Strong momentum puts packaging group on course to meet expectations
Packaging group Macfarlane, which has a large operation in Coventry, has said it remains on course to meet full year expectations after seeing momentum from the first six months of the year roll over into the second half.
In a trading update covering the period from June 30 to October 31, 2017, the group said much would depend on the final quarter of the year and the continued expected growth of the e-commerce sector.
It said sales for the year to date in its Packaging Distribution division had increased by 11%, while its recent acquisition, Greenwoods, was performing well. Gross margins are at similar levels to last year, reflecting the effective recovery of recent input price increases.
Operating profit for the full year in Packaging Distribution is expected to be well above that achieved in 2016.
Combined sales from the businesses in its Manufacturing Operations are 3% below 2016, principally due to a continued focus on higher margin sales. Operating profit for the full year in the Manufacturing Operations is expected to be similar to 2016 levels.
The net effect of these factors is that Macfarlane Group’s pre-tax profit for 2017 to date is well above the corresponding period in 2016 with a good contribution from acquisitions. This trend is expected to continue for the remainder of the year.
Bank borrowings of £14.6m (at June 30, 2017) are expected to reduce by the end of the year, reflecting the group’s traditionally strong working capital inflows in the final quarter.
Stuart Paterson, chairman of Macfarlane Group, said: “I am pleased to report that Macfarlane Group’s performance in the second half of 2017 has continued to reflect the good progress demonstrated in the first half. The board remains confident that our full year expectations will be met.”
The Glasgow-based group employs more than 850 people at 29 sites, principally in the UK, but also in Ireland and Sweden.
The company has 20,000+ customers in the UK, Europe and the USA providing 600,000+ lines to a wide range of industry sectors including: consumer goods; food manufacturing; logistics; internet retail; mail order; electronics; defence and aerospace.
