Interim results show profit and turnover jumps for Macfarlane

GLASGOW-headquartered packaging firm Macfarlane Packaging has reported a rise in turnover and profits as it posts its interim results.

Group turnover saw a rise of 14% on the previous year, to £102 million, while profit before tax jumped 39% to £3.5 million.

Packaging distribution sales grew by 14% in the first half of 2018, with 5% achieved from organic growth and the remainder from the 2017 acquisition of Greenwoods Stock Boxes. Gross margin in packaging distribution rose to £29.3% (2017: 29.0%) Operating profit for the division was up £1 million on 2017’s figure to £3.7 million.

Sales in Macfarlane’s manufacturing operations division saw an 11% increase, with “strong demand” for composite packs for export markets. However, both manufacturing businesses experienced lower gross margins, attributed to increased raw materials and unfavourable sales mix, resulting in operating profit of £200,000.

The pension scheme deficit has reduced from £11.8 million at the end of 2017 to £9.4 million.

The board is recommending an 8% increase in the interim dividend to 0.65p per share.

Stuart Paterson, chairman of Macfarlane Group commented on the results, “This strong performance in the first six months of 2018, supplemented by the expected seasonal uplift from the e-commerce sector in the second half of the year, give the board confidence that its full year expectations for 2018 will be achieved.

“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 2018 reflects the successful implementation of our strategy and we are confident that the group will continue to make further progress in the remainder of 2018.”