Macfarlane Group, the Glasgow-based protective packaging, design and distribution firm, said the increase in employers’ national insurance rates and National Minimum Wage announced in the UK Government’s Budget will increase its costs by £1.5 million annually from April 2025. 

“Mitigation actions are currently being reviewed to minimise the impact,” said the company.

In a trading update for the period January 1 to October 31 Macfarlane said its board anticipates performance for 2024 will be broadly in line with its full year expectations.

“Revenue year to date is 4% below the same period last year, with continued challenging market conditions resulting in weaker volumes and lower pricing impacting most sectors,” said Macfarlane.

“These impacts are being offset by improved new business performance, effective management of pricing and costs and the completion of two acquisitions during the period, both of which are performing well.

“The group continues to progress its strong acquisitions pipeline.

“A strong balance sheet and cash generation, supported by a £35m bank facility, underpin the group’s strategy; net bank debt at 31 October 2024 was £4.7m (30 June 2024: Net bank funds of £0.8m), after £11.3m of investment in acquisitions and payment of dividends of £5.8m.”

Headquartered in Glasgow, Macfarlane Group employs over 1,000 people at 40 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands.

The firm supplies more than 20,000 customers, principally in the UK and Europe.

Macfarlane Group chair Aleen Gulvanessian said: “As outlined in our Interim Results, the management team is responding effectively to the market headwinds.

“Our strong balance sheet gives us confidence we can continue to execute accretive acquisitions. There is good new business momentum as customers increasingly recognise the added value we can offer both on an environmental and cost savings basis.

“The group remains well-positioned to benefit when the macro-economic outlook improves.”