those as they might emerge.

Speaker #1: Thank you, Adam. There's a question about whether Lambert was a strategic sale or a fire sale.

Operator: Thank you, Adam. There is a question whether Lambert was a strategic sale or a fire sale.

[Company Representative] (Mpac Group): Thank you, Adam. There is a question whether Lambert was a strategic sale or a fire sale.

Speaker #2: Okay. There's a very clear answer. It was a strategic decision. We did a review of the Lambert business. We thought very carefully about how it fits.

Adam Holland: Okay. There is a very clear answer. It was a strategic decision. We did a review of the Lambert business. We thought very carefully about how it fits, and I described all that air gap between assembly of a product inside a customer's factory and the packaging and end-of-line processes. That is really important, and once we had made that strategic decision. Let me say, not every business has to fit perfectly within the group. It is okay to have a business in the group if it is generating staggering amounts of cash in profit every year. But as you heard from Duncan, for us, our experience of the Lambert business over many highs and lows in the cycle in the market was that was not the case. We had made the strategic decision. We knew exactly what we wanted to do with that business. It was really important to us.

Speaker #2: And I described all that kind of air gap between assembly of a product inside a customer's factory and the packaging and end of line processes.

Speaker #2: That's really important. And we once we'd made that strategic decision yeah, let me say you don't have not every business has to fit perfectly within the group.

Speaker #2: It's okay to have a business in the group if it's generating staggering amounts of cash and profit every year. But as you said from Duncan, for us, our experience of the Lambert business over many highs and lows in the cycle in the market was that that wasn't the case.

Speaker #2: So we've made the strategic decision. We knew exactly what we wanted to do with that business. It was really important to us. We found a really good home for it.

Adam Holland: We knew exactly what we wanted to do with that business. It was really important to us. We found a really good home for it. The customers of the Lambert business deserve a good future. The team in the Lambert business deserve a good future. I am delighted with where the Lambert business has landed in the world. But the timing of that sale absolutely was a response to the conditions that we found ourselves in. A strategic decision, the timing, no accident.

Adam Holland: We found a really good home for it. The customers of the Lambert business deserve a good future. The team in the Lambert business deserve a good future. I am delighted with where the Lambert business has landed in the world. But the timing of that sale absolutely was a response to the conditions that we found ourselves in. A strategic decision, the timing, no accident.

Speaker #2: The customers of the Lambert business deserve a good future. The team in the Lambert business deserve a good future. I'm delighted with where the Lambert business has landed in the world.

Speaker #2: But the timing of that sale absolutely was a response to the conditions that we found ourselves in. So a strategic decision, the timing no accident.

Speaker #1: Thank you, Adam. Duncan, is this a structural change in the market or do you expect margins to recover?

Operator: Thank you, Adam. Duncan, is this a structural change in the market, or do you expect margins to recover?

[Company Representative] (Mpac Group): Thank you, Adam. Duncan, is this a structural change in the market, or do you expect margins to recover?

Speaker #3: We don't see this as a structural change. I mean, that's probably a very clear answer that I can give. So as markets recover to more normalized levels, we fully expect to see margins the groups generating to recover back up to levels that we've seen in the past.

Duncan Tyler: We do not see this as a structural change, and that is probably a very clear answer that I can give. As markets recover to more normalized levels, we fully expect to see margins the group is generating to recover back up to levels that we have seen in the past. It is probably also worth saying that our ambition around service revenues as a percentage of total revenues is to get it towards 30%. I will not comment on what margins are for OEM services, because that is commercially sensitive. But as we drive service revenues, I think people would expect us to see improving margins as well.

Speaker #3: It's probably also worth saying that our ambition around service revenues as a percentage of total revenues is to get it towards 30%. I won't comment on what margins are for OEN services because that's commercially sensitive.

Speaker #3: But as we drive service revenues, I think people would expect us to see improving margins as well.

Speaker #1: Thank you, Duncan. There have been a couple of questions around net debt. One states that a year ago, net debt was in the low 40s, and today it's £43 million.

Operator: Thank you, Duncan. There have been a couple questions around net debt. One states, a year ago, net debt was low 40s, and today it's GBP 43 million. You've had GBP 16 million from the Lambert sale, and net debt has not changed in the past year. Can you go into this further?

