The financial statements of Macfarlane Group PLC, Company registration number SC004221, were approved by the Board of Directors on 27 February 2025 and signed on its behalf by
Peter D. Atkinson\tIvor GrayChief Executive\tFinance Director
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Macfarlane Group PLC is a public company listed on the London Stock Exchange (\u2018the Company\u2019), incorporated and domiciled in the United Kingdom and registered in Scotland. The Company\u2019s registered office is 3 Park Gardens, Glasgow, G3 7YE.
Basis of accounting
The principal activities of the Company and its subsidiaries (\u2018the Group\u2019) and the nature of the Group\u2019s operations are set out in the strategic report on pages 1 to 58. The 2024 financial statements have been prepared in accordance with United Kingdom adopted international accounting standards. These consolidated financial statements are presented in Sterling, which is the Company\u2019s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.
The financial statements have been prepared on the historical cost basis. The revaluation reserve relates to a period before transition to IFRS.
Going concern
The Directors, in their consideration of going concern, have reviewed the Group\u2019s future cash flow forecasts and profit projections, which they believe are based on an appropriate assessment of the market and past experience. The Group\u2019s business activities, together with the factors likely to affect its future development, performance and financial position are set out in the Strategic Report on pages 1 to 58.
The Group\u2019s principal financial risks in the medium term relate to liquidity and credit risk. Liquidity risk is managed by ensuring that the Group\u2019s day-to-day working capital requirements are met by having access to banking facilities with suitable terms and conditions to accommodate the requirements of the Group\u2019s operations. The Group has a committed borrowing facility of \u00a340m with Bank of Scotland PLC and HSBC UK Bank plc in place until November 2027. The facility bears interest at normal commercial rates and carries standard financial covenants in relation to interest cover and leverage. Credit risk is mitigated by applying considerable rigour in managing the Group\u2019s trade receivables. The Directors believe that the Group is adequately placed to manage its financial risks effectively, despite any economic uncertainty.
The Directors are of the opinion that the Group\u2019s cash flow forecasts and profit projections, which they believe are based on a prudent assessment of the market and past experience taking account of reasonably possible changes in trading performance given current market and economic conditions, show that the Group should be able to operate within the current facility and comply with its banking covenants. The Directors have modelled a range of scenarios, including a base case, a downside scenario, a severe but plausible downside and a reverse stress test, over a three-year horizon. Details are set out in the Viability Statement on page 21.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for a period extending at least for the next twelve months from the date of approval of these financial statements. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
Critical judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. Due to the nature of estimation, the actual outcomes may well differ from these estimates.
Critical judgements
As detailed in note 20, property provisions of \u00a31.4m have been recognised as at 31 December 2024 (2023: \u00a31.7m), representing the Directors\u2019 best estimate of dilapidations on property leases. The Directors have made the judgement that no provision is required for certain property leases where there is no intention to exit, having considered a number of factors including the extent of modifications to the property, the terms of the lease agreement, and the condition of the property.
No other significant critical judgements have been made in the current or prior year.
Key sources of estimation uncertainty
The key sources of estimation uncertainty that could have significant effect on the carrying amounts of assets and liabilities in the next twelve months are discussed below:
Retirement benefit obligations
The determination of any defined benefit pension scheme asset or liability is based on assumptions determined with independent actuarial advice. The key assumptions used include discount rate and inflation rate assumptions, for which a sensitivity analysis is provided in note 23. The Directors consider that those sensitivities represent reasonable sensitivities which could occur in the next financial year.
Valuation of deferred contingent consideration
The valuation of deferred contingent consideration at both acquisition date and the balance sheet date is measured at fair value. This involves the assessment of forecast future cash flows against earn-out targets agreed with the sellers of acquired businesses over a period of up to two years. This assessment is based on the Directors\u2019 best estimate using the information available at the relevant dates. However, there remains a risk that the actual payment differs from the amount assumed as consideration within the PPA accounting as detailed in note 22 and from the amount recorded as a liability at the balance sheet date as detailed in note 15. Deferred contingent considerations are recognised as a liability in trade and other payables in note 15 and are remeasured to fair value of \u00a35.5m at the balance sheet date, of which \u00a32.3m is due in more than one year, based on a range of outcomes between \u00a3Nil and \u00a37.3m. Trading in the post-acquisition period supports the remeasured value of \u00a35.5m.
Basis of accounting
The principal activities of the Company and its subsidiaries (\u2018the Group\u2019) and the nature of the Group\u2019s operations are set out in the strategic report on pages 1 to 58. The 2024 financial statements have been prepared in accordance with United Kingdom adopted international accounting standardsThese consolidated financial statements are presented in Sterling, which is the Company\u2019s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.The financial statements have been prepared on the historical cost basis. The revaluation reserve relates to a period before transition to IFRS.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870188": { "value": "Macfarlane Group PLC ", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870191": { "value": "public company ", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870192": { "value": "United Kingdom ", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870193": { "value": "United Kingdom ", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870194": { "value": "United Kingdom ", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870195": { "value": "3 Park Gardens, Glasgow, G3 7YE.", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870198": { "value": "The 2024 financial statements have been prepared in accordance with United Kingdom adopted international accounting standards", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870197": { "value": "The 2024 financial statements have been prepared in accordance with United Kingdom adopted international accounting standards. These consolidated financial statements are presented in Sterling, which is the Company\u2019s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.The financial statements have been prepared on the historical cost basis. The revaluation reserve relates to a period before transition to IFRS.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870196": { "value": "Going concern
The Directors, in their consideration of going concern, have reviewed the Group\u2019s future cash flow forecasts and profit projections, which they believe are based on an appropriate assessment of the market and past experience. The Group\u2019s business activities, together with the factors likely to affect its future development, performance and financial position are set out in the Strategic Report on pages 1 to 58.
The Group\u2019s principal financial risks in the medium term relate to liquidity and credit risk. Liquidity risk is managed by ensuring that the Group\u2019s day-to-day working capital requirements are met by having access to banking facilities with suitable terms and conditions to accommodate the requirements of the Group\u2019s operations. The Group has a committed borrowing facility of \u00a340m with Bank of Scotland PLC and HSBC UK Bank plc in place until November 2027. The facility bears interest at normal commercial rates and carries standard financial covenants in relation to interest cover and leverage. Credit risk is mitigated by applying considerable rigour in managing the Group\u2019s trade receivables. The Directors believe that the Group is adequately placed to manage its financial risks effectively, despite any economic uncertainty.
The Directors are of the opinion that the Group\u2019s cash flow forecasts and profit projections, which they believe are based on a prudent assessment of the market and past experience taking account of reasonably possible changes in trading performance given current market and economic conditions, show that the Group should be able to operate within the current facility and comply with its banking covenants. The Directors have modelled a range of scenarios, including a base case, a downside scenario, a severe but plausible downside and a reverse stress test, over a three-year horizon. Details are set out in the Viability Statement on page 21.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for a period extending at least for the next twelve months from the date of approval of these financial statements. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870199": { "value": "Critical judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. Due to the nature of estimation, the actual outcomes may well differ from these estimates.
Critical judgements
As detailed in note 20, property provisions of \u00a31.4m have been recognised as at 31 December 2024 (2023: \u00a31.7m), representing the Directors\u2019 best estimate of dilapidations on property leases. The Directors have made the judgement that no provision is required for certain property leases where there is no intention to exit, having considered a number of factors including the extent of modifications to the property, the terms of the lease agreement, and the condition of the property.
No other significant critical judgements have been made in the current or prior year.
Key sources of estimation uncertainty
The key sources of estimation uncertainty that could have significant effect on the carrying amounts of assets and liabilities in the next twelve months are discussed below:
Retirement benefit obligations
The determination of any defined benefit pension scheme asset or liability is based on assumptions determined with independent actuarial advice. The key assumptions used include discount rate and inflation rate assumptions, for which a sensitivity analysis is provided in note 23. The Directors consider that those sensitivities represent reasonable sensitivities which could occur in the next financial year.
Valuation of deferred contingent consideration
The valuation of deferred contingent consideration at both acquisition date and the balance sheet date is measured at fair value. This involves the assessment of forecast future cash flows against earn-out targets agreed with the sellers of acquired businesses over a period of up to two years. This assessment is based on the Directors\u2019 best estimate using the information available at the relevant dates. However, there remains a risk that the actual payment differs from the amount assumed as consideration within the PPA accounting as detailed in note 22 and from the amount recorded as a liability at the balance sheet date as detailed in note 15. Deferred contingent considerations are recognised as a liability in trade and other payables in note 15 and are remeasured to fair value of \u00a35.5m at the balance sheet date, of which \u00a32.3m is due in more than one year, based on a range of outcomes between \u00a3Nil and \u00a37.3m. Trading in the post-acquisition period supports the remeasured value of \u00a35.5m.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870200": { "value": "Key sources of estimation uncertaintyThe key sources of estimation uncertainty that could have significant effect on the carrying amounts of assets and liabilities in the next twelve months are discussed below:Retirement benefit obligations The determination of any defined benefit pension scheme asset or liability is based on assumptions determined with independent actuarial advice. The key assumptions used include discount rate and inflation rate assumptions, for which a sensitivity analysis is provided in note 23. The Directors consider that those sensitivities represent reasonable sensitivities which could occur in the next financial year.Valuation of deferred contingent consideration The valuation of deferred contingent consideration at both acquisition date and the balance sheet date is measured at fair value. This involves the assessment of forecast future cash flows against earn-out targets agreed with the sellers of acquired businesses over a period of up to two years. This assessment is based on the Directors\u2019 best estimate using the information available at the relevant dates. However, there remains a risk that the actual payment differs from the amount assumed as consideration within the PPA accounting as detailed in note 22 and from the amount recorded as a liability at the balance sheet date as detailed in note 15. Deferred contingent considerations are recognised as a liability in trade and other payables in note 15 and are remeasured to fair value of \u00a35.5m at the balance sheet date, of which \u00a32.3m is due in more than one year, based on a range of outcomes between \u00a3Nil and \u00a37.3m. Trading in the post-acquisition period supports the remeasured value of \u00a35.5m.", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870261": { "value": "Changes in accounting policies in 2024
There are no new accounting policies applied in 2024 which have had a material effect on these accounts. In addition, the Directors do not consider that the adoption of new and revised standards and interpretations issued by the IASB in 2024 has had any material impact on the financial statements of the Group.
New accounting standards and interpretations
In the current year, the Group has applied a number of amendments to IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2024. The adoption of the following amendments has not had any material impact on the disclosures or on the amounts reported in these financial statements:
Amendments to IAS 1 \u2013 Classification of Liabilities as Current or Non-current
Amendments to IAS 1 \u2013 Non-current Liabilities with Covenants
Amendments to IFRS 16 Leases\u00a0\u2013 Lease Liability in a Sale and Leaseback
The adoption of the amendment below has an impact on the disclosures in these financial statements which is set out in note 15:
Amendments to IAS 7 \u2013 Statement of Cash Flows\u00a0and IFRS 7 Financial Instruments: Disclosures titled\u00a0Supplier Finance Arrangements
At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective:
Amendments to IAS 21 \u2013 Lack of Exchangeability
IFRS 18 \u2013 Presentation and Disclosures in Financial Statements
IFRS 19 \u2013 Subsidiaries without Public Accountability: DisclosureThe Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods, except as noted below.
IFRS 18 Presentation and Disclosures in Financial Statements
IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1 unchanged and complementing them with new requirements. In addition, some IAS 1 paragraphs have been moved to IAS 8 and IFRS 7. Furthermore, the IASB has made minor amendments to IAS 7 and IAS 33 Earnings per Share.
IFRS 18 introduces new requirements to:
present specified categories and defined subtotals in the statement of profit or loss
provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements
improve aggregation and disaggregation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870201": { "value": "Changes in accounting policies in 2024
There are no new accounting policies applied in 2024 which have had a material effect on these accounts. In addition, the Directors do not consider that the adoption of new and revised standards and interpretations issued by the IASB in 2024 has had any material impact on the financial statements of the Group.
New accounting standards and interpretations
In the current year, the Group has applied a number of amendments to IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2024. The adoption of the following amendments has not had any material impact on the disclosures or on the amounts reported in these financial statements:
Amendments to IAS 1 \u2013 Classification of Liabilities as Current or Non-current
Amendments to IAS 1 \u2013 Non-current Liabilities with Covenants
Amendments to IFRS 16 Leases\u00a0\u2013 Lease Liability in a Sale and Leaseback
The adoption of the amendment below has an impact on the disclosures in these financial statements which is set out in note 15:
Amendments to IAS 7 \u2013 Statement of Cash Flows\u00a0and IFRS 7 Financial Instruments: Disclosures titled\u00a0Supplier Finance Arrangements
At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective:
Amendments to IAS 21 \u2013 Lack of Exchangeability
IFRS 18 \u2013 Presentation and Disclosures in Financial Statements
IFRS 19 \u2013 Subsidiaries without Public Accountability: DisclosureThe Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods, except as noted below.
IFRS 18 Presentation and Disclosures in Financial Statements
IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1 unchanged and complementing them with new requirements. In addition, some IAS 1 paragraphs have been moved to IAS 8 and IFRS 7. Furthermore, the IASB has made minor amendments to IAS 7 and IAS 33 Earnings per Share.
IFRS 18 introduces new requirements to:
present specified categories and defined subtotals in the statement of profit or loss
provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements
improve aggregation and disaggregation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870202": { "value": "Basis of consolidationSubsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting rights. The acquisition date is the date on which control is transferred to the acquirer.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.
Business combinations
The acquisition of subsidiaries is accounted for under the acquisition method. The acquired business is measured at the effective date of acquisition, defined as the date control is acquired, as the aggregate fair value of assets, liabilities and contingent liabilities as required under IFRS 3 \u2018Business Combinations\u2019. Any excess of the cost of acquisition over the fair value of the separately identifiable net assets of the acquired business is represented as goodwill. Contingent consideration classified as a liability is subsequently re-measured through the consolidated income statement.
The results of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal. The consolidated gain or loss on disposal of a subsidiary is the difference between the net proceeds of sale and the Group\u2019s share of the subsidiary\u2019s net assets together with the carrying value of any related goodwill at the effective date of disposal.
Transactions eliminated on consolidation
Intra-Group balances and transactions, and any unrealised income and expenses arising from intra-Group transactions, are eliminated on consolidation.
Discontinued operations
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
represents a separate major line of business or geographical area of operations; or
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the income statement.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870204": { "value": "Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting rights. The acquisition date is the date on which control is transferred to the acquirer.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870206": { "value": "Business combinations
The acquisition of subsidiaries is accounted for under the acquisition method. The acquired business is measured at the effective date of acquisition, defined as the date control is acquired, as the aggregate fair value of assets, liabilities and contingent liabilities as required under IFRS 3 \u2018Business Combinations\u2019. Any excess of the cost of acquisition over the fair value of the separately identifiable net assets of the acquired business is represented as goodwill. Contingent consideration classified as a liability is subsequently re-measured through the consolidated income statement.
The results of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal. The consolidated gain or loss on disposal of a subsidiary is the difference between the net proceeds of sale and the Group\u2019s share of the subsidiary\u2019s net assets together with the carrying value of any related goodwill at the effective date of disposal.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870203": { "value": "Business combinations
The acquisition of subsidiaries is accounted for under the acquisition method. The acquired business is measured at the effective date of acquisition, defined as the date control is acquired, as the aggregate fair value of assets, liabilities and contingent liabilities as required under IFRS 3 \u2018Business Combinations\u2019. Any excess of the cost of acquisition over the fair value of the separately identifiable net assets of the acquired business is represented as goodwill. Contingent consideration classified as a liability is subsequently re-measured through the consolidated income statement.
The results of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal. The consolidated gain or loss on disposal of a subsidiary is the difference between the net proceeds of sale and the Group\u2019s share of the subsidiary\u2019s net assets together with the carrying value of any related goodwill at the effective date of disposalGoodwill
Goodwill arising on a business combination is recognised as an asset and represents the excess of the cost of acquisition over the net fair values of the separately identifiable assets and liabilities of the acquired business or subsidiary at the effective date of acquisition. Where the cost of an acquisition includes contingent consideration, this is based on our best assessment of the fair value of deferred contingent consideration payable based on the conditions and information available at the date of acquisition and then subsequently reviewed at each balance sheet date.
