Macfarlane Group publishes its 2022 Interim Results

INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2022 Expectations for the full year unchanged; managing inflationary environment; slowdown in e-commerce; progress in Europe


Financial Highlights                             H1 2022  H1 2021 Increase

                                                                       £000        £000            %

Continuing operations
Revenue 139,209 122,144 14%
Operating profit before amortisation2 11,384 10,817 5%
Operating profit 9,604 9,256 4%
Profit before tax 8,857 8,585 3%
Continuing and discontinued1 operations
Profit for the period 6,888 6,041 14%
Interim dividend (pence) 0.90p 0.87p 3%
Basic earnings per share (pence) 4.36p 3.83p 14%


In accordance with IFRS5, 2021 has been restated to reflect the result of the Labels division, sold on 31 December 2021, as a discontinued operation.

See note 2 for reconciliation of alternative performance measure, operating profit before amortisation, to operating profit.

Key highlights

Sales from continuing operations1 grew by 14% versus H1 2021 to £139.2m.

  • Operating profit at £9.6m and profit before tax at £8.9m, both from continuing operations, increased by 4% and 3% respectively with revenue growth partly offset by increased costs.
  • Basic and diluted earnings per share were 4.36p per share (H1 2021: 3.83p per share) and 4.31p per share (H1 2021: 3.79p per share) respectively.

Packaging Distribution

  • Achieved sales growth of 11% to £123.5m (H1 2021: £111.0m), with recovery of input price increases and the benefits from the acquisitions of Carters Packaging in March 2021 and PackMann in May 2022 offsetting lower demand from e-commerce customers after the sector experienced a strong H1 last year due to Covid-19 restrictions.
  • Gross margin at 32.3% (H1 2021: 32.7%) was marginally behind a very strong H1 2021 and reflects effective recovery of input price inflation.
  • Operating profit before amortisation reduced by 2% to £8.9m (H1 2021: £9.1m) due to cost increases of 14%. The key areas of increased costs were inflationary pressures on labour and logistics, start-up costs for the company’s new North-west of England distribution centre and strategic IT investments.
  • The contribution from acquisitions was reduced by the expensing of acquisition-related costs of £0.2m in H1 2022.

Manufacturing Operations

  • Delivered strong growth, with sales increasing 40% to £15.7m (H1 2021: £11.2m) and operating profit before amortisation increasing 44% to £2.5m (H1 2021: £1.7m). There was a continued strong performance from GWP, acquired in February 2021, and recovery in the aerospace sector benefited the Macfarlane Design and Manufacture business.
  • The Group sold its Labels division in December 2021. Labels generated a loss before tax of £0.1m in H1 2022 (H1 2021: Loss £0.8m) after finalisation of the net asset position.


  • Net cash inflow from operating activities of £6.5m (H1 2021: £11.3m) reflected significantly higher 2021 employee incentive payments paid in H1 2022 compared to the same period last year.
  • The Group cash position continues to be managed well, enabling capital investment and acquisitions to be funded through the committed bank debt facility.
  • 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 will accelerate the growth of the protective packaging business in Northern Europe.
  • Net bank debt on 30 June 2022 was £9.7m – a cash outflow of £12.1m from 31 December 2021, including £9.1m of net investment in acquisitions and disposals. The Group is operating well within its existing bank facility of £30.0m which runs until 31 December 2025.
  • Pension scheme surplus increased to £8.8m at 30 June 2022 (31 December 2021: £8.3m). The improvement is due to continued contributions from the Group and an increase in the discount rate, offset by lower investment returns in H1 2022. An additional contribution of £0.7m was paid into the pension scheme in H1 2022 to satisfy the debt on exit of the Labels business.
  • Interim dividend increased to 0.90p per share (H1 2021: 0.87p per share) – to be paid on 13 October 2022 to shareholders on the register as at 16 September 2022.

Stuart Paterson, Chairman of Macfarlane Group PLC, today 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. We have also made strategic IT investments and incurred start-up costs on our new North-west of England distribution centre. Our people have consistently demonstrated commitment and operating excellence as the business continues to grow and develop.


We expect to experience a continuing challenging environment with inflationary pressure on our operating costs and slower demand from our e-commerce customers. Overall, the Group is confident that the effectiveness of our strategy, the diversity of the customers and sectors we serve, the quality of our people, and the resilience of our business model will ensure 2022 will be another year of growth for Macfarlane. Our expectations for the full year 2022 are unchanged. 

Board change

As set out in the Annual Report 2021, after over nine years on the Board, I am standing down from the Board, effective 30 September 2022, and I am pleased to announce my successor as Chair will be Aleen Gulvanessian.

Aleen joined the Board in October 2021 as Chair of the Remuneration Committee and in a short time has made a significant contribution through her Corporate legal background and extensive commercial and governance experience. Aleen was selected after an extensive process involving a number of very capable external candidates. We expect to make an announcement on a new Chair of the Remuneration Committee shortly.

I wish Aleen, the Board and all of Macfarlane’s employees continued success in the future and thank them for their excellent support during my tenure as Chairman and Non-executive Director of Macfarlane Group.”


Further enquiries: Macfarlane Group Tel: 0141 333 9666
Stuart Paterson Chairman
Peter Atkinson Chief Executive
Ivor Gray Finance Director
Spreng Thomson
Callum Spreng Mob: 07803 970103


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