MACFARLANE Group boss Peter Atkinson has signalled the company’s confidence in accelerating the packaging firm’s growth in Europe, declaring that its ambitions are showing no signs of being impeded by Brexit.

Speaking at the Glasgow company’s annual meeting yesterday, Mr Atkinson identified Novupak, the partnership it formed with European packaging distributors Moonen and Boxon three years ago, as the prime vehicle for expanding sales of its packaging solutions around Scandinavia and Northern Europe.

While the company remains keen to make further acquisitions in the UK – Mr Atkinson declared yesterday it was “very” close to completing its latest deal - it does not intend to build business in Europe via takeovers.

Mr Atkinson, who noted that demand from clients such as Thermo Fisher and Schneider was leading its expansion into Europe, said: “We still see Novupak as the mechanism we would use for expanding into Europe. We’re being very careful. There’s definitely an opportunity. Our customers are asking us to be there, but these are geographies, cultures, countries we haven’t got a great deal of experience in, hence it is right that we partner with local companies.”

Mr Atkinson described the mood of the customers calling for its solutions in Europe as “very bullish”, despite the uncertainties brought by Brexit.

“At the moment they are not indicating there is going to be any material impact as they would see it,” he said. “Clearly with exchange rates they will potentially source and manufacture from different locations, but they are not looking at material changes to their supply chain.”

However, he conceded the weakness of sterling since the Brexit vote was impacting on its cost case. “We have started seeing and are seeing some increased costs, because a number of things that we buy are euro-denominated,” he said. “We’re in the process of basically working those costs through with our customers. It’s a level playing field – it’s the same for our customers, so it’s like for like in a way.”

Macfarlane reported that sales have risen by 11 per cent so far this year, with profits up on last year too. The board is confident that, recognising the impact the influence of the online retail sector in the second half of the year, the company will perform in line with expectations in 2017.

Macfarlane’s dominant packaging distribution business, whose clients include Selfridges, Feel Unique, Bertram Books, Homebase, Argos and Gym Shark – has seen sales rise by 13 per cent so far this year. That growth has been driven by the impact of the three acquisitions it made last year – Nelsons and Colton Packaging in England and Edward McNeil in Glasgow – which accounted for 10 per cent of the uplift. Organic sales are up three per cent.

Having acquired six companies in the last three years, Mr Atkinson said acquisitions will continue to be a key part of its strategy.

Asked if he was confident of finalising deals this year, Mr Atkinson said: “Very. If anything, the pipeline has strengthened and as much as anything that’s a function of age of the owners [looking to sell].”