Goodwill is allocated to cash generating units (\u2018CGUs\u2019) expected to benefit from the synergies of the combination for the purpose of impairment testing. The carrying value of goodwill for each CGU is not amortised but is considered annually and also reviewed where management has reason to believe that a change in circumstances may give rise to any impairment or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870207": { "value": "Discontinued operations
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
represents a separate major line of business or geographical area of operations; or
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870205": { "value": "Discontinued operations
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
represents a separate major line of business or geographical area of operations; or
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870271": { "value": "Other intangible assets
Other intangible assets comprise separately identifiable intangible assets recognised on the acquisitions of businesses or subsidiary companies. They are recorded at fair value on acquisition less any amortisation and subsequent impairment. These are primarily brand values, which are calculated on the relief from royalty method, and customer relationship values, which are calculated on the excess earnings method based on the net anticipated earnings stream. Brand values are amortised on a straight-line basis of up to five years and customer relationships are amortised on a straight-line basis of up to fifteen years and are expensed through administration expenses in the income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870208": { "value": "Impairment
The carrying values of the Group\u2019s assets are reviewed annually to determine if there is any indication of impairment. If any such indication exists, the assets\u2019 recoverable values are calculated as the present value of the estimated future cash flows, discounted at appropriate pre-tax discount rates. Impairment losses are recognised when the carrying value of an asset or CGU exceeds recoverable value. Impairment losses are recognised in the consolidated income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870209": { "value": "(c) Revenue recognition
The Group is engaged in the delivery of packaging materials and packing machinery to customers. Revenue is not recognised if there is significant uncertainty regarding the recovery of the revenue consideration. Revenue represents amounts receivable for goods provided to third parties in the normal course of business, net of discounts, customer rebates, VAT and other sales related taxes.
IFRS 15 \u2018Revenue from Contracts with Customers\u2019 requires the Group to apportion revenues from customer contracts to separate performance obligations and recognise revenues as each performance obligation is satisfied. The Group\u2019s revenue is generated from the delivery of the goods to customers and the Group considers this to be a single performance obligation. The Group does not enter into any repurchase agreements. It is therefore appropriate to recognise revenue at the point of transfer of goods to the customer, consistent with the revenue recognition framework in IFRS 15.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870210": { "value": "(d) Leasing
The Group recognises a right-of-use asset and a corresponding lease liability for all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets below \u00a34,000. For these short-term or low value leases, the Group recognises the lease payments as an operating expense disclosed in administrative expenses on a straight-line basis over the term of the lease.
The lease liability is initially measured at the present value of lease payments that are not paid at the commencement date, discounted using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses appropriate incremental borrowing rates.
Lease liabilities are presented on two separate lines in the balance sheet for amounts due within one year and amounts due beyond one year. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the liability by payments made. The Company remeasures the lease liability (and adjusts the related right-of-use asset) whenever the lease term has changed or a lease contract is modified and the modification is not accounted for as a separate lease.
Right-of-use (\u2018ROU\u2019) assets comprise the initial measurement of the corresponding lease liability and are subsequently measured at cost less accumulated depreciation and impairment losses. ROU assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the ROU asset reflects that the Company expects to exercise a purchase option, the related ROU asset is depreciated over the useful life of the asset. Depreciation starts on the commencement date of the lease.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has not used this practical expedient and has separated out the non-lease components for its leases. These non-lease components, typically servicing and maintenance costs, have been recognised as an expense on a straight-line basis and disclosed in administrative expenses in the consolidated income statement.
The Group\u2019s incremental borrowing rates applied to lease liabilities in 2024 ranged between 2.75% and 8.75%, with the average rate applied across all leases being 5.59%.
ROU assets are tested for impairment in accordance with IAS 36 Impairment of Assets.
Movements in ROU assets and lease liabilities and are set out in note 11 and note 16 respectively.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870211": { "value": "(e) Foreign currencies
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the consolidated income statement. Non-monetary assets and liabilities, measured at historical cost in a foreign currency, are translated using the exchange rates at the date of the transaction. Non-monetary assets and liabilities, stated at fair value in a foreign currency, are retranslated to the functional currency at the exchange rates ruling at the dates the fair value was determined.
Assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to the Group\u2019s presentational currency, Sterling, at the exchange rates ruling at the balance sheet date. Revenues and expenses of foreign operations are translated at an average rate for the year where this rate approximates to the exchange rates ruling at the dates of the transactions. Exchange differences arising from the translation of foreign operations are reported as an item of other comprehensive income and accumulated in the translation reserve.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870272": { "value": "(f) Retirement benefits
Defined contribution schemes
A defined contribution scheme is a post-employment benefit scheme under which the Company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension schemes are recognised as an expense in the consolidated income statement in the periods during which services are rendered by employees.
100\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
Defined benefit schemes
A defined benefit scheme is a post-employment benefit scheme other than a defined contribution scheme. The Group\u2019s net retirement benefit obligation in respect of its defined benefit pension scheme is calculated by estimating the amount of future benefits that employees have earned in return for their service in current and prior periods. These benefits are then discounted to determine the present value, and the fair values of any scheme investments, at bid price, are deducted. The net interest on the net retirement benefit obligation for the year is calculated by applying the discount rate used to measure the defined benefit obligation at the beginning of the year.
The discount rate is the yield at the reporting date on bonds that have a credit rating of at least AA that have maturity dates approximating to the average duration of the Group\u2019s retirement benefit obligations and that are denominated in the currency in which the benefits are expected to be paid.
Remeasurements arising from defined benefit plans comprise actuarial gains and losses, returns on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). Remeasurements are recognised in the statement of other comprehensive income and all other expenses related to defined benefit schemes charged in staff costs in the consolidated income statement.
When the benefits of a scheme are changed, or when a scheme is curtailed, the portion of the changed benefit related to past service by employees, or the gain or loss on curtailment, is recognised immediately in the consolidated income statement when the scheme amendment or curtailment occurs.
The calculation of the retirement benefit obligations is performed by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the present value of benefits available in the form of any future refunds from the plan or reductions in future contributions and takes into account the adverse effect of the present value of any minimum funding requirements.
The Group\u2019s defined benefit pension scheme covers Macfarlane Group PLC and Macfarlane Group UK Limited at December 2024. The net defined benefit cost of the scheme is apportioned to these participating entities based on the employment history of scheme members, who are allocated to the relevant subsidiary, with any remaining members allocated to the parent company.
(l) Share-based payments
The grant date fair value of share-based payments awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the awards. The fair value of the awards granted is measured using an option valuation model, taking into account the terms and conditions upon which the awards were granted. The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
Details of the determination of the fair value of equity-settled share-based transactions are set out in note 24.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870213": { "value": "The tax expense represents the sum of the current tax payable and deferred tax.
Current tax is payable based on the taxable profit for the year. Taxable profit differs from profit before tax as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and excludes items that are never taxable or deductible. The current tax liability is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date and any adjustments in respect of prior years.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870212": { "value": "Deferred tax balances represent the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax assets and liabilities are not discounted.
The carrying value of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax laws and rates that have been substantively enacted at the balance sheet date. Deferred tax is charged or credited in the consolidated income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also recorded in the consolidated statement of other comprehensive income.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870218": { "value": "(h) Property, plant and equipment
Property, plant and equipment are stated at cost, with assets revalued before the date of transition to IFRS recorded at deemed cost.
No depreciation is provided on land. Depreciation is recognised so as to write off the cost of the property, plant and equipment, less their estimated residual values, by equal annual instalments over their estimated useful lives. The rates of depreciation use the straight-line method and vary between 2% and 5% per annum on buildings and 7% and 33% per annum on plant and equipment. Rates of depreciation are reviewed annually to ensure they remain relevant and residual values are reviewed to ensure they remain appropriate once in each calendar year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870215": { "value": "No depreciation is provided on land. Depreciation is recognised so as to write off the cost of the property, plant and equipment, less their estimated residual values, by equal annual instalments over their estimated useful lives. The rates of depreciation use the straight-line method and vary between 2% and 5% per annum on buildings and 7% and 33% per annum on plant and equipment. Rates of depreciation are reviewed annually to ensure they remain relevant and residual values are reviewed to ensure they remain appropriate once in each calendar year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870217": { "value": "(i) Inventories
Inventories are consistently stated at the lower of cost and net realisable value. Cost represents purchase price. In the case of work in progress and finished goods, cost comprises direct materials, direct labour costs and attributable overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value is based on the estimated selling price, less any further costs expected to be incurred to completion and disposal. Inventories are stated less provisions required for slow-moving and obsolete items, where appropriate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870222": { "value": "(j) Financial instruments
Financial assets and financial liabilities are recognised in the Group\u2019s statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
Other financial assets comprise trade and other receivables that have fixed or determinable recoveries. The classification takes account of the nature and purpose of the financial assets and is determined on initial recognition. The entity always recognises lifetimes expected credit losses (ECL) for trade receivables as estimated using a provision matrix based on the Group\u2019s historic credit loss experience. In accordance with IFRS 9 \u2018Financial Instruments\u2019 changes in the carrying value of the provision are recognised in the consolidated income statement.
Cash and cash equivalents\u00a0comprise cash on hand and on demand deposits, readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.
Financial liabilities and equity instruments\u00a0are classified in accordance with the substance of the contractual arrangements.
All financial liabilities are measured subsequently at amortised cost using the effective interest method or at FVTPL.
Financial liabilities,that are not (i) contingent consideration of an acquirer in a business combination, (ii) held-for-trading, or (iii) designated as at FVTPL, are measured subsequently at amortised cost using the effective interest method.
Equity instruments are any contracts evidencing a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Derivative financial instruments were not used in the current or preceding financial year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870221": { "value": "(j) Financial instruments
Financial assets and financial liabilities are recognised in the Group\u2019s statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
Other financial assets comprise trade and other receivables that have fixed or determinable recoveries. The classification takes account of the nature and purpose of the financial assets and is determined on initial recognition. The entity always recognises lifetimes expected credit losses (ECL) for trade receivables as estimated using a provision matrix based on the Group\u2019s historic credit loss experience. In accordance with IFRS 9 \u2018Financial Instruments\u2019 changes in the carrying value of the provision are recognised in the consolidated income statement.
Cash and cash equivalents\u00a0comprise cash on hand and on demand deposits, readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.
Financial liabilities and equity instruments\u00a0are classified in accordance with the substance of the contractual arrangements.
All financial liabilities are measured subsequently at amortised cost using the effective interest method or at FVTPL.
Financial liabilities,that are not (i) contingent consideration of an acquirer in a business combination, (ii) held-for-trading, or (iii) designated as at FVTPL, are measured subsequently at amortised cost using the effective interest method.
Equity instruments are any contracts evidencing a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Derivative financial instruments were not used in the current or preceding financial year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870219": { "value": "Other financial assets comprise trade and other receivables that have fixed or determinable recoveries. The classification takes account of the nature and purpose of the financial assets and is determined on initial recognition. The entity always recognises lifetimes expected credit losses (ECL) for trade receivables as estimated using a provision matrix based on the Group\u2019s historic credit loss experience. In accordance with IFRS 9 \u2018Financial Instruments\u2019 changes in the carrying value of the provision are recognised in the consolidated income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870214": { "value": "Cash and cash equivalents\u00a0comprise cash on hand and on demand deposits, readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromBanksExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870220": { "value": "All financial liabilities are measured subsequently at amortised cost using the effective interest method or at FVTPL.
Financial liabilities,that are not (i) contingent consideration of an acquirer in a business combination, (ii) held-for-trading, or (iii) designated as at FVTPL, are measured subsequently at amortised cost using the effective interest method.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870216": { "value": "Equity instruments are any contracts evidencing a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870262": { "value": "ProvisionsProperty provisions
The Group has a number of property leases. Under IAS 37 an entity must recognise a provision if a present obligation has arisen as a result of a past event, payment is probable and the amount can be estimated reliably. Where it is probable at the balance sheet date that there is a liability in respect of restoring the property to its original condition a provision is made for the best estimate of the cost of fulfilling any residual repairing obligation for that property lease.
The Group may make the determination to exit a property lease before the expiry date, when it does not have a commercial rationale to continue to occupy the property. In this case the Group could have surplus properties and it would seek to attract a new tenant to obtain rental income from a sub-lease to cover its ongoing liabilities under the remaining period of the head lease. If there is likely to be a rental void for a period of time, then a provision is made at each balance sheet date to cover the best estimate of the future cost of the likely void period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870224": { "value": "Business and geographical segments(a) Business segments
The Group\u2019s principal business segment is Packaging Distribution, comprising the distribution of packaging materials in the UK, Ireland and Europe. This segment accounts for 85% of Group revenue and 73% of Group operating profit.
The Manufacturing Operations segment comprises the design, manufacture and assembly of timber, corrugated and foam-based packaging materials in the UK. This segment accounts for 15% of Group revenue and 27% of Group operating profit.
External revenues from major products and services
2024
\u00a3000
2023
\u00a3000
Packaging Distribution
228,763
244,938
Manufacturing Operations
41,674
35,776
External revenues
270,437
280,714
(b) Segmental information
Packaging
Distribution
\u00a3000
Manufacturing
Operations
\u00a3000
2024
Total
\u00a3000
Packaging
Distribution
\u00a3000
Manufacturing
Operations
\u00a3000
2023
Total
\u00a3000
Revenue
Total revenue
228,763
47,458
276,221
244,938
40,929
285,867
Inter-segment revenue
\u2013
(5,784)
(5,784)
\u2013
(5,153)
(5,153)
External revenue
228,763
41,674
270,437
244,938
35,776
280,714
Cost of sales
(143,890)
(21,175)
(165,065)
(157,458)
(17,575)
(175,033)
Gross profit
84,873
20,499
105,372
87,480
18,201
105,681
Net operating expenses
(64,715)
(13,255)
(77,970)
(66,436)
(11,608)
(78,044)
Adjusted operating profit
20,158
7,244
27,402
21,044
6,593
27,637
Amortisation
(3,082)
(1,528)
(4,610)
(2,983)
(1,051)
(4,034)
Deferred contingent consideration adjustments
255
550
805
(1,550)
15
(1,535)
Operating profit
17,331
6,266
23,597
16,511
5,557
22,068
Net finance costs
(2,701)
(1,788)
Profit before tax
20,896
20,280
Tax
(5,366)
(5,306)
Profit for the year
15,530
14,974
Capital additions
16,887
12,331
29,218
8,377
12,663
21,040
Depreciation/amortisation
12,258
3,109
15,367
11,297
2,289
13,586
Segment assets
189,768
57,163
246,931
176,740
44,488
221,228
Segment liabilities
(110,832)
(12,826)
(123,658)
(94,757)
(11,895)
(106,652)
Net assets
78,936
44,337
123,273
81,983
32,593
114,576
Inter-segment revenues are charged at prevailing market prices.
(c) Geographical segments
The Group\u2019s operations are primarily located in the UK and Europe. No individual country in Europe accounts for more than 10% of Group external revenue. Europe revenue below originates from the Group\u2019s subsidiaries in Germany (53%), the Netherlands (30%) and Ireland (17%). Europe non-current assets below relates to the Group\u2019s subsidiaries in Germany (97%) and Ireland (3%).
Packaging Distribution activities are primarily in the UK, with some activity in Europe,
Manufacturing Operations are primarily in the UK.
Continuing operations
2024
Total
\u00a3000
Continuing operations
2023
Total
\u00a3000
UK
\u00a3000
Europe
\u00a3000
UK
\u00a3000
Europe
\u00a3000
External revenue
248,503
21,934
270,437
258,464
22,250
280,714
Operating profit
20,849
2,748
23,597
20,588
1,480
22,068
Non-current assets1
144,763
4,926
149,689
126,063
5,643
131,706
Capital additions
29,205
13
29,218
20,953
87
21,040
(d) Information about major customers
No single customer accounts for more than 10% of the Group\u2019s external revenues. Customer dependencies are regularly monitored.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870225": { "value": "(a) Business segments
The Group\u2019s principal business segment is Packaging Distribution, comprising the distribution of packaging materials in the UK, Ireland and Europe. This segment accounts for 85% of Group revenue and 73% of Group operating profit.
The Manufacturing Operations segment comprises the design, manufacture and assembly of timber, corrugated and foam-based packaging materials in the UK. This segment accounts for 15% of Group revenue and 27% of Group operating profit.
