Macfarlane Group is the leader in its chosen market, generates cash, is seeing steady 3-5% organic growth, indeed 2015 saw growth towards the upper end of that range, at 4.5%. Overall sales growth 2015 has been 9.9% (translating to PBT +20.7%) and some 55% of growth is from acquisitions, further of which we anticipate in 2016. The acquisitions of recent years are all on track to achieve maximum earnout hurdles. EBITA margins are exhibiting a modestly upward trend.
Strong 2015: Dividend +10%. Sales came in line with estimates (raised in 2015). Margins were ahead and so the PBT estimate of £7.3m was exceeded by 4%. We raise 2016E by 2%, but we would anticipate raising 2016E during the course of the year, in part through acquisition benefits. Cost input price is assisting.
Growth: Packaging Distribution is well over 80% sales and profit. Growth here eased from c7% start 2015 to c5% end year but we anticipate this quantum to be maintained in 2016 despite UK modest GDP growth slowing.