Glasgow's Macfarlane Group unwraps robust first-half numbers

Scottish packaging group Macfarlane has hinted at further acquisitions after unwrapping solid first-half trading with a steady rise in sales and profits.

The Glasgow-headquartered firm is celebrating its 70th anniversary this year. Picture: Contributed

Turnover at the Glasgow-headquartered firm, which is celebrating its 70th anniversary this year, rose by 5.4 per cent to just over £107.5 million in the six months to the end of June, compared with a year earlier. Profit before tax was up 8.7 per cent to £3.8m.

Shareholders are set to receive an interim dividend of 0.69p per share, up 6.2 per cent, year-on-year.

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Chairman Stuart Paterson told investors: “Macfarlane Group grew sales by 5.4 per cent in the first half. This was achieved against a background of well-publicised weaker demand.

“The performance in the first six months of 2019 and our actions in place to increase the margin in the second half of the year, together with the normal seasonal uplift from the e-commerce sector in the final quarter, gives the board confidence that its full-year expectations for 2019 will be achieved.

“Packaging Distribution grew sales by 4.4 per cent in the first half. Sales revenue from existing customers was impacted by weaker demand and sales price deflation but this was offset by good new business growth and the benefit of the 2018 acquisitions of Tyler Packaging and Harrisons Packaging, as well as the recent acquisition of Ecopac, concluded at the start of May 2019.”

He added: “Our strategy is to deliver sustainable profit growth by focusing on added value products and services in our target market sectors, combined with the execution of value-enhancing acquisitions.

“Macfarlane Group’s performance in the first half of 2019 reflects the successful implementation of this strategy and we are confident that the group will continue to make further progress in the remainder of 2019.”

Net bank debt at the end of June stood at £15m, against £13.2m at 31 December 2018, mainly due to a £2.8m cash outflow on the acquisition of Ecopac, a protective packaging distribution business based in Buckinghamshire.