[Company Representative] (Mpac Group): Thank you, Duncan. There have been a couple questions around net debt. One states, a year ago, net debt was low 40s, and today it's GBP 43 million. You've had GBP 16 million from the Lambert sale, and net debt has not changed in the past year. Can you go into this further?

Speaker #1: You've had 16 million from the Lambert sale. And net debt has not changed in the past year. Can you go into this further?

Speaker #3: Yeah, yeah. Absolutely. I think it's worth saying that the challenge in market scenario that we see in front of us is not only impacting margin, but making cash flow a focus for us for management.

Duncan Tyler: Yeah, absolutely. I think it's worth saying that the challenging market scenario that we see in front of us is not only impacting margin but making cash flow a focus for us, for management. I'll repeat what I said during the presentation. The cash generation of the ongoing group has been good, 100% in the H1 of the year, but we have seen a drain from a cash outflow in the Lambert business. There was a cash outflow in 2025. That doesn't get repeated in 2027. That headwind is not with us anymore. We are continuing to contribute to the UK pension fund as well as the small US fund we have, but it's the UK one where we're contributing the most. There will come a time when those contributions cease, and therefore, that kind of headwind is not in front of us.

Speaker #3: I'll repeat what I said during the presentation: the cash generation of the ongoing group has been good—100% in the first half of the year.

Speaker #3: But we have seen a drain from a cash outflow in the Lambert business. There was a cash outflow in 2025. And that doesn't get repeated in 2027.

Speaker #3: That headwind is not with us anymore. We are continuing to contribute to the UK pension fund, as well as the small US fund we have.

Speaker #3: But it's the UK one where we're contributing the most. There will come a time when those contributions cease, and therefore, that kind of headwind is not in front of us.

Speaker #3: But right now, with the levels of profitability. Whilst cash generation is good, we're not generating free cash flow. That's clear to everybody. So as activity levels and demand levels improve, we think that will trade through into cash.

Duncan Tyler: But right now, with the levels of profitability, whilst cash generation is good, we're not generating free cash flow. That's clear to everybody. As activity levels and demand levels improve, we think that will trade through into cash. In the meantime, we continue to focus on cash management and working capital management in particular, and try and put our attention towards those factors that we can influence in the meantime.

Speaker #3: But in the meantime, we continue to focus on cash management and working capital management in particular and try and put our attention towards those factors that we can influence in the meantime.

Speaker #1: Thank you, Duncan. You mentioned about pension and there's been a question asking whether you could explain the financial implications of your pension buyout deal with Aviva.

Operator: Thank you, Duncan. You mentioned about pension, and there's been a question asking whether you could explain the financial implications of your pension buyout deal with Aviva.

[Company Representative] (Mpac Group): Thank you, Duncan. You mentioned about pension, and there's been a question asking whether you could explain the financial implications of your pension buyout deal with Aviva.

Speaker #3: Yeah. Absolutely. I mean, those people that have followed MPAC for a number of years will well understand there's quite a bit of complexity around our UK defined benefit pension scheme.

Duncan Tyler: Yeah, absolutely. Those people that have followed Mpac for a number of years will well understand there is quite a bit of complexity around our UK defined benefit pension scheme. In terms of trying to answer that in a straightforward way, the financial implications are that in time, the contributions into the scheme will stop. The escrow that is built up, we are paying those contributions into an escrow now, not to the pension fund, will be returned to the company, and the company and the trustees will work towards the efficient wind-up of the scheme. But there is work to be done to achieve that. So those are the broad financial implications of the buyout and the subsequent wind-up. And in time, observers and investors will notice that there are no more items in our income statement or balance sheet in respect to that pension scheme.

Speaker #3: In terms of trying to answer that in a straightforward way, I mean, the financial implications are that in time, the contributions into the scheme will stop.

Speaker #3: The escrow that's built up and we're paying those contributions into an escrow now, not to the pension fund, will be returned to the company.

Speaker #3: And the company and the trustees will work towards the efficient wind-up of the scheme. But there is work to be done to achieve that.

Speaker #3: So those are the broad financial implications of the buyout and the subsequent wind up. And in time, observers and investors will notice that there are no more items in our income statement or balance sheet irrespective of that scheme.

Speaker #1: Thank you very much, Duncan. We've just got a few more questions, if any viewers do want to ask. Any further questions? So, the next one is: what is the source of pricing pressures seen across the business?

