Group turnover for the six months to 30 June 2016 was £81.4m, a 3.7% increase on the same period in 2015. Pre-tax profit rose by 8.1%, from £1.85m to £2m.

The board has recommended an interim dividend of 55p per share, up from 53p last year.

The Glasgow-headquartered company's strong performance was partly attributed to an acquisition strategy that has seen the company take on three businesses this year and will result in two to three acquisitions per year for the next three to five years.

Macfarlane group chief executive Peter Atkinson said: “We’ve clearly had good sales from a group point of view, especially in packaging distribution, which has benefitted to a certain extent from the acquisitions that have been made during the year.

“Internet retail sales account for 22%, which is good (2015 H1: 19%), we’ve had good profit growth and packaging profit growth at double digit levels. So overall a very solid set of results, which gives us confidence going into the second half of the year," he added.

The results take into account two acquisitions made in the first half of 2016, while the third acquisition made in July, Leicester-based Nelsons for Cartons & Packaging, will contribute to second-half results. Macfarlane raised £5.6m from share placements for its acquisition of Nelsons, with 10m new ordinary shares released at a price of 58p each.

In April, it acquired Colton Packaging Teesside for £1.25m to fill in what it referred to at the time as a geographical gap.

One month later, it bought the packaging arm of Glasgow-based Edward McNeil for £3.6m. Edward McNeil has now been relocated to Macfarlane’s new Baillieston premises.

“They all had a sense of logic to them and are all performing very well in their first few months,” said Atkinson.

The newly acquired businesses will now go through an earnout period of 12 to 24 months before being fully integrated with Macfarlane. Meanwhile the earnout period of 2015-acquired One Packaging is due to expire at the end of August.

Macfarlane is in various acquisition talks with other companies of approximately Nelsons' size but is unlikely to complete any more deals until 2017, Atkinson said.

The business has also invested £300,000 in an 'Innovation Lab' in Milton Keynes, which Atkinson said had already been responsible for increased sales.

In the divisions, sales in packaging distribution increased by 5.5% on the same period last year, from £66.2m to £69.9m. Operating profit was up 10% to £2.3m. The packaging distribution division of Macfarlane now accounts for 86% of its overall turnover.

However, sales in manufacturing operations, Macfarlane’s labels business, fell from £15m to £13.6m, a decrease that Atkinson puts down to the company's decision to "proactively exit relationships with low-margin customers". That programme which has now ended, he said.

“This has been a programme that we have been running for about two years. What we were seeing was a number of customers who were being increasingly demanding in terms of the goods they require from us and at the same time expecting increasingly lower prices," he explained.

“In reality we had to work with these customers and try and change that relationship. If we couldn’t manage that relationship, we would have a discussion with them about whether we were the right supplier for them. The result of that is lower sales in our labels business but improved productivity.” 

He added that in the past two years Macfarlane has severed ties with approximately 50 companies, which accounts for around 20% of its labels customers. Macfarlane operates its packaging, design and manufacturing operations from its Grantham and Westbury sites. 

Macfarlane’s pension scheme deficit increased by 10%, from £11.5m to £12.6m, due to lower bond yields. Earnings per share compared to the same period last year rose from 1.26p to 1.35p. 

Share price was 61.1p at the time of writing, down from 65.6p at the start of morning trading (12 month high: 69.35p, low: 44.2p).