Macfarlane Group has reported a 32% drop in its profit before tax in the first half of its financial year, totalling £7.93m, citing "challenging" market conditions as the reason for this reduction.

The Glasgow-headquartered packaging company also recorded a 22% year-on-year drop in its operating profit to £9.78m in the six months to 30 June, while its earnings per share fell by 49% to 2.32 pence.

However, in this time, its revenue increased by 13% to £146m.

Chair at Macfarlane Group, Aleen Gulvanassian, said that the first half of the group’s financial year has been challenging due to "economic headwinds and uncertainty".

He added: "Whilst distribution has experienced weaker than expected demand, delays in new business decision-making and pressure on profit margins, manufacturing operations has performed more robustly.

"Manufacturing operations' performance was driven by good contributions from the acquisitions of Polyformes in July 2024 and The Pitreavie Group in January 2025 combined with stronger demand from customers, particularly in the defence and aerospace sectors."

The latest update comes after the group lowered its operating profit guidance by 10% year-on-year last month.

Macfarlane expects its performance to improve in H2 through "seasonal trading uplift" and actions taken by the management team to manage cost changes and mitigate operating cost increases.

The firm has reiterated its guidance for the full year, and following the announcement, its share price increased by 1.3%.

Gulvanassian concluded: "Despite the current market conditions, the board remains confident that our strengthened sales team, differentiated customer proposition and proven executional skills mean the medium-term prospects for the group are positive."

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