macfarlane group

Macfarlane Group Announces 2021 Preliminary Results



Strong growth delivers results ahead of market expectations.

Financial Highlights  









Continuing operations
Revenue 264,465 210,227 26%
Operating profit before amortisation2 23,366 16,179 44%
Operating profit 20,055 13,659 47%
Profit before tax 18,665 12,433 50%
Continuing and discontinued1 operations
Profit for the year 12,598 10,171 24%
Proposed full year dividend 3.20p 2.55p 25%
Basic earnings per share 7.98p 6.45p 24%


I am pleased to report that Macfarlane Group has performed strongly in the year ended 31 December 2021. Our results are well ahead of the previous year and better than market expectations.

In the face of challenging market conditions our team has shown great commitment and dedication in servicing our customers and the Board wishes to place on record its thanks for their outstanding performance in helping the Group to continue its positive progress.

The key highlights of 2021 are set out below:

  • Sales from continuing operations1 grew by 26% versus 2020 to £264.5m.
  • Operating profit at £20.1m and operating profit before amortisation2 at £23.4m, both from continuing operations, increased by 47% and 44% respectively.
  • Profit for the year of £12.6m increased £2.4m or 24% compared to 2020.
  • Basic and diluted earnings per share were 7.98p per share (2020: 6.45p per share) and 7.90p per share (2020: 6.42p per share) respectively.
  • Packaging Distribution achieved strong growth in sales and an improvement in operating profit before amortisation of 19% versus 2020.
  • Manufacturing Operations delivered an encouraging recovery versus 2020 in both sales and operating profit before amortisation.
  • GWP Holdings Limited (“GWP”) and Carters Packaging (Cornwall) Limited (“Carters Packaging”), which were acquired in February and March 2021 respectively, have performed well.
  • The Group sold its Labels3 division in December 2021. Labels generated a loss before tax of £0.9m (2020: Profit of £0.6m) after charging goodwill impairment of £1.0m and costs of disposal of £0.3m. Labels has been treated as a discontinued operation in the year.
  • Net cash inflow from operating activities of £23.8m (2020: £23.3m) reflects increased activity and continuing good management of working capital.
  • Net bank funds4 on 31 December 2021 was £2.5m, an increase of £3.0m from 31 December 2020, including £12.2m of investment in the acquisition of GWP and Carters Packaging and £5.2m5 of net proceeds from the sale of Labels. The Group is operating well within its existing bank facility of £30.0m which runs until 31 December 2025.
  • Pension scheme surplus of £8.3m at 31 December 2021 (31 December 2020 deficit of £1.5m). The improvement is due to continued contributions from Macfarlane Group, an increase in the discount rate and growth in investments during the year.
  • The Board is proposing a final dividend of 2.33p per share (2020: 1.85p per share) which would take the total dividend for 2021 to 3.20p per share (2020: 2.55p per share) up 25% on 2020.


Macfarlane Group achieved good sales growth from continuing operations in 2021, benefiting from the ongoing structural shift to e-commerce retail, the recovery in certain industrial sectors which had been affected by Covid-19 in 2020 and the acquisitions of GWP and Carters Packaging. Despite ongoing difficult operating conditions due to Covid-19, significant inflationary pressure on input costs and supply shortages of some materials, the business has produced a strong profit performance.

Packaging Distribution has grown sales through strong demand from existing customers in the e-commerce retail and medical sectors and recovery in a number of industrial sectors.  However, demand from the aerospace, high street retail and hospitality sectors has not yet recovered to pre-pandemic levels. New business activity has increased significantly compared with 2020 and Carters Packaging has traded well since its acquisition in March 2021.

Manufacturing Operations has benefited from the acquisition of GWP, which is performing ahead of expectations, and a strong recovery in the Packaging Design and Manufacture business which returned to profit following the restructuring actions that we took in H2 2020.  The development of the partnership with our Packaging Distribution business has played a key part in the recovery of the Manufacturing Operations in 2021.

The Group sold its Labels business on 31 December 2021 to The Reflex Group Limited, a well-established, privately owned UK company focused on the manufacture of labels and flexible packaging. We believe the sale gives the best opportunity for the Labels business to develop and allows the Group to focus its resources on accelerating the growth of our protective packaging distribution and manufacturing businesses.

Our effective management of operating cash in 2021 has enabled the business to finance two good quality acquisitions through our existing bank facility. The sale of Labels provides the Group with additional cash resources to invest in the further development of the protective packaging businesses.

The pension scheme was in surplus at 31 December 2021 of £8.3m (2020: deficit £1.5m).

Covid-19 Response

Throughout 2021, the Covid-19 pandemic has continued to impact the Group and has presented significant challenges to the operations of the businesses. However, in supporting our customers we have continually adapted to the changing government guidance to ensure we provide a safe workplace for our teams with particular focus on their health and well-being.

Environment, Social and Governance (“ESG”)

The Board has always recognised the importance of ensuring ESG is prioritised within the business and ESG is now a standing item on the Board agenda. A comprehensive ESG action plan has been approved by the Board which will clearly demonstrate our commitment to sustainability, effective customer, employee, supplier and community engagement and governance.

In September 2021 Andrea Dunstan, the Chair of the Remuneration Committee, retired from the Board and after an extensive search process we welcomed Aleen Gulvanessian as a new non-Executive director to the Board in October 2021. Aleen, who is the new Chair of the Remuneration Committee, has a strong governance background and brings extensive commercial and legal experience to the business.

In 2022 I will enter my 10th year of service on the Macfarlane Group Board and as such cease to be seen as independent under the Corporate Governance code. I have therefore given the Board notice of my intention to stand down this year once a new Chair has been identified and a smooth transition ensured. Plans for my succession are well advanced.

Proposed Dividend

The Board is proposing a final dividend of 2.33 pence per share, amounting to a full year dividend of 3.20 pence per share, compared to the prior year dividend of 2.55 pence per share. Subject to the approval of shareholders at the Annual General Meeting on Tuesday 10 May 2022, the final dividend will be paid on Thursday 2 June 2022 to those shareholders on the register at Friday 13 May 2022.


We anticipate that 2022 will see ongoing inflationary pressure on input prices, continuing supply constraints on most raw materials and operating costs increasing due to staffing pressures. However, despite these challenges, trading in the early months has been encouraging and the Board is confident that, given the effectiveness of our strategy, the resilience of our business model and the experience and commitment of our people, Macfarlane Group will continue to deliver further growth in 2022.

Lord Macfarlane of Bearsden

It was with great sadness that we learned of the passing of our founder Lord Macfarlane of Bearsden in November last year.  Lord Macfarlane was the driving force in building the Macfarlane Group between 1949 and 1999 when, as Chairman, he retired from the Board.  Since then, he was a constant supportive presence and he is greatly missed.

  • In accordance with IFRS5 2020 has been restated to reflect the result of the Labels division, sold on 31 December 2021, as a discontinued operation.
  • See page 21 for reconciliation of Alternative Performance Measure operating profit before amortisation to operating profit.
  • Macfarlane Labels Limited and its subsidiaries, Macfarlane Group Ireland (Labels & Packaging) Limited and Macfarlane Group Sweden AB (collectively “Labels”).
  • Alternative Performance Measure as defined in note 10.
  • Gross proceeds of £6.1m offset by £0.6m of cash retained within Labels at completion and £0.3m costs of disposal.
Further enquiries: Macfarlane Group Tel: 0141 333 9666
Stuart Paterson             Chairman
Peter Atkinson              Chief Executive
Ivor Gray                       Finance Director
Spreng Thomson Tel: 0141 548 5191
Callum Spreng Mob: 07803 970103


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