Macfarlane set to tackle pension deficit as profits begin recovery

PACKAGING group Macfarlane is to freeze future increases in pensionable salary for staff to tackle its £20 million-plus pension deficit.

In a trading update yesterday the Glasgow-based company said "further actions" were also being planned to limit future increases in liabilities in the pension scheme.

Chairman Archie Hunter told the company's AGM that the reduction in deficit from the move would be reflected in the company's half-year results, which are due in August.

The company also said that group profit performance in the first four months of the year had been in line with the board's expectations and was significantly ahead of last year when figures had been hit hard by the recession.

Group revenue in the first four months of the year is 9 per cent ahead of the same period last year, with packaging distribution showing a 10 per cent rise and manufacturing operations being 8 per cent ahead.

Hunter said: "We continue to face customer and sector challenges particularly in our manufacturing operations, and there is still market uncertainty, but the business is performing in line with the board's expectations."

He added that group continues to operate "well within its existing bank facilities".

Macfarlane employs 700 people at 22 sites with customers in industries including food retailing and consumer goods. Shares closed down 0.5p at 23p, valuing the company at 26.5m