The growth of e-commerce has helped to deliver strong profits for the Glasgow-based Macfarlane Group, the UK’s largest protective packaging supplier.
Sales rose 6% to £179.8 million in 2016 and pre-tax profit was 15% higher at £7.8m.
It was the seventh consecutive year of profit growth by the group in a trading performance in line with market expectations.
The manufacturers and suppliers of cardboard, plastic and bespoke
packaging employ over 800 people at 29 sites across the UK, a site in Ireland and a site in Sweden.
It services more than 20,000 customers in a wide range of sectors.
The packaging distribution division increased sales by 9% to £155.9m and accounted for more than 80% of group revenue.
Organic sales growth was challenging in the first half of the year but strengthened in the second half, boosted by contributions from three company
acquisitions which came into the Macfarlane fold last year.
Chief executive Peter Atkinson said Macfarlane’s focus on the e-commerce sector paid dividends. He said: “We are producing packaging for the goods that are bought online and delivered to people’s homes and workplaces.
“More people are choosing to buy products online and this has resulted in more business for our packaging division.”
Sales in manufacturing operations were down 9% at £23.9m, mainly due to management actions to rebalance the mix of labels products, a category which went on to achieve profit growth.
The packaging design and manufacture business recovered from a poor first half but its full year profit was lower than in 2015.
Chairman Graeme Bissett said: “The group has started 2017 well.
“We will continue to focus on opportunities in sectors with strong growth prospects.
“This includes internet retail, third party logistics and national accounts, and to deliver high standards of service to all customers across a wide range of sectors.
“We will also maintain our programme of acquiring good quality businesses to augment organic growth.
“This is a strategy based on taking positive action, which has served all stakeholders in our business well in recent years and we remain confident that it will continue to do so.”
The board proposed a final dividend of 1.40 pence per share, amounting to a full year dividend of 1.95 pence, a 7% increase on the previous year.