By Scott Wright
Macfarlane Group, the Glasgow-based packaging company, has lifted its profit expectations for the full year amid a “robust” performance in “demanding” conditions.
The company, which supplies packaging solutions to major e-commerce retailers, raised its forecasts despite warning that inflation, supply constraints on raw materials and increased costs because of staffing challenges will present challenges during the rest of the year.
It comes after Macfarlane previously increased profit expectations in August, when it reported a strong set of results for its first half. The company booked profits before tax of £7.8 million for the six months to June 30 – around 120 per cent higher than at the same stage last year, which coincided with the first UK-wide lockdown.
In a trading update yesterday, Macfarlane reported that revenue had grown by 25% in the year to date, with profit before tax “well ahead” of the same period in 2020.
It also said the two companies it has acquired this year – GWP Holdings of Wiltshire and Carters Packaging (Cornwall) – were performing well. Net bank debt stood at £2m at October 31, having been reduced from £8.7m on
June 30.
Macfarlane Group chairman Stuart Paterson said: “The Macfarlane Group performance has been robust in demanding market conditions and is testament to the strength of our business model and the diligence of our people.
“At the interim results we indicated that we expected headwinds in the second half of 2021, so it is particularly pleasing to be once again raising our expectations for the full year.”
Macfarlane made a pre-tax profit of £13m on turnover of £230m in 2020.
Earlier this month, the company was rocked by the news that its founder, Lord Macfarlane of Bearsden, had passed away at the age of 95.
Lord Macfarlane established the company that bears his name as a commercial stationer in 1949, and went on to float it on the stock market in 1973. He stepped down as chief executive in 1990, by which time he had overseen its first move into packaging distribution with the acquisition of Abbots Packaging in 1980. In a statement at the time of his death, Mr Paterson said everyone at the company was “deeply upset by his passing”.
He added: “He was an inspirational leader, an astute businessman and a strongly supportive shareholder. He made countless friends, both across the packaging industry and within the company, during his time at the helm of Macfarlane Group and I know he will be dearly missed.”
Shares in Macfarlane closed up 3.5p, or 2.7%, at 135p.
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