External revenues from major products and services
2024
\u00a3000
2023
\u00a3000
Packaging Distribution
228,763
244,938
Manufacturing Operations
41,674
35,776
External revenues
270,437
280,714
(b) Segmental information
Packaging
Distribution
\u00a3000
Manufacturing
Operations
\u00a3000
2024
Total
\u00a3000
Packaging
Distribution
\u00a3000
Manufacturing
Operations
\u00a3000
2023
Total
\u00a3000
Revenue
Total revenue
228,763
47,458
276,221
244,938
40,929
285,867
Inter-segment revenue
\u2013
(5,784)
(5,784)
\u2013
(5,153)
(5,153)
External revenue
228,763
41,674
270,437
244,938
35,776
280,714
Cost of sales
(143,890)
(21,175)
(165,065)
(157,458)
(17,575)
(175,033)
Gross profit
84,873
20,499
105,372
87,480
18,201
105,681
Net operating expenses
(64,715)
(13,255)
(77,970)
(66,436)
(11,608)
(78,044)
Adjusted operating profit
20,158
7,244
27,402
21,044
6,593
27,637
Amortisation
(3,082)
(1,528)
(4,610)
(2,983)
(1,051)
(4,034)
Deferred contingent consideration adjustments
255
550
805
(1,550)
15
(1,535)
Operating profit
17,331
6,266
23,597
16,511
5,557
22,068
Net finance costs
(2,701)
(1,788)
Profit before tax
20,896
20,280
Tax
(5,366)
(5,306)
Profit for the year
15,530
14,974
Capital additions
16,887
12,331
29,218
8,377
12,663
21,040
Depreciation/amortisation
12,258
3,109
15,367
11,297
2,289
13,586
Segment assets
189,768
57,163
246,931
176,740
44,488
221,228
Segment liabilities
(110,832)
(12,826)
(123,658)
(94,757)
(11,895)
(106,652)
Net assets
78,936
44,337
123,273
81,983
32,593
114,576
Inter-segment revenues are charged at prevailing market prices.
(c) Geographical segments
The Group\u2019s operations are primarily located in the UK and Europe. No individual country in Europe accounts for more than 10% of Group external revenue. Europe revenue below originates from the Group\u2019s subsidiaries in Germany (53%), the Netherlands (30%) and Ireland (17%). Europe non-current assets below relates to the Group\u2019s subsidiaries in Germany (97%) and Ireland (3%).
Packaging Distribution activities are primarily in the UK, with some activity in Europe,
Manufacturing Operations are primarily in the UK.
Continuing operations
2024
Total
\u00a3000
Continuing operations
2023
Total
\u00a3000
UK
\u00a3000
Europe
\u00a3000
UK
\u00a3000
Europe
\u00a3000
External revenue
248,503
21,934
270,437
258,464
22,250
280,714
Operating profit
20,849
2,748
23,597
20,588
1,480
22,068
Non-current assets1
144,763
4,926
149,689
126,063
5,643
131,706
Capital additions
29,205
13
29,218
20,953
87
21,040
(d) Information about major customers
No single customer accounts for more than 10% of the Group\u2019s external revenues. Customer dependencies are regularly monitored.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870228": { "value": "2. Operating profit
Operating profit from continuing operations has been arrived at after charging:
2024
\u00a3000
2023
\u00a3000
Cost of inventories recognised as an expense in the consolidated income statement
157,956
169,002
Amortisation of other intangible assets (note 9)
4,610
4,034
Depreciation of property, plant and equipment (note 10)
1,879
1,720
Depreciation of right-of-use assets (note 11)
8,878
7,854
Acquisition related costs
198
219
Staff costs (note 3)
48,614
48,665
The detailed analysis of auditor\u2019s remuneration is provided below:\t
Audit services
Fees payable to the auditor for the audit of these financial statements
84
69
Fees payable to auditor for the audit of the Company\u2019s subsidiaries
306
282
Total audit fees
390
351
Non-audit services
Other assurance services for the audit of the Company pension scheme
\u2013
16
Total non-audit fees
\u2013
16
Total fees paid to auditor
390
367
The Audit Committee reviews and approves non-audit work which the auditor performs, including the fees paid for such work, to ensure that the auditor\u2019s objectivity and independence is not compromised.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProfitLossFromOperatingActivitiesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870227": { "value": "Amortisation of other intangible assets (note 9)
4,610
4,034
Depreciation of property, plant and equipment (note 10)
1,879
1,720
Depreciation of right-of-use assets (note 11)
8,878
7,854
The detailed analysis of auditor\u2019s remuneration is provided below:\t
Audit services
Fees payable to the auditor for the audit of these financial statements
84
69
Fees payable to auditor for the audit of the Company\u2019s subsidiaries
306
282
Total audit fees
390
351
Non-audit services
Other assurance services for the audit of the Company pension scheme
\u2013
16
Total non-audit fees
\u2013
16
Total fees paid to auditor
390
367
The Audit Committee reviews and approves non-audit work which the auditor performs, including the fees paid for such work, to ensure that the auditor\u2019s objectivity and independence is not compromised.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870263": { "value": "3. Staff costs
The average monthly number of employees (including Directors) was:
2024
No.
2023
No.
Production
273
234
Sales and distribution
553
572
Administration
305
287
1,131
1,093
The costs incurred in respect of these employees were:
2024
\u00a3000
2023
\u00a3000
Wages and salaries
41,206
40,765
Social security costs
4,218
4,278
Pension costs
Contributions to defined contribution schemes
3,460
3,036
Share-based payments (note 24)
(270)
586
48,614
48,665
4. Net finance costs
2024
\u00a3000
2023
\u00a3000
Interest on bank borrowings
950
878
Interest on leases
1,921
1,420
Finance income relating to defined benefit scheme (note 23)
(438)
(510)
Finance charge relating to deferred contingent consideration
268
\u2013
Net finance costs
2,701
1,788
3. Staff costs
The average monthly number of employees (including Directors) was:
2024
No.
2023
No.
Production
273
234
Sales and distribution
553
572
Administration
305
287
1,131
1,093
The costs incurred in respect of these employees were:
2024
\u00a3000
2023
\u00a3000
Wages and salaries
41,206
40,765
Social security costs
4,218
4,278
Pension costs
Contributions to defined contribution schemes
3,460
3,036
Share-based payments (note 24)
(270)
586
48,614
48,665
Introduction
Macfarlane Group PLC sponsors a defined benefit pension scheme for former UK employees \u2013 the Macfarlane Group PLC Pension & Life Assurance Scheme (1974) (\u2018the Scheme\u2019). One of the trading subsidiaries, Macfarlane Group UK Limited is also a sponsoring employer of the Scheme. Macfarlane Labels Limited was a sponsoring employer until 31 December 2021 when the Company was sold and ceased to be a sponsoring member. The Scheme is currently in surplus and disclosure of the respective proportions of the Group surplus are included and disclosed in the financial statements of each of the two participating employers.
The Scheme is an HMRC registered pension scheme, administered by a Board of Trustees composed of employer-nominated representatives and member-nominated Trustees which is legally separate from the Group. The Scheme\u2019s investments are held separately from those of the Group in managed funds under the supervision of the Trustees. The Trustees are required by law to act in the interest of all classes of beneficiary in the Scheme and are responsible for investment policy and the administration of benefits. Macfarlane Group PLC, based on legal opinion provided, has an unconditional right to a refund of surplus assets assuming the full settlement of plan liabilities in the event of a wind up of the Scheme. Furthermore, in the ordinary course of business the trustees have no rights to unilaterally wind up the Scheme, or otherwise augment the benefits due to members of the Scheme. Based on these rights, any net surplus in the Scheme is recognised in full.
The Scheme provides qualifying employees with an annual pension of 1/60 of pensionable salary for each completed years\u2019 service on attainment of a normal retirement age of 65. Pensionable salaries were frozen for the remaining active members at the levels current at 30 April 2009 with the change taking effect from 30 April 2010. As a result no further salary inflation applies for active members who elected to remain in the Scheme. Active members\u2019 benefits also include life assurance cover, with the payment of these benefits at the discretion of the Trustees of the Scheme. The Scheme was closed to new entrants during 2002. The Scheme was closed to future accrual on 30 November 2022 with the 3 remaining active members transferring to the Group\u2019s defined contribution pension scheme.
On leaving active service a deferred member\u2019s pension is revalued from the time of withdrawal until the pension is drawn. Revaluation in deferment is statutory and since 2010 has been revalued on the Consumer Price Index (\u2018CPI\u2019) measure of inflation. Revaluation of pensions in payment is a blend of fixed increases and inflationary increases depending on the relevant periods of accrual of benefit. For pensions in payment, the inflationary increase is currently based on the Retail Price Index (\u2018RPI\u2019) measure of inflation or based on Limited Price Indexation (\u2018LPI\u2019) for certain defined periods of service.
During 2012, Macfarlane Group PLC agreed with the Board of Trustees to amend benefits for pensioner, deferred and active members in the Scheme by offering a Pension Increase Exchange (\u2018PIE\u2019) option to pensioner members and a PIE option to all other members at retirement after 1 May 2012.
118\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
In June 2023, the UK High Court issued a ruling in the case of Virgin Media Limited v NTL Pension Trustees II Limited and other (\u2018the Virgin Media case\u2019) relating to the validity of certain historical pension changes. The ruling was upheld at the Court of Appeal in July 2024. After seeking external legal advice the Group has concluded that they are not aware of any issues that would require any adjustment to the defined benefit obligations and no further action is required at this stage.
Balance sheet disclosures at 31 December 2024
The Scheme\u2019s qualified actuary from Aon carries out triennial valuations using the Projected Unit Credit Method to determine the level of surplus/deficit. For the most recent triennial valuation at 1 May 2023, the results of this valuation showed that the market value of the relevant investments of the Scheme was \u00a371,900,000 and represented 109% of the actuarial value of benefits that had accrued to members.
The Trustees review the scheme\u2019s investments on a regular basis and consult with the Company regarding any proposed changes to the investment profile. During 2024 the Trustees maintained the overall allocations in line with the strategic asset allocation in the Trustees\u2019 Statement of Investment Principles.
Liability-Driven Investment Funds provide a match of 100% against the impact of inflation movements on pension liabilities and against the impact of movements in interest rates on pension liabilities.
The ability to realise the Scheme\u2019s investments at, or close to, fair value was considered when setting the investment strategy. 100% (2023: 100%) of the Scheme\u2019s investments can be realised at fair value on a daily or weekly basis. The remaining investments have monthly or quarterly liquidity. However, whilst the regular income from these helps to meet the Scheme\u2019s cash flow needs, they are not expected to be realised at short notice from a strategic perspective. The present value of the Scheme liabilities is derived from cash flow projections and the expected return of the assets over a long period and is thus inherently uncertain.
The investment classes held by the Scheme and the Scheme surplus, based on the results of the actuarial valuation as at 1 May 2023, updated to the year-end are as shown below:
Investment class
Valuation
2024
\u00a3000
Asset
\u00a0allocation
Valuation
2023
\u00a3000
Asset
allocation
Valuation
2022
\u00a3000
Asset
allocation
Equities
UK equity funds
\u2013
\u2013
\u2013
\u2013
6,616
9.4%
Overseas equity funds
\u2013
\u2013
\u2013
\u2013
13,671
19.4%
Multi-asset diversified growth funds
2,879
4.5%
10,198
14.1%
12,674
18.0%
Bonds
Liability-driven investment funds
32,589
50.8%
32,052
44.2%
23,352
33.1%
Other
European loan fund
\u2013
\u2013
\u2013
\u2013
6,546
9.3%
Secured property income fund
\u2013
\u2013
\u2013
\u2013
5,670
8.0%
Multi-asset credit funds
10,234
16.0%
9,824
13.5%
\u2013
\u2013
Securitised credit funds
16,895
26.3%
13,047
18.0%
\u2013
\u2013
Cash
1,511
2.4%
7,402
10.2%
1,957
2.8%
Fair value of scheme investments
64,108
100.0%
72,523
100.0%
70,486
100.0%
Present value of scheme liabilities
(54,472)
(62,602)
(60,287)
Pension scheme surplus
9,636
9,921
10,199
Assumptions
The Scheme\u2019s liabilities at 31 December 2024 were calculated on the following bases as required under IAS 19:
2024
2023
2022
Discount rate
5.50%
4.50%
4,80%
Rate of increase in salaries
0.00%
0.00%
0.00%
Rate of increase in pensions in payment
3% or 5% for fixed
\u00a0increases or 3.03%
for LPI. 2.03% post
5 April 2006
3% or 5% for fixed
\u00a0increases or 3.03%
for LPI. 2.03% post
5 April 2006
3% or 5% for fixed
\u00a0increases or 3.17%
for LPI. 2.09% post
5 April 2006
Spouse\u2019s pension assumption
\u2013 Pensioners (male/female)
84%/60%
84%/60%
75%/75%
\u2013 Deferred members (male/female)
87%/76%
87%/76%
75%/75%
PIE take up rate
60%
60%
65%
Inflation assumption (RPI)
3.20%
3.20%
3.40%
Inflation assumption (CPI)
2.80%
2.70%
2.80%
Life expectancy beyond normal retirement age of 65
Scheme members aged 55
Male
22.3 years
22.3 years
22.6 years
Female
24.1 years
24.0 years
24.2 years
Scheme members aged 65
Male
21.8 years
21.8 years
22.0 years
Female
23.4 years
23.3 years
23.4 years
Average uplift for GMP service
0.40%
0.40%
0.40%
Strategic report Governance Financial statements\u00a0Shareholder information 119
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
23. Retirement benefit obligations\u00a0(cont)
Sensitivity to significant assumptions
The Pension scheme exposes the Group to actuarial risks, such as interest rate risk, inflation risk, longevity risk and investment risk. The significant assumptions used for IAS 19 are discount rate, inflation and mortality. If different assumptions were used, then this could have a material effect on the surplus/deficit.
Assuming all other assumptions are held static then a movement in the following key assumptions would affect the level of the Pension scheme surplus/deficit as shown below:
2024
\u00a3000
2023
\u00a3000
Assumptions
Discount rate movement of +3.0%
19,605
22,531
Inflation rate movement of +0.25%
(521)
(599)
Mortality movement of +0.1 year in age rating
123
141
Positive figures reflect a reduction in scheme liabilities and therefore a reduction in the deficit or increase in the surplus. The sensitivity information has been prepared using the same method as adopted when updating the results of the most recent actuarial valuation to the balance sheet date and is consistent with the approach adopted in previous years.
The level of sensitivities shown reflect average movements in the assumptions in the last three years.
The sensitivity information assumes that the average duration of the scheme\u2019s liabilities is 12 years.
GMP equalisation
In 2018, the Directors made the judgement that the estimated effect of GMP equalisation on the Group\u2019s pension liabilities was a past service cost. The average uplift for GMP service for impacted members was reflected through the consolidated income statement in 2018, with any subsequent changes in the estimate to be recognised in other comprehensive income.
Right to surplus
UK pension legislation requires that pension schemes are funded prudently. Following the conclusion of the 2023 actuarial valuation, the Scheme\u2019s trustees agreed the Company does not require to provide further contributions to the Scheme. The Group retains an unconditional right to a refund of any surplus, based on and in accordance with the terms and conditions of the defined benefit scheme and minimum funding requirements. Accordingly, IFRIC 14 does not require an adjustment to the net pension surplus.
Following the closure of the Scheme to future accrual on 30 November 2022 there are no active members.
