At its AGM held today (13 May), the Glasgow-headquartered PLC said that its expectations for this year were unchanged.
Chair Aleen Gulvanessian noted that market conditions continued to be challenging, and global economic uncertainty was “impacting the behaviour of some customers”.
“However, the group sees positive momentum in several areas, and we have a clear action plan for the remainder of the year which will enable Macfarlane to continue its progress.”
The group is planning a share buyback programme of up to £4m, with further details to follow.
“Our decision to commence buying back shares has been made following extensive dialogue with our shareholders,” Gulvanessian said.
“This reflects our capital allocation policy of investing in the business, making acquisitions, and returning capital to shareholders through dividends and, when appropriate, share buybacks."
Sales in Q1 were up 14.2% year-on-year, on the back of acquisitions and with “signs of organic growth momentum” at its Distribution wing, and a strong showing from its Manufacturing side.
Q1 profits were lower, though, due to a reduction in gross margins and a duplication of costs because of the consolidation of its East Midlands operations.
An increase in property costs and costs related to acquisitions also contributed to the reduction in profits.
In January Macfarlane completed the acquisition of Scottish protective packaging specialist the Pitreavie Group in a deal worth up to £22m.
Net debt increased from £1.9m at the year-end, to £13m at 31 March including £13.9m related to the Pitreavie buy.
Macfarlane said it continued to operate well within its £40m bank facility, and related covenants, with the facility committed until November 2027.
Performance in H2 is expected to improve as the benefits of its recent actions flow through, including synergies from the Pitreavie buy.
Macfarlane also noted that its management team was “taking actions” to mitigate the increases in National Insurance rates and the National Minimum Wage that came into effect last month.
Macfarlane employs more than 1,000 people across 43 sites.
For the year ended 31 December 2024 the group had sales of £270.4m, down from £280.7m in 2023. Its pre-tax profit was £20.9m, up from the £20.3m the prior year.
Macfarlane’s share price was effectively flat following the update, and was down by 0.48% at the time of writing at 103.00p (52-week high: 131p, low: 93.20p).
