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Macfarlane Group PLC (MACF)

Macfarlane Group PLC

Chairman's AGM Statement
Macfarlane Group PLC
22 May 2000

                        Macfarlane Group PLC
                                  
                            AGM Statement

At  the Annual General Meeting of later today John Ward, Chairman, of
Macfarlane Group will make the following comments:

'1999  was  a  year of challenge and change within Macfarlane  Group.
Positive  steps  were  taken to reverse the  decline  in  profits  in
previous years, build on the success of the restructuring carried out
in  our  Plastics Division in recent years, and the continued success
of  our Labels Division.  At the same time the Group has put in place
a structure and strong base to drive forward growth.

Quite  apart from these internal challenges and changes,  the  market
remains  highly competitive.  In addition, the high value of sterling
has  made export markets less attractive.  Despite these pressures  I
am  pleased  to report that the Group is responding positively.   The
Group  has  made  investments overseas, particularly  in  the  United
States and in Eastern Europe to ensure a presence in overseas markets
to  serve  our  customers.  The performance in each of our  Divisions
continues  to be benchmarked against a range of comparator  companies
and compares favourably with top quartile performances being achieved
in a number of cases.

Trading in our Merchanting Division remains strong with good top-line
growth  despite  competition  in  the  market  place.   The  Division
continues  to  outperform its competitors and its clear expertise  in
distribution are vital to the Group's future development.

Our  Packaging Division has made a good start to 2000  with  year  on
year  improvements and continued strong demand from new customers  in
the  electronics  sectors.   Despite continuing  raw  material  price
pressures  in  the first half of 2000, margins are being  maintained.
Our  American subsidiary, Western Foam, continues to trade well.  The
management team is well advanced with the restructuring programme and
this  will  be  completed  by the half year within  the  cost  levels
previously outlined.

Trading  conditions  in the Plastics Division have  continued  to  be
competitive  in 2000.  The well-documented hardening of raw  material
prices  has  continued and despite tough trading  conditions  in  the
first two months, the Division has now returned to the upper quartile
levels  of  profitability that we would expect from  its  strong  and
experienced management team.  The division acquired Marpak Limited, a
small  but  profitable extruder and converter based in Leeds,  for  a
consideration  of  £2.25m. This acquisition is  consistent  with  our
strategy  of bolt-on acquisitions in place of capital expenditure  to
expand the product portfolio in the division with new products  which
achieve good levels of profitability.

Our  Labels  Division  continues to  respond  well  to  all  business
opportunities, providing the highest quality self-adhesive labels  to
key  customers  in  the  United  Kingdom.  As  previously  indicated,
profitability  is below the levels achieved in 1999,  reflecting  the
need   to   secure  substantial  long-term  contracts  from  existing
customers, but still represents upper quartile performance of the  UK
labels industry.  The Division is currently participating in a number
of new customer initiatives to fuel top-line growth.

The  Board  remains  confident for the future  of  Macfarlane  Group.
There  is  a  new and enthusiastic executive team in  place  and  our
restructuring programme has progressed well.  Sales continue to  grow
in  line  with  our  expectations in spite of  cost  and  competitive
pressures.

The cash position of the Group is strong, allowing the executive team
to  make the necessary investment to support plans for organic growth
and  take  advantage  of  acquisition opportunities.   As  previously
outlined, our objective in reshaping Macfarlane Group is to produce a
company  which  has  the  capacity to provide  shareholder  value  by
delivering double digit earnings growth. The Board's objective is  to
meet  performance  targets and in spite of  the  competitive  trading
conditions  in the year to date we have not altered our  expectations
for the year.'

Enquiries:
John M. Ward                       Chairman      0141 333 9666
Iain D. Duffin              Chief Executive      0141 333 9666
John Love                  Finance Director      0141 333 9666

Press and Media:
Martin Cryans                 Beattie Media       01698 787878
Ann-marie Wilkinson           Beattie Media       07730 415019


Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.

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