Macfarlane profit jumps on demand at distribution business
Macfarlane Group’s first-half profit jumped 39% as strong growth at the company’s packaging distribution business offset lower manufacturing profit.
Pre-tax profit for the six months to the end of June rose to £3.5m from £2.4m as group revenue rose 14% to £102m. The interim dividend increased 8% to 0.65p a share.
Packaging distribution sales rose 14% with almost two-thirds of the growth from the acquisition of Greenwoods in 2017. Operating profit at that business rose by £1m to £3.7m.
Manufacturing sales rose 11% but margins were squeezed by higher raw materials costs and a poor sales mix, causing operating profit to fall to £201,000 from £278,000.
The company, which sells boxes, tape, bubble wrap and other packaging products, said it would get a boost from sales to online retailers as Christmas approaches.
Stuart Paterson, Macfarlane's chairman, said: "This strong performance in the first six months of 2018, supplemented by the expected seasonal uplift from the e-commerce sector in the second half of the year, gives the board confidence that its full year expectations for 2018 will be achieved."
Macfarlane shares rose 3% to 105p at 10:34 BST.