Shares in Macfarlane Group PLC tumbled on Tuesday as it reported a ‘challenging’ start to the year.

Shares in the Glasgow-based packaging firm were down 8.5% to 130.00 pence each in London on Tuesday.

‘As anticipated, the start of 2024 has been challenging, with first quarter sales and profits below the same period in 2023,’ Macfarlane said in a trading update ahead of Tuesday’s annual general meeting.

However, despite the slow start to the year, expectations for the full year are unchanged, it added.

Macfarlane said first quarter sales fell 9.5% from a year prior with continued weak customer demand and price deflation.

The profit impact was partially offset by strong gross margins and the benefit of acquisitions, the company added.

In March, Macfarlane completed the acquisition of Allpack Packaging Supplies Ltd, protective packaging distributor based in Bury St Edmunds.

Macfarlane expects trading to improve in the second half of 2024 through the conversion of a strong new business pipeline combined with some sales recovery from existing customers, good management of gross margins, control of costs and further benefits from M&A activity.

It said net bank funds at March 31 were £4.7 million, an improvement on £500,000 reported at December 31.

‘The group continues to operate well within its bank facilities of £35 million and related covenants, which are committed until December 2025,’ the company added.

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