2024
\u00a3000
2023
\u00a3000
Movement in the scheme surplus during the year
At 1 January
9,921
10,199
Administration costs incurred
(361)
(71)
Contributions from sponsoring employers
\u2013
1,250
Net finance income (note 4)
438
510
Remeasurement of pension scheme surplus in the year
(362)
(1,967)
At 31 December
9,636
9,921
Analysis of amounts charged to profit before tax
Administration costs incurred
(361)
(71)
Net finance income
438
510
Pension net income credited to profit before tax
77
439
Analysis of the remeasurement of the pension scheme liability recognised \u00a0in the statement of other comprehensive income
Return on scheme investments excluding amount shown in interest income
(6,933)
1,543
Changes due to scheme experience
502
(1,695)
Changes in financial assumptions underlying the present value of scheme liabilities
6,069
(1,815)
Remeasurement of the pension scheme liability recognised in the statement \u00a0of other comprehensive income
(362)
(1,967)
120\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
2024
\u00a3000
2023
\u00a3000
Movement in the fair value of scheme investments
At 1 January
72,523
70,486
Interest income
3,160
3,313
Return on scheme investments (excluding amount shown in interest income)
(6,933)
1,543
Contributions from sponsoring employers
\u2013
1,250
Administration costs incurred
(361)
(71)
Benefits paid
(4,281)
(3,998)
At 31 December
64,108
72,523
Movement in the present value of scheme liabilities
At 1 January
(62,602)
(60,287)
Interest cost
(2,722)
(2,803)
Changes due to scheme experience
502
(1,695)
Changes in assumptions underlying the scheme liabilities
6,069
(1,815)
Benefits paid
4,281
3,998
At 31 December
(54,472)
(62,602)
The history of experience adjustments and actual returns on scheme assets and scheme liabilities is as follows:
2024
\u00a3000
2023
\u00a3000
2022
\u00a3000
2021
\u00a3000
2020
\u00a3000
Present value of defined benefit obligations
(54,472)
(62,602)
(60,287)
(92,156)
(100,901)
Fair value of scheme investments
64,108
72,523
70,486
100,423
99,430
Pension scheme surplus/(deficit)
9,636
9,921
10,199
8,267
(1,471)
Actual return on scheme investments
Amount
(3,773)
4,856
(27,589)
2,605
12,406
Percentage of scheme investments
(5.9%)
6.7%
(39.1%)
2.6%
12.5%
Experience adjustment on scheme liabilities
Amount
6,571
(3,510)
29,393
6,939
(8,543)
Percentage of scheme liabilities
12.1%
(5.6%)
48.8%
7.5%
(8.5%)
Experience adjustment on scheme investments
Amount
(6,933)
1,543
(29,475)
1,273
10,655
Percentage of scheme investments
(10.8%)
2.1%
(41.8%)
1.3%
10.7%
Defined contribution schemes
The Group also operates a number of defined contribution pension arrangements, set up as the Macfarlane Group Personal Pension Plan, including an Auto-enrolment scheme. The assets of these plans are held separately from those of the Group in independently administered funds. The pension cost charge represents contributions paid by the Group to these plans and amounted to \u00a33,460,000 (2023: \u00a32,904,000). Contributions amounting to \u00a3266,000 (2023: \u00a3253,000) were payable to the plans and are included in trade and other payables at 31 December.
\u00a0
24. Share-based payments
Equity-settled Long-Term Incentive PlansMovements in PSP awards during the year
Number
of shares
2024
Number
of shares
2023
Outstanding at 1 January
1,956,238
1,771,542
Awarded during the year
744,430
789,587
Vested during the year
(628,265)
(604,891)
Outstanding at 31 December
2,072,403
1,956,238
A nil cost option award was granted under The Macfarlane Group PLC Long Term Incentive Plan in March 2024 based on 100% of salary. The performance condition requires EPS in 2026 to be between 11.30p and 13.56p for between 25%-100% of this part of the award to vest, working on a straight-line basis.
A nil cost option award was granted under The Macfarlane Group PLC Long Term Incentive Plan in March 2023 based on 100% of salary. The performance condition requires EPS in 2025 to be between 10.80p and 12.95p for between 25%-100% of this part of the award to vest, working on a straight-line basis.
Strategic report Governance Financial statements\u00a0Shareholder information 121
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
24. Share-based payments\u00a0(cont)
A nil cost option award was granted under The Macfarlane Group PLC Long Term Incentive Plan in March 2022 based on 100% of salary. The performance condition requires EPS in 2024 to be between 10.16p and 12.19p for between 25%-100% of this part of the award to vest, working on a straight-line basis.
All awards are subject to an underpin based on the Remuneration Committee\u2019s view of overall performance in the three-year periods to 31 December 2024, 2025 and 2026 respectively. No re-setting of either award is allowed. Vesting periods are three years and awards vesting then have a holding period of two years after vesting.
A nil cost option award was granted under The Macfarlane Group PLC Long Term Incentive Plan in March 2021 based on 100% of salary. The performance condition required EPS in 2023 to be between 7.95p and 9.54p for between 25%-100% of this part of the award to vest, working on a straight-line basis. The 2021 vesting at 100% and dividend equivalent awarded in shares were confirmed by the Remuneration Committee at its meeting on 26 February 2024. The total number of shares vesting were 628,265.
The Group recognised a credit of \u00a3270,000 (2023: expense of \u00a3586,000) in 2024 relating to equity-settled long-term incentive plan awards on the basis that the 2021 awards vested at 100% (2023: 100%), the 2022 awards had an estimated probability of vesting of 0% (2023: 50%), the 2023 awards had an estimated probability of vesting of 0% (2023: 49%) and the 2024 awards had an estimated probability of vesting of 0%.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6881226": { "value": "4. Net finance costs
2024
\u00a3000
2023
\u00a3000
Interest on bank borrowings
950
878
Interest on leases
1,921
1,420
Finance income relating to defined benefit scheme (note 23)
(438)
(510)
Finance charge relating to deferred contingent consideration
268
\u2013
Net finance costs
2,701
1,788
4. Net finance costs
2024
\u00a3000
2023
\u00a3000
Interest on bank borrowings
950
878
Interest on leases
1,921
1,420
Finance income relating to defined benefit scheme (note 23)
(438)
(510)
Finance charge relating to deferred contingent consideration
268
\u2013
Net finance costs
2,701
1,788
5. Tax
2024
\u00a3000
2023
\u00a3000
Current tax
United Kingdom corporation tax
5,363
5,615
Foreign tax
795
460
Adjustments in respect of prior years
(58)
(38)
Current tax charge
6,100
6,037
Deferred tax
Current year
(899)
(731)
Adjustments in respect of prior years
165
\u2013
Deferred tax charge\u00a0(note 17)
(734)
(731)
Total tax charge
5,366
5,306
The standard rate of tax, based on the UK average rate of corporation tax is 25% (2023: 23.5%). The increase in 2024 is due to the corporation tax rate increasing from 19% to 25% effective from 1 April 2023. Taxation for other jurisdictions is calculated at the rates prevailing in these jurisdictions.
The actual tax charge varies from the standard rate of tax on the results in the consolidated income statement for the reasons set out below.
2024
\u00a3000
2023
\u00a3000
Profit before tax from total operations
20,896
20,280
Tax on profit at 25% (2023: 23.5%)
5,224
4,766
Factors affecting tax charge for the year:
Difference in rate for deferred tax (25%) on pensions
\u2013
25
Deferred contingent consideration adjustments not allowable for tax
(134)
360
Non-deductible net expenses
100
127
Difference on overseas tax rates
69
66
Changes in estimates related to prior years
107
(38)
Tax charge for the year
5,366
5,306
Weighted average effective tax rate for the year
25.7%
26.2%
Macfarlane Group\u2019s corporate tax structure is such that the effective corporation tax rate should be relatively close to the prevailing tax rate with non-deductible expenses usually the principal reason for any variation.
Deferred tax assets and liabilities at 31 December 2024 have been calculated based on the long-term corporation tax rate of 25%.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870229": { "value": "6. Dividends
2024
\u00a3000
2023
\u00a3000
Amounts recognised as distributions to equity holders in the year:
Final dividend for 2023 of 2.65p per share (2022: 2.52p per share)
4,221
3,990
Interim dividend for 2024 of 0.96p per share (2023: 0.94p per share)
1,529
1,494
5,750
5,484
A proposed final dividend of 2.70p per share totalling \u00a34,300,000 will be paid on 13 June 2025 to shareholders on the register at 16 May 2025 (ex dividend date 15 May 2025). This is subject to approval by shareholders at the Annual General Meeting on 13 May 2025 and therefore is not included as a liability in these financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6881228": { "value": "0.027", "decimals": 4, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP/xbrli:shares" } }, "shtag_6870230": { "value": "7. Earnings per share
2024
\u00a3000
2023
\u00a3000
Earnings for the purposes of calculating earnings per share
Profit for the year
15,530
14,974
Number of shares in issue
2024
Number of
shares
\u2018000
2023
Number of
shares
\u2018000
Weighted average number of shares in issue
159,461
158,542
Less shares held by the EBT
(278)
\u2013
Weighted average number of ordinary shares to calculate basic earnings per share
159,183
158,542
Dilutive effect of Long-Term Incentive Plan awards in issue
340
1,788
Weighted average number of ordinary shares to calculate diluted earnings per share
159,523
160,330
Basic earnings per share
9.76p
9.44p
Diluted earnings per share
9.74p
9.34p
\u00a0
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870231": { "value": "9. Goodwill and other intangible assets
Packaging
Distribution
\u00a3000
Manufacturing
Operations
\u00a3000
2024
Total
\u00a3000
2023
Total
\u00a3000
Goodwill
51,831
17,752
69,583
63,941
Other intangible assets
11,318
17,069
28,387
23,554
Goodwill and other intangible assets
63,149
34,821
97,970
87,495
Goodwill
Packaging
Distribution
\u00a3000
Manufacturing
Operations
\u00a3000
2024
Total
\u00a3000
2023
Total
\u00a3000
Fair value on acquisition
At 1 January
50,738
13,203
63,941
56,574
Additions (note 22)
1,093
4,549
5,642
7,367
At 31 December
51,831
17,752
69,583
63,941
Accumulated impairment losses
At 1 January and 31 December
\u2013
\u2013
\u2013
\u2013
Carrying amount
At 31 December 2024
51,831
17,752
69,583
At 31 December 2023
50,738
13,203
63,941
106\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
At 31 December 2024, the Group had two CGU Groupings to which goodwill had been ascribed namely:
(i)\tPackaging Distribution, comprising goodwill arising on all acquisitions in this segment since 2001; and
(ii)\tManufacturing Operations, comprising goodwill arising on all acquisitions in this segment since 2021.
On 13 March 2024, Macfarlane Group UK Limited (\u2018MGUK\u2019) acquired 100% of Allpack Packaging Supplies Limited (\u2018Allpack Direct\u2019). Goodwill arising on the Allpack Direct acquisition was added to the Packaging Distribution CGU.
On 6 July 2024, MGUK acquired 100% of Polyformes Limited (\u2018Polyformes\u2019). Goodwill arising on the Polyformes acquisition was added to the Manufacturing Operations CGU.
The recoverable amount of each CGU Grouping is determined using \u2018value in use\u2019 calculations with key assumptions relating to discount rates, revenue growth rates, projected gross margin and overhead costs. A pre-tax discount rate of 12.2% (2023: 11.0%) is used for both CGU\u2019s reflecting the Group\u2019s weighted average cost of capital adjusted for appropriate market risk, which is considered to be the most definitive basis for arriving at a discount rate. The Group believes the risk profiles across the markets in which it operates are not significantly different and has therefore deemed it appropriate to apply the same discount rate to both CGUs.
Revenue growth rates of 1%, changes in gross margin and overhead costs are based on our expectation of future performance in the markets in which we operate. The assumptions are used to extrapolate cash flows for five years after which a terminal value is calculated assuming no inherent growth.
Furthermore, in preparing this assessment we have considered the potential impact of climate change. In particular, we have considered the impact of climate change on the useful economic lives of assets, disruption to key sites and supply chain, and potential asset impairments. These considerations did not have a material impact on the goodwill impairment assessment.
The Directors believe the assumptions used are appropriate. In addition, they have conducted a sensitivity analysis to determine the changes in assumptions that would result in an impairment of the carrying amount of goodwill. Based on this analysis the Directors believe that any reasonable changes in the key assumptions would maintain a value for each CGU Grouping that exceeds its carrying amount. Therefore at 31 December 2024 no impairment charge is required against the carrying amount of goodwill.
Other intangible assets
Brand
values
\u00a3000
Customer
relationships
\u00a3000
2024
Total
\u00a3000
2023
Total
\u00a3000
Fair value on acquisition
At 1 January
1,505
45,784
47,289
38,812
Additions (note 22)
217
9,226
9,443
8,477
At 31 December
1,722
55,010
56,732
47,289
Amortisation
At 1 January
1,183
22,552
23,735
19,701
Charge for year
135
4,475
4,610
4,034
At 31 December
1,318
27,027
28,345
23,735
Carrying amount
At 31 December 2024
404
27,983
28,387
At 31 December 2023
322
23,232
23,554
Other intangible assets comprise separately identifiable intangible assets recognised on the acquisitions of businesses and subsidiary companies between 2014 and 2024. They are recorded at fair value on acquisition less subsequent amortisation.
These are primarily brand values, which are calculated on the relief from royalty method and a valuation of customer relationships, which is calculated on the excess earnings method based on the net anticipated earnings stream. Brand values are calculated on royalty rates of 0.5%, consistent with an assessment of what would be charged in a typical franchise agreement. The valuation of customer relationships is calculated using our best estimates of customer attrition rates, and returns based on assessments of performance levels in the markets in which we operate. Brand values and customer relationship valuations are amortised on a straight-line basis over periods up to five and fifteen years respectively.
Strategic report Governance Financial statements\u00a0Shareholder information 107
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
9. Goodwill and other intangible assets\u00a0(cont)
At 31 December 2024, the Group retained values in respect of:
Year of acquisition
Company/Business acquired
Brand
\u00a3000
Customer
Relationships
\u00a3000
2015
One Packaging Limited
\u2013
57
2016
Packaging business of Colton Packaging Teesside
\u2013
86
2016
Packaging business of Edward McNeil Limited
\u2013
121
2016
Nelsons for Cartons & Packaging Limited
\u2013
441
2017
Packaging business of Greenwoods Stock Boxes Limited and Nottingham Recycling Limited
\u2013
2,490
2018
Tyler Packaging (Leicester) Limited
\u2013
285
2018
Harrisons Packaging Limited
\u2013
443
2019
Ecopac (U.K.) Limited
\u2013
654
2019
Leyland Packaging Company (Lancs) Limited
\u2013
803
2020
Packaging business of Armagrip
\u2013
146
2021
GWP Group Limited
\u2013
4,547
2021
Carters Packaging Limited
\u2013
1,206
2022
PackMann Gesellschaft f\u00fcr Verpackungen und Dienstleistungen mbH
116
722
2023
A.E. Sutton Limited
83
3,451
2023
A and G Holdings Limited
6
1,662
2023
B&D 2010 Group Limited
11
2,063
2024
Allpack Packaging Supplies Limited
13
2,066
2024
Polyformes Limited
175
6,740
404
27,983
10. Property, plant and equipment
Note
Property
\u00a3000
Plant,
\u00a0machinery
& vehicles
\u00a3000
Total
\u00a3000
Cost
At 1 January 2023
8,110
22,260
30,370
Acquisitions
\u2013
2,160
2,160
Additions
616
1,559
2,175
Transfer from right of use assets
\u2013
478
478
Exchange movements
\u2013
(12)
(12)
Disposals
(4)
(800)
(804)
At 31 December 2023
8,722
25,645
34,367
Acquisitions
22
\u2013
3,267
3,267
Additions
1,443
1,482
2,925
Exchange movements
\u2013
(31)
(31)
Disposals
(13)
(822)
(835)
At 31 December 2024
10,152
29,541
39,693
Accumulated depreciation
At 1 January 2023
4,625
17,882
22,507
Acquisitions
\u2013
1,406
1,406
Charge for year
417
1,303
1,720
Transfer from right of use assets
\u2013
251
251
Exchange movements
\u2013
(10)
(10)
Disposals
(4)
(713)
(717)
At 31 December 2023
5,038
20,119
25,157
Acquisitions
22
\u2013
2,827
2,827
Charge for year
482
1,397
1,879
Exchange movements
\u2013
(26)
(26)
Disposals
(13)
(738)
(751)
At 31 December 2024
5,507
23,579
29,086
Carrying amount
At 31 December 2024
4,645
5,962
10,607
At 31 December 2023
3,684
5,526
9,210
At 1 January 2023
3,485
4,378
7,863
10. Property, plant and equipment
Note
Property
\u00a3000
Plant,
\u00a0machinery
& vehicles
\u00a3000
Total
\u00a3000
Cost
At 1 January 2023
8,110
22,260
30,370
Acquisitions
\u2013
2,160
2,160
Additions
616
1,559
2,175
Transfer from right of use assets
\u2013
478
478
Exchange movements
\u2013
(12)
(12)
Disposals
(4)
(800)
(804)
At 31 December 2023
8,722
25,645
34,367
Acquisitions
22
\u2013
3,267
3,267
Additions
1,443
1,482
2,925
Exchange movements
\u2013
(31)
(31)
Disposals
(13)
(822)
(835)
At 31 December 2024
10,152
29,541
39,693
Accumulated depreciation
At 1 January 2023
4,625
17,882
22,507
Acquisitions
\u2013
1,406
1,406
Charge for year
417
1,303
1,720
Transfer from right of use assets
\u2013
251
251
Exchange movements
\u2013
(10)
(10)
Disposals
(4)
(713)
(717)
At 31 December 2023
5,038
20,119
25,157
Acquisitions
22
\u2013
2,827
2,827
Charge for year
482
1,397
1,879
Exchange movements
\u2013
(26)
(26)
Disposals
(13)
(738)
(751)
At 31 December 2024
5,507
23,579
29,086
Carrying amount
At 31 December 2024
4,645
5,962
10,607
At 31 December 2023
3,684
5,526
9,210
At 1 January 2023
3,485
4,378
7,863
108\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
The main components of property, plant and equipment are:
(i)\tTwo properties owned in our Manufacturing Operations and tenant\u2019s improvements at a number of short and medium-term leases in Packaging Distribution, categorised as property.
