The Glasgow-headquartered packaging manufacturer and supplier attributed the increase to recovering supplier price increases from existing customers, seeking out new business opportunities and becoming more efficient.

The company also posted a 7% increase in turnover from £64.1m to £68.5m but a reduction in its margins from 31.2% to 30.1%, which it blamed on the "inevitable" time lag in passing on supplier increases to customers.

Macfarlane Group reduced its pension deficit by £100,000 to £15.6m in six months but increased its net debt by £700,000 from £9.7m to £10.4m.

The company said that trading for the second half of 2011 had started "satisfactorily" but that it expected demand to remain "subdued" for the rest of the year. It set out its priorities for the rest of 2011 as expanding its presence in specific industries, improving its gross margin and developing its strategic initiatives.

Chief executive officer Peter Atkinson said: "Currently around 25% of sales from our packaging manufacturing division are channelled through our distribution business and looking forward we want to encourage more cross-selling between these divisions.

"This year we will also be rolling out the introduction of our Reseal-it label, which we sell in the US and continental Europe, to the UK market and major retailers will be introducing it on their own-brand fruit and pastry products by the final quarter of this year.

"We see other potential growth areas as internet-based retailers, presentational packaging and our transit packaging business, which is where we supply packaging to the third-party logistics sector." He added.