Macfarlane sees annual profit broadly unchanged

Macfarlane Group said it expected annual profit would be broadly in line with the year before after sales were better than expected.

The packaging and labels company said sales revenue and profit so far in the second half were higher than a year earlier. Macfarlane also announced the retirement of Finance Director John Love after more than 20 years in the job.

Sales revenue in the four months to the end of October was up 4% and better than expected, Macfarlane said. The performance was a turnaround from the previous quarter when sales fell 5.2% during the first Covid-19 lockdown.

The company had good growth in the internet retail, household essentials and medical sectors but aerospace, high street retail and food services will take time to recover, Macfarlane said.

"Group sales revenue and profit before tax for the second half of the year to date is ahead of the corresponding period in 2019," the company said. "These trends give us confidence that the full year results for 2020 will be broadly in line with the 2019 profit before tax."

Net debt at the end of October was £0.8m, in line with the figure at the end of June. Since then, cash generation has funded repaying £5.4m of government coronavirus support, paying £1.1m in dividends and a £0.8m earn-out from the acquisition of Ecopac in 2019.

"The group continues to report strong cash generation and is operating well within its existing bank facility of £30m," Macfarlane said.

Love will retire as finance director on 31 December but stay on the board until the end of March. He joined the company in 1996 and became finance director in 1999.

His replacement will be Ivor Gray, Macfarlane's financial controller and company secretary, who has worked at the company for 24 years. Gray has joined the board with immediate effect.

Macfarlane shares fell 0.7% to 93.89p at 11:08 GMT.