MACFARLANE Group has said it has made a solid start to the current year after growing sales and profits in the first quarter compared with the same period in 2022.
The Glasgow-based group said it felt the benefit of recent acquisitions in the three months to March 31 leaving it on track to meet analysts’ expectations for full year earnings.
Macfarlane has used acquisitions to support growth in both of its main areas of business. The group distributes protective packaging made by other firms. It also and designs and manufacturers bespoke packaging to protect high value and fragile products.
“Packaging Distribution sales grew by 4% in Q1 2023, with the benefit of the acquisition of PackMann in May 2022 and new business growth being partly offset by continuing weak demand from the e-commerce retail sector,” the company told investors at yesterday’s annual general meeting.
It added: “Manufacturing Operations grew sales by 14% in Q1 2023, with good recovery in certain industrial markets enhanced by the acquisition of A.E. Sutton Limited in March 2023.”
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Led by chief executive Peter Atkinson, Macfarlane returned to the acquisition trail last week when it bought Manchester-based Gottlieb Packaging Materials. The group will pay up to £3.55 million for Gottlieb, which it said supplies protective packaging products to customers across a wide range of sectors.
Macfarlane has the firepower to make further acquisitions. The group said it had net bank debt of £0.1m at the end of the first quarter. “This remains well within the Group's bank facilities of £30m and related covenants, committed until December 2025,” it said.
London Stock Exchange-listed Macfarlane made £19.9m profit before tax in 2022, against £18.7m in the preceding year. Turnover increased to £290.4m from £264.4m.
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In its results announcement in February the group noted: “Our performance in 2022 was achieved against a background of a marked slowdown in spend from the e-commerce sector, following strong growth during the 2021 Covid-19 lockdown periods, and inflationary pressures on operating costs.”
Shares in Macfarlane group closed up 3%, 3.5p, at 115.5p leaving it with a stock market capitalisation of around £180m.
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