Scottish packaging group Macfarlane suffered a sharp fall in profits during a “difficult” year of rising costs and a tragic accident.
Production revenue increased by 11% to £300.8m (2024: £270.4m) but pre-tax profit fell 61% to £8.1 million from £20.1m.
Operating profit almost halved (-47%) to £12.5m (2024: £23.6m). Group adjusted operating profit was 28% lower at £19.7m (2024: £27.4m).
No provision has been made in respect of the outcome of the investigation into the incident at the Glasgow-based company’s Pitreavie subsidiary, acquired in early 2025, in which a member of staff died, causing production to be disrupted. The incident remains under investigation by the authorities.
Company chair Aleen Gulvanessian said: “We had expected Pitreavie to be a significant contributor to the group in 2025, but its performance was well below expectations, mainly due to the impact of the tragic incident.
“The recently announced £1.2m investment in new equipment will return the business to full operational capacity in Q2 2026, helping to accelerate the process of recovery and support future growth.”
She added: “Whilst acquisitions are not anticipated in the short term, the group continues to work on the acquisition pipeline for the future.
“The board is confident that effective execution of the key priorities identified will create forward momentum for the group.”
Despite the weaker trading year, the board is proposing an unchanged final dividend of 2.7p per share, taking the total dividend for 2025 to 3.66p per share, also unchanged.
The company said it is operating well within its bank facility of £40m which runs until November 2028, with an option to extend to November 2029.
As it prepares the pension scheme for buy-in, a non-recurring charge of £1.9m was accrued in 2025 to recognise an increase in the expected cost of historic equalisation of pensions. The pension scheme surplus, after reflecting the charge, was £6.0m at 31 December 2025 (31 December 2024: £9.6m).
Ms Gulvanessian, said: “2025 was a difficult year for the group, however revenue increased 11% and profit, although below 2024, was in line with the revised market expectations.
“During the year we experienced economic headwinds and uncertainty creating a particularly competitive trading environment and material increases in operating costs which, together with the impact of the Pitreavie incident, resulted in a marked impact on the group’s financial performance.
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