Glasgow’s Macfarlane Group says profit hit by ‘tragic incident’ and slow trading

The fatality at one of the Pitreavie sites has resulted in a temporary suspension of operations at that facility. As a consequence, the full-year performance for the Cumbernauld-based Pitreavie business, which the group acquired in January, will be materially below previous management expectations.

Any additional impact of the Pitreavie incident will only become clear when the authorities have completed their investigation, Macfarlane added.

In a trading update, the firm told investors: “The financial impact of this, combined with slower improvements in trading in distribution, are the key contributors to a reduction in the group’s estimated full-year 2025 adjusted operating profit, now expected to be 20 per cent to 25 per cent below market expectations.”

It noted that the second-half improvement in distribution sales and gross margin had been slower than expected, with market conditions still “challenging”. Manufacturing operations, excluding Pitreavie, continue to perform robustly, the group said.

Aleen Gulvanessian, chair of the group, said: “Following the tragic incident at Pitreavie our thoughts are with all those who have been impacted. Since then, steps have been taken and will continue to be taken to provide such support and activities as are needed to ensure the wellbeing of our colleagues.

“The incident has naturally had a significant impact on the Macfarlane business. The board supports the management team in its focus on stabilising the Pitreavie business and implementing actions to improve the performance of the distribution business.”

Shares fell sharply following the update.

Analysts at house brokerage Shore Capital noted: “While manufacturing operations have continued to perform strongly, following the fatal incident at its Cumbernauld corrugated manufacturing facility, Pitreavie full-year performance is now expected to be materially below management expectations as operations were temporarily suspended.

“To maintain its competitive positioning and to retain customers, Macfarlane, with the support of its long-standing supply partners, has outsourced production and selling at cost (i.e. breaking even on sales). We reduce our [full-year] adjusted EBIT [earnings before interest and taxes] by 23 per cent to £19 million.”