Macfarlane seals further acquisition as footprint grows

● Multi-million takeover of Ecopac (UK) comes in group’s 70th anniversary year

Scottish packaging group Macfarlane has sealed a fresh multi-million-pound acquisition as it continues to expand its geographic reach.

The firm, which is celebrating its 70th anniversary this year, said it was taking over Ecopac (UK), a protective packaging distribution business based near Aylesbury, Buckinghamshire.

Glasgow-headquartered Macfarlane has acquired 100 per cent of Ecopac for a maximum of £3.9 million in cash. In the year to the end of March 2018, the English firm generated sales of £6m and booked a pre-tax profit of £500,000.

The latest deal, which was hinted at in February when Macfarlane reported its ninth consecutive year of growth, means that the group has undertaken ten acquisitions in the past five years. It has also seen steady organic growth.

Chief executive Peter Atkinson said: “Ecopac is a well-run, profitable packaging business that meets our strict acquisition criteria and will be earnings-enhancing in its first full year in the group.

“I am confident that the business will prove to be an excellent acquisition improving our geographic penetration and extending our customer reach.”

Ecopac focuses chiefly on customers within a close radius of its 60,000 square foot facility near Aylesbury and Macfarlane said the business was expected to benefit from access to its extended range of protective packaging products and services.

Ecopac has 21 employees all of whom will remain with the firm following the acquisition.

Arden analyst Andrew Simms noted: “We have said previously that we believe Macfarlane’s market positioning, strong management team and demonstrable track record support the potential for an excellent and robust growth profile in coming years. The acquisition of Ecopac is further evidence of this.”

In February, Macfarlane said it had enjoyed a strong start to the new financial year on the back of its ninth consecutive year of growth in 2018.

The group said sales in January were up some 11 per cent on last year although Atkinson added that it was “very difficult to determine” how much of that was related to Brexitrelated stockpiling.

“Very few customers are currently asking us to stock build for them but it would be wrong to say you can’t imagine there is a little bit of that sales growth which is Brexit related, possibly 1 or 2 per cent, ” he said.

Group sales in 2018 rose by 11 per cent to £217.3m with profit before tax and exceptional items of £11.2m, up 20 per cent on 2017. An exceptional charge of £330,000 was booked in relation to pension benefit costs.

The group’s main packaging distribution arm grew sales by 11 per cent during the year. A slight fall in sales to the UK retail sector was offset by strong demand from industrial customers. The company also secured a number of new business wins including the Body Shop and Dunelm.