Macfarlane Group updates on sales growth and board changes
Thursday, November 19, 2020
Macfarlane Group has reported better than expected revenue for the second half of the year to date and revealed a change to its board as its longstanding finance director gears up for retirement.
In a trading update released this morning (19 November), the Glasgow-headquartered packaging company said group sales revenue and pre-tax profit for the period from 30 June to 31 October 2020 is ahead of the corresponding period in 2019.
The company is therefore confident that its full-year results for 2020 will be broadly in line with the pre-tax profit it achieved in 2019.
Revenue in the period was better than expected and has grown by 4% compared to the same period last year, the company said, representing a recovery from Q2 when sales decreased by 5.2% due to the impact of the coronavirus lockdown.
The company said it has continued to achieve good sales growth in the internet retail, household essentials and medical sectors and seen improving sales in some industrial sectors.
However sales in the aerospace, high street retail and food service sectors will take some time to recover to pre-Covid-19 levels.
Macfarlane Group chairman Stuart Paterson said: “The Macfarlane Group performance in the second half of 2020 has been robust in the face of significant challenges.
“This has only been achieved due to the outstanding commitment and hard work of our people. We have focused on ensuring they can service our customers effectively by creating safe environments in which they can work. The health and wellbeing of our employees continues to be paramount.
“There remain uncertainties and concerns over future economic conditions. However, with our diversified customer base, strong added value sales proposition and highly capable and committed team Macfarlane Group has demonstrated it is well positioned to manage the challenges facing the business in the remainder of 2020 and beyond.”
Net debt over the four-month period was £0.8m, which is in line with the group’s debt at 30 June 2020.
The company’s cash generation for the period has fully funded the repayment of £5.4m from the various government support and tax deferral programmes, payment of the maximum earn out of £0.8m from its 2019 acquisition of Ecopac and payment of the interim dividend of £1.1m.
The group added it is operating well within its existing bank facility of £30m.
The company’s board also said this morning that John Love will retire as group finance director on 31 December 2020, after 24 years with the business including more than two decades in his current role, which he was appointed to in 1999. He will be succeeded by Ivor Gray, whose appointment will be effective on 1 January 2021.
Gray, currently group financial controller and company secretary, is a qualified chartered accountant who has worked at Macfarlane for 24 years in a variety of financial and commercial roles including financial director of Macfarlane Labels, general manager of Macfarlane USA and commercial director of Macfarlane Packaging Distribution.
He will be appointed to Macfarlane’s board with immediate effect, in advance of assuming the group finance director role. Love will remain as a director of the group until 31 March 2021, at which point he will fully retire from the board.
900-staff Macfarlane Group's share price was up by 1.3% to 95.73p at the time of writing.