Macfarlane Group (MACF) H1 2024 earnings summary

Executive summary

• H1 2024 was challenging due to weak demand and price deflation, but actions taken limited the impact on profitability and supported resilient performance.

• New business revenue grew 10% year-over-year, with strong progress in e-commerce and industrial sectors.

• Acquisitions, including Allpack Direct and Polyformes, contributed positively, with most deals performing in line with expectations.

• The business remains resilient, supported by a broad customer base, value-added services, and strong supply relationships.

• Market expectations for full year 2024 remain broadly unchanged, with the business well positioned for recovery and further acquisition activity.

Financial highlights

• Revenue declined 8% year-over-year to £129.6m, with organic sales down 11% but partially offset by acquisitions.

• Adjusted operating profit for H1 2024 was £12.5m, down from £12.8m in H1 2023; margin improved to 9.7% from 9.1%.

• Diluted EPS fell to 4.51p from 4.70p; interim dividend increased to 0.96p per share.

• Net cash inflow from operating activities was £14.0m, with cash funds rising to £0.8m at June-end.

• Pension scheme surplus increased to £10.2m.

Outlook and guidance

• H2 expected to see price inflation, seasonal Q4 uplift, and full benefit from the Polyformes acquisition.

• Full-year profit expectations remain broadly unchanged, supported by ongoing cost control, new business momentum, and recent acquisitions.

• Focus areas for H2 include accelerating new business, further acquisitions, cost synergies, and efficiency improvements.