UK – UK-based packaging and labeling company Macfarlane Group has recorded £139.2 million (US$164.4 million) in sales for the first half (H1) of fiscal 2022 (FY22), up by 14% from the same period of fiscal 2021 (FY21).

The group’s operating profit from continuing operations was £9.6 million (US$11.28m), increasing by 4% from a year earlier, while its profit before tax grew by 3% from £8.58 million (US$10.08m) to £8.9 million (US$10.46m) year-over-year.

Macfarlane Group recorded basic earnings per share (EPS) of 4.36p in H1 2022 against 3.83p in the first half of FY21, while its diluted EPS was 4.31p, compared with 3.79p a year earlier.

Net cash inflow from operating activities was £6.5 million (US$7.64m) at the half year, compared to £11.3 million (US$13.28 m) at the same point last year, reflecting “significantly higher 2021 employee incentive payments”.

The group has reinvested the proceeds from the sale of the labels business into the acquisition of PackMann in Germany, strengthening the platform from which it should accelerate the growth of the protective packaging business in northern Europe.

Net bank debt on 30 June was £9.7 million (US$11.40m) – a cash outflow of £12.1 million (US$14.22m) from 31 December 2021, including £9.1 million (US$10.69m) of net investment in acquisitions and disposals.

Macfarlane’s pension scheme surplus increased to £8.8 million (US$10.34m) at the half-year mark, up from £8.3 million (US$9.75m) at the end of last year.

An additional contribution of £700,000 (US$822,464) was paid into the scheme to satisfy the debt on the exit of the labels business.

The packaging distribution division achieved sales growth of 11% to £123.5 million (US$145.11m) – up from £111 million (US$130.42m) during the same period last year.

The division reported a slight decline in gross margin of 32.3% during the six-month period, compared with 32.7% in H1 2021.

Macfarlane Group’s Manufacturing Operations also registered a robust performance, with its sales increasing by 40% from £11.2 million (US$13.16m) to £15.7 million (US$18.45m) against the same period of last year.

Macfarlane Group outgoing Chairman Stuart Paterson said: “The Group has achieved a solid performance in the first half of 2022, especially when compared to a strong trading period in H1 2021.

“This has been achieved against the backdrop of a slowdown in spend from the e-commerce sector and significant inflationary pressure on operating costs.”

Elaborating on the group’s investment strategies, Paterson added: “We have also made strategic IT investments and incurred start-up costs on our new North-west of England distribution center.

“Our people have consistently demonstrated commitment and operating excellence as the business continues to grow and develop.”

Macfarlane Group has kept its full-year outlook for FY22 unchanged and expects the ‘challenging’ trading environment, pressure from operating costs and slow customer demand to continue.

The Glasgow-based company has also announced a change in management, with Aleen Gulvanessian set to replace Paterson as its chairman.

She joined the board in October 2021 as chair of the remuneration committee and “was selected after an extensive process involving a number of very capable external candidates”.

Headquartered in Glasgow, the group employs more than 1,000 people at 37 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands.

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