Chairman Graeme Bissett told the group’s annual general meeting in Glasgow yesterday that positive sales trends seen at the end of last year had continued.
“Both businesses acquired in 2014 are performing well. Group sales in the first four months of 2015 are 13% ahead of 2014 and profitability is stronger than in the equivalent period last year,” he said.
“Sales in packaging distribution are 16% ahead of 2014 of which 6% relates to organic growth and the remainder relates to the impact of the acquisitions made last year. Gross margins have also improved as anticipated and as a result profitability is well ahead of the equivalent period in 2014.”
Bissett said that sales in the company’s manufacturing operations were at similar levels to 2014 but the UK retail sector continued to impact the group’s labels business.
However he said the group's packaging design and manufacture business had won new customers in its target sectors.
"Profitability in our manufacturing operations is slightly ahead of last year’s levels. Net debt has risen from the 31 December 2014 level, but this reflects the normal seasonal uplift in working capital and the group continues to operate well within its existing bank facilities.”
The board will pay an increased final dividend of 1.15p per share on 4 June 2015.
The group acquired Lane Packaging for an initial £700,000 (rising to £1.1m subject to performance) in May and Network Packaging for a maximum consideration of £7.5m in September. At the same time it announced a £3m capital raise to support future acquisitions.
Last month it reported a turnover of £153.8m in its 2014 accounts for the calendar year, the group’s fifth consecutive year of growth, and a 7% rise in sales from £143.9m in 2013. It also saw a rise in profit before tax and exceptional items of 11% from £5.1m to £5.6m.
The packaging distribution business was most successful, with a 9% rise in sales to £126.9m. However sales were down in the manufacturing division - from £27.6m in 2013 to £26.9m in 2014 and the labels division saw an operating profit before exceptional items of £900,000 against £1.3m in 2013.
Bissett added: “Our full-year results will again be heavily influenced by performance in the second half of the year due to our increasing presence in the internet retail sector. Given the strong start to the year, the board is confident that the group will perform in line with its expectations for 2015.”
Macfarlane is headquartered in Glasgow and employs over 730 people at 25 sites, principally in the UK and Ireland.
The company has more than 20,000 customers in the UK, Europe and the US providing in excess of 600,000 products to industry sectors including consumer goods, food manufacturing, logistics, internet retail, mail order, electronics, defence and aerospace.
Macfarlane Group is comprised of three companies: distributor Macfarlane Packaging, a labels business which designs and prints self-adhesive and re-sealable labels and Packaging Design and Manufacture, which specialises in designing and producing protective packaging for high value, fragile products.
