Macfarlane chairman 'pleased' with Glasgow firm's performance in face of 'adverse' conditions

Scottish protective packaging provider Macfarlane Group’s new chairman said he was “pleased” with the firm’s performance this year in the face of “adverse market conditions”.

Aleen Gulvanessian said the Glasgow-headquartered group’s results for 2022 were expected to be ahead of last year and in line with full-year expectations. Sales revenue in the year to date is running 11 per cent ahead of the same period last year, with weaker volumes being offset through the “effective management” of input price increases as the group tackles inflationary pressures.

The group noted that actions to improve productivity and streamline its operating footprint were being implemented. Net bank debt has also been slashed to £5 million from £9.7m at the end of June.

In a brief trading update, Gulvanessian told investors: “Given the well-publicised adverse market conditions we are pleased with the performance of the group so far in 2022 and confident in meeting our profit expectations for the year. Whilst challenges will continue to persist, with the experience of our management team, resilience of our business model and strong acquisition pipeline, we are well placed to maintain the group’s positive progress.”

Analysts at house brokerage Shore Capital noted: “Macfarlane Group has published a strong trading update for the period from the end of June to the end of October, building on a robust set of interim results in August. We also note a strong cash performance with net bank debt reducing since the end of June, from £9.7m to £5m. A pleasing performance to our minds, therefore.”

In August, the group said it was bracing itself for a “challenging environment” but remained confident that it could mitigate the impact of spiralling inflation. Posting first-half results revealing a rise in sales and profit, the firm said it had achieved a “solid performance”, particularly when compared to a strong trading period a year earlier. It said this had been achieved against the backdrop of a slowdown in spending from the e-commerce sector and “significant inflationary pressure” on operating costs.

The business employs more than 1,000 people at 37 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands. It supplies more than 20,000 customers, chiefly in the UK and Europe.

Results for the six months to the end of June showed that the group generated revenues from continuing operations of just over £139.2m, up 14 per cent on a year earlier. Operating profit was up 4 per cent to £9.6m while profit before tax rose 3 per cent to almost £8.9m. An interim dividend of 0.9p per share was declared, marking a year-on-year increase of 3 per cent.

Headquartered in Glasgow, Macfarlane Group employs more than 1,000 people at 37 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands. It supplies more than 20,000 customers, chiefly in the UK and Europe.

Departing chairman Stuart Paterson said at the time: “The group has achieved a solid performance in the first half of 2022. This has been achieved against the backdrop of a slowdown in spend from the e-commerce sector and significant inflationary pressure on operating costs. We have also made strategic IT investments and incurred start-up costs on our new north-west of England distribution centre.”