- Macfarlane Group
- 10 July 2025 09:52:44
Source: Sharecast
In a trading update ahead of its interim results due on 28 August, the packaging and labelling specialist said distribution had been hit by competitive pricing pressure, increased input costs, and slower-than-expected recovery of labour and property-related expenses.
Demand was also affected by delays in new business decisions and subdued customer activity.
The group said its manufacturing operations were performing more robustly, supported by strength in the aerospace and defence sectors and the contribution from its recent acquisition of Polyformes.
However, performance in some areas had been slightly offset by uncertainty surrounding US tariffs, which has impacted customer activity in affected sectors.
Macfarlane noted that Pitreavie, the packaging business it acquired in January, was expected to benefit from seasonal demand improvements in the second half of the year, as well as internal supply opportunities within the wider group.
Despite the earnings downgrade, Macfarlane said its net bank debt remained comfortably within its £40m facility, and that its share buyback programme would continue as planned.
“We highlighted in our AGM statement that market conditions in 2025 were challenging,” said chair Aleen Gulvanessian.
“It is disappointing that the momentum increase we experienced early in the second quarter of 2025 has not been maintained and as a result will impact our full year performance.”
She added that the company’s management was focused on implementing an action plan to recover cost increases and execute against its “strong pipeline” of new business.
“The board remains confident that our strengthened sales team, differentiated customer proposition and proven executional skills mean that the prospects for the group remain positive.”
At 0934 BST, shares in Macfarlane were down 16.06% at 97.79p.
Reporting by Josh White for Sharecast.com.