Macfarlane Grp. Share Chat (MACF)

Tenobas thanks for the link MacFarlane in my view is far more integrated and resilient to be moved by this however who knows competition is competition even coming from Turkey 😊

I think that Eren Holding has a highly integrated operation which goes all the way to individual cardboard boxes. https://www.modern-ambalaj.com.tr/

https://www.modern-ambalaj.com.tr/urun/kutu-21

That is in Turkey but I guess that in time it will be here.

Tenobas I think this (https://www.euwid-paper.com/news/companies/eren-holding-officially-launches-pound1bn-shotton-mill-project-in-wales-260924/) is big but how does it impact their operations?

I said I would buy at 110p. We arrived there today but I am not buying yet.

I think that today's fall is due to:

Eren Holding said its new plant would process a quarter of the waste cardboard the UK currently sends abroad, and focus on creating containerboard - used to make packaging and corrugated boxes from recycled paper - as well as tissue products.

The question I think is whether there will be more vertical integration in this industry

This company grows profits at 14.5% p.a. but for two consecutive years profits will fall.

Over 10 years profit over turnover is up by 50%. (3.75 -> 5.5)

I note that the company never states exceptional restructuring costs despite buying lots of businesses.

This is IMO a big plus.

With a P/E of 13 and a dividend yield of 3% on the face of it this looks like a good buy.

On the other hand I have two concerns:

1) Are they amortising goodwill fast enough?

2) They are for the first time entering the EU but will the cultural and Brexit issues weigh heavier than the technological synergies.

The business buys on average two businesses per year.

Goodwill is about £100m and is being amortised at 5% p.a.

As the report suggests an issue is the amortisation of customers.

IMO assuming that they will keep customers for an average 20 years is not realistic.

If amortisation was doubled then profit over turnover would be up by 30% over ten years (3% -> 3.9%)

My concern is the possibility that the company is pursuing margin causing them to lose turnover.

I note that all their acquisitions include a payment contingent upon future trading targets which seem to be heavily weighted towards profit and that adds weight to the above concerns.

Turnover fell for the first time despite the influence of about £30m spent on acquisitions.

One reason for this is price deflation with a 30% fall in recycling prices and this could hit inventories.

Nevertheless there are long standing concerns about asset stripping goodwill.

I would buy at about 110p.

Mcfarlane Acquisitions

2024 Polyformes £11.5m

2024 Allpack Direct £ 4.7m

2023 B & D Group £ 5.4m

2023 A & G Holding Gottlieb £ 4.3m

2023 A.E. Sutton Ltd £13.7m

2022 PackMann £ 7.4m

2021 (Labels Division) (£ 6.3m)

2021 Carters Packaging Ltd £ 4.5m

2021 GWP Group Ltd £15.1m

2020 Armagrip £ 1m

2019 Leyland £ 3.25

2019 Carnweather Ltd £ 3.9m

2018 Tyler Packaging £ 2.1m

2018 Harrisons Packaging £ 2.8m

2017 Greenwoods Stock Boxing £17.2m

2016 Nelsons for C & P Ltd £ 7.2m

2016 Edward McNeil

2016 Colton Packaging

Stargate Bingo and we have lift-off prices that have gone through 146 nice cups and handle break-outs IMOO DYOR

Roger that stargate a weekly close above 134 a fresh new course target is set in motion for a retest of the old 146 ATH (2021). IMOO DYOR

Overhead supply from previous trading at current price level, more than 2 years ago, is unlikely to cause resistance to upward equity rise. Weekly price pivot low of 26/10/23 to weekly pivot low of 24/2/24, provides an bullish uptrend line, supporting the sp, which has made a new weekly high sp. The volatility based Bollinger bands are separating, signifying increased volatility. The RSI(relative strength index), is above 50, providing additional confirmation that MACF, is in an uptrend. DYOR.

Easy to lose sight if you're a short term trader but some companies have done extremely well with bolt on acquisitions with bank facilities. I think management is astute. Nice to see SP closer to 2 but I can't influence SP but far those looking at these posts to either buy or sell, read the results, see progressive dividend, cash flow and hold as I'm doing. I like the Pac Man buy, could be a steal but dyor!

