Glasgow-based packaging firm Macfarlane Group pledged to continue looking for takeover deals as it revealed that recent acquisitions helped its 2016 sales rise 6% to £179.8 million and profit before tax climb 15% to £7.8 million.

Macfarlane said its packaging distribution business increased sales by 9% to £155.9 million.

“Organic sales growth was challenging in the first half of the year but strengthened in the second half of the year to 3%,” said the firm

“This was supplemented by the contributions from Nelsons for Cartons & Packaging, acquired in July 2016, Colton Packaging Teesside and the packaging business of Edward McNeil, acquired in April 2016 and May 2016 respectively. 

“Integration of these businesses has worked well and the combination of organic growth and the contributions from the acquired businesses resulted in packaging distribution achieving a 16% increase in operating profit to £7.8 million.”

Macfarlane is proposing a 7.1% increase in full year dividend to 1.95p.

The firm’s shares were trading slightly lower at around 64p, giving it a stock market value of roughly £87 million.

Macfarlane said sales in its manufacturing operations fell 9% to £23.9 million “mainly due to management actions to rebalance the mix of products in our labels business, which positively impacted margins and resulted in labels achieving good profit growth compared to 2015.”

In its outlook for 2017, Macfarlane said: “We will concentrate our sales efforts on those segments of the market, such as e-commerce, which are forecast to show continued above average growth rates and where customers recognise the real value of a specialist protective packaging distributor.

“During 2017 we will look at opportunities for growth through the acquisition of good quality protective packaging businesses that improve our penetration of target market sectors, leverage our property footprint or improve our geographic coverage.”

Macfarlane chairman Graeme Bissett said: “The 15% increase in pre-tax profits in 2016 represents the seventh consecutive year of profit growth for Macfarlane Group and the group has started 2017 well.

“We will continue to focus on opportunities in sectors with strong growth prospects — including internet retail, third party logistics and national accounts …

“We will also maintain our programme of acquiring good quality businesses to augment organic growth.

“This is a strategy based on taking positive action, which has served all stakeholders in our business well in recent years and we remain confident that it will continue to do so.”