MACFARLANE Group has published its interim results for the first six months of 2021, which revealed that sales grew by 26.5% to £133.5 million compared with the same period last year.
Operating profit before amortisation and impairment at £11.1 million and pre-tax profit at £7.8 million have both more than doubled.
The packaging specialist said it now expects outlook for the full year to be ahead of previous expectations.
Packaging distribution achieved sales growth of 21.3% and growth in operating profit before amortisation and impairment of 71.4% when compared with the first half of 2020, which was impacted by the Covid-19 pandemic.
Macfarlane added that manufacturing operations also saw ‘encouraging’ recovery in both sales and operating profit before amortisation and impairment.
The acquisitions of GWP Holdings and Carters Packaging (Cornwall) in the first half of this year have contributed £8.1 million of sales and £1.9 million of operating profit before amortisation and impairment versus 2020 levels.
Interim dividend increased by 24.3% to 0.87p per share.
Stuart Paterson, chairman of Macfarlane Group PLC, said, “Macfarlane Group achieved good sales growth in the first half of 2021, benefiting from the ongoing structural shift to e-commerce retail and recovery in certain industrial sectors which were affected by Covid-19 in the first six months of 2020. Despite ongoing difficult operating conditions due to Covid-19, significant inflationary pressure on input costs and supply shortages of some materials, the business has produced a strong profit performance. Our people have excelled, maintaining service to our customers in the most challenging environment.
“Packaging distribution has grown sales through strong demand from existing customers in the e-commerce retail and medical sectors and recovery in a number of industrial sectors. Demand from the aerospace, high street retail and hospitality sectors continues to be weak. New business activity has increased significantly compared to the same period in 2020 and Carters has traded strongly since acquisition.
“Manufacturing operations has benefited from the acquisition of GWP, which is performing ahead of expectations, and a strong recovery in the packaging design and manufacture business which returned to profit following the restructuring actions we took in H2 2020. Labels’ profitability is below the same period in 2020 due to higher costs to serve customers offsetting growth in sales.
“After re-assessing projected profits and cash flows in manufacturing operations, an impairment of historic goodwill held at consolidated level of £1m has been charged in H1 2021. It is pleasing to report that the effective management of operating cash has enabled the business to finance two further good quality acquisitions through our existing bank facility. In addition, the pension scheme is now in surplus.
“The performance of the business in the first half of 2021 continues to demonstrate the effectiveness of our strategy and the resilience of our business model. We expect the second half of 2021 to be challenging as we anticipate further inflationary pressure on input prices, continuing supply constraints on most raw materials and operating costs increasing due to staffing pressures. However, the group has previously demonstrated effective management of these challenges and, as a result of this and the performance in H1 2021, the Board expects the Group will exceed its previous expectations for the full year.”
