‘Challenging’ times for Glasgow packaging group Macfarlane but results on track

Chairman Aleen Gulvanessian says he expects some improvement in trading conditions in the second half of 2024.

Macfarlane Group, the Glasgow-headquartered packaging provider, is not budging from its full-year projections despite a “challenging” start to the year.

Updating investors as it held its annual shareholder meeting, the firm said first-quarter sales and profits were below the same period in 2023. Despite that slow start to the year, the group’s expectations for the full year are unchanged.

In a brief trading update, Macfarlane told investors: “Sales in the first quarter were 9.5 per cent lower than the same period in 2023 with continued weak customer demand and price deflation, with the profit impact being partially offset by strong gross margins and the benefit of acquisitions. The group expects an improved trading performance in the second half of 2024 through the conversion of a strong new business pipeline combined with some sales recovery from existing customers, good management of gross margins, control of costs and further benefits from M&A [merger and acquisition] activity.”

Headquartered in Glasgow, Macfarlane Group employs more than 1,000 people at 40 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands.

Chairman Aleen Gulvanessian added: “On presenting our 2023 results we indicated that the challenging market conditions experienced in the latter part of 2023 would continue into 2024 and this has been the case. We expect some improvement in trading conditions in the second half of 2024 and we have a clear plan of management actions to enable the group to continue its progress.”

House brokerage Shore Capital noted: “Macfarlane is a much more diverse, resilient, profitable and higher-quality business relative to the past five years.”

In March, the group further extended its reach south of the Border after sealing a £3 million-plus takeover deal. Bosses said the acquisition of East Anglia-based Allpack Packaging Supplies would be earnings enhancing and bolster the firm’s protective packaging business. Just weeks before, Macfarlane said it was “well advanced” with a number of potential bolt-on deals as it continues to benefit from a series of strategic acquisitions and tackle tough market conditions.

Headquartered in Glasgow, Macfarlane Group employs more than 1,000 people at 40 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands. The business has been listed on the main market of the London Stock Exchange since 1973.

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