Glasgow packaging group Macfarlane has posted a 3% rise in annual profit, despite a 4% fall in revenue, and says it expects another challenging year as costs rise.

These include increased employment costs resulting from the recent UK budget and the introduction by the UK Government of Extended Producer Responsibility fees. 

“Management is taking actions to mitigate these incremental costs and we are working with our customers to help them manage the impact of EPR,” said chair Aleen Gulvanessian in a statement with results.

“We start 2025 with new-business momentum as customers increasingly recognise the added-value we can offer both on an environmental and cost-savings basis.

“The recently-announced purchase of The Pitreavie Group demonstrates our continued ability to identify and execute high-quality acquisitions and we have a strong pipeline of opportunities.

“We are well positioned to continue our profitable growth in 2025.”

Group revenue fell by 4% to £270.4m (2023: £280.7m). Group profit before tax increased by 3% to £20.9m (2023: £20.3m).

Net bank debt was £1.9m on 31 December 2024 and the group negotiated an improved banking facility of £40m during 2024 which is committed until November 2027, with options to extend to November 2029.

The board proposes a final dividend of 2.7p per share (2023: 2.65p per share) payable on 13 June 2025, taking the total dividend for 2024 to 3.66p per share (2023: 3.59p per share) up 2% on 2023.

Shares closed 3.5p lower at 104p.