Glasgow’s Macfarlane Group on road to profit recovery as sales momentum builds
“Our first-half results are reflecting favourably on the actions we are implementing” – Peter Atkinson, CEO
Macfarlane Group, the Glasgow-based packaging provider that employs more than 1,200 people, said it was on the road to profit recovery after a “difficult” 2025.
Chief executive Peter Atkinson said the group, which has been listed on the London Stock Exchange since 1973, had to contend with a number of challenges in the first half of 2026 including inflationary pressures caused by the conflict in the Middle East.
“Our focus has been on profit recovery and our first-half results are reflecting favourably on the actions we are implementing,” he said.
“In our distribution business we have seen sales start to grow again and have seen margin stability. We also have good new business momentum. We have made some cost reductions with the headcount there down by about 6 per cent.”
The results for the six months to the end of June show that group revenue increased by 2 per cent, year on year, to £148.9 million, while operating profit nudged up to just under £7.1m, from £7m a year earlier.
Group adjusted operating profit fell by 3 per cent to £9.5m, impacted by the performance of its Pitreavie business. Operations were affected following a fatality at a corrugated manufacturing facility that Macfarlane acquired as part of its takeover of Pitreavie Group in early 2025. The incident led to a temporary suspension of operations at that plant.
Atkinson added: “We got Pitreavie back into profitability in Q2 and we are now working towards the September through November period, which is critical for that business in terms of the food and drink industry in Scotland.”
An unchanged interim dividend of 0.96p per share was declared. The group also unveiled a new £6m gradual share buyback programme commencing in October, insisting that this was an efficient use of capital.
The firm intends to undertake further “high-quality” acquisitions, likely from 2028, as its business performance improves.
Headquartered in Glasgow, Macfarlane Group employs some 1,200 people at 42 sites, chiefly in the UK, as well as in Ireland, Germany and the Netherlands. It supplies some 20,000 customers, principally in the UK and Europe.
Chair Aleen Gulvanessian told investors: “As we said at our AGM [annual general meeting], following a difficult year in 2025, our main focus for 2026 was to start the process of profit recovery.
“I am pleased to report that the group has made progress in the first-half of 2026, returning the packaging distribution business to organic profit growth, continuing to generate attractive returns from manufacturing operations and restoring the Pitreavie business to profitability in the second quarter.
“This performance gives us confidence to maintain the interim dividend and allocate a further £6m to a new share buyback programme.”
She added: “We have also taken decisive action to mitigate the cost impacts arising from events in the Middle East and successfully completed the pension scheme buy-in, strengthening security for members while further reducing the group’s financial risk.
“Management is focused for the remainder of 2026 on continuing the execution of these actions.”
Analysts at investment bank Stifel noted: “Whilst macro threats persist, recent trading trends are encouraging and we view the highly experienced management team as more than capable of navigating these challenges as they have done in the past.”
The results also show that net bank debt had risen to £17.9m from £16.2m at the end of December. The group noted that it was operating “well within” its bank facility of £40m which runs until November 2028 with an option to extend it for a further year.
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