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MHM Automation continues growth trajectory despite covid challenges

Increases in revenue, profitability and $40 million of forward-booked orders were among the highlights of the half year report released by MHM Automation recently.

The NZX-listed automation company reported revenue growth of 19% to $29.5 million and EBITDA growth of 45% to $2.12 million for the six months to 31 December 2021.

These results continue the momentum of growth the company has seen over the last two years, primarily driven by strong sales of its Milmeq chilling and freezing equipment to the Australian red meat sector.

MHM Automation Chief Executive Officer, Richard Rookes said the growth was admirable, particularly given the challenges posed by Covid and border restrictions.

“It is a real credit to the performance of our team. Our project managers and procurement teams have negotiated numerous logistics challenges, and our ability to continue to deliver projects to clients overseas was only possible thanks to the dedicated staff who were prepared to travel in uncertain circumstances,” he said.

“We welcomed the news of the imminent re-opening of New Zealand’s borders, as this will significantly reduce our project risk and costs going forward,” he added.

Key projects delivered during the year included a milestone 200th Milmeq plate freezer installation for a major Australian meat processor and a first-of-its-kind robotic de-boxing line for a leading meat processor in the US.

Mr Rookes said the company’s continued success was a reflection of the world-leading status of its technologies, and its ability to innovate to resolve customers’ production challenges.

“Take the universal robotic box cutter for example. It’s a robotic system that can open boxes of various shapes and sizes on the fly, without operator invention. Our client told us they could not find a system on the market that would fulfil this task, so we developed one to meet their needs,” he said.

The global pandemic was also credited with increasing demand for automation across all industries.

“The ability to attract and retain staff has long been an issue for food processing businesses but the Covid-19 pandemic has exacerbated that issue. Our customers across the globe are telling us they need to automate aspects of their operations to ensure business continuity,” Mr Rookes said.

MHM Automation forecasted its growth trajectory to continue but acknowledged it faced some headwinds with a shortage of people and increasing costs.

“We are currently about 20 people short across the business, in areas from controls and mechanical engineers to skilled tradespeople. The New Zealand Government immigration policies continue to restrict the available talent pool, which is in turn driving wage inflation,” Mr Rookes said.

Acquisition has been another driver of growth for MHM Automation, with the company having successfully acquired and integrated three businesses in the past five years, the most recent being Christchurch-based fabrication business Southern Cross Engineering Limited (SCE) which it acquired in 2021.

Mr Rookes said the company’s acquisition of brands such as Milmeq, H&C, and SCE had enabled diversification into new market sectors and delivered operational synergies. He indicated acquisition would continue to form part of the company’s growth strategy.

“We are currently in discussion with a number of potential targets and expect to finalise these negotiations in the coming months,” Mr Rookes said.

 

 

 

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