The company attributed the decline to challenging economic conditions, which put pressure on profit margins and led to weaker-than-expected demand in its key distribution division.

Group revenue for the six months to 30 June 2025 grew by 13% to £146.6m, largely driven by a strong performance in its manufacturing operations, which were boosted by recent acquisitions. The manufacturing division saw revenues increase to £39.2m and adjusted operating profit rise to £5.0m. In contrast, the Distribution arm experienced a significant fall in adjusted operating profit to £4.8m from £9.3m a year earlier.

Despite the drop in profitability, the interim dividend was held steady at 0.96p per share. Looking ahead, Macfarlane Group stated its full-year outlook remains in line with market expectations, with an improved performance anticipated in the second half of the year.

Aleen Gulvanessian, chair of Macfarlane Group PLC, said: “As noted in the trading update on 10 July, market conditions have been challenging in H1 2025 due to economic headwinds and uncertainty.

“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 Limited in July 2024 and The Pitreavie Group Limited in January 2025 combined with stronger demand from customers, particularly in the defence and aerospace sectors.

“The recently launched share buyback programme will continue as planned.

“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.”