Macfarlane Group has said that it has made progress in its profit recovery in the first half of the year, despite it falling by 5% year-on-year to £4.71m.

In the six months to 30 June, the packaging distribution and manufacturing operations firm said that its revenue rose by 2% to £148.9m, while its operating profit remained flat at £7.1m.

Across its divisions, packaging distribution saw its revenue increased by 1% to £111.7m, while its manufacturing operations revenue jumped by 3% to £40.6m.

Packaging distribution’s operating profit rose by 6.2% to £5.1m. However, its manufacturing operations’ operating profit dropped by 12% to £4.4m.

In its outlook, Macfarlane said it is currently trading in line with market expectations, with its second half performance benefiting from momentum in new business growth, control of operating expenses and build on the return to profitability in its Pitreavie business.

However, it has noted the there may be a continued impact following the conflict in the Middle East.

Following the update, shares in Macfarlane increased by almost 1.5%

Chair at Macfarlane, Aleen Gulvanessian, stated that following a difficult year in 2025, its main focus for 2026 was to "start the process of profit recovery".

He concluded: "I am pleased to report that the group has made progress in the first-half of 2026, returning the packaging distribution business to organic profit growth, continuing to generate attractive returns from manufacturing operations and restoring the Pitreavie business to profitability in the second quarter. This performance gives us confidence to maintain the interim dividend and allocate a further £6m to a new share buyback programme.

"We have also taken decisive action to mitigate the cost impacts arising from events in the Middle East and successfully completed the pension scheme buy-in, strengthening security for members while further reducing the group's financial risk. Management is focused for the remainder of 2026 on continuing the execution of these actions."

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