Operator: Thank you very much, Duncan. We have just got a few more questions if any viewers do want to ask any further questions. So the next one is, what is the source of pricing pressures seen across the business?

[Company Representative] (Mpac Group): Thank you very much, Duncan. We have just got a few more questions if any viewers do want to ask any further questions. So the next one is, what is the source of pricing pressures seen across the business?

Speaker #2: I think this is probably one for me. I mean, a short answer is volume. We've been through cycles before. Go back to 2009 financial crisis.

Adam Holland: This is probably one for me. The short answer is volume. We have been through cycles before. Go back to the 2008/2009 financial crisis. You go through COVID and the chip shortages. Capital equipment markets are cyclical periods of investment, and there are periods where our customers hold back on investment. And we are definitely in one of those periods where the volume in the market is lower than we have seen in previous periods. We have talked about all the reasons for that already, so I will not go back over old ground. It is probably also fair to say, though, that this has been a longer low period than we perhaps have seen in previous cycles. And I think there is something to be said about how many shocks we have had to the system. Not just one tariff shock, but a series of tariff shocks.

Speaker #2: You go through COVID and the chip shortages. Capital equipment markets are cyclical. There are periods of investment and there are periods where our customers hold back on investment.

Speaker #2: And we're definitely in one of these periods where the volume in the market is lower than we've seen in previous periods. We've talked about all the reasons for that already.

Speaker #2: So I won't go back over old ground. It's probably also fair to say, though, that this has been a lower a longer low period than we perhaps have seen in previous cycles.

Speaker #2: And I think there's something to be said about how many shocks we've had to the system—not just one tariff shock, but a series of tariff shocks.

Speaker #2: Not just some conflict, but widespread conflict in the Middle East and so on. So this has been going on for a little while. And the result of that is that that long period of low volume with customers delaying decisions and holding back on investment means that the volume that is there to be won is being highly competed for.

Adam Holland: Not just some conflicts, but widespread conflict in the Middle East and so on. So this has been going on for a little while, and the result of that is that that long period of low volume with customers delaying decisions and holding back on investment means that the volume that is there to be won is being highly competed for. And some of those customers are also making decisions about the availability of cash and what they are going to spend.

Speaker #2: And some of those customers are also making decisions about the availability of cash and what they're going to spend. If you're a factory manager and you've got an outstanding new project that you want to launch, with a really good return on investment, but your corporate center is saying there just isn't the cash to deploy into a project of that scale at this time, your choice as a factory manager is to wait until cash can be afforded to be deployed.

Adam Holland: If you are a factory manager and you have got an outstanding new project that you want to launch with a really good return on investment, but your corporate center are saying, "There just is not the cash to deploy into that kind of a scale of a project at this time," your choice as a factory manager is to wait until cash can be afforded to be deployed or scale back and go for a different system, perhaps a simpler system. That tends to come with a lower price and lower margin point. So the impact that we are seeing is a volume piece. The question you have got to ask yourselves is, do you think that is the new normal forever? I do not believe that. I am absolutely of the firm opinion that we have seen these cycles before, and these cycles tend to recover.

Speaker #2: We'll scale back and go for a different system, perhaps a simpler system. And that tends to come with a lower price and a lower margin point.

Speaker #2: So the impact that we're seeing is a volume piece. And the question you've got to ask yourselves is, do you think that is the new normal forever?

Speaker #2: I do not believe that. I am absolutely of the firm opinion that we've seen these cycles before. And these cycles tend to recover. And when they do, they tend to come back quickly.

Adam Holland: When they do, they tend to come back quickly. I do not know when. Anyone who tells you they know what is going to happen in the future, I think, is kidding themselves, and they are trying to kid you. But they will come back. These volumes will come back. As the volume returns, the margin will recover as well, because it is that pressure we are seeing that is coming through in our margins. In two ways. Perhaps it is worth just explaining that to help people tuned in today to understand what we are seeing. Our margins are impacted by two things. Firstly, the price pressure that we are seeing in the market. That is the sales price pressure. The second thing is the timing.

Speaker #2: I don't know when. And anyone who tells you they know what's going to happen in the future, I think is kidding themselves and they're trying to kid you.

Speaker #2: But they will come back. These volumes will come back. And as the volume returns, the market the margin will recover as well because it's that pressure we're seeing that's coming through in our margins.

