The Glasgow-based group released first-half results that revealed sales and profit growth and said it had delivered a “solid performance”, especially compared to a strong trading period a year ago.
This was achieved against a backdrop of slowing spending in the e-commerce sector and “significant inflationary pressures” on operating expenses.
In addition to distributing a range of protective packaging products, the company designs and manufactures packaging for high value and fragile items.
The company employs over 1,000 people at 37 locations, mainly in the UK, as well as in Ireland, Germany and the Netherlands. It serves over 20,000 customers mainly in the UK and Europe.
Results for the six months to the end of June showed the group had revenue from continuing operations of more than £139.2 million, a 14 per cent increase on the previous year. Operating profit rose 4 per cent to £9.6m, while profit before tax rose 3 per cent to almost £8.9m. An interim dividend of 0.9 pence per share was declared, up 3 per cent year-on-year.
Chairman Stuart Patterson said: “The group has delivered a solid performance in the first half of 2022, especially compared to a strong trading period. [the first half of] 2021
“This was achieved against a backdrop of slowing spending in the e-commerce sector and significant inflationary pressures on operational expenses. We have also made strategic IT investments and start-up costs at our new distribution center in North West England.
Headquartered in Glasgow, the MacFarlane Group employs over 1,000 people across 37 locations primarily in the UK, Ireland, Germany and the Netherlands. It serves over 20,000 customers mainly in the UK and Europe.
“We expect the environment to remain challenging, with inflationary pressures on our operating expenses and slowing demand from our e-commerce customers.
“Overall, the Group is confident that the effectiveness of our strategy, the diversity of customers and sectors we serve, the quality of our people and the flexibility of our business model will ensure 2022 will be a year of growth for MacFarlane. There will be another year.”
Patterson is to be replaced as chairman by Alain Gulvanesian, who joined the board last October.
Analysts at home brokerage firm Shore Capital said the company released a “strong” set of first-half numbers that “showed pleasing year-over-year sales, earnings and revenue growth.”
He added: “The update gives us confidence in the board and the group meeting.” [full-year] Assumptions, so let’s leave them as they are for now.
“We remain excited about the Group’s growth opportunities, particularly in the developed markets, and continue to gain momentum in continental Europe by leveraging our ‘buy and build’ model.”
In May, MacFarlane sealed its first foreign acquisition in several years when the company bought Packman, a packaging supplies company based in Appelheim near Heidelberg, Germany, in a multi-million euro deal.
The group said the acquisition is in line with its strategy to grow its protective packaging business in Northern Europe through a combination of organic and acquisitive growth.
Glasgow packaging group MacFarlane seals German takeover worth millions