Aleen Gulvanessian

However, amidst challenging market conditions, the company demonstrated resilience with adjusted profits before tax increasing by 10% from £23.5m to £25.8m.

Group profit before tax saw a 2% increase to £20.3m, taking into account a £1.5m charge for deferred contingent consideration linked to the acquisition of PackMann. The latter exceeded expectations, contributing to a robust operating performance.

In the packaging distribution segment, revenue dropped by 6% to £244.9m due to weak demand in the UK and Ireland. Yet, gross margins rose from 32.1% to 35.7%, attributed to effective management of input prices, countering inflationary increases in certain operating costs.

On the manufacturing front, operations experienced a significant 16% revenue growth, reaching £35.8m. Acquisitions, including A.E. Sutton and B&D 2010 Group, played a crucial role in offsetting sluggish demand in specific industrial markets.

The net cash inflow from operating activities soared to £33.5m, up from £18m in 2022, indicating robust working capital management. Despite a net cash inflow of £4m, the group’s net bank funds stood at £500,000 on 31 December 31. This is after an investment of £16.6m in acquisitions and capital expenditure, maintaining a comfortable position within the £35m bank facility.

The board proposed a final dividend of 2.65p per share, up from 2.52p in 2022, payable on 30 May, bringing the total dividend for 2023 to 3.59p per share, a 5% increase from the previous year.

Macfarlane Group chair Aleen Gulvanessian said: “Against a backdrop of challenging market conditions, Macfarlane Group PLC has once again demonstrated the resilience of its business model and achieved another year of profit growth in 2023. In addition, we have made good progress against our ESG objectives.”

Additionally, the company reported that the pension scheme remained in surplus, with company contributions reduced to nil after the latest triennial valuation.

As of December, senior independent director Bob McLellan retired, initiating the recruitment process for a non-executive director. Audit committee chair James Baird has been appointed as the new senior independent director.