Chairman Archie Hunter confirmed in the company’s recent AGM statement that “carefully targeted and manageable acquisitions” are being pursued.

This is welcome news for MacFarlane, which put out a profit warning last summer after it was hit by steep rises in costs driven by suppliers; profits for 2006 dropped by more than 30% to £2.05 million, compared to £3.38 million the previous year.

Nevertheless, there were more positive notes from MacFarlane’s results. The company’s turnover was up 2% in 2006 to £130.1 million, its pension deficit has been cut to £11.1 million from £16.1 million and debt has also been reduced. Also, according to Hunter, margin controls were tightened in the second half of 2006 and have duly recovered and continue to do so.

In addition, MacFarlane’s various business units continue to trade relatively well. Organic turnover in its packaging distribution business is up 10% year on year. Its e-commerce arm, Packaging2U, is also growing at “encouraging levels”.

This has helped MacFarlane’s share price recover some ground. When the warning was released on June 28, it dropped by 10p to 35p and continued a steady decline until March, when it reached a low of 27.75p. But since announcing its yearly results, MacFarlane’s shares have recovered to 32p at the time of writing, giving the company a market cap of some £36.8 million.

“The board believes that that the group has gained from the experiences of 2006 and its response to them,” Hunter said. “It is confident that the key businesses on which we will concentrate in 2007 have been strengthened. Further acquisitions will be pursued.”

According to press reports, Glasgow-based MacFarlane is looking to acquire businesses to improve its presence in the Thames Valley, Kent and Scotland.