Solid start to year for Glasgow packaging group Macfarlane despite e-commerce blip
Releasing a trading update, the group said sales at its packaging distribution arm grew by 4 per cent in the first quarter of the year, with the benefit of the acquisition of PackMann in May 2022 feeding through and new business growth being partly offset by continuing weak demand from the e-commerce retail sector. Manufacturing operations grew sales by 14 per cent in the quarter, with good recovery in certain industrial markets enhanced by the acquisition of AE Sutton in March 2023.
Bosses said the firm had completed two “quality” acquisitions during the first four months of 2023, the latest being the takeover of Gottlieb Packaging Materials, a protective packaging distributor based in Manchester. Profit expectations for the full year are unchanged.
Chairman Aleen Gulvanessian told investors: “The growth in both sales and profits that we have achieved in the first quarter of 2023 continues to demonstrate the effectiveness of our strategy, the quality of our people and the resilience of our business model.”
Analysts at house broker Shore Capital Stockbrokers noted: “The short-term outlook for e-commerce continues to remain challenging due to the cost-of-living crisis with volumes likely remaining stable for the next couple of years. However, management still believes e-commerce is a long-term growth market for the group reflecting underlying secular trends. Industrial markets (i.e. aerospace, defence, scientific instruments and medical) are continuing to recover (higher margin) and leave the group well positioned to benefit in our view, despite the wider macro-economic challenges.”
Macfarlane unveiled the acquisition of A&G Holdings, owner of Gottlieb Packaging Materials, for £3.55 million in cash at the start of May. Gottlieb supplies protective packaging products to customers across a wide range of sectors from its warehouse facilities in Manchester. It has an experienced team of 15 employees, including two directors, all of whom will remain with the business following the takeover. Headquartered in Glasgow, Macfarlane employs more than 1,000 people at 39 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands.
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