(ii)\tA significant investment in plant and machinery in Manufacturing Operations, typically corrugated case-making machinery, as well as investments in our IT hardware systems throughout the Group, which are all categorised under the combined heading of plant, machinery and vehicles.
(iii)\tAssets under construction totalling \u00a31.6m at 31 December 2024 not depreciated during 2024.
2024
\u00a3000
2023
\u00a3000
Property at net book value comprises:
Freeholds
1,139
1,030
Long leaseholds
3,418
2,626
Short leaseholds
88
28
4,645
3,684
Contractual commitments for capital expenditure for which no provision has been made in these accounts amount to \u00a3593,000 (2023: \u00a31,836,000).
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870233": { "value": "Contractual commitments for capital expenditure for which no provision has been made in these accounts amount to \u00a3593,000 (2023: \u00a31,836,000).
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6881218": { "value": "Contractual commitments for capital expenditure for which no provision has been made in these accounts amount to \u00a3593,000 (2023: \u00a31,836,000)", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870235": { "value": "11. Right of use assetsNote
Property
\u00a3000
Plant,
machinery
& vehicles
\u00a3000
Total
\u00a3000
Cost
At 1 January 2023
41,061
10,459
51,520
Acquisitions
1,801
\u2013
1,801
Additions
1,363
1,658
3,021
Lease modifications
2,265
(264)
2,001
Exchange movements
(46)
\u2013
(46)
Transfer to property, plant & equipment
\u2013
(478)
(478)
Disposals
(683)
(991)
(1,674)
At 31 December 2023
45,761
10,384
56,145
Acquisitions
22
1,709
\u2013
1,709
Additions
9,171
2,037
11,208
Lease modifications
1,499
410
1,909
Exchange movements
(99)
(1)
(100)
Disposals
(2,049)
(1,013)
(3,062)
At 31 December 2024
55,992
11,817
67,809
Accumulated depreciation
At 1 January 2023
13,117
4,465
17,582
Charge for year
5,716
2,138
7,854
Lease modifications
(1,881)
(584)
(2,465)
Exchange movements
(7)
\u2013
(7)
Transfer to property, plant & equipment
\u2013
(251)
(251)
Disposals
(619)
(950)
(1,569)
At 31 December 2023
16,326
4,818
21,144
Charge for year
6,392
2,486
8,878
Lease modifications
(146)
(158)
(304)
Exchange movements
(33)
\u2013
(33)
Disposals
(2,049)
(904)
(2,953)
At 31 December 2024
20,490
6,242
26,732
Carrying amount
At 31 December 2024
35,502
5,575
41,077
Carrying amount
At 31 December 2023
29,435
5,566
35,001
The property portfolio comprises a number of property leases for periods from one to twenty years, which are subject to rent reviews. The Group also leases the majority of its commercial vehicles, motor vehicles and forklift trucks on leases, with the leases running for periods of up to seven years.
16. Lease liabilities
2024
\u00a3000
2023
\u00a3000
Amounts payable under leases
Within one year
7,223
7,307
Between one and five years
20,606
19,242
After more than five years
15,047
9,627
Present value of lease liabilities
42,876
36,176
Due for settlement within 12 months (Current liabilities)
(7,223)
(7,307)
Due for settlement after more than 12 months (Non-current liabilities)
35,653
28,869
2024
\u00a3000
2023
\u00a3000
At 1 January
36,176
34,569
New leases
11,208
3,021
Acquisitions (note 22)
1,709
1,801
Disposals
(107)
(227)
Lease modifications
2,210
4,562
Exchange movements
(69)
(40)
Interest
1,921
1,410
Repayments under leases
(10,172)
(8,920)
At 31 December
42,876
36,176
The Directors consider that the carrying amounts for lease liabilities approximate to their fair value. Repayment of lease obligations in the cash flow statement of \u00a38,251,000 consists of repayments under leases of \u00a310,172,000 less interest of \u00a31,921,000.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6881229": { "value": "12. Inventories
2024
\u00a3000
2023
\u00a3000
Raw materials and consumables
1,171
1,202
Work in progress
226
123
Finished goods and goods for resale
17,652
16,198
19,049
17,523
Inventories represent raw materials, work in progress and finished goods held at the year-end in our businesses to respond to customers\u2019 requirements. These comprise large numbers of comparatively small balances.
Local teams review inventory levels, older and obsolete inventories and provide against exposures throughout the year. The Group\u2019s executive management then reviews these local judgements to ensure they properly reflect movements in absolute inventory levels, ageing of holdings and known obsolescence.
Movement in the provisions for slow-moving and obsolete inventories
2024
\u00a3000
2023
\u00a3000
At 1 January
2,015
1,760
Additional provisions recognised in the consolidated income statement
616
883
Inventories written off during the year
(601)
(628)
At 31 December
2,030
2,015
2024
\u00a3000
2023
\u00a3000
Current
Trade receivables
47,820
48,217
Loss allowance
(179)
(458)
47,641
47,759
Other receivables
3,554
3,215
Prepayments
3,200
2,432
Other taxation and social security
620
386
55,015
53,792
Non-current
Other receivables
35
35
Trade receivables represent amounts owed by customers in respect of revenues for goods or services provided prior to the year end. The Group\u2019s credit risk is primarily attributable to trade receivables. The average credit period taken at the reporting date is 53 days (2023: 54 days). No interest is charged on overdue receivables.
The Group uses external credit scoring systems to assess new customers\u2019 credit quality and set credit limits for each customer. The Group has a substantial customer base covering a wide range of business segments. No individual customer represents more than 5% of total trade receivables. Receivables balances greater than \u00a325,000 are reviewed by the Board twice in each year.
Since the inception of IFRS 9 \u2018Financial Instruments\u2019, the Group has applied a simplified approach to measuring the ECL level. This uses a provision matrix which takes into account historical credit loss experience based on the past-due status of receivables, adjusted to reflect current conditions and management\u2019s estimates of future economic conditions and known recoverability issues as a means of measuring the loss allowance.
The Group writes off trade receivables when there is no realistic prospect of recovery with the amount written off against the loss allowance held. The credit risk profile of these receivables is presented based on their past due status and the calculated loss ratios applied to the profiled receivables to give the ECL.
Risk profile category (ageing)
2024
\u00a3000
ECL rate
2024 ECL
allowance
\u00a3000
2023
\u00a3000
ECL rate
2023 ECL
allowance
\u00a3000
Current
34,665
0.25%
85
34,758
0.52%
182
Overdue
0-30 days
11,468
0.42%
48
11,147
0.93%
104
30-60 days
1,128
0.74%
8
1,195
1.67%
20
60-90 days
359
2.37%
9
421
5.23%
22
Over 90 days
200
14.39%
29
696
18.7%
130
47,820
179
48,217
458
110\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
The ECL allowance reflects the Group\u2019s prior experience and assessment of the current economic environment. In determining the recoverability of trade receivables and the level of loss allowance, known changes in credit quality or expected credit loss from the date credit was originally granted are taken into account.
ECL allowance
2024
\u00a3000
2023
\u00a3000
At 1 January
458
795
Change in loss allowance
161
115
Amounts written off as uncollectible (net of recoveries)
(440)
(452)
At 31 December
179
458
The Directors consider that the carrying amount of trade and other receivables approximate to their fair value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870239": { "value": "Trade and other receivables2024
\u00a3000
2023
\u00a3000
Current
Trade receivables
47,820
48,217
Loss allowance
(179)
(458)
47,641
47,759
Other receivables
3,554
3,215
Prepayments
3,200
2,432
Other taxation and social security
620
386
55,015
53,792
Non-current
Other receivables
35
35
Trade receivables represent amounts owed by customers in respect of revenues for goods or services provided prior to the year end. The Group\u2019s credit risk is primarily attributable to trade receivables. The average credit period taken at the reporting date is 53 days (2023: 54 days). No interest is charged on overdue receivables.
The Group uses external credit scoring systems to assess new customers\u2019 credit quality and set credit limits for each customer. The Group has a substantial customer base covering a wide range of business segments. No individual customer represents more than 5% of total trade receivables. Receivables balances greater than \u00a325,000 are reviewed by the Board twice in each year.
Since the inception of IFRS 9 \u2018Financial Instruments\u2019, the Group has applied a simplified approach to measuring the ECL level. This uses a provision matrix which takes into account historical credit loss experience based on the past-due status of receivables, adjusted to reflect current conditions and management\u2019s estimates of future economic conditions and known recoverability issues as a means of measuring the loss allowance.
The Group writes off trade receivables when there is no realistic prospect of recovery with the amount written off against the loss allowance held. The credit risk profile of these receivables is presented based on their past due status and the calculated loss ratios applied to the profiled receivables to give the ECLRisk profile category (ageing)
2024
\u00a3000
ECL rate
2024 ECL
allowance
\u00a3000
2023
\u00a3000
ECL rate
2023 ECL
allowance
\u00a3000
Current
34,665
0.25%
85
34,758
0.52%
182
Overdue
0-30 days
11,468
0.42%
48
11,147
0.93%
104
30-60 days
1,128
0.74%
8
1,195
1.67%
20
60-90 days
359
2.37%
9
421
5.23%
22
Over 90 days
200
14.39%
29
696
18.7%
130
47,820
179
48,217
458
110\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
The ECL allowance reflects the Group\u2019s prior experience and assessment of the current economic environment. In determining the recoverability of trade receivables and the level of loss allowance, known changes in credit quality or expected credit loss from the date credit was originally granted are taken into account.
ECL allowance
2024
\u00a3000
2023
\u00a3000
At 1 January
458
795
Change in loss allowance
161
115
Amounts written off as uncollectible (net of recoveries)
(440)
(452)
At 31 December
179
458
The Directors consider that the carrying amount of trade and other receivables approximate to their fair value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870238": { "value": "Trade and other receivables2024
\u00a3000
2023
\u00a3000
Current
Trade receivables
47,820
48,217
Loss allowance
(179)
(458)
47,641
47,759
Other receivables
3,554
3,215
Prepayments
3,200
2,432
Other taxation and social security
620
386
55,015
53,792
Non-current
Other receivables
35
35
2024
\u00a3000
2023
\u00a3000
Current
Trade receivables
47,820
48,217
Loss allowance
(179)
(458)
47,641
47,759
Other receivables
3,554
3,215
Prepayments
3,200
2,432
Other taxation and social security
620
386
55,015
53,792
Non-current
Other receivables
35
35
Risk profile category (ageing)
2024
\u00a3000
ECL rate
2024 ECL
allowance
\u00a3000
2023
\u00a3000
ECL rate
2023 ECL
allowance
\u00a3000
Current
34,665
0.25%
85
34,758
0.52%
182
Overdue
0-30 days
11,468
0.42%
48
11,147
0.93%
104
30-60 days
1,128
0.74%
8
1,195
1.67%
20
60-90 days
359
2.37%
9
421
5.23%
22
Over 90 days
200
14.39%
29
696
18.7%
130
47,820
179
48,217
458
110\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
The ECL allowance reflects the Group\u2019s prior experience and assessment of the current economic environment. In determining the recoverability of trade receivables and the level of loss allowance, known changes in credit quality or expected credit loss from the date credit was originally granted are taken into account.
ECL allowance
2024
\u00a3000
2023
\u00a3000
At 1 January
458
795
Change in loss allowance
161
115
Amounts written off as uncollectible (net of recoveries)
(440)
(452)
At 31 December
179
458
The Directors consider that the carrying amount of trade and other receivables approximate to their fair value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870245": { "value": "14. Financial instruments
The Group funds its operations from a number of sources of finance, namely operating cash flows, bank borrowings, finance leases and shareholders\u2019 equity, which comprises share capital, reserves and retained earnings. The objective is to achieve a capital structure with an appropriate cost of capital, whilst providing flexibility in immediate and medium-term funding to accommodate any material investment requirements.
The Group\u2019s principal financial instruments comprise borrowings, cash and short-term deposits, and other items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Group\u2019s operations. Throughout the period under review, the Group\u2019s policy is that no trading in financial instruments is undertaken for speculative purposes.
There has been no significant change to the Group\u2019s exposure to market risks during 2024. Principal risks arising are liquidity risk and credit risk, with secondary risks being interest rate risk and currency risk. The Board reviews and agrees policies for managing each of these risks, which are summarised below and have remained unchanged since the beginning of 2025.
Liquidity risk
The Group\u2019s liquidity requirements are met by ensuring adequate access to funds by maintaining appropriate levels of committed bank facilities, which are reviewed regularly. The Group bank borrowing facility with Bank of Scotland PLC and HSBC UK Bank plc of \u00a340m is available until November 2027 with options to extend a further two years to November 2029. The facility bears interest at normal commercial rates and carries standard financial covenants in relation to interest cover and leverage. The maturity profile is set out in this note.
Credit risk
The Group\u2019s exposure to credit risk is managed by dealing only with banks and financial institutions with good credit ratings and by applying considerable rigour in managing trade receivables. The Group\u2019s principal credit risk is primarily attributable to its trade receivables. Amounts presented in the balance sheet are shown net of an ECL allowance, as estimated by the Group\u2019s management with details set out in note 13.
Interest rate risk
The Group borrows in currencies at floating rates of interest. It was not considered necessary to cover interest rate exposures by the use of financial instruments during 2024.
A sensitivity analysis has been prepared based on bank interest rate exposures at the year-end date and the stipulated change taking place at the beginning of the financial year and held constant throughout the year. If interest rates had been 50 basis points higher and all other variables held constant, the Group\u2019s profit before tax would have decreased by \u00a347,000 (2023: \u00a344,000).
Currency risk
The Group had three overseas subsidiaries in 2024, one operating in Ireland, one operating in the Netherlands and one operating in Germany. Revenues and expenses are denominated exclusively in Euros. Movements in the Euro to sterling exchange rates could affect the Group\u2019s sterling balance sheet. The Group\u2019s policy during 2024 has been to review the need to hedge currency exposures on a regular basis and it was not considered necessary to cover existing currency exposures by the use of financial instruments. The Group continues to review the need to hedge exposures on a regular basis.
The Sterling value of foreign currency denominated assets and liabilities at the year-end is as follows:
Assets
Liabilities
2024
\u00a3000
2023
\u00a3000
2024
\u00a3000
2023
\u00a3000
Euros
8,334
7,105
2,964
2,936
The sterling value of the Group\u2019s foreign currency denominated profit before tax from continuing operations is as follows:
2024
\u00a3000
2023
\u00a3000
Euros
2,902
1,679
Strategic report Governance Financial statements\u00a0Shareholder information 111
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
14. Financial instruments\u00a0(cont)
The following table details the sensitivity to a 5% reduction in Sterling against the respective foreign currencies. The sensitivity of the Group\u2019s exposure to foreign currency risk is determined based on the exposure at the year-end and on the change taking place at the beginning of the financial year and held constant throughout the year.
