MACFARLANE Group is continuing its "self-help" remedy for business growth because there are few signs of economic improvement around the UK.

Peter Atkinson, chief executive, said the Glasgow packaging and labelling business is focusing on ways to improve operations and win more customers at home and abroad. He said: "We have just accepted the economy is not going to give us any help so it is basically self-help programmes that will drive our performance. That is what we have seen in the past two or three years and expect that to be the same in 2013."

Macfarlane yesterday posted a rise in pre-tax profits before exceptional items from £3.9 million to £4.9m in spite of a dip in turnover from £144.6m to £141.8m in 2012.

There was an exceptional credit of £1.65m relating to a pension increase exchange – where scheme members can choose a one-off rise in payments instead of incremental growth – against a £670,000 one-off cost for the relocation of facilities in Ireland from Dublin to Wicklow.

The overall rise in profit was due to improvements in margins across its packaging and manufacturing divisions, plus tight controls on costs.

In packaging distribution, operating profits before exceptional items rose from £4.6m to £4.9m, even though sales slid 1.6% from £116.7m to £114.8m because of price deflation and lower revenue per order.

In the manufacturing arm, which includes the labels business, operating profit before exceptional items rose from £100,000 to £1m in spite of a 3.1% dip in sales from £27.9m to £27m.

Mr Atkinson said Macfarlane had seen strong growth in sales of protective packaging for internet retailers – where customers include O2, Play.com owner Rakuten Group, Lakeland and Argos – and its re-sealable labels business.

He said: "The most interesting thing for us is despite the fact we are seeing sales weakness within that we have some good growing areas. Internet retail driven sales represent around 20% of our total sales and all the [statistics] say that sector will grow significantly in the next 10 years.

"We have seen good growth in re-sealable labels, which are 9% up versus last year and in the US, which is probably our prime market, sales were 28% up.

"So we have real momentum in key segments, even though the overall sales picture is not easy."

Mr Atkinson also highlighted sales through Macfarlane's own website grew 24% across 2012. Macfarlane looked at several possible acquisitions during the year but was unable to find any attractive deals. However, Mr Atkinson indicated the company is still looking for potential takeovers in product areas such as presentational packaging plus further geographic areas.

Macfarlane's pension deficit narrowed during the year from £20.5m to £18.9m while net debt declined from £7.6m to £6.8m.

The company also confirmed Bob McLellan, former chief executive of DS Smith Packaging UK, has been appointed as a non-executive director.

Investor Miton Group increased its stake in Macfarlane from 1.91% to 5.8%. Shares in Macfarlane closed down 0.62p, or 2.23%, to 27.38p.