Based on these robust half-year returns we might reasonably assume where shareholders in Macfarlane Group (MACF) stand on the perennial argument over whether small really is beautiful. The Small-Cap constituent, a specialist distributor of protective packaging materials, has been expanding sales both organically (5 per cent) and through last year’s acquisitions (9 per cent), but about a fifth of the top-line is now linked to e-commerce, a sure pointer to one of the key growth channels.
Sales in Manufacturing Operations were 11 per cent above 2017, on the back of strengthening demand for composite packs for export markets. The group offers bespoke packaging for industrial manufacturers, often as part of supply chains. So, the structural integrity of the products is paramount where their customers are concerned. Macfarlane undertakes a considered, collaborative approach to ensure that the packaging offered ensures that valuable and often complex industrial products and components are not damaged in transit. Around 70 per cent of the customer base falls within this category, and given the nature of the business, group chief executive Peter Atkinson was right to highlight the high incidence of repeat revenues - or “stickability” as he put it.
Arden Partners gives adjusted pre-tax profits of £13.6m for the full-year, leading to EPS of 7.0p, rising to £14.8m and 7.6p in 2019.
| MACFARLANE (MACF) | ||||
| ORD PRICE: | 105p | MARKET VALUE: | £ 165m | |
| TOUCH: | 105-108p | 12-MONTH HIGH: | 114p | LOW: 65p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 37p* | NET DEBT: | 19% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 89.8 | 2.54 | 1.53 | 0.60 |
| 2018 | 102 | 3.53 | 1.81 | 0.65 |
| % change | +14 | +39 | +18 | +8 |
| Ex-div: | 20 Sep | |||
| Payment: | 11 Oct | |||
| *Includes intangible assets of £56.2m, or 36p a share. | ||||
