Macfarlane Group (MACF) investor relations material

Executive summary

• Revenue increased by 2% year-over-year to £148.9m in H1 2026, with early signs of profit recovery and Packaging Distribution returning to organic profit growth.

• Pitreavie returned to profitability in Q2 2026 after operational setbacks in 2025.

• Sales growth was primarily price-driven, with new business momentum up 40% year-over-year.

• Cost inflation from Middle East events was managed, and headcount in distribution was reduced by 6% to control costs.

• Dividend was maintained at 0.96p per share, and a new £6m share buyback programme will commence in October 2026.

Financial highlights

• Group revenue grew 2% year-over-year to £148.9m, with gross margin stable at 37.7%.

• Adjusted operating profit declined 3% to £9.5m, and adjusted profit before tax fell 9% to £7.2m.

• EPS fell 9% year-over-year to 3.45p, and basic/diluted EPS were 2.22p.

• Net bank debt increased to £17.9m, mainly due to higher inventory and working capital absorption.

• Net cash inflow from operating activities was £10.3m, down from £12.4m in H1 2025.

Outlook and guidance

• No significant market catalysts expected; focus remains on executing the profit recovery plan and cost control.

• Targeting a return to 7%-8% net margin in distribution within three years through organic growth and margin maintenance.

• Expect stronger sales in H2 2026, with slight margin weakening due to ongoing input cost pressures.

• M&A activity is on hold until profit recovery is further advanced and market valuations improve, with a potential return to acquisitions in early 2028.

• Full year trading expected to be in line with market expectations.