Gall & Eke this month highlights the investment attractions of £25 million cap MacFarlane, the UK’s leading distributor of ‘high-quality packaging consumable products’ with more than 20,000 product lines from 650 plus suppliers through its UK network.

Following the recent disposals of overseas operations in the US and Mexico, MacFarlane plans to increase its domestic UK market share through acquisitions such as the takeover of Bloomfield Supplies in 2007.

Successful package
‘The UK packaging market is highly fragmented’, writes Gall & Eke, ‘with MacFarlane’s £100 million of annual revenue equating to approximately 15 per cent of the total market. The number two player, Ambassador, is estimated to have sales in the region of £25 million from its five branches and, as such, we believe the sector is ripe for consolidation, and MacFarlane’s dominant position ensures that it is well positioned to accelerate growth’.

Furthermore, Gall & Eke’s considered view is that ‘MacFarlane has the ability to take advantage of current trends towards environmentally friendly packaging’, having developed its products to capitalise on this burgeoning market. ‘Currently trading on a 2008 forward multiple of 7.8 times and possessing a highly attractive dividend yield of 7.4 per cent,’ the broker concludes, ‘we view this stock as an attractive opportunity for investors at its current price of 22p.’

Macfarlane Group	LSE	£18.98m	16.50p	0.00p
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