Robust sales and change of long-standing director at Glasgow packaging group Macfarlane
The firm expects its full-year pre-tax profits to be “broadly in line” with 2019’s result after half-year sales and profits pushed ahead.
Releasing a trading update to the stock exchange, the group, which employs more than 900 people at 31 sites, said sales revenue in the four months to October 31 was better than expected and has grown by 4 per cent compared to the same period last year.
This marks a “strong recovery” from the second quarter when sales fell by 5.2 per cent due to the impact of the initial Covid lockdown.
Bosses pointed to the benefits of having a broad customer base across a variety of market sectors.
Good sales growth in the internet retail, household essentials and medical sectors was countered by tougher conditions in the aerospace, high street retail and food service sectors.
The group reported strong cash generation and noted that it was operating “well within” its existing bank facility of £30 million.
Chairman Stuart Paterson told investors: “The Macfarlane Group performance in the second half of 2020 has been robust in the face of significant challenges. This has only been achieved due to the outstanding commitment and hard work of our people.
“We have focused on ensuring they can service our customers effectively by creating safe environments in which they can work. The health and wellbeing of our employees continues to be paramount.
“There remain uncertainties and concerns over future economic conditions. However, with our diversified customer base, strong added value sales proposition and highly capable and committed team Macfarlane Group has demonstrated it is well positioned to manage the challenges facing the business in the remainder of 2020 and beyond.”
Meanwhile, John Love is retiring as group finance director at the end of the year. He will be replaced by Ivor Gray whose appointment will be effective on January 1.
Love joined Macfarlane in 1996 and was appointed to his current post three years later.
Gray, a qualified chartered accountant, has worked at the group for 24 years in a variety of financial and commercial roles including financial director of Macfarlane Labels, general manager of Macfarlane USA and commercial director of Macfarlane Packaging Distribution.
Paterson added: “The board would like to record their gratitude to John Love for his long, dedicated and valued contribution and specifically for his part in helping to steer the company through the current pandemic. We wish him a long and happy retirement.
“The board also welcomes Ivor Gray to his new role. His extensive knowledge and experience of the business will enable an effective and orderly transition and help ensure Macfarlane Group continues to progress.”
In August, the group increased its interim dividend despite a fall in profits after a “resilient” first-half performance.
Results for the six months to the end of June revealed group turnover of just under £105.6m, a fall of 1.8 per cent on a year earlier, resulting in a profit before tax of £3.6m, down 5.5 per cent, year-on-year.
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