Distribution weakness offsets manufacturing growth at Macfarlane

(Sharecast News) - Macfarlane Group reported higher first-half revenue but a sharp fall in profit on Thursday, as weaker demand in its distribution arm offset growth in manufacturing operations.

Revenue for the six months ended 30 June rose 13% year on year to £146.6m, driven by acquisitions and stronger demand in manufacturing.

Adjusted operating profit fell 22% to £9.8m, while adjusted pre-tax profit dropped 32% to £7.9m.

Reported operating profit was down 34% at £7.0m, with pre-tax profit halving to £5.0m.

Diluted earnings per share fell 49% to 2.32p.

Chair Aleen Gulvanessian said market conditions had been "challenging in H1 2025 due to economic headwinds and uncertainty," adding that "whilst distribution has experienced weaker than expected demand, delays in new business decision-making and pressure on profit margins, manufacturing operations has performed more robustly."

The division benefited from contributions by Polyformes, acquired in July 2024, and Pitreavie, bought in January 2025, alongside strong demand from defence and aerospace customers.

Manufacturing revenue increased to £39.2m from £21.3m a year earlier, while adjusted operating profit rose to £5.0m from £3.2m.

Distribution revenue slipped slightly to £110.4m from £110.9m, with adjusted operating profit falling to £4.8m from £9.3m.

The group generated £12.4m of net cash from operations, ending the period with net bank debt of £15.2m after £16.5m of acquisition and capital spending.

The board declared an interim dividend of 0.96p per share, unchanged year on year, payable on 9 October to shareholders on the register by 12 September.

Macfarlane said it expected a stronger second half on the back of seasonal trading, cost controls, new business wins and synergies from recent acquisitions.

Full-year expectations were left unchanged.

At 0920 BST, shares in Macfarlane Group were up 0.42% at 95.6p.

Reporting by Josh White for Sharecast.com.