Macfarlane set to end year in line with expectations

(Sharecast News) - Protective packaging specialist Macfarlane Group said in an update on Thursday that its performance for 2024 was set to align with full-year expectations, despite market headwinds impacting revenue and pricing. The London-listed firm said that for the 10 months to 31 October, revenue was 4% lower year-on-year, driven by weaker volumes and reduced pricing across most sectors.

Those challenges were offset by improved new business performance, effective cost and pricing management, and contributions from two acquisitions completed during the period, both of which the board said were performing well.

The group highlighted progress in its acquisitions pipeline, supported by a robust balance sheet and strong cash generation.

As at 31 October, net bank debt stood at £4.7m, compared to net bank funds of £0.8m on 30 June, reflecting £11.3m invested in acquisitions and £5.8m in dividend payments.

Macfarlane said it had access to a £35m bank facility to support its strategic goals.

The company also noted that increased employers' National Insurance rates and a higher National Minimum Wage, announced in the recent UK Budget, would add around £1.5m in annual costs from April.

The board said it was evaluating measures to mitigate the impact.

Macfarlane's board said it remained focused on its growth strategy, and was confident in the company's ability to navigate current market conditions.

"As outlined in our interim results, the management team is responding effectively to the market headwinds," said chair Aleen Gulvanessian.

"Our strong balance sheet gives us confidence we can continue to execute accretive acquisitions."

Gulvanessian said there was "good new business momentum" as customers increasingly recognised the added value the company offered, both on an environmental and cost savings basis.

"The group remains well-positioned to benefit when the macro-economic outlook improves."

At 0804 GMT, shares in Macfarlane Group were up 0.96% at 105p.

Reporting by Josh White for Sharecast.com.