End of year results posted by the Glasgow-based firm show that profits before tax and exceptional items had increased from £3.9m in 2011 to £4.9m last year while group turnover slipped to £141.8m for the year to 31 December 2012 (2011: £144.6m).
A one-off exceptional charge of £0.66m was incurred as a result of relocating its Ireland-based facilities from Dublin to Wicklow although the figures were bolstered by a £1.65m exceptional credit, the result of a Pension Increase Exchange exercise that brought the group’s pension deficit down to £18.5m (2011: £20.5m).
Meanwhile a reduction of net debt from £7.6m to £6.8m was achieved over the year.
The company said that the overall rise in profit was down to improvements in margins across its packaging and manufacturing divisions as well as tight cost controls.
Its packaging distribution business grew operating profit before exceptional items by 7% to £4.9m despite a decrease in sales to £114.8m (2011:£116.7m). In a statement, group chairman Graeme Bissett said that new business wins had offset the impact of weak demand and he attributed strong growth to a focus on the supply of protective packaging to internet retailers.
The group’s manufacturing and labelling arm recorded an increase in operating profit before exceptional items to £1.0m compared to £0.1m in 2011, again against a 3.1% decline in sales from £27.9m in 2011 to £27m.
Bissett said: "Our Labels and Packaging Design and Manufacture businesses have each focused on more profitable areas of their respective markets and the consequent fall in turnover was more than offset by enhancements in gross margin and improved cost savings."
He added: "Our main market is the UK where demand levels have remained subdued, making the achievement of increased profit all the more creditable. We have attracted a range of new customers in 2012 and we continue to see success from the strategic development of our business in key sectors such as internet retail and with our partners in the third party logistics sector."
Bissett said that Macfarlane Group’s performance so far in 2013 reflected those of 2012 and whilst there was little evidence of any increase in demand he remained confident.
"We believe that success in these difficult times will flow from ongoing rational and determined action such as that already taken in 2012. We will continue to focus on those sectors, such as internet retailing, which display real growth and I am confident that Macfarlane Group will demonstrate its strengths again in 2013 as we continue to focus on developing the medium term prosperity of the Group."
Bisset also confirmed that former chief executive of DS Smith Packaging UK, Bob McLellan, has been appointed as a non-executive director.
Macfarlane posts 27% pre-tax profit hike
UK packaging firm Macfarlane Group recorded pre-tax profits before exceptional items of 4.9m in the 12 months to 31 December despite a 2% revenue decline.
