Online boom helps Glasgow's Macfarlane Group seal 'resilient' year of sales
Macfarlane Group, the Glasgow-headquartered protective packaging specialist, said it is well placed to benefit when the UK economy begins to recover after booking a “resilient” full-year performance, sending its shares sharply higher.
During 2020, sales from existing customers benefited from underlying strength in the e-commerce, household essentials and medical sectors as a result of the pandemic, the firm noted.
This was partially offset by weaker demand from those sectors most affected by Covid-19 – automotive, aerospace, high street retail and hospitality.
Sales at the group’s core packaging distribution business lifted 2.6 per cent, year-on-year, to £201.7 million, as part of overall turnover of £230m, marking a rise of 2.1 per cent. Profit before tax rose 9.6 per cent to £13m.
Headquartered in Glasgow, Macfarlane employs more than 850 people at 31 sites, principally in the UK, but also in Ireland, Sweden and Holland. That headcount is down by about 60 as a result of restructuring actions.
Sales have also benefited from the 2019 acquisitions of Ecopac and Leyland Packaging, as well as the January 2020 takeover of Armagrip.
Chief executive Peter Atkinson said discussions were “well developed and well advanced” regarding fresh bolt-on deals.
The latest results showed that sales at the group’s manufacturing operations dipped 0.9 per cent to £28.3m last year. Strong demand from the food, medical and household essentials sectors in the labels business was more than offset by weaker demand from the aerospace and automotive sectors in the packaging design and manufacture business.
The board is proposing a final dividend of 1.85p per share, amounting to a full-year payout of 2.55p, compared to the prior year dividend of just 0.69p which was impacted by the cancellation of the proposed final payment of 1.76p amid Covid cash conservation measures.
New finance director Ivor Gray, who has been with the group for more than two decades and recently replaced the long-standing John Love, said the dividend strategy was back on track.
The firm told investors: “The board is confident that, given the resilience seen in 2020, the strength of our business model and the commitment of our people, Macfarlane Group will progress in 2021 and is well positioned to benefit when the UK economy begins to recover.”
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