A Glasgow-based packaging company has seen a significant increase in its profits and turnover in the last year, despite a challenging financial environment.
Macfarlane Packaging, a leading name in the UK consumable packaging arena, saw its profits rise from £3.4 million in 2010 to £3.9 million in 2011. The company, which presently enjoys nearly a quarter share of the sector in the UK, also saw turnover increasing to £144.6 million from £135.5 million in 2010 – up by more than seven per cent.
The announcement is seen by the industry as extremely positive news, in light of the continuing cost rises in raw materials for their product and increasing pressures caused by the home market slackening off.
The company has admitted that this weakening demand is challenging, particularly as it continues to face down a:
“…bad debt experience in the retail sector…”
As with many companies throughout Scotland, Macfarlane has been a victim of lending restrictions imposed on their customers. Scottish factoring companies are helping many find alternative lending streams which is easing the issue, but difficulties still remain.
The firm also faces other issues, perhaps most notably its rising pension scheme deficit which is proving “difficult to tackle”. The deficit is now over £20.5 million, a yearly increase of £4.8 million.
That the firm has made such strong progress throughout the challenging climate shows what can be done with the right strategies in place. There is still much work to do though, with the announcement actually followed by a dip in the firm’s share price at market opening.