Macfarlane Group - ahead of next week's Finals, shares 73.80p, SQC sets a TP @ 90p

Mark Watson-Mitchell - 18.02.2026

The announcement this morning that Aberforth Partners has increased its stake to 12.0%, some 18.84m shares, in the Macfarlane Group (LON:MACF) reminded me that we should be looking out for the Final Results from the UK and Ireland's largest packaging supplier, due next week.

This time last year, the group was bedding down the mid-January 2025 £18m acquisition of Pitreavie packaging group.

Unfortunately, a fatal incident at that company's plant last October saw the group's shares collapse in reaction from 92p to 67p.

A month later, they were even lower at 61p since then they have been edging gently higher to the current 73.80p.

Now I am taking the view that next week's Finals will be the base from which its price and profits recovery will ascend.

The Business

Macfarlane Group, which has been listed since 1973, has over 70 years of experience in the UK packaging industry.

Through its two divisions, Macfarlane Group services a broad range of business customers, supplying them with high-quality protective packaging products which help customers reduce supply chain costs, improve operational efficiencies and sustainability and enhance their brand presentation.

The divisions are:

Packaging Distribution - Macfarlane Packaging Distribution is the leading UK distributor of a comprehensive range of protective packaging products; and

Manufacturing Operations - Macfarlane Design and Manufacture is a UK market leader in the design and production of protective packaging for high value and fragile products.

Headquartered in Glasgow, Scotland, Macfarlane Group employs over 1,000 people at 43 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands.

Macfarlane Group supplies more than 20,000 customers, principally in the UK and Europe.

In partnership with 1,700 suppliers, Macfarlane Group distributes and manufactures 600,000+ lines, supplying to a wide range of sectors, including: retail e-commerce; consumer goods; food; logistics; mail order; electronics; defence; medical; automotive; and aerospace.

Broker's View

The year to end-December 2025 could see sales up 10% to around £300m, while adjusted pre-tax profits could have fallen 40% to £15.0m or thereabouts, with earnings collapsing from 11.6p to around 7p per share.

That will have been after various costs hit the group due to both the Pitreavie occurence, as well as challenging trading.

This current year could see around £310m in revenues, profits of £16.5m, earnings of 7.6p together with a maintained 2.2p a share dividend.

Further recovery is anticipated next year, with analyst Akhil Patel at Shore Capital Markets predicting £318m sales, £18.4m profits, 8.5p earnings and a 2.3p per share dividend.

Macfarlane Group anticipates its full-year performance to align with market expectations, with consensus adjusted operating profit at £19.1m.

The company is investing £1.2m in new equipment to restore full operational capability at its Pitreavie business by the end of Q1 2026, following the recent incident.

Additionally, Macfarlane is preparing its pension scheme for a potential buy-in, which is expected to result in a non-recurring accounting charge of £2m to £3m due to an increase in the cost of historic pension equalisation.

My View

The Finals next week could well prove to be a turning point for the group to gradually recover its poise.

The shares at 73.80p, in my view, offer some real upside.

I now set a Target Price at 90p.