Growth momentum maintained at packaging firm Macfarlane

PACKAGING firm Macfarlane Group, which has an operation in Coventry, says it is making good progress after releasing a largely positive trading update.

In an interim management statement covering the period from June 30 to date, the firm said growth momentum achieved in the first half of 2015 has been maintained and with the normal uplift in the trading cycle in the final quarter, it is confident that its full year expectations will be met.

In packaging distribution, sales for the year to date have increased by 14% compared to 2014, of which 6% represents organic growth. 

Gross margin continues to run ahead of the 2014 level and the growth in overhead costs versus 2014 is mainly related to the impact of acquisitions. 

The most recent acquisition, One Packaging which was completed in August, is performing in line with plan. 

Operating profit for the full year from packaging distribution is expected to be well above that achieved in 2014.

Sales from manufacturing operations are showing improvement in the second half, but year to date are 2% below 2014. 

Demand weakness in customers’ export markets continues to negatively impact sales and the exit of low margin business in labels is impacting sales but improving margin. 

Operating profit for the full year in manufacturing operations is expected to be slightly above 2014 levels.

The net effect of these factors is that Macfarlane Group’s profit before tax for 2015 to date continues to be well above the corresponding period in 2014 and this trend is expected to continue for the remainder of 2015, the firm says.

Graeme Bissett, chairman of Macfarlane Group, said “I am pleased to report that Macfarlane Group’s performance in the second half of 2015 continues to demonstrate good progress following the growth seen in the first half of the year. 

“The board remains confident that our full year expectations will be met.”

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