Shares of Glasgow-based packaging firm Macfarlane Group ended Tuesday trading down almost 7% — having been down around 20% at one stage — after it gave a mixed trading statement for 2016 so far and spoke of “subdued market conditions.”
Macfarlane chairman Graeme Bissett told the firm’s annual general meeting that group sales have grown 3% year to date.
However, Bissett said sales in Macfarlane’s manufacturing operations were running 3% below the equivalent period in 2015 due partly to “softer demand in certain of the market sectors served by our packaging design and manufacture business.”
“Our group sales in the year to date have grown by 3%, reflecting subdued market conditions more than offset by the benefit of acquired business,” said Bissett.
“From this base and recognising the influence of the ecommerce sector in the second half of the year, the board is confident that Macfarlane Group will perform in line with its expectations for 2016.
“Our larger business, packaging distribution, has achieved sales growth of 4% compared to 2015 reflecting the benefit of prior year acquisition activity and we are delighted with the recently announced acquisitions of Colton Packaging Teesside and Edward McNeil in Glasgow.
“The investment in the new Macfarlane Innovation Lab has been very well received by our customers, which should help accelerate a strong new business pipeline in the remainder of 2016.
“Sales in our manufacturing operations are running 3% below the equivalent period in 2015.
“This is due to our ongoing focus on value added products and services, combined with softer demand in certain of the market sectors served by our packaging design and manufacture business.
“Net debt has risen from the 31 December 2015 level, reflecting the normal seasonal uplift in working capital and recent acquisitions.
“The group continues to operate well within its existing bank facilities.
“We are confident that we will make further good progress in the remainder of the year.”