Speaker #2: And in two ways. Perhaps it's worth just explaining that, to help people tuned in today understand what we're seeing. Our margins are impacted by two things.

Speaker #2: Firstly, the price pressure that we're seeing in the market—that's the sales price pressure. And the second thing is the timing. If we're expecting an order next week and we've got engineers lined up to start work, and that customer delays the decision by two, three weeks, or two, three months, what are we doing with those engineers?

Adam Holland: If we are expecting an order next week, and we have got engineers lined up to start work, and that customer delays the decision by two, three weeks or two, three months, what are we doing with those engineers? That underutilization of engineers is inefficient in our factories. That causes a marginal impact on us. When those orders do land, the laws tell you that they all land at the same time, don't they? All of a sudden, you go from underutilized to overutilized. Then you have teams working overtime. You are bringing in contractors to take on some of the work that can be offloaded to contractors. All of that is inefficient as well. Factories like stable, even production, and that is not the world we are in. Price pressure, timing pressure, both impact margin, and those both go away as volumes pick back up again.

Speaker #2: That underutilization of engineers, is it inefficient in our factories? That causes a margin impact on us. And when those orders do land, the laws tell you that they all land at the same time, don't they?

Speaker #2: And all of a sudden, you go from underutilized to overutilized. So then you have teams working overtime. You bring in contractors to take on some of the work that can be offloaded to contractors.

Speaker #2: All of that's inefficient as well. Factories like stable even production. And that's not the world we're in. So price pressure, timing pressure, both impact margin.

Speaker #2: And those both go away as volumes pick back up again. Now, I told you there's also a link to the point that Duncan touched on with cash.

Adam Holland: Now, I would say there is also a link to the point that Duncan touched on with cash. How does cash improve in the future? How do we drive net debt down in the future? Well, as the volumes come back, deposits with new orders improve. That is a very important part. You have got to remember that although the order book is flat and we have been stable for a long time, we were GBP 20 million down during the H1 last year. The order book declined more than GBP 20 million. GBP 20 million on a like-to-like basis. That is a huge amount of order book deposits that we do not have in the bank right now at Mpac. As the order book grows again in the future, our cash balance will improve. The volume of cash margins will help, too.

Speaker #2: How does cash improve in the future? How do we drive net debt down in the future? Well, as the volumes come back, deposits with new orders improve.

Speaker #2: That's a very important part. You've got to remember that, although the order book is flat and we've been stable for a long time, we were £20 million down during the first half last year.

Speaker #2: The order book declined more than 20 million pounds. 20 million on a like basis. That's a huge amount of order book deposits that we don't have in the bank right now and impact.

Speaker #2: And as the order book grows again in the future, our cash balance will improve. The volume of cash margins will help too. When the last point I'll make on kind of cash conversion from normal operations, Duncan told you the cash conversion is good in the first half of this year.

Adam Holland: The last point I will make on cash conversion from normal operations, Duncan told you the cash conversion is good in the H1 of this year, on profits in the H1 of this year. As volumes pick up, we generate more leverage through the organization. That generates more profits. If we can maintain the same cash conversion or even just good cash conversion, because it was excellent in the H1 on the underlying business, that will generate an improvement in working capital. We can see lots of routes to improve our position in the future. That is on the normal piece of the business. Of course, if we get to a point where we stop contributing to the UK defined benefit pension scheme, that will also have a benefit.

Speaker #2: On profits in the first half of this year. As volumes pick up, we generate more leverage through the organization. That generates more profit if we can maintain the same cash conversion or even just good cash conversion because it was excellent in the first half on the underlying business.

Speaker #2: That will generate an improvement in working capital. So we can see lots of routes to improve our position in the future. And that's on the normal piece of the business.

Speaker #2: Of course, if we get to a point where we stop contributing to the UK Defined Benefit pension scheme, that will also have a benefit.

Speaker #2: We finish payments on the existing deferred. To help with our cash on net debt position. Okay. So there's a lot in that. But there was an excellent question.

Adam Holland: We have finished payments on the existing deferred to help with our cash on net debt position. There is a lot in that, but that was an excellent question. Katie?

Speaker #2: Katie.

Speaker #1: Thank you, Adam. And the last question. Order intake was strong in H1. And you've said that the pipeline is now larger and building faster than last year.

Operator: Thank you, Adam. The last question. Order intake was strong in H1, and you have said that the pipeline is now larger and building faster than last year. Could you give us a little more color on what you are seeing in the pipeline?

