10th Jul 2025 13:14
(Alliance News) - Macfarlane Group PLC shares fell on Thursday after it forecast a decline in full-year adjusted earnings, having suffered "weaker than expected demand" in the first half of 2025.
The company's stock was down 14% at 99.72 pence on Thursday afternoon in London.
The Glasgow-based packaging firm expects adjusted operating profit for 2025 to be about 10% lower than the previous year. In 2024, adjusted operating profit was GBP7.2 million.
Macfarlane said Distribution was the main area of weakness, experiencing "delays in new business decision making, pressure on gross margin due to the competitive environment, rising input prices and slower than anticipated recovery of labour and property-related cost increases".
Manufacturing Operations traded robustly, as aerospace and defence business ticked up, though growth was "marginally offset" by US tariffs, Macfarlane said.
Manufacturing was bolstered by the acquisition of foam manufacturer Polyformes Ltd, back in July 2024. Additionally, Macfarlane in January paid GBP18.0 million for fellow packaging company Pitreavie Group Ltd, which it expects "to benefit from the normal seasonal uplift" in the second-half.
Macfarlane did not provide details of its financial position but said net debt was "well within the group's GBP40 million facility."
Chair Aleen Gulvanessian commented: "It is disappointing that the momentum increase we experienced early in the second-quarter of 2025 has not been maintained and as a result will impact our full year performance.
"Management is focused on implementing an action plan to recover cost increases and execute against our strong pipeline of new business."
She added that "the prospects for the group remain positive".
By Holly Munks, Alliance News reporter
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