Macfarlane reports US$400M revenue in 2025 as profitability comes under pressure

UK – Macfarlane Group has reported year-on-year revenue growth in 2025, but described trading conditions as “challenging” amid weaker demand, margin pressure and rising operating costs.

The protective packaging specialist posted group revenue of £300.8 million (US$402.5 million) for the year, up 11% from £270.4 million (US$ 362.55m) in 2024.

However, operating profit fell sharply to £12.5 million (US$16.76m) from £23.6 million (US$31.64m) in the prior year, while adjusted operating profit declined 28% to £19.7 million (US$26.41m).

Within the packaging distribution segment, revenues remained broadly flat at £229.2 million (US$307.31m).

Adjusted operating profit in the division dropped significantly to £11.4 million (US$15.29m) from £20.2 million (US$27.08m), reflecting weaker-than-expected demand, sustained competitive pricing pressure and higher labour and property-related costs.

Despite these headwinds, the company continued investing in strengthening its management and sales teams to support long-term resilience.

By contrast, manufacturing operations delivered stronger top-line growth. Revenues rose to £78.5 million (US$105.25m) in 2025 from £47.5 million (US$63.69m) the previous year, largely driven by the acquisition of Polyformes in July 2024 and increased demand from defence, space and aerospace customers.

Adjusted operating profit in the segment increased to £8.3 million (US$11.13m), up from £7.2 million (US$9.65m) in 2024.

Excluding the impact of last year’s acquisition of Pitreavie, the company said the division performed “well”.

Performance at Pitreavie Group, a Scotland-based protective packaging manufacturer and distributor acquired for up to £18 million (US$24.13m), fell “well below” expectations.

Operations were significantly disrupted following the death of an employee at the site in October 2025, affecting output and financial results.

Macfarlane chair Aleen Gulvanessian said the group faced economic headwinds and uncertainty throughout the year, resulting in a particularly competitive trading environment and material increases in operating costs.

These factors, combined with the operational disruption at Pitreavie, had a marked impact on overall financial performance.

To stabilize the business, Macfarlane has announced a £1.2 million (US$1.61m) investment in new equipment at the Pitreavie facility. The company expects this to restore full operational capacity by the second quarter of 2026.

Looking ahead, Macfarlane anticipates market conditions and competitive pressures will remain challenging in 2026, signalling a continued focus on cost control, operational efficiency and integration of recent acquisitions to support profitability.

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