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Group expects higher input costs

Macfarlane ready to respond to EU fall-out

Graeme BissettPackaging group Macfarlane said it has the flexibility to react to an expected slowdown in market conditions caused by the EU vote.

Profits at the Glasgow based group rose 8.1% to just over £2 million for the half year to the end of June on a 3.7% rise in turnover to £81.5m.

In a statement, the company said all its businesses have “strong market positions with differentiated product and  service offerings”. 

It added: “We have a flexible business model and a clear strategic plan, incorporating a range of actions, which is being effectively implemented.

“The key impact of the EU referendum is that there is a likelihood that we will experience slower demand as well as potentially higher input prices for those items purchased from non-UK suppliers. 

“We have a good track record of reacting promptly to changes in market conditions and if demand is not maintained at normalised levels then we would take positive steps to adjust our cost base accordingly.  Existing procedures should ensure that we recover input price changes from the market.

“Our track record of continued profitable growth reflects the successful execution of this plan and we expect the full year 2016 to be another successful year for Macfarlane Group.”

Chairman Graeme Bissett (pictured) added: “The uncertain economic climate arising from the outcome of the EU referendum is likely to continue for a considerable time and we will monitor developments and take appropriate action.

“The performance of the business in the period to 30 June 2016 reflects the successful implementation of our strategy and we will maintain that focus in the period ahead.”

He said sales and profits both benefited from the positive impact of recent acquisitions, underlining the value of the strategy. 

“Our increasing presence in the internet retail sector means that sales revenues are more weighted towards H2 and we expect to see the typical seasonal uplift in the second six months of the year.  The board remains confident that its full year expectations for 2016 will be met.

The board is recommending an increase of 3.8% in the interim dividend to 0.55p per share to be paid on 13 October to shareholders on the register as at 23 September. 

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