[Company Representative] (Mpac Group): Thank you, Adam. The last question. Order intake was strong in H1, and you have said that the pipeline is now larger and building faster than last year. Could you give us a little more color on what you are seeing in the pipeline?

Speaker #1: Could you give us a little more color on what you're seeing in the pipeline?

Speaker #2: Yeah. Color, no. A number, yes. I'll give you a number. The pipeline is about 5% larger at the end of July, compared with the start of January this year.

Adam Holland: Yeah. Color, no. A number, yes. I will give you a number. The pipeline is about 5% larger at the end of July, compared with the start of January this year. So in the seven months to the end of July. I am sorry I do not have an August figure to give you, but I can remember the July number. So the pipeline is now 5% bigger. If I was to break that down by business or by region, I think the standouts for me would be BCA and CSi. The businesses we acquired in 2024 are really recovering really well to the disruptions we saw last year. The pipeline for those two businesses is above the 5%, and really helping with the group average. All businesses have shown improvement versus the pre-tariff levels of the pipeline in 2024.

Speaker #2: So in the seven months to the end of July. I'm sorry, I don't have an August figure to give you, but I can remember the July number.

Speaker #2: So the pipeline is now 5% bigger. If I was to break that down by business or by region, I think the standouts for me would be BCA and CSI.

Speaker #2: The businesses we acquired in 2024 are really recovering really well to these disruptions we saw last year. The pipeline for those two businesses is above the 5%.

Speaker #2: And really helping with the group average. All businesses have shown improvement versus the pre-tariff levels of the pipeline in 2024. But the pipeline is only the pipeline is interesting.

Adam Holland: But the pipeline is interesting, but the P&L is only as good as conversion of those orders, conversion of the pipeline into orders and orders to cash. We are going to keep making the right decisions. We are not going to get carried away with the pipeline until we see it converting to orders, until we see orders converting to cash. We are going to prepare the group for growth ahead, and I think that is the right thing to do. So, keep making the right decisions in a challenging market.

Speaker #2: But the P&L is only as good as conversion of those orders. Conversion of the pipeline into orders and orders to cash. So we're going to keep making the right decisions.

Speaker #2: We're not going to carry it away with the pipeline until we see it converting towards, until we see orders converting to cash. We're going to prepare the group for growth ahead.

Speaker #2: And I think that's the right thing to do. So keep making the right decisions in a challenging market.

Speaker #1: Thank you, Adam. And let me know your question. So if you just want to do a quick summary before the end of the webinar, that'd be great.

Operator: Thank you, Adam. There has been no more questions, so if you just want to do a quick summary before the end of the webinar, that would be great.

[Company Representative] (Mpac Group): Thank you, Adam. There has been no more questions, so if you just want to do a quick summary before the end of the webinar, that would be great.

Speaker #2: Yeah. Thank you. I mean, I've probably touched back on those five things, I think, that I've mentioned earlier. So the highlights for me, better order intake, 43% up, stable order book, 6% up, resilient service business.

Adam Holland: Yeah. Thank you. I will probably touch back on those five things I think that I have mentioned earlier. So, the highlights for me, better order intake, 43% up. A stable order book, 6% up. Resilient service business. We are seeing margin pressure, but the impact of cost saving actions that we have already taken is starting to come through in the P&L, and there is more to do in the H2. Uncertain markets, but we are making the right kinds of decisions, and I am really confident in the leadership to manage that. So thank you every so much for your questions today, and I am looking forward to the next update early next year.

Speaker #2: We are seeing margin pressure, but the impact of cost-saving actions that we've already taken is starting to come through in the P&L. And there's more to do in the second half.

Speaker #2: Uncertain markets, but we're making the right kinds of decisions. And I'm really confident in the leadership to manage that. So thank you ever so much for your questions today.

Speaker #2: And I'm looking forward to the next update early next year.

Speaker #3: Yes. Thank you.

Operator: Yes. Thank you.

Duncan Tyler: Yes. Thank you.

[Analyst]: Perfect. Thank you, Katie, and thank you to the team for updating investors today. Could I please ask investors not to close this session

Operator: Perfect. Thank you, Katie, and thank you to the team for updating investors today. Could I please ask investors not to close this session

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Q2 2026 Mpac Group PLC Earnings Call

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