Macfarlane Group records 9% rise in profit in H1 of FY23 amid weak market demand

UK – Glasgow-based supplier of protective packaging products Macfarlane Group has reported a profit of £7.51 million (US$9.45m) for the first half (H1) of 2023, a 9% increase from £6.88m in the previous year’s H1.

For the period, which ended on 30 June 2023, basic and diluted earnings per share (measured in pence) were 4.74p and 4.70p, respectively. The company’s revenue increased by 2% to £141.61 million (US$178.16m), compared with £139.20 million (US$175.13m) in H1 2022.

The group’s Packaging Distribution business alone generated £123.95 million (US$155.94m) revenue in H1 2023, while its Manufacturing Operations segment’s revenue totaled £17.65 million (US$22.21m).

Revenue within Packaging Distribution grew by £400,000 (US$503,239.60). The growth in this business can be attributed to the acquisition of two major protective packaging companies – PackMann in May 2022 and Gottlieb in April 2023.

Manufacturing Operations’ growth was driven by the acquisition of Suttons in February 2023, which was partly offset by slower demand in some industrial markets.

In H1 2023, Macfarlane registered a gross profit of £51.32 million (US$64.57m) versus £47.09 million (US$59.24m) during the same period last year.

The company’s operating profit in H1 2023 increased by 12% to £10.80 million (US$13.59m) from £9.60 million (US$12.08m) a year ago.

The overall operating profit before amortization during the reported period was £12.83 million (US$16.14m), representing an increase of 13% from £11.38 million (US$14.32m) in H1 2022.

Packaging Distribution’s operating profit before amortization grew by 6% to £9.43 million (US$11.86m) from £8.88 million (US$11.17m).

Manufacturing Operations also saw a 36% rise in operating profit before amortization to £3.40 million (US$4.28m), as against £2.50 million (US$3.15m) in the prior year’s H1.

Macfarlane Group chair Aleen Gulvanessian said: “The group has demonstrated resilience in H1 of 2023, against the backdrop of a slowdown in customer demand.

“The inflationary impact of operating cost increases has been offset by effective input price management. We opened our new Northern Innovation Lab in March 2023 which is already having early success in helping our customers reduce their total cost of packaging and carbon footprint.

“Whilst we expect H2 of 2023 to remain challenging, our good progress in Europe, diverse customer base, strong new business momentum and effective management of pricing and costs mean that our profit expectations for the full year remain unchanged.”

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