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Macfarlane reports eighth consecutive year of profit growth

Thursday, 22nd February 2018
Macfarlane, the packaging group, achieved another year of growth in 2017 with sales up 9% to £196.0m and profit before tax rising 19% to £9.3m, in line with market expectations.

Packaging Distribution increased sales by 10% to £171.8m with 3% achieved from organic growth and the remainder from acquisitions.

Gross margin 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.

Sales in manufacturing operations rose 1% to £24.2m.

Gross margin reduced from 43.8% to 40.7%, mainly due to operational pressures in Packaging Design and Manufacture and an adverse exchange rate impact in the Labels business. As a result, manufacturing division operating profit in 2017 was £0.7m, £0.2m below the 2016 result.

The board is proposing a final dividend of 1.50 pence per share, amounting to a full year dividend of 2.10 pence per share, an 8% increase on the prior year's dividend of 1.95 pence per share.

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."

At 8:14am: (LON:MACF) Macfarlane Group PLC share price was -2p at 84p

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