Macfarlane first-half sales up 10% to £89.8m

Glasgow-based packaging firm Macfarlane Group said its first-half sales rose 10% to £89.8 million and profit before tax soared 27% to £2.5 million as recent acquisitions boosted the firm’s performance.

Macfarlane is proposing a 9.1% increase in its interim dividend to 0.6p per share.

Macfarlane chairman Graeme Bissett said in a statement he will step down by the end of 2017 and the company’s process to select a new chairman was “well advanced.”

Bissett said: “The strong performance in the first six months of 2017, supplemented by the expected seasonal uplift from the e-commerce sector in the second half of the year gives the board confidence that its full year expectations for 2017 will be achieved.

“Packaging distribution sales were 12% up on the first half of 2016, with 3% achieved from organic growth and the remainder from recent acquisitions, all of which are performing well.

“Gross margin in packaging distribution was similar to last year at 29.0%.

“Operating profit at £2.7 million is £0.4 million, 18% ahead of 2016.

“Sales in our manufacturing operations are 1% below 2016 levels, principally due to our continuing programme of focusing on higher margin sales.

“Operating profit is £0.3 million, 29% ahead of 2016 …

“Net debt at 30 June 2017 was £14.6 million, a £1.5 million reduction from the level of £16.1 million at 31 December 2016.

“The group is operating well within its existing bank facility of £25 million.

“Consistent with our normal pattern, group trading is expected to be strongly cash generative in the second half of 2017.

“The pension scheme deficit reduced to £13.4 million at 30 June 2017 from £14.5 million at 31 December 2016, mainly due to the payment of deficit reduction contributions during the six month period.”