Macfarlane Group PLC has posted sales figures of £196.0m for 2017, up 9% from the 2016 figure of £179.8m.
Profits are up to £9.3m which is a 19% increase from the 2016 figure which was £7.8m.
Packaging Distribution increased sales by 10% to £171.8m (2016: £155.9m) with 3% achieved from organic growth and the remainder from acquisitions, both those in 2017 and the full year benefit of those completed in 2016, all of which continue to perform well.
Gross margin in Packaging Distribution grew to 29.4%, (2016: 29.0%) reflecting the effective management of input price increases as well as a strong contribution from the Greenwoods’ business acquired in September 2017. This resulted in Packaging Distribution achieving a 20% increase in operating profit to £9.4m (2016: £7.8m).
Sales in the Manufacturing Operations at £24.2m (2016: £23.9m) were 1% up on the previous year. Gross margin reduced from 43.8% in 2016 to 40.7% in 2017, mainly due to operational pressures in Packaging Design and Manufacture and an adverse exchange rate impact in our Labels business. As a result, Manufacturing Division operating profit in 2017 was £0.7m, £0.2m below the 2016 result.
After charging interest of £0.8m (2016: £0.9m), Group profit before tax totalled £9.3m (2016: £7.8m) an increase of 19%. Following the share issue in September 2017 to support the Greenwoods’ acquisition, diluted earnings per share for 2017 increased by 13% from 4.64p to 5.22p per share.
Commenting on the 2017 results, Stuart Paterson, Chairman, said:
“The 19% increase in pre-tax profits in 2017 represents the eighth consecutive year of profit growth for Macfarlane Group. Group profitability in the year to date is ahead of the same period in 2017.
“Our strategy continues to be the delivery of sustainable profit growth by focusing on added value products and services in our target market sectors, combined with efficiency improvements and the identification and completion of value-enhancing acquisitions. This strategy, which continues to be refined, has served all stakeholders well in recent years and we remain confident that it will continue to do so. Macfarlane Group’s performance in 2017 reflects the successful implementation of this strategy and we are confident that the Group will demonstrate further progress in 2018.”