Profits rise

Macfarlane lifted by deals and progress in Europe

Macfarlane lorry
Macfarlane saw another rise in profit

Scottish packaging group Macfarlane said recent acquisitions, tight cost control and growth in Europe were behind a rise in profit for the year.

Group profit before tax rose 2% to £20.3m after charging £1.5m related to the acquisition of German firm PackMann, which delivered a stronger operating performance than previously anticipated.

It said Gottlieb Packaging Materials, acquired in April 2023, was also performing well.

The Glasgow-based firm said the acquisition activity, progress in Europe and stronger new business momentum offset weak customer demand in the UK and Ireland, sales price deflation and inflation in operating costs.

The board said it expects market conditions to remain challenging but its confidence is reflected in a proposed 5% rise in the payout to shareholders. It is recommending a final dividend of 2.65p per share, amounting to a full year dividend of 3.59p (2022: 3.42p).

It funded £16.6m (2022: £11.9m) of acquisition and capital investment activity through its existing bank facilities due its continued strong operating cash flows. Net bank funds at 31 December 2023 were £0.5m.

In a statement, the company said it expects the year ahead to remain challenging due to uncertainty over customer demand.

“However, we are confident that we will continue to make progress in 2024 through strong new business momentum, a well-developed pipeline of potential acquisitions, the continued effective management of input prices and operational efficiencies.”

Group chair Aleen Gulvanessian added: “I am pleased to report that, against a backdrop of challenging market conditions, Macfarlane Group PLC has once again demonstrated the resilience of its business model and achieved another year of profit growth in 2023. In addition, we have made good progress against our ESG objectives.”

Bob McLellan, senior independent director, retired from the board at the end of December and the recruitment process for a non-executive director has begun. James Baird, audit committee chair, has been appointed senior independent director.

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