Macfarlane Grp. Regulatory News (MACF)

Property update

Macfarlane Group PLC ("Macfarlane") has completed two property transactions in order to reduce the long-term property costs in its Packaging Distribution business.

Macfarlane has reached an agreement to assign the lease on its 132,000 sq. ft. site in Coventry to a third party. As part of the transaction Macfarlane will enter into sub-leases with the third party for approximately 51,000 sq. ft. to accommodate the existing Midlands Regional Distribution Centre ("RDC") and the Packaging Distribution head office functions. The National Distribution Centre activities, which operated from this site until 31 July 2011, have been absorbed into our existing Wakefield and Enfield RDCs.

The three units in West London comprising 44,000 sq. ft., from the acquisition of Allpoint Packaging Limited in 2008, have now been closed and the business transferred to a new Hayes RDC of 23,000 sq. ft.

These are the latest in a number of actions to reduce the long-term property costs of the Packaging Distribution business without impacting customer service. The expected annual savings in property costs from 2012 onwards will be approximately £0.6m, after allowing for the amortised costs of the assignation. There is minimal impact on the results for 2011, which remain in line with the Board's expectation.

Macfarlane currently has leases on 8 sites that are sub-let. Scheduled renewals of these leases over the next two years may result in increased net property costs for Macfarlane, however these additional costs, should they arise, are expected to be lower than the expected annual savings announced today.

Macfarlane will continue to explore additional options to reduce the long-term property costs as part of its ongoing focus on managing costs acrossthe business.

Notes to Editors:

Macfarlane Group PLC is a UK-based group of companies focused on packaging-related activities. The Packaging Distribution business is the leading UK distributor of a comprehensive range of packaging consumable products. The Manufacturing Operations comprise the manufacture of transit packaging and the manufacture of self-adhesive and re-sealable labels. Headquartered in Glasgow, Scotland, Macfarlane Group employs 700 people at 22 sites, principally in the UK and Ireland, servicing 20,000+ customers, in a wide range of sectors including: consumer goods; logistics; electronics; food manufacturing and retailing; internet and home retailing.