Further progress expected
Eighth year of profit growth for Macfarlane
Packing a profit: Macfarlane group recorded eighth successive year of profit growth
Packaging company Macfarlane Group reported a sharp rise in profits, boosted by organic growth and recent acquisitions.
Profit before tax rose 19% to £9.3 million (2016: £7.8m) on sales 9% higher at £196m (2016: £179.8m). It was the eighth consecutive year of profit growth.
The trading performance continued the positive trends of recent years and the results were in line with market expectations.
The company reported “a strong contribution” from the Greenwoods’ business acquired in September 2017.
The board is proposing a final dividend of 1.5p per share, amounting to a full year dividend of 2.1p, an 8% increase on the prior year’s dividend of 1.95p to be paid on 7 June.
Net bank borrowing at 31 December decreased by £1m to £14.3m and the group’s existing bank facility with Lloyds Banking Group of £25m is available until June 2019 and accommodates normal working capital requirements as well as supporting acquisition funding.
As part of the group’s long-term financing strategy, it is anticipated that these facilities will be extended or replaced over the course of 2018.
The pension deficit at 31 December reduced by £2.7m to £11.8m, (2016: £14.5m) primarily due to the group making deficit recovery contributions in the year.
Graeme Bissett stood down as chairman at the end of September and in January 2018 James Baird was appointed a non-executive director and chairman of the audit committee.
Mike Arrowsmith has indicated his intention to step down from the board later this year, having completed six years as a non-executive director.
The board said it remains confident that its strategy to position the business to serve key growth markets continues to be effective.
Chairman Stuart Paterson said: “The 19% increase in pre-tax profits in 2017 represents the eighth consecutive year of profit growth for Macfarlane Group.
“Our strategy continues to be the delivery of sustainable profit growth by focusing on added value products and services in our target market sectors, combined with efficiency improvements and the identification and completion of value-enhancing acquisitions.
“This strategy, which continues to be refined, has served all stakeholders well in recent years and we remain confident that it will continue to do so.
“Macfarlane Group’s performance in 2017 reflects the successful implementation of this strategy and we are confident that the group will demonstrate further progress in 2018.”