The new chairman of Scottish protective packaging supplier Macfarlane Group said he was “satisfied” with the company’s performance this year in the face of “adverse market conditions”.
Aleen Gulvanessian said the Glasgow-based group’s 2022 results should be ahead of last year and in line with expectations for the full year. Year-to-date sales are 11% higher than the same period last year, with lower volumes being offset by “efficient management” of input price increases as the group tackles inflationary pressures.
The group noted that actions to improve productivity and rationalize its operational footprint were put in place. Net bank debt was also reduced to £5m from £9.7m at the end of June.
In a brief trading update, Gulvanessian told investors: “Given the highly publicized adverse market conditions, we are pleased with the group’s performance so far in 2022 and confident in delivering our earnings expectations. for the year.While the challenges will continue to persist, with the experience of our management team, the resilience of our business model and a strong pipeline of acquisitions, we are well placed to maintain the positive progress of the group.
Analysts at brokerage Shore Capital noted: “Macfarlane Group has released a strong trading update for the period from the end of June to the end of October, building on a strong set of interim results in August. We also note a solid cash performance with a reduction in net bank debt since the end of June from £9.7m to £5m A pleasing performance in our eyes, then.
In August, the group said it was preparing for a “challenging environment” but remained confident it could mitigate the impact of spiraling inflation. Reporting first-half results showing higher sales and earnings, the company said it delivered a “solid performance”, especially compared to a strong trading run a year earlier. He said this was achieved amid slowing e-commerce sector spending and “significant inflationary pressure” on operating costs.
The company employs over 1,000 people at 37 locations, primarily in the UK, as well as Ireland, Germany and the Netherlands. It supplies over 20,000 customers, mainly in the UK and Europe.
Results for the six months to the end of June showed the group generated revenue from continuing operations of just over £139.2m, up 14% on the previous year. Operating profit rose 4% to £9.6m while pre-tax profit rose 3% to almost £8.9m. An interim dividend of 0.9p per share was declared, marking a 3% year-on-year increase.
Outgoing chairman Stuart Paterson said at the time: “The group delivered a strong performance in the first half of 2022. This was achieved against the backdrop of a slowdown in e-commerce industry spending and pressure significant inflationary impact on operating costs. We also made strategic IT investments and incurred start-up costs for our new distribution center in the North West of England.