Macfarlane Group has issued a profits warning after admitting weakening demand in a challenging year of economic uncertainty.
The Glasgow-based packaging company expects adjusted operating profit for the full year to be about 10% below the same period last year, prompting another round of cost savings.
In a trading update this morning, Aleen Gulvanessian, chair, said: “We highlighted in our AGM statement that market conditions in 2025 were challenging.
“It is disappointing that the momentum increase we experienced early in Q2 2025 has not been maintained and as a result will impact our full year performance.
“Management is focused on implementing an action plan to recover cost increases and execute against our strong pipeline of new business.
“The board remains confident that our strengthened sales team, differentiated customer proposition and proven executional skills mean that the prospects for the group remain positive.
“We will provide a further update along with the announcement of our interim results on 28 August 2025.”
The company said distribution is experiencing weaker than expected demand, delays in new business decision making, pressure on gross margin due to the competitive environment, rising input prices and slower than anticipated recovery of labour and property-related cost increases.
Manufacturing is performing robustly with good momentum from aerospace and defence related customers and the benefit of the Polyformes acquisition, marginally offset by the slowdown in those sectors where customers are being impacted by uncertainty over US tariffs.
“We expect the Pitreavie business, acquired in January, to benefit from the normal seasonal uplift in demand in H2 2025, together with additional sales from in-house supply to Macfarlane Distribution.” said the company.
“The focus for the remainder of 2025 is the recovery of cost increases, the implementation of additional cost saving actions and ensuring we convert the strong new business pipeline.”
Net bank debt remains well within the group’s £40m facility, it said, and the recently launched share buyback programme will continue as planned.
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