Result
2024
\u00a3000
Result
2023
\u00a3000
Other
equity
2024
\u00a3000
Other
equity
2023
\u00a3000
Euros
106
64
162
106
2024
\u00a3000
2023
\u00a3000
Cash and cash equivalents
Currency\t\u2013 Sterling
11,110
5,468
\u00a0\u2013 Euros
1,776
2,218
\u00a0\u2013 US Dollars
42
5
Cash and cash equivalents
12,928
7,691
Bank borrowings
Currency\t\u2013 Sterling
14,846
7,164
\u00a0\u2013 Euros
\u2013
\u2013
Bank borrowings
14,846
7,164
Net bank (debt)/funds
(1,918)
527
Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments with an original maturity of three months or less. Bank borrowings comprise \u00a314.8m drawn down on the borrowing facility.
Effective from 28 November 2024 the Group has had a revolving credit facility with Bank of Scotland PLC and HSBC UK Bank plc of \u00a340m which is available until November 2027, with the option to extend a further two years. Under this facility, the Group requires to provide over 85% guarantor coverage for Revenue, EBITDA and Gross Assets. At 31 December 2024, the guarantor group consisted of Macfarlane Group PLC and its UK subsidiaries. The facility bears interest at normal commercial rates and carries standard financial covenants in relation to interest cover and leverage.
Prior to 28 November the Group had an invoice discounting facility with Bank of Scotland PLC of \u00a335m, now replaced by the revolving credit facility. Under this facility, trade receivables of the Group\u2019s largest trading subsidiary, Macfarlane Group UK Limited and, another subsidiary, GWP Group Limited were assigned to Bank of Scotland PLC who then funded the Group in advance of the collection of these receivables. The Group retained the credit risk associated with collecting the receivables. This facility bore interest at normal commercial rates and carried standard financial covenants in relation to interest cover and levels of headroom over trade receivables balances.
The Group has been in compliance with all conditions in relation to both the revolving credit facility and the invoice discounting facility throughout 2024 and has remained in compliance in 2025 to date.
Interest rates
Bank borrowings are held at floating rates of interest. The average effective interest rate on these borrowings approximates to 8.96% per annum (2023: 7.97%).
Fair value of financial instruments
Current assets and liabilities are all held at floating rates. The fair values of cash and cash equivalents and bank borrowings at 31 December 2024 all materially equate to book values.
Borrowing facilities
The Group\u2019s committed borrowing facilities, for which all conditions precedent had been met, are as follows:
2024
\u00a3000
2023
\u00a3000
Drawn down
14,846
6,460
Undrawn
25,154
28,540
Committed borrowing facilities
40,000
35,000
112\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
The Group\u2019s borrowing profile is as follows:
2024
\u00a3000
2023
\u00a3000
At amortised cost
Bank borrowings \u2013 secured
14,846
7,164
Lease liabilities
7,223
7,307
Current borrowings
22,069
14,471
Non-current lease liabilities
35,653
28,869
Total borrowings
57,722
43,340
Equity
123,273
114,576
Gearing (net debt to equity) ratio
47%
38%
Financial instruments carried at fair value
IFRS 7 requires that all financial instruments carried at fair value be analysed under certain levels. The table below analyses financial instruments, into a fair value hierarchy based on the valuation technique used to determine fair value.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair values of all financial assets and financial liabilities by class together with their carrying amounts shown in the balance sheet are as follows:
Financial instruments which are designated \u00a0at fair value through profit or loss (note 15)
Carrying
amount
2024
\u00a3000
Fair value
2024
\u00a3000
Level 1
2024
\u00a3000
Level 2
2024
\u00a3000
Level 3
2024
\u00a3000
Contingent consideration
(5,542)
(5,542)
\u2013
\u2013
(5,542)
Carrying
amount
2023
\u00a3000
Fair value
2023
\u00a3000
Level 1
2023
\u00a3000
Level 2
2023
\u00a3000
Level 3
2023
\u00a3000
Contingent consideration
(4,031)
(4,031)
\u2013
\u2013
(4,031)
The following table shows the valuation techniques used for Level 3 fair values, and significant unobservable inputs used for Level 3 items.
Financial instruments measured at fair value
Valuation technique
Significant unobservable inputs (Level 3 only)
Contingent consideration
The expected payment reflects calculated cash outflows under possible earn-out scenarios and is not discounted
Trading performance of acquired subsidiary companies in a period of 12-24 months following acquisition
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the effect of netting agreements.
2024 Contractual cash flows
Non-derivative financial instruments
Total
\u00a3000
Due within
one year
\u00a3000
Due from
1-5 years
\u00a3000
Due after
five years
\u00a3000
Secured bank borrowings
14,846
14,846
\u2013
\u2013
Lease liabilities
42,876
7,223
20,606
15,047
Trade payables
34,432
34,432
\u2013
\u2013
Accruals and deferred income
7,977
7,977
\u2013
\u2013
Deferred contingent consideration
5,542
3,212
2,330
\u2013
105,673
67,690
22,936
15,047
Strategic report Governance Financial statements\u00a0Shareholder information 113
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
14. Financial instruments\u00a0(cont)
2023 Contractual cash flows
Non-derivative financial instruments
Total
\u00a3000
Due within
one year
\u00a3000
Due from
1-5 years
\u00a3000
Due after
five years
\u00a3000
Secured bank borrowings
7,164
7,164
\u2013
\u2013
Lease liabilities
36,176
7,307
19,242
9,627
Trade payables
30,323
30,323
\u2013
\u2013
Accruals and deferred income
11,401
11,401
\u2013
\u2013
Deferred contingent consideration
4,031
3,527
504
\u2013
89,095
59,722
19,746
9,627
14. Financial instruments
The Group funds its operations from a number of sources of finance, namely operating cash flows, bank borrowings, finance leases and shareholders\u2019 equity, which comprises share capital, reserves and retained earnings. The objective is to achieve a capital structure with an appropriate cost of capital, whilst providing flexibility in immediate and medium-term funding to accommodate any material investment requirements.
The Group\u2019s principal financial instruments comprise borrowings, cash and short-term deposits, and other items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Group\u2019s operations. Throughout the period under review, the Group\u2019s policy is that no trading in financial instruments is undertaken for speculative purposes.
There has been no significant change to the Group\u2019s exposure to market risks during 2024. Principal risks arising are liquidity risk and credit risk, with secondary risks being interest rate risk and currency risk. The Board reviews and agrees policies for managing each of these risks, which are summarised below and have remained unchanged since the beginning of 2025.
Liquidity risk
The Group\u2019s liquidity requirements are met by ensuring adequate access to funds by maintaining appropriate levels of committed bank facilities, which are reviewed regularly. The Group bank borrowing facility with Bank of Scotland PLC and HSBC UK Bank plc of \u00a340m is available until November 2027 with options to extend a further two years to November 2029. The facility bears interest at normal commercial rates and carries standard financial covenants in relation to interest cover and leverage. The maturity profile is set out in this note.
Credit risk
The Group\u2019s exposure to credit risk is managed by dealing only with banks and financial institutions with good credit ratings and by applying considerable rigour in managing trade receivables. The Group\u2019s principal credit risk is primarily attributable to its trade receivables. Amounts presented in the balance sheet are shown net of an ECL allowance, as estimated by the Group\u2019s management with details set out in note 13.
Interest rate risk
The Group borrows in currencies at floating rates of interest. It was not considered necessary to cover interest rate exposures by the use of financial instruments during 2024.
A sensitivity analysis has been prepared based on bank interest rate exposures at the year-end date and the stipulated change taking place at the beginning of the financial year and held constant throughout the year. If interest rates had been 50 basis points higher and all other variables held constant, the Group\u2019s profit before tax would have decreased by \u00a347,000 (2023: \u00a344,000).
Currency risk
The Group had three overseas subsidiaries in 2024, one operating in Ireland, one operating in the Netherlands and one operating in Germany. Revenues and expenses are denominated exclusively in Euros. Movements in the Euro to sterling exchange rates could affect the Group\u2019s sterling balance sheet. The Group\u2019s policy during 2024 has been to review the need to hedge currency exposures on a regular basis and it was not considered necessary to cover existing currency exposures by the use of financial instruments. The Group continues to review the need to hedge exposures on a regular basis.
The Sterling value of foreign currency denominated assets and liabilities at the year-end is as follows:
Assets
Liabilities
2024
\u00a3000
2023
\u00a3000
2024
\u00a3000
2023
\u00a3000
Euros
8,334
7,105
2,964
2,936
The sterling value of the Group\u2019s foreign currency denominated profit before tax from continuing operations is as follows:
2024
\u00a3000
2023
\u00a3000
Euros
2,902
1,679
Strategic report Governance Financial statements\u00a0Shareholder information 111
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
14. Financial instruments\u00a0(cont)
The following table details the sensitivity to a 5% reduction in Sterling against the respective foreign currencies. The sensitivity of the Group\u2019s exposure to foreign currency risk is determined based on the exposure at the year-end and on the change taking place at the beginning of the financial year and held constant throughout the year.
Result
2024
\u00a3000
Result
2023
\u00a3000
Other
equity
2024
\u00a3000
Other
equity
2023
\u00a3000
Euros
106
64
162
106
2024
\u00a3000
2023
\u00a3000
Cash and cash equivalents
Currency\t\u2013 Sterling
11,110
5,468
\u00a0\u2013 Euros
1,776
2,218
\u00a0\u2013 US Dollars
42
5
Cash and cash equivalents
12,928
7,691
Bank borrowings
Currency\t\u2013 Sterling
14,846
7,164
\u00a0\u2013 Euros
\u2013
\u2013
Bank borrowings
14,846
7,164
Net bank (debt)/funds
(1,918)
527
Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments with an original maturity of three months or less. Bank borrowings comprise \u00a314.8m drawn down on the borrowing facility.
Effective from 28 November 2024 the Group has had a revolving credit facility with Bank of Scotland PLC and HSBC UK Bank plc of \u00a340m which is available until November 2027, with the option to extend a further two years. Under this facility, the Group requires to provide over 85% guarantor coverage for Revenue, EBITDA and Gross Assets. At 31 December 2024, the guarantor group consisted of Macfarlane Group PLC and its UK subsidiaries. The facility bears interest at normal commercial rates and carries standard financial covenants in relation to interest cover and leverage.
Prior to 28 November the Group had an invoice discounting facility with Bank of Scotland PLC of \u00a335m, now replaced by the revolving credit facility. Under this facility, trade receivables of the Group\u2019s largest trading subsidiary, Macfarlane Group UK Limited and, another subsidiary, GWP Group Limited were assigned to Bank of Scotland PLC who then funded the Group in advance of the collection of these receivables. The Group retained the credit risk associated with collecting the receivables. This facility bore interest at normal commercial rates and carried standard financial covenants in relation to interest cover and levels of headroom over trade receivables balances.
The Group has been in compliance with all conditions in relation to both the revolving credit facility and the invoice discounting facility throughout 2024 and has remained in compliance in 2025 to date.
Interest rates
Bank borrowings are held at floating rates of interest. The average effective interest rate on these borrowings approximates to 8.96% per annum (2023: 7.97%).
Fair value of financial instruments
Current assets and liabilities are all held at floating rates. The fair values of cash and cash equivalents and bank borrowings at 31 December 2024 all materially equate to book values.
Borrowing facilities
The Group\u2019s committed borrowing facilities, for which all conditions precedent had been met, are as follows:
2024
\u00a3000
2023
\u00a3000
Drawn down
14,846
6,460
Undrawn
25,154
28,540
Committed borrowing facilities
40,000
35,000
112\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
The Group\u2019s borrowing profile is as follows:
2024
\u00a3000
2023
\u00a3000
At amortised cost
Bank borrowings \u2013 secured
14,846
7,164
Lease liabilities
7,223
7,307
Current borrowings
22,069
14,471
Non-current lease liabilities
35,653
28,869
Total borrowings
57,722
43,340
Equity
123,273
114,576
Gearing (net debt to equity) ratio
47%
38%
Financial instruments carried at fair value
IFRS 7 requires that all financial instruments carried at fair value be analysed under certain levels. The table below analyses financial instruments, into a fair value hierarchy based on the valuation technique used to determine fair value.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair values of all financial assets and financial liabilities by class together with their carrying amounts shown in the balance sheet are as follows:
Financial instruments which are designated \u00a0at fair value through profit or loss (note 15)
Carrying
amount
2024
\u00a3000
Fair value
2024
\u00a3000
Level 1
2024
\u00a3000
Level 2
2024
\u00a3000
Level 3
2024
\u00a3000
Contingent consideration
(5,542)
(5,542)
\u2013
\u2013
(5,542)
Carrying
amount
2023
\u00a3000
Fair value
2023
\u00a3000
Level 1
2023
\u00a3000
Level 2
2023
\u00a3000
Level 3
2023
\u00a3000
Contingent consideration
(4,031)
(4,031)
\u2013
\u2013
(4,031)
The following table shows the valuation techniques used for Level 3 fair values, and significant unobservable inputs used for Level 3 items.
Financial instruments measured at fair value
Valuation technique
Significant unobservable inputs (Level 3 only)
Contingent consideration
The expected payment reflects calculated cash outflows under possible earn-out scenarios and is not discounted
Trading performance of acquired subsidiary companies in a period of 12-24 months following acquisition
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the effect of netting agreements.
2024 Contractual cash flows
Non-derivative financial instruments
Total
\u00a3000
Due within
one year
\u00a3000
Due from
1-5 years
\u00a3000
Due after
five years
\u00a3000
Secured bank borrowings
14,846
14,846
\u2013
\u2013
Lease liabilities
42,876
7,223
20,606
15,047
Trade payables
34,432
34,432
\u2013
\u2013
Accruals and deferred income
7,977
7,977
\u2013
\u2013
Deferred contingent consideration
5,542
3,212
2,330
\u2013
105,673
67,690
22,936
15,047
Strategic report Governance Financial statements\u00a0Shareholder information 113
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
14. Financial instruments\u00a0(cont)
2023 Contractual cash flows
Non-derivative financial instruments
Total
\u00a3000
Due within
one year
\u00a3000
Due from
1-5 years
\u00a3000
Due after
five years
\u00a3000
Secured bank borrowings
7,164
7,164
\u2013
\u2013
Lease liabilities
36,176
7,307
19,242
9,627
Trade payables
30,323
30,323
\u2013
\u2013
Accruals and deferred income
11,401
11,401
\u2013
\u2013
Deferred contingent consideration
4,031
3,527
504
\u2013
89,095
59,722
19,746
9,627
14. Financial instruments
The Group funds its operations from a number of sources of finance, namely operating cash flows, bank borrowings, finance leases and shareholders\u2019 equity, which comprises share capital, reserves and retained earnings. The objective is to achieve a capital structure with an appropriate cost of capital, whilst providing flexibility in immediate and medium-term funding to accommodate any material investment requirements.
The Group\u2019s principal financial instruments comprise borrowings, cash and short-term deposits, and other items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Group\u2019s operations. Throughout the period under review, the Group\u2019s policy is that no trading in financial instruments is undertaken for speculative purposes.
There has been no significant change to the Group\u2019s exposure to market risks during 2024. Principal risks arising are liquidity risk and credit risk, with secondary risks being interest rate risk and currency risk. The Board reviews and agrees policies for managing each of these risks, which are summarised below and have remained unchanged since the beginning of 2025.
Liquidity risk
The Group\u2019s liquidity requirements are met by ensuring adequate access to funds by maintaining appropriate levels of committed bank facilities, which are reviewed regularly. The Group bank borrowing facility with Bank of Scotland PLC and HSBC UK Bank plc of \u00a340m is available until November 2027 with options to extend a further two years to November 2029. The facility bears interest at normal commercial rates and carries standard financial covenants in relation to interest cover and leverage. The maturity profile is set out in this note.
Credit risk
The Group\u2019s exposure to credit risk is managed by dealing only with banks and financial institutions with good credit ratings and by applying considerable rigour in managing trade receivables. The Group\u2019s principal credit risk is primarily attributable to its trade receivables. Amounts presented in the balance sheet are shown net of an ECL allowance, as estimated by the Group\u2019s management with details set out in note 13.
Interest rate risk
The Group borrows in currencies at floating rates of interest. It was not considered necessary to cover interest rate exposures by the use of financial instruments during 2024.
A sensitivity analysis has been prepared based on bank interest rate exposures at the year-end date and the stipulated change taking place at the beginning of the financial year and held constant throughout the year. If interest rates had been 50 basis points higher and all other variables held constant, the Group\u2019s profit before tax would have decreased by \u00a347,000 (2023: \u00a344,000).
