Supply chain

Macfarlane Group, the packaging distributor and manufacturer, overcame cost pressures on raw materials, fuel and energy to increase pre-tax profit by 66% to £2.5m for the year to 31 December 2007.

The group's turnover rose 13% to £119.7m and its operating profit from continuing activities increased 55% to £3.1m.

Macfarlane chairman Archie Hunter said 2007 was a year of "significant progress" for the company as it continued to reshape the business and focus on its core activities.

Macfarlane's packaging distribution arm increased its turnover by 15% to £92.7m after acquiring Bloomfield Supplies in October 2006. Its profit tripled to £1.3m.

The company acquired Online Packaging for £5.1m in January this year.

The group said it grew its product range penetration in its existing customer base to an average 8.7 lines per customer, compared with 8.6 in 2006 and 8.2 in 2005. It opened 2,278 new customer accounts in 2007.

Macfarlane's manufacturing business, which includes labels and composite transit packaging, reported a 10% increase in profit to £1.7m. It sales rose 6% compared with 2006.

The company said its labels business had been moving away from the volatile, lower-margin own-brand food business to more secure-margin, high-quality branded products.

The group said it would continue to evaluate additional acquisitions in 2008.

Macfarlane's share price rose 0.25p to 26.25p following the results announcement.