LONDON (Alliance News) - Macfarlane Group PLC on Thursday posted an increase in profit in the first six months of 2018 with its acquisition of Almadon Ltd playing a significant role.
In the half year ended June 30, the packaging and labelling company recorded a GBP3.5 million pretax profit, climbing 39% from GBP2.5 million last year.
Revenue grew 14% to GBP102.0 million from GBP89.8 million. There was a particularly strong performance from Macfarlane's packaging distribution business, which saw sales growth of 14%.
Almadon, which was acquired back in 2017, provided 9% of packaging sales growth in the first half of 2018. Margins increased slightly to 29.3% from 29.0% as well, creating a total operating profit for the division of GBP3.7 million, 39% ahead of the GBP2.7 million recorded the prior year.
The company's manufacturing operations underperformed compared to the previous year despite sales rising 11%. Lower gross margins dragged operating profit down 28% to GBP201,000 from GBP278,000.
Macfarlane has declared an 8% rise in its interim dividend per share to 0.65 pence from 0.60p.
The company said it is confident it will meet its full year expectations as its first half performance has been further enhanced by "unexpected seasonal uplift from the e-commerce sector" in the second half.
Post period end the company has also concluded its Harrisons Packaging Ltd and Tyler Packaging Ltd acquisitions, the combined cost of which is expected to be GBP3.5 million.
"Our strategy is to deliver sustainable profit growth by focusing on added value products and services in our target market sectors, combined with the execution of value-enhancing acquisitions. Macfarlane Group's performance in the first half of 2018 reflects the successful implementation of our strategy and we are confident that the group will continue to make further progress in the remainder of 2018," said Macfarlane Chairman Stuart Paterson.
Shares in Macfarlane were up 3.9% at 106.00 pence on Thursday.