Macfarlane ‘cautious’ despite 22% jump in profits

Packaging firm Macfarlane will return to the acquisition trail next year as it looks to capitalise on growing demand from online retailers.

Chief executive Peter Atkinson said: “We are very keen to get back to looking for acquisition opportunities to accelerate growth.”

He said the Glasgow-based group was looking for privately-owned firms that would allow it to fill gaps in the packaging market or in its UK presence.

Atkinson’s comments came as Macfarlane reported a 22 per cent jump in profits, to £1.6 million in the first half of the year.

The firm is benefiting from the growth of internet shopping and has recently signed contracts to supply online retailers Asos, Feel Unique and The Hut. Together, the deals will be worth about £1m a year in revenues to Macfarlane.

Atkinson said the internet retail sector was growing at about 10 per cent a year, and Macfarlane has about a 20 per cent share of the UK market supplying packaging to the sellers.

The company is providing a full consultancy service, including wrappings that can easily be used for returns.

But outside the online sector the firm is getting no help from the consumer environment.

Atkinson said: “Markets are still subdued. People are talking up the wider economy but we are certainly not seeing that at the moment.”

Sales were almost flat at £68.1m, with the profits growth driven by cost cutting initiatives. The company reduced its net debt and pension deficit, while holding its interim dividend at 0.5p a share.