Currency risk
The Group had three overseas subsidiaries in 2024, one operating in Ireland, one operating in the Netherlands and one operating in Germany. Revenues and expenses are denominated exclusively in Euros. Movements in the Euro to sterling exchange rates could affect the Group\u2019s sterling balance sheet. The Group\u2019s policy during 2024 has been to review the need to hedge currency exposures on a regular basis and it was not considered necessary to cover existing currency exposures by the use of financial instruments. The Group continues to review the need to hedge exposures on a regular basis.
The Sterling value of foreign currency denominated assets and liabilities at the year-end is as follows:
Assets
Liabilities
2024
\u00a3000
2023
\u00a3000
2024
\u00a3000
2023
\u00a3000
Euros
8,334
7,105
2,964
2,936
The sterling value of the Group\u2019s foreign currency denominated profit before tax from continuing operations is as follows:
2024
\u00a3000
2023
\u00a3000
Euros
2,902
1,679
Strategic report Governance Financial statements\u00a0Shareholder information 111
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
14. Financial instruments\u00a0(cont)
The following table details the sensitivity to a 5% reduction in Sterling against the respective foreign currencies. The sensitivity of the Group\u2019s exposure to foreign currency risk is determined based on the exposure at the year-end and on the change taking place at the beginning of the financial year and held constant throughout the year.
Result
2024
\u00a3000
Result
2023
\u00a3000
Other
equity
2024
\u00a3000
Other
equity
2023
\u00a3000
Euros
106
64
162
106
2024
\u00a3000
2023
\u00a3000
Cash and cash equivalents
Currency\t\u2013 Sterling
11,110
5,468
\u00a0\u2013 Euros
1,776
2,218
\u00a0\u2013 US Dollars
42
5
Cash and cash equivalents
12,928
7,691
Bank borrowings
Currency\t\u2013 Sterling
14,846
7,164
\u00a0\u2013 Euros
\u2013
\u2013
Bank borrowings
14,846
7,164
Net bank (debt)/funds
(1,918)
527
Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments with an original maturity of three months or less. Bank borrowings comprise \u00a314.8m drawn down on the borrowing facility.
Effective from 28 November 2024 the Group has had a revolving credit facility with Bank of Scotland PLC and HSBC UK Bank plc of \u00a340m which is available until November 2027, with the option to extend a further two years. Under this facility, the Group requires to provide over 85% guarantor coverage for Revenue, EBITDA and Gross Assets. At 31 December 2024, the guarantor group consisted of Macfarlane Group PLC and its UK subsidiaries. The facility bears interest at normal commercial rates and carries standard financial covenants in relation to interest cover and leverage.
Prior to 28 November the Group had an invoice discounting facility with Bank of Scotland PLC of \u00a335m, now replaced by the revolving credit facility. Under this facility, trade receivables of the Group\u2019s largest trading subsidiary, Macfarlane Group UK Limited and, another subsidiary, GWP Group Limited were assigned to Bank of Scotland PLC who then funded the Group in advance of the collection of these receivables. The Group retained the credit risk associated with collecting the receivables. This facility bore interest at normal commercial rates and carried standard financial covenants in relation to interest cover and levels of headroom over trade receivables balances.
The Group has been in compliance with all conditions in relation to both the revolving credit facility and the invoice discounting facility throughout 2024 and has remained in compliance in 2025 to date.
Interest rates
Bank borrowings are held at floating rates of interest. The average effective interest rate on these borrowings approximates to 8.96% per annum (2023: 7.97%).
Fair value of financial instruments
Current assets and liabilities are all held at floating rates. The fair values of cash and cash equivalents and bank borrowings at 31 December 2024 all materially equate to book values.
Borrowing facilities
The Group\u2019s committed borrowing facilities, for which all conditions precedent had been met, are as follows:
2024
\u00a3000
2023
\u00a3000
Drawn down
14,846
6,460
Undrawn
25,154
28,540
Committed borrowing facilities
40,000
35,000
112\u00a0Macfarlane Group PLC Annual Report and Accounts 2024
The Group\u2019s borrowing profile is as follows:
2024
\u00a3000
2023
\u00a3000
At amortised cost
Bank borrowings \u2013 secured
14,846
7,164
Lease liabilities
7,223
7,307
Current borrowings
22,069
14,471
Non-current lease liabilities
35,653
28,869
Total borrowings
57,722
43,340
Equity
123,273
114,576
Gearing (net debt to equity) ratio
47%
38%
Financial instruments carried at fair value
IFRS 7 requires that all financial instruments carried at fair value be analysed under certain levels. The table below analyses financial instruments, into a fair value hierarchy based on the valuation technique used to determine fair value.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair values of all financial assets and financial liabilities by class together with their carrying amounts shown in the balance sheet are as follows:
Financial instruments which are designated \u00a0at fair value through profit or loss (note 15)
Carrying
amount
2024
\u00a3000
Fair value
2024
\u00a3000
Level 1
2024
\u00a3000
Level 2
2024
\u00a3000
Level 3
2024
\u00a3000
Contingent consideration
(5,542)
(5,542)
\u2013
\u2013
(5,542)
Carrying
amount
2023
\u00a3000
Fair value
2023
\u00a3000
Level 1
2023
\u00a3000
Level 2
2023
\u00a3000
Level 3
2023
\u00a3000
Contingent consideration
(4,031)
(4,031)
\u2013
\u2013
(4,031)
The following table shows the valuation techniques used for Level 3 fair values, and significant unobservable inputs used for Level 3 items.
Financial instruments measured at fair value
Valuation technique
Significant unobservable inputs (Level 3 only)
Contingent consideration
The expected payment reflects calculated cash outflows under possible earn-out scenarios and is not discounted
Trading performance of acquired subsidiary companies in a period of 12-24 months following acquisition
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the effect of netting agreements.
2024 Contractual cash flows
Non-derivative financial instruments
Total
\u00a3000
Due within
one year
\u00a3000
Due from
1-5 years
\u00a3000
Due after
five years
\u00a3000
Secured bank borrowings
14,846
14,846
\u2013
\u2013
Lease liabilities
42,876
7,223
20,606
15,047
Trade payables
34,432
34,432
\u2013
\u2013
Accruals and deferred income
7,977
7,977
\u2013
\u2013
Deferred contingent consideration
5,542
3,212
2,330
\u2013
105,673
67,690
22,936
15,047
Strategic report Governance Financial statements\u00a0Shareholder information 113
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
14. Financial instruments\u00a0(cont)
2023 Contractual cash flows
Non-derivative financial instruments
Total
\u00a3000
Due within
one year
\u00a3000
Due from
1-5 years
\u00a3000
Due after
five years
\u00a3000
Secured bank borrowings
7,164
7,164
\u2013
\u2013
Lease liabilities
36,176
7,307
19,242
9,627
Trade payables
30,323
30,323
\u2013
\u2013
Accruals and deferred income
11,401
11,401
\u2013
\u2013
Deferred contingent consideration
4,031
3,527
504
\u2013
89,095
59,722
19,746
9,627
The Group funds its operations from a number of sources of finance, namely operating cash flows, bank borrowings, finance leases and shareholders\u2019 equity, which comprises share capital, reserves and retained earnings. The objective is to achieve a capital structure with an appropriate cost of capital, whilst providing flexibility in immediate and medium-term funding to accommodate any material investment requirements.
The Group\u2019s principal financial instruments comprise borrowings, cash and short-term deposits, and other items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Group\u2019s operations. Throughout the period under review, the Group\u2019s policy is that no trading in financial instruments is undertaken for speculative purposes.
There has been no significant change to the Group\u2019s exposure to market risks during 2024. Principal risks arising are liquidity risk and credit risk, with secondary risks being interest rate risk and currency risk. The Board reviews and agrees policies for managing each of these risks, which are summarised below and have remained unchanged since the beginning of 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsDesignatedAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870240": { "value": "Liquidity risk
The Group\u2019s liquidity requirements are met by ensuring adequate access to funds by maintaining appropriate levels of committed bank facilities, which are reviewed regularly. The Group bank borrowing facility with Bank of Scotland PLC and HSBC UK Bank plc of \u00a340m is available until November 2027 with options to extend a further two years to November 2029. The facility bears interest at normal commercial rates and carries standard financial covenants in relation to interest cover and leverage. The maturity profile is set out in this note", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870242": { "value": "Interest rate risk
The Group borrows in currencies at floating rates of interest. It was not considered necessary to cover interest rate exposures by the use of financial instruments during 2024.
A sensitivity analysis has been prepared based on bank interest rate exposures at the year-end date and the stipulated change taking place at the beginning of the financial year and held constant throughout the year. If interest rates had been 50 basis points higher and all other variables held constant, the Group\u2019s profit before tax would have decreased by \u00a347,000 (2023: \u00a344,000).
Currency risk
The Group had three overseas subsidiaries in 2024, one operating in Ireland, one operating in the Netherlands and one operating in Germany. Revenues and expenses are denominated exclusively in Euros. Movements in the Euro to sterling exchange rates could affect the Group\u2019s sterling balance sheet. The Group\u2019s policy during 2024 has been to review the need to hedge currency exposures on a regular basis and it was not considered necessary to cover existing currency exposures by the use of financial instruments. The Group continues to review the need to hedge exposures on a regular basis.
The Sterling value of foreign currency denominated assets and liabilities at the year-end is as follows:
Assets
Liabilities
2024
\u00a3000
2023
\u00a3000
2024
\u00a3000
2023
\u00a3000
Euros
8,334
7,105
2,964
2,936
The sterling value of the Group\u2019s foreign currency denominated profit before tax from continuing operations is as follows:
2024
\u00a3000
2023
\u00a3000
Euros
2,902
1,679
Strategic report Governance Financial statements\u00a0Shareholder information 111
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
14. Financial instruments\u00a0(cont)
The following table details the sensitivity to a 5% reduction in Sterling against the respective foreign currencies. The sensitivity of the Group\u2019s exposure to foreign currency risk is determined based on the exposure at the year-end and on the change taking place at the beginning of the financial year and held constant throughout the year.
Result
2024
\u00a3000
Result
2023
\u00a3000
Other
equity
2024
\u00a3000
Other
equity
2023
\u00a3000
Euros
106
64
162
106
2024
\u00a3000
2023
\u00a3000
Cash and cash equivalents
Currency\t\u2013 Sterling
11,110
5,468
\u00a0\u2013 Euros
1,776
2,218
\u00a0\u2013 US Dollars
42
5
Cash and cash equivalents
12,928
7,691
Bank borrowings
Currency\t\u2013 Sterling
14,846
7,164
\u00a0\u2013 Euros
\u2013
\u2013
Bank borrowings
14,846
7,164
Net bank (debt)/funds
(1,918)
527
Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments with an original maturity of three months or less. Bank borrowings comprise \u00a314.8m drawn down on the borrowing facility.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870248": { "value": "Interest rates
Bank borrowings are held at floating rates of interest. The average effective interest rate on these borrowings approximates to 8.96% per annum (2023: 7.97%).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870264": { "value": "Borrowing facilities
The Group\u2019s committed borrowing facilities, for which all conditions precedent had been met, are as follows:
2024
\u00a3000
2023
\u00a3000
Drawn down
14,846
6,460
Undrawn
25,154
28,540
Committed borrowing facilities
40,000
35,000
The Group\u2019s borrowing profile is as follows:
2024
\u00a3000
2023
\u00a3000
At amortised cost
Bank borrowings \u2013 secured
14,846
7,164
Lease liabilities
7,223
7,307
Current borrowings
22,069
14,471
Non-current lease liabilities
35,653
28,869
Total borrowings
57,722
43,340
Equity
123,273
114,576
Gearing (net debt to equity) ratio
47%
38%
15. Trade and other payables
2024
\u00a3000
2023
\u00a3000
Due within one year
Trade payables
34,432
30,323
Other taxation and social security
3,929
4,472
Deferred contingent consideration
3,212
3,527
Other payables
713
900
Accruals and deferred income
7,977
11,401
50,263
50,623
Due after more than one year
Deferred contingent consideration
2,330
504
2,330
504
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs in all the Group\u2019s businesses. No interest is charged on overdue trade payables. \u00a33.0m of deferred contingent consideration was paid during 2024 related to the acquisitions of PackMann Gesellschaft f\u00fcr Verpackungen und Dienstleistungen mbH in 2022 and A.E. Sutton Limited and A and G Holdings Limited both in 2023. The Directors consider that the carrying amounts for trade and other payables approximate to their fair value.
The Group has commercial credit card facilities of \u00a34m with Lloyds Bank plc which it uses to pay certain suppliers. The credit terms on the facilities are 60 days. The facility was used during 2024 and 2023 to pay two suppliers who benefited through early payment of their invoices by 30 days.
2024
\u00a3000
2023
\u00a3000
Trade payables
34,432
30,323
of which suppliers have received payment
1,447
2,034
Liabilities that are part of the arrangement
25-35 days
25-35 days
Comparable trade payables that are not part of the arrangements
55-65 days
55-65 days
\u00a0
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870267": { "value": "15. Trade and other payables
2024
\u00a3000
2023
\u00a3000
Due within one year
Trade payables
34,432
30,323
Other taxation and social security
3,929
4,472
Deferred contingent consideration
3,212
3,527
Other payables
713
900
Accruals and deferred income
7,977
11,401
50,263
50,623
Due after more than one year
Deferred contingent consideration
2,330
504
2,330
504
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs in all the Group\u2019s businesses. No interest is charged on overdue trade payables. \u00a33.0m of deferred contingent consideration was paid during 2024 related to the acquisitions of PackMann Gesellschaft f\u00fcr Verpackungen und Dienstleistungen mbH in 2022 and A.E. Sutton Limited and A and G Holdings Limited both in 2023. The Directors consider that the carrying amounts for trade and other payables approximate to their fair value.
The Group has commercial credit card facilities of \u00a34m with Lloyds Bank plc which it uses to pay certain suppliers. The credit terms on the facilities are 60 days. The facility was used during 2024 and 2023 to pay two suppliers who benefited through early payment of their invoices by 30 days.
2024
\u00a3000
2023
\u00a3000
Trade payables
34,432
30,323
of which suppliers have received payment
1,447
2,034
Liabilities that are part of the arrangement
25-35 days
25-35 days
Comparable trade payables that are not part of the arrangements
55-65 days
55-65 days
\u00a0
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870266": { "value": "15. Trade and other payables
2024
\u00a3000
2023
\u00a3000
Due within one year
Trade payables
34,432
30,323
Other taxation and social security
3,929
4,472
Deferred contingent consideration
3,212
3,527
Other payables
713
900
Accruals and deferred income
7,977
11,401
50,263
50,623
Due after more than one year
Deferred contingent consideration
2,330
504
2,330
504
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs in all the Group\u2019s businesses. No interest is charged on overdue trade payables. \u00a33.0m of deferred contingent consideration was paid during 2024 related to the acquisitions of PackMann Gesellschaft f\u00fcr Verpackungen und Dienstleistungen mbH in 2022 and A.E. Sutton Limited and A and G Holdings Limited both in 2023. The Directors consider that the carrying amounts for trade and other payables approximate to their fair value.
The Group has commercial credit card facilities of \u00a34m with Lloyds Bank plc which it uses to pay certain suppliers. The credit terms on the facilities are 60 days. The facility was used during 2024 and 2023 to pay two suppliers who benefited through early payment of their invoices by 30 days.
2024
\u00a3000
2023
\u00a3000
Trade payables
34,432
30,323
of which suppliers have received payment
1,447
2,034
Liabilities that are part of the arrangement
25-35 days
25-35 days
Comparable trade payables that are not part of the arrangements
55-65 days
55-65 days
\u00a0
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870249": { "value": "15. Trade and other payables
2024
\u00a3000
2023
\u00a3000
Due within one year
Trade payables
34,432
30,323
Other taxation and social security
3,929
4,472
Deferred contingent consideration
3,212
3,527
Other payables
713
900
Accruals and deferred income
7,977
11,401
50,263
50,623
Due after more than one year
Deferred contingent consideration
2,330
504
2,330
504
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs in all the Group\u2019s businesses. No interest is charged on overdue trade payables. \u00a33.0m of deferred contingent consideration was paid during 2024 related to the acquisitions of PackMann Gesellschaft f\u00fcr Verpackungen und Dienstleistungen mbH in 2022 and A.E. Sutton Limited and A and G Holdings Limited both in 2023. The Directors consider that the carrying amounts for trade and other payables approximate to their fair value.
The Group has commercial credit card facilities of \u00a34m with Lloyds Bank plc which it uses to pay certain suppliers. The credit terms on the facilities are 60 days. The facility was used during 2024 and 2023 to pay two suppliers who benefited through early payment of their invoices by 30 days.
2024
\u00a3000
2023
\u00a3000
Trade payables
34,432
30,323
of which suppliers have received payment
1,447
2,034
Liabilities that are part of the arrangement
25-35 days
25-35 days
Comparable trade payables that are not part of the arrangements
55-65 days
55-65 days
\u00a0
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870250": { "value": "17. Deferred tax
Timing
\u00a0differences/
\u00a0Accelerated
\u00a0capital
\u00a0allowances
\u00a3000
Other
intangible
assets
\u00a3000
Retirement
benefit
obligations
\u00a3000
Total
\u00a3000
At 1 January 2023
(803)
(4,763)
(2,551)
(8,117)
Acquisition
(124)
(2,119)
\u2013
(2,243)
Credited/(charged) in income statement
190
963
(422)
731
Credited in other comprehensive income
Deferred tax on remeasurement of pension scheme liability
\u2013
\u2013
492
492
At 31 December 2023
(737)
(5,919)
(2,481)
(9,137)
Acquisition (note 22)
(119)
(2,361)
\u2013
(2,480)
(Charged)/credited in income statement
(405)
1,158
(19)
734
Credited in other comprehensive income
Deferred tax on remeasurement of pension scheme liability
\u2013
\u2013
91
91
At 31 December 2024
(1,261)
(7,122)
(2,409)
(10,792)
2024 Deferred tax assets due outwith one year
145
\u2013
\u2013
145
2024 Deferred tax liabilities due outwith one year
(1,406)
(7,122)
(2,409)
(10,937)
(1,261)
(7,122)
(2,409)
(10,792)
2023 Deferred tax assets due outwith one year
335
\u2013
\u2013
335
2023 Deferred tax liabilities due outwith one year
(1,072)
(5,919)
(2,481)
(9,472)
(737)
(5,919)
(2,481)
(9,137)
Deferred tax balances represent tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax assets and liabilities at 31 December 2024 have been calculated based on a corporation tax rate of 25%.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6881230": { "value": "18. Share capital\t
Number of
25p shares
2024
\u00a3000
2023
\u00a3000
Allotted, issued and fully paid:
At 1 January
158,952,000
39,738
39,584
Issued during the year
648,000
162
154
At 31 December
159,600,000
39,900
39,738
The Company has one class of ordinary shares, which carry no right to fixed income.
Each ordinary share carries one vote in any General Meeting of the Company.
On 19 March 2024, the Company issued 648,000 ordinary shares of 25p at a value of 104.4p to settle 2021 share awards under the Company\u2019s 2016 Performance Share Plan.
Strategic report Governance Financial statements\u00a0Shareholder information 115
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
19. Reserves
Share
Premium
\u00a3000
Revaluation
reserve
\u00a3000
Own
shares
\u00a3000
Translation
reserve
\u00a3000
Retained
earnings
\u00a3000
Balance at 1 January 2023
13,573
70
(7)
216
52,584
Profit for the year
\u2013
\u2013
\u2013
\u2013
14,974
Dividends paid (see note 6)
\u2013
\u2013
\u2013
\u2013
(5,484)
Issue of new shares
408
\u2013
(9)
\u2013
(553)
Foreign currency translation differences \u2013 foreign operations
\u2013
\u2013
\u2013
(45)
\u2013
Share-based payments
\u2013
\u2013
\u2013
\u2013
586
Remeasurement of pension scheme liability taken direct to equity
\u2013
\u2013
\u2013
\u2013
(1,967)
Deferred tax taken direct to equity
\u2013
\u2013
\u2013
\u2013
492
Balance at 31 December 2023
13,981
70
(16)
171
60,632
Profit for the year
\u2013
\u2013
\u2013
\u2013
15,530
Dividends paid (see note 6)
\u2013
\u2013
\u2013
\u2013
(5,750)
Issue of new shares
515
\u2013
(21)
\u2013
(656)
Purchase of own shares
\u2013
\u2013
(392)
\u2013
\u2013
Foreign currency translation differences \u2013 foreign operations
\u2013
\u2013
\u2013
(150)
\u2013
Share-based payments
\u2013
\u2013
\u2013
\u2013
(270)
Remeasurement of pension scheme liability taken direct to equity
\u2013
\u2013
\u2013
\u2013
(362)
Deferred tax taken direct to equity
\u2013
\u2013
\u2013
\u2013
91
Balance at 31 December 2024
14,496
70
(429)
21
69,215
Exchange differences arising in the consolidated accounts on the retranslation at closing rates of the Group\u2019s net investments in foreign subsidiary companies are recorded as movements on the translation reserve.
293,420 shares were purchased during 2024 by an Employee Benefit Trust and were held at 31 December 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6881231": { "value": "20. Provisions\t
Property
\u00a3000
At 1 January 2023
3,329
Additions in the year
25
Acquisitions
51
Releases
(184)
Payments
(1,491)
At 31 December 2023
1,730
Additions in the year
16
Releases
(128)
Payments
(247)
At 31 December 2024
1,371
2024\t\u2013 Due within one year
1,044
\u00a0\u2013 Due after more than one year
327
At 31 December 2024
1,371
2023\t\u2013 Due within one year
401
\u00a0\u2013 Due after more than one year
1,329
At 31 December 2023
1,730
Property provisions relate to sums due in respect of dilapidations.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6881224": { "value": "22. Acquisitions
On 13 March 2024, Macfarlane Group UK Limited (\u2018MGUK\u2019) acquired 100% of Allpack Packaging Supplies Limited (\u2018Allpack Direct\u2019), for a total potential consideration of \u00a35.5m and inherited net cash/bank balances of \u00a31.9m. Full potential contingent consideration of \u00a30.75m is payable in the second quarter of 2025, subject to certain trading targets being met in the twelve-month period ending on 28 February 2025.
On 6 July 2024, MGUK acquired 100% of Polyformes Limited (\u2018Polyformes\u2019), for a total potential consideration of \u00a311.6m and inherited net cash/bank balances of \u00a30.6m. Full potential contingent consideration of \u00a34.8m is payable in the third quarters of 2025 and 2026, subject to certain trading targets being met in the two twelve-month periods ending on 30 June 2025 and 2026 respectively.
\u00a31.5m was paid in 2024 to the sellers of PackMann Gesellschaft f\u00fcr Verpackungen und Dienstleistungen mbH (\u2018PackMann\u2019), acquired in 2022, as the profit targets were met for the twelve-month periods ending 31 May 2023 and 31 May 2024.
\u00a31.25m was paid in 2024 to the sellers of A.E. Sutton Limited (\u2018Suttons\u2019), acquired in 2023, as the profit target was met for the twelve-month period ending 29 February 2024.
\u00a30.25m was paid in 2024 to the sellers of A & G Holdings Limited (\u2018Gottlieb\u2019), acquired in 2023, as the profit target was met for the twelve-month period ending 30 April 2024.
Contingent considerations are recognised as a liability in trade and other payables and are remeasured to fair value of \u00a35.5m at the balance sheet date, \u00a33.2m due within one year, based on a range of outcomes between \u00a3Nil and \u00a37.3m. Trading in the post-acquisition period supports the remeasured value of \u00a35.5m. The \u00a35.5m relates to the acquisitions of Gottlieb (\u00a30.5m), Allpack Direct (\u00a30.5m) and Polyformes (\u00a34.5m). The settlement of the amount initially recognised upon acquisition is reflected in cash flows from investing activities, with the element of the payment relating to any subsequent remeasurement included within cash flows from operating activities.
The impact of the acquisitions of Allpack Direct and Polyformes on 2024 results and if the acquisitions had been completed on the first day of 2024 are set out below:
From date
of acquisition
If completed 1 January 2024
Revenue
\u00a3000
Profit
\u00a3000
Revenue
\u00a3000
Profit
\u00a3000
Allpack Direct
2,442
525
2,930
630
Polyformes
5,335
822
10,670
1,644
Strategic report Governance Financial statements\u00a0Shareholder information 117
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
22. Acquisitions\u00a0(cont)
Fair values assigned to net assets acquired and consideration paid and payable are set out below:
Allpack
Direct
\u00a3000
Polyformes
\u00a3000
Prior year
acquisitions
\u00a3000
2024
Total
\u00a3000
Net assets acquired
Other intangible assets (note 9)
2,277
7,166
\u2013
9,443
Tangible assets (inc. ROU assets)
24
2,125
\u2013
2,149
Inventories
185
695
\u2013
880
Trade and other receivables
1,084
1,802
\u2013
2,886
Cash and bank balances (note 21)
1,862
621
\u2013
2,483
Trade and other payables
(324)
(1,855)
\u2013
(2,179)
Current tax liabilities
(185)
(307)
\u2013
(492)
Lease liabilities (note 16)
\u2013
(1,709)
\u2013
(1,709)
Deferred tax liabilities (note 17)
(575)
(1,905)
\u2013
(2,480)
Net assets acquired
4,348
6,633
\u2013
10,981
Goodwill arising on acquisition (note 9)
1,093
4,549
\u2013
5,642
Total consideration
5,441
11,182
\u2013
16,623
Contingent consideration on acquisitions
Current year
(701)
(4,344)
\u2013
(5,045)
Prior years
\u2013
\u2013
2,997
2,997
Total cash consideration
4,740
6,838
2,997
14,575
Net cash outflow arising on acquisitions
Cash consideration
(4,740)
(6,838)
(2,997)
(14,575)
Cash and bank balances acquired
1,862
621
\u2013
2,483
Net cash outflow \u2013 acquisitions
(2,878)
(6,217)
(2,997)
(12,092)
Net cash outflow arising on acquisitions
Net cash flow from operating activities
\u2013
\u2013
(1,492)
(1,492)
Net cash flow from investing activities
(2,878)
(6,217)
(1,505)
(10,600)
Net cash outflow \u2013 acquisitions
(2,878)
(6,217)
(2,997)
(12,092)
24. Share-based payments
Equity-settled Long-Term Incentive PlansMovements in PSP awards during the year
Number
of shares
2024
Number
of shares
2023
Outstanding at 1 January
1,956,238
1,771,542
Awarded during the year
744,430
789,587
Vested during the year
(628,265)
(604,891)
Outstanding at 31 December
2,072,403
1,956,238
A nil cost option award was granted under The Macfarlane Group PLC Long Term Incentive Plan in March 2024 based on 100% of salary. The performance condition requires EPS in 2026 to be between 11.30p and 13.56p for between 25%-100% of this part of the award to vest, working on a straight-line basis.
A nil cost option award was granted under The Macfarlane Group PLC Long Term Incentive Plan in March 2023 based on 100% of salary. The performance condition requires EPS in 2025 to be between 10.80p and 12.95p for between 25%-100% of this part of the award to vest, working on a straight-line basis.
Strategic report Governance Financial statements\u00a0Shareholder information 121
Notes to the financial statements\u00a0(cont)
For the year ended 31\u00a0December\u00a02024
24. Share-based payments\u00a0(cont)
A nil cost option award was granted under The Macfarlane Group PLC Long Term Incentive Plan in March 2022 based on 100% of salary. The performance condition requires EPS in 2024 to be between 10.16p and 12.19p for between 25%-100% of this part of the award to vest, working on a straight-line basis.
All awards are subject to an underpin based on the Remuneration Committee\u2019s view of overall performance in the three-year periods to 31 December 2024, 2025 and 2026 respectively. No re-setting of either award is allowed. Vesting periods are three years and awards vesting then have a holding period of two years after vesting.
A nil cost option award was granted under The Macfarlane Group PLC Long Term Incentive Plan in March 2021 based on 100% of salary. The performance condition required EPS in 2023 to be between 7.95p and 9.54p for between 25%-100% of this part of the award to vest, working on a straight-line basis. The 2021 vesting at 100% and dividend equivalent awarded in shares were confirmed by the Remuneration Committee at its meeting on 26 February 2024. The total number of shares vesting were 628,265.
The Group recognised a credit of \u00a3270,000 (2023: expense of \u00a3586,000) in 2024 relating to equity-settled long-term incentive plan awards on the basis that the 2021 awards vested at 100% (2023: 100%), the 2022 awards had an estimated probability of vesting of 0% (2023: 50%), the 2023 awards had an estimated probability of vesting of 0% (2023: 49%) and the 2024 awards had an estimated probability of vesting of 0%.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870252": { "value": "25. Post balance sheet event
On 10 January 2025, MGUK acquired 100% of the protective packaging manufacturer and distributor The Pitreavie Group Limited and its subsidiary Pitreavie Packaging Limited (\u2018Pitreavie\u2019) based in Scotland for a maximum cash consideration of \u00a318.0m, including a deferred contingent consideration of \u00a34.0m payable over two years. In addition, an estimated completion adjustment was paid to MGUK of \u00a33.4m with net debt inherited of \u00a34.1m.
Pitreavie is a leading player in Scotland in the design, manufacturing and distribution of protective packaging, primarily in the food & drink, energy, electronics and industrial sectors, with more than 150 employees.
Due to the recent nature of the acquisition and size of the transaction, the Group is in preliminary stages of its fair value assessment of the assets required and the liability assumed under IFRS 3 Business Combinations. The completed fair value exercise and provisional disclosures will be reported in the Group\u2019s 2025 interim results.", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870253": { "value": "\u00a0
26. Related party transactions
The Group has related party relationships with
(i)\tits subsidiaries, listed on page 135,
(ii)\tits Directors who comprise the Group Board; and
(iii)\tthe Macfarlane Group PLC sponsored pension schemes (see note 23).
Transactions between the Company and its subsidiaries are eliminated on consolidation and are not disclosed.
Key management personnel comprise the Group Board. Their remuneration is set out below in aggregate for each of the categories specified in IAS 24 \u2018Related Party Disclosures\u2019.
2024
\u00a3000
2023
\u00a3000
Directors\u2019 remuneration
1,701
2,147
Employer\u2019s national insurance contributions
231
287
1,932
2,434
Further details of Directors\u2019 individual and collective remuneration are set out in the Directors\u2019 Remuneration Report on page 72. The details provided in the Directors\u2019 Remuneration Report address the Companies Act disclosure requirements relating to Directors\u2019 remuneration.
Details of Directors\u2019 shareholdings in the Company are shown on page 73 and total dividends of \u00a367,000 were paid in respect of these shareholdings in 2024 (2023: \u00a350,000).
Disclosures in relation to the pension schemes are set out in note 23.
The Directors have considered the implications of IAS 24 \u2018Related Party Disclosures\u2019 and are satisfied that there are no other related party transactions occurring during the year, which require disclosure other than those already disclosed in these financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870223": { "value": "Share-based payments
The fair value of share-based payments awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the awards. The fair value of the awards granted is measured using an option valuation model, taking into account the terms and conditions upon which the awards were granted. The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.Details of the determination of the fair value of equity-settled share-based transactions are set out in note 24.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870254": { "value": "Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation in the Group financial statements. The Directors have considered the implications of IAS 24 \u2018Related Party Disclosures\u2019 and are satisfied that there are no other related party transactions occurring during the year, which require disclosure, other than those already disclosed in these financial statements.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:213800LVRYDERSJAAZ73", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_6870255": { "value": "Company name
Principal activities
Country of registration
Macfarlane Group UK Limited1
Coventry Tel: 02476 511511
Supply and distribution of all forms of packaging materials and equipment. Design and manufacture of specialist packaging.
England
Nelsons for Cartons & Packaging Limited1
Leicester\tTel: 0116 2641050
Supply and distribution of all forms of packaging materials and equipment.
England
Carters Packaging Limited1
Redruth\tTel: 01209 204777
Supply and distribution of all forms of packaging materials and equipment.
England
GWP Group Limited1
Swindon\tTel: 01793 754444
Design and manufacture of specialist packaging.
England
Nottingham Recycling Limited1
Nottingham\tTel: 0115 986 7181
Recovery of waste paper and corrugated board for recycling.
England
Macfarlane Group B.V.2Hoofddorp\tTel: 00 31 235689207
Supply and distribution of all forms of packaging materials and equipment.
Netherlands
Macfarlane Packaging Ireland Limited3
Wicklow Tel: 00 353 