28th Aug 2025 13:07
(Alliance News) - Macfarlane Group PLC on Thursday predicted an improved second half performance after a drop in first half profit in challenging markets.
The Glasgow-based packaging firm said pretax profit nearly halved to GBP5.0 million in the six months to June 30 from GBP9.7 million a year prior, despite revenue rising 13% to GBP146.6 million from GBP129.6 million.
Adjusted pretax profit dropped 32% to GBP7.9 million from GBP11.6 million with adjusted diluted earnings per share down 30% to 3.78 pence from 5.37p.
Gross margin was lower at 35.6% compared to 37.9% a year ago, reflecting the timing of the pass-through of increased input prices, the competitive environment and one second-tier corrugate supplier going into administration.
Market conditions have been "challenging" in the first half due to "economic headwinds and uncertainty", explained Macfarlane Chair Aleen Gulvanessian.
The Distribution unit experienced weaker than expected demand, delays in new business decision-making and pressure on profit margins, but Manufacturing Operations performed more robustly, the firm said.
Distribution generated half year adjusted operating profit of GBP4.8 million, down from GBP9.3 million, a year ago. Manufacturing Operations increased adjusted operating profit to GBP5.0 million from GBP3.2 million.
The interim dividend was unchanged at 0.96 pence per share and Macfarlane said its recently launched share buyback programme will continue as planned.
The company expects performance to improve in the second half of 2025, through seasonal trading uplift and actions taken to manage input cost changes, mitigate operating cost increases and convert a strong pipeline of new business.
"The full year outlook for 2025 is in line with market expectations," Macfarlane said.
In a research note on Thursday, Stifel forecast 2025 adjusted pretax profit of GBP21.1 million and adjusted EPS of 9.9p, both down 15% from GBP24.7 million and 11.6p in 2024 respectively.
Shares in Macfarlane rose 2.1% to 97.20p on Thursday afternoon in London.
By Jeremy Cutler, Alliance News reporter
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