Macfarlane Group (LSE:MACF), the protective packaging specialist, said trading is in line with market expectations for the year to 31 December.
Group revenue in the first quarter was marginally ahead of the same period in 2025, with organic growth in both Distribution and Manufacturing, while production at Pitreavie was constrained pending the £1.2m replacement equipment which became fully operational in Q2 2026.
Group profit in Q1 was in line with management's expectations but, as anticipated, behind the prior year because manufacturing was temporarily outsourced at Pitreavie and restructuring actions were taken in Distribution.
Management expects performance to improve in the second half of 2026 as organic revenue momentum builds, the new Pitreavie equipment is deployed and strong control of operating costs is maintained.
The board said it is taking actions to mitigate the significant inflationary impact on input prices and logistics costs caused by events in the Middle East.
Net bank debt was £16.7m at 31 March versus £16.2m at 31 December 2025, and the Group is operating well within its £40m facility and related covenants that are committed until November 2028.
Subject to renewal of authority at today's AGM, the Group intends to extend its £4m share buyback programme through to the end of 2026, with £2.6m spent to 31 March.
"We welcome the early signs of organic revenue growth in our Distribution business, the resilience in our Manufacturing businesses and the investment in Pitreavie which will enable that business to restore profitability in 2026," Aleen Gulvanessian said.
