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Packaging firm making progress

Macfarlane eyeing more deals as profits rise 15%

Graeme BissettPackaging company Macfarlane Group said it will maintain an interest in acquisitions as it reported a 15% rise in pre-tax profit.

The trading performance continued the positive trends achieved in recent years and the results were in line with market expectations.

The board is proposing a final dividend of 1.4p per share, amounting to a full year dividend of 1.95p per share, a 7% increase on the prior year’s dividend of 1.82p per share. It will be paid on 8 June.

As a consequence of acquisitions during the year the group’s net bank borrowing at 31 December 2016 increased to £15.3m from £11.6m at the prior year-end. 

The group’s existing bank facility with Lloyds Banking Group of £25 million is available until June 2019 and accommodates normal working capital requirements as well as supporting acquisition funding.  A further option is available to extend the facility to £30m in the period.

The pension deficit increased as a result of the widely reported fall in gilt yields which reduced the discount rate used to measure the scheme’s liabilities. 

Whilst much of the increase in liabilities resulting from the lower discount rate was offset by the scheme’s holding in liability-driven investments, the deficit at 31 December 2016, rose by £3m to £14.5m (2015: £11.5m).

The board is confident that its strategy to position the business to serve key growth markets continues to be effective.

Chairman Graeme Bissett (pictured) 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) and to deliver high standards of service to all customers across a wide range of sectors.  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.” 

Financial Highlights

2016

2015

Year on Year Change

Turnover

£179.8m

£169.1m

+6.3%

Profit before tax

£7.8m

£6.8m

+15.4%

Diluted earnings per share

4.64p

4.35p

+6.7%

Proposed full year dividend

1.95p

1.82p

+7.1%

 

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