Supply chain

Macfarlane Group has cashed in on the strong Euro and its newly-acquired distribution business as it doubled pre-tax profit in the first six months of the year.

In first-half results published this morning, the group reported pre-tax profit of £1m, up from £0.5m in the first half of 2007, and turnover up 12% to £64.4m.

The improvements in profit came in both the packaging distribution and manufacturing divisions of the group.

In distribution, turnover was up 15% to £51m, in part due to the acquisition of Online Packaging in January and in part thanks to organic growth. Pre-tax profit for the division stood at £0.6m

Archie Hunter, Macfarlane chairman, said that the increases showed the merit of targeting growth by both mean s[acquisition and organic], a strategy "we will hold to in the future".

Meanwhile, the higher-margin manufacturing division posted sales of £13.5m, up 3.2%, and pre-tax profit of £0.9m.

Hunter said that the profits reflected a strong performance in the group’s labels business, which had benefited from a strong euro.

However, Hunter sounded a note of caution for the rest of the year. "It would be unrealistic to assume that we will be immune to the effects of a general economic downturn," he said.

"But we have taken actions to ensure that our infrastructure is in line with a reduced level of demand and we are confident that we have the business strength and momentum to cope."

Macfarlane Group H1 results
Turnover: £64.4m (2007: £57.4m)
Operating profit: £1.4m (£0.7m)
Pre-tax profit: £1.0m (£0.5m)