By Scott Wright
MACFARLANE Group, the Scottish packaging firm, has signalled its appetite to make acquisitions in Europe as it unveiled a tenth consecutive year of profits growth.
The Glasgow-based firm has been holding talks with prospective sellers in Europe as it explores options to help existing customers grow sales on the mainland.
But chief executive Peter Atkinson said moves on this front have so far been stymied because of Brexit uncertainty.
READ MORE: Macfarlane in deal pledge as profits rise in tough market
Mr Atkinson, who is hopeful that Macfarlane will continue its acquisition run in the UK this year following the January deal to buy Teeside firm Armagrip, said: “I guess the area that has been a little bit more difficult for us has been the acquisition progress in Europe, where like the UK we have a strong pipeline. But the whole Brexit issue has probably slowed down European companies looking at selling to a UK player.
“We have discussions ongoing. [It] is probably unlikely anything will happen in 2020, but we are still keen to find suitable acquisitions in Europe to accelerate our programme.”
Mr Atkinson highlighted the ambition as Macfarlane credited new business wins and the benefit of acquisitions as it reported a 10 per cent rise in pre-tax profits to £12 million for 2019.
Its dominant packaging distribution business, which provides solutions to e-commerce retailers, reported a 4% increase in sales to £196.7m, despite an impact on sales from weaker demand from existing customers, and sales price deflation.
READ MORE: Monday Interview: Macfarlane ready to take on the world again at 70
New customers include Dunelm, Hobbycraft and Ideal Shopping.
Macfarlane said the two firms it acquired in 2019, Ecopac and Leyland Packaging Company (Lancs) had performed well, and contributed to overall turnover climbing by 4% to £225.4m. Mr Atkinson is hopeful of completing at least one more deal this year.
Meanwhile, he said Macfarlane has plans in place to deal with potential consequences of coronavirus. While its supply chain is unaffected so far, it has lined up alternative sources for the 3% of products it sources in China, in India, and Greece and Turkey. It sources 1% of products in the south of Italy, where the supply chain is also still intact.
The company proposed to lift its full-year dividend by 7% to 2.45p. Shares closed down 2.8% at 97.2p.
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