Shares of Macfarlane Group, the Glasgow-based protective packaging, design and distribution firm, fell as much as 15% after it published a trading update saying it expects full year 2025 adjusted operating profit to be 10% below 2024.

Macfarlane said its distribution business is experiencing weaker than expected demand and delays in new business decision making.

The firm said its manufacturing business is performing “robustly” despite a slowdown in those sectors where customers are being impacted by uncertainty over US tariffs.

Macfarlane employs over 1,000 people at 43 sites in the UK, Ireland, Germany and the Netherlands, and supplies more than 20,000 customers in the UK and Europe.

Macfarlane said: “In a year of challenge and economic uncertainty, we currently expect full year 2025 Adjusted Operating Profit¹ to be approximately 10% below 2024 …

“Distribution is experiencing weaker than expected demand, delays in new business decision making, pressure on gross margin due to the competitive environment, rising input prices and slower than anticipated recovery of labour and property-related cost increases …

“Manufacturing Operations is performing robustly with good momentum with our aerospace and defence related customers and the benefit of the Polyformes acquisition, marginally offset by the slowdown in those sectors where customers are being impacted by uncertainty over US tariffs …

“We expect the Pitreavie business, acquired in January, to benefit from the normal seasonal uplift in demand in H2 2025, together with additional sales from in-house supply to Macfarlane Distribution …

“The focus for the remainder of 2025 is the recovery of cost increases, the implementation of additional cost saving actions and ensuring we convert the strong new business pipeline.”

Macfarlane chair Aleen Gulvanessian said: “We highlighted in our AGM statement that market conditions in 2025 were challenging.

“It is disappointing that the momentum increase we experienced early in Q2 2025 has not been maintained and as a result will impact our full year performance.

“Management is focused on implementing an action plan to recover cost increases and execute against our strong pipeline of new business.

“The board remains confident that our strengthened sales team, differentiated customer proposition and proven executional skills mean that the prospects for the group remain positive.

^​”We will provide a further update along with the announcement of our interim results on 28 August 2025.”