Glasgow-based packaging firm Macfarlane Group said revenue in the six months to June 30 rose 3.7% to £81.5 million and profit before tax rose 8.1% to just over £2 million as the firm benefited from recent acquisitions.
“Sales and profits both benefited from the positive impact of recent acquisitions, underlining the value of our acquisition strategy,” said Macfarlane Group chairman Graeme Bissett.
Bissett said Macfarlane’s increasing presence in the internet retail sector means that sales revenues are more weighted towards the second half of the year and the firm expects to see the typical seasonal uplift during that period.
Packaging distribution sales were 5.5% ahead of the equivalent period in 2015, with 0.5% achieved from organic growth and the remainder from the recent acquisitions.
Operating profit was up 9.7% at £2.3 million.
Macfarlane acquired Colton Packaging Teesside and the packaging business of Edward McNeil in Glasgow in the first half of this year.
And it completed the acquisition of Nelsons for Cartons & Packaging last month and expects that to contribute to profits in the second half of the year.
“Sales in our manufacturing operations are 9% below 2015 levels principally due to our decision not to follow low price competition in the labels sector,” said the firm.
Net debt at June 30 was £16.9 million, an increase of £5 million compared to the same point last year, reflecting outgoings of £6.4 million connected to the recent acquisitions.
Macfarlane’s pension scheme deficit increased from £11.5 million at December 31 to £12.6 million at June 30 due to lower bond yields, despite the payment of £1.4 million deficit reduction contributions.
Macfarlane’s board is recommending an increase of 3.8% in the interim dividend to 0.55p per share.
“Our strategy is to continue to deliver sustainable profit growth through focusing on added value products and services in our key UK market sectors, combined with the execution of value enhancing acquisitions,” concluded the firm in its half year report.
“The uncertain economic climate arising from the outcome of the EU referendum is likely to continue for a considerable time and we will monitor developments and take appropriate action.”