The momentum achieved in the first half of 2017 has continued in the second half of the year with improving organic growth and the continuing benefit from acquisitions. The Board is confident that its full year expectations will be met assuming that the Group benefits from the trading cycle in the final quarter of 2017 through our focus on the e-commerce sector.
Sales for the year to date in Packaging Distribution have increased by 11% and our recent acquisition, Greenwoods, is performing well in the final quarter of the year. Gross margins achieved are at similar levels to last year, reflecting the effective recovery of recent input price increases. Operating profit for the full year in Packaging Distribution is expected to be well above that achieved in 2016.
Combined sales from the businesses in our Manufacturing Operations are 3% below 2016, principally due to our continuing programme to focus on higher margin sales. Operating profit for the full year in the Manufacturing Operations is expected to be similar to 2016 levels.
The net effect of these factors is that Macfarlane Group’s profit before tax for 2017 to date is well above the corresponding period in 2016 with a good contribution from acquisitions and this trend is expected to continue for the remainder of the year.
Bank borrowings of £14.6m at 30 June 2017 are expected to reduce by the end of the year, reflecting the Group’s traditionally strong working capital inflows in the final quarter.
Stuart Paterson, Chairman of Macfarlane Group, said:
“I am pleased to report that Macfarlane Group’s performance in the second half of 2017 has continued to reflect the good progress demonstrated in the first half. The Board remains confident that our full year expectations will be met.”