Yes, solid results and nice to hear that the pipeline is firmly on track for new additions to join the 'family'.

Yes. Good results. Decent dividend. 1million shares traded at 127. Nice to see slow steady price appreciation.

Results, out today, look good enough to me.

Fair trading update with cash in the bank and maintaining their guidance for the full year steady as you go

MACF - A good Company this one. Bought some shares this morning, for long term hold.

Chelsea11 Yes steady solid results whilst navigating inflationary pressures all around Nice recovery stock should be north of 120 and towards 140 very soon meanwhile look forward to their presentation next week.

Https://www.scotsman.com/business/glasgow-packaging-group-macfarlane-gives-profit-assurance-despite-challenging-outlook-4266689

Unspectacular results, arguably a mixed bag but overall solid, with no huge surprises.

https://www.londonstockexchange.com/news-article/MACF/half-year-report/16096105

HY Report RNS came out on 25th August last year and so reasonable to expect another in the next 4-5 weeks.

Will be interesting to see what impact the most recent acquisitions have had on the bottom line but the last Trading Update was positive.

Solid track record as said onward and upwards rerating well overdue here SP sprint to new highs AGW

Solid Trading Update and another year of growth, both sales and profits, on the cards for Macfarlane. More acquisition action before the end of 2023 a fair bet imo.

2 May 2023

Macfarlane Group PLC

Acquisition of protective packaging distributor Gottlieb

Macfarlane Group PLC ("Macfarlane") is pleased to announce the acquisition of A & G Holdings Limited, owner of Gottlieb Packaging Materials Limited ("Gottlieb"). This earnings enhancing acquisition further progresses Macfarlane's strategy of building its protective packaging business through a combination of organic and acquisitive growth.

Strategic highlights

Gottlieb is a well-established business based in the North-West of England, supplying protective packaging products to customers across a wide range of sectors, from its warehouse facilities in Manchester.
Gottlieb has an experienced team of 15 employees, including two Directors, all of whom will remain with the business following the acquisition.
There are opportunities for Gottlieb's customers to benefit from access to Macfarlane's extensive range of protective packaging products and services.
This earnings accretive acquisition continues to demonstrate Macfarlane's 'buy and build' strategy in delivering further stakeholder value.

Transaction details

Macfarlane's wholly-owned subsidiary, Macfarlane Group UK Limited, has acquired 100% of Gottlieb for a maximum cash consideration of £3.55 million (including an earn-out of up to £0.8 million based on agreed profit growth targets over two years)
A further adjustment is due for net assets in excess of £0.3 million with the expected net assets on completion being £1.0 million, including £0.8 million of net cash.
The consideration is being financed entirely from Macfarlane's existing £30.0 million bank facility.
For the year ended 31 December 2022, Gottlieb generated sales of £4.5 million, with EBITDA and pre-tax profits of £0.7 million.

Peter Atkinson, Chief Executive of Macfarlane, said:

"Gottlieb is a well-run, successful protective packaging distributor with an experienced management team. The acquisition of Gottlieb complements the recent opening of our new distribution facility in Heywood and further strengthens our ability to serve customers in the North-West of England. We look forward to working with the team at Gottlieb to support its continued growth."

And another earning accretive acquisition.

Given it’s only 2nd May today, perhaps the statement of “We are very confident that we will complete another couple of acquisitions in 2023,” will prove conservative.

Regardless, more good news.

Onward & upwards the share price rerating is truly overdue

Watch this space indeed!

“This earnings accretive acquisition demonstrates Macfarlane's comprehensive 'buy and build' strategy in delivering further stakeholder value.”

Watch this space…….

“We are very confident that we will complete another couple of acquisitions in 2023,” he said. “We have a very strong pipeline.”

https://www.scotsman.com/business/glasgow-packaging-heavyweight-macfarlane-targets-further-acquisitions-after-solid-rise-in-sales-and-profits-4038020