ANNUAL RESULTS 2025
Group profit in line with revised market consensus
FINANCIAL HIGHLIGHTS
|
2025 £000 |
2024 £000 |
Increase/
% |
|
| (Decrease) | |||
| £000 | £000 | % | |
| Statutory measures | |||
| Revenue | 300,810 | 270,437 | 11% |
| Gross profit | 112,171 | 105,372 | 6% |
| Operating profit | 12,495 | 23,597 | (47%) |
| Profit before tax | 8,050 | 20,896 | (61%) |
| Profit for the year | 6,316 | 15,530 | (59%) |
| Interim and proposed final dividend (pence) | 3.66p | 3.66p | – |
| Diluted earnings per share (pence) | 3.98p | 9.74p | (59%) |
| Alternative performance measures | |||
| Adjusted operating profit | 19,689 | 27,402 | (28%) |
| Adjusted profit before tax | 15,573 | 24,969 | (38%) |
| Adjusted diluted earnings per share (pence) | 7.62p | 11.56p | (34%) |
- See below for reconciliation of Alternative Performance Measures to Statutory Measures.
Key Financial Highlights
- Group revenue increased by 11% to £300.8m (2024: £270.4m) and operating profit reduced to £12.5m (2024: £23.6m).
- Group adjusted operating profit reduced by 28% to £19.7m (2024: £27.4m).
- Group adjusted operating profit as a percentage of revenue decreased to 6.5% (2024: 10.1%).
- No provision has been made in respect of the outcome of the investigation into the Pitreavie incident.
- Basic and diluted earnings per share were 3.99p per share (2024: 9.76p per share) and 3.98p per share (2024: 9.74p per share) respectively.
- The Board proposes to maintain the final dividend at 2.70p per share (2024: 2.70p per share) payable on 12 June 2026, taking the total dividend for 2025 to 3.66p per share (2024: 3.66p per share).
- Packaging Distribution generated revenues of £229.2m (2024: £228.8m) with adjusted operating profit of £11.4m (2024: £20.2m).
- Manufacturing Operations generated revenues of £78.5m (2024: £47.5m) with adjusted operating profit of £8.3m (2024: £7.2m).
- Net cash inflow from operating activities of £24.8m (2024: £25.4m) reflects continued effective management of working capital.
- Net bank debt was £16.2m on 31 December 2025, following a net cash outflow of £14.2m in the year, after £25.3m (2024: £21.1m) attributable to acquisitions, the share buyback, dividends and net capital expenditure.
- The Group is operating well within its bank facility of £40.0m which runs until November 2028, with an option to extend to November 2029.
- As we prepare 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).
CHAIR’S STATEMENT
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.
We were deeply saddened to report in October 2025 the loss of one of our colleagues in a tragic incident at the corrugate manufacturing facility of The Pitreavie Group Limited (“Pitreavie”), acquired in early 2025. Our thoughts remain with all those affected and we continue to provide support to ensure their wellbeing. The incident remains under investigation by the authorities.
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.
Trading Performance
Packaging Distribution profits were significantly below 2024 as the business experienced weaker-than-expected demand, delays in new business decision making, pressure on gross margins from a more intense trading environment and increased labour and property-related costs. The business continued to invest in strengthening its management and sales teams during 2025.
Manufacturing Operations, excluding Pitreavie, performed well. The performance was driven by a good contribution from the acquisition of Polyformes Limited (“Polyformes”) in July 2024 combined with stronger demand from customers, particularly in the defence, space and aerospace sectors.
Pitreavie was acquired to strengthen our business in Scotland and offer in-house corrugate supply. We 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.
Cash Flow and Bank Borrowings
The Group’s strong operating cash flows enabled the allocation of capital to invest in the business, fund acquisitions, purchase shares and to support our dividend policy with a low level of net bank debt. The Group extended its borrowing facility of £40m with Bank of Scotland PLC and HSBC UK Bank plc to November 2028 and retains options to extend by one further year and to increase the facilities by up to £20m.
Pension Scheme
The Group is positioning the pension scheme for a possible buy-in to reduce future risk and minimise any further requirement for cash contributions. As part of this process, a non-recurring charge of £1.9m was accrued in 2025 to recognise an increase in the expected cost of historic equalisation of pensions.
Capital Allocation
The Board proposes to maintain the final dividend at 2.70 pence per share, amounting to a full-year dividend of 3.66 pence per share (2024: 3.66 pence per share). Subject to the approval of shareholders at the Annual General Meeting on Tuesday 12 May 2026, the final dividend will be paid on Friday 12 June 2026 to those shareholders on the register on Friday 15 May 2026 (ex-dividend date 14 May 2026).
The Group has spent £2.1m by 31 December 2025 of the £4m share buyback programme which commenced in June 2025.
Sustainability
In 2025, the Group achieved a reduction in its Scope 1 and 2 carbon emissions. The Group is committed to reducing its direct impact on the environment through electrification of our delivery fleet and expanding the use of renewable energy through the installation of solar panels at more of our operating locations.
We continued to work with our customers to reduce the environmental impact of their packaging operations with a particular focus in 2025 on supporting our customers in the retail sector to navigate the challenges of the Extended Producer Responsibility (“EPR”) regulations that came into effect during the year.
Outlook
In 2026 we anticipate markets and the competitive environment to remain challenging.
Management is focused on actions to improve the performance of Packaging Distribution, to recover the Pitreavie business and to continue the development of our specialist Manufacturing Operations. Management priorities for 2026, which are expected to accrue benefits weighted towards the second half of the year, are to:
- Focus new business development primarily in industrial markets to optimise the benefits of our product/ service offer for customers
- Improve operational efficiency through targeted cost savings
- Refine our sourcing model to reduce input pricing
- Recover the Pitreavie performance, benefitting from the recently announced replacement investment in corrugate production capacity
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.
The table below reconciles alternative performance measures to statutory financial measures.
| Alternative Performance Measures | Amortisation £000 | Goodwill Impairment | Deferred Contingent Consideration Adjustments | IAS19 Past Service Cost Adjustment | Tax | Statutory Measures | ||
| £000 | £000 | £000 | £000 | £000 | £000 | £000 | ||
| Year to 31 December 2025 | ||||||||
| Adjusted operating profit | 19,689 | (5,171) | (1,625) | 1,532 | (1,930) | – | 12,495 | Operating profit |
| Adjusted profit before tax | 15,573 | (5,171) | (1,625) | 1,203 | (1,930) | – | 8,050 | Profit before tax |
| Adjusted diluted earnings per share (pence) | 7.62p | (3.26)p | (1.03)p | 0.76p | (1.22)p | 1.11p | 3.98p | Diluted earnings per share (pence) |
| Year to 31 December 2024 | ||||||||
| Adjusted operating profit | 27,402 | (4,610) | – | 805 | – | – | 23,597 | Operating profit |
| Adjusted profit before tax | 24,969 | (4,610) | – | 537 | – | – | 20,896 | Profit before tax |
| Adjusted diluted earnings per share (pence) | 11.56p | (2.89)p | – | 0.34p | – | 0.73p | 9.74p | Diluted earnings per share (pence) |
| Further enquiries: | Macfarlane Group | Tel: 0141 333 9666 |
| Aleen Gulvanessian Chair | ||
| Peter Atkinson Chief Executive | ||
| Ivor Gray Finance Director | ||
| Spreng Thomson | ||
| Callum Spreng | Mob: 07803 970103 |
Legal Entity Identifier (LEI): 213800LVRYDERSJAAZ73
