Weak customer demand dents Macfarlane Q1 profits, sales

Macfarlane slumped on Tuesday as the packaging supplier backed its full-year expectations but said sales and profits in the first quarter were below the same period a year earlier amid weak customer demand.

In an update ahead of its annual general meeting, the company cited "challenging" conditions.

Sales fell 9.5% on the same quarter a year earlier, with "continued weak customer demand and price deflation". Macfarlane said the profit impact was only partially offset by strong gross margins and the benefit of acquisitions.

Despite the slow start to the year, the company left its full-year expectations unchanged. It expects trading to improve in the second half through the conversion of a "strong" new business pipeline, some sales recovery from existing customers, good management of gross margins, control of costs and further benefits from M&A activity.

Chair Aleen Gulvanessian said: "On presenting our 2023 results we indicated that the challenging market conditions experienced in the latter part of 2023 would continue into 2024 and this has been the case.

"We expect some improvement in trading conditions in the second half of 2024 and we have a clear plan of management actions to enable the group to continue its progress."

At 0820 BST, the shares were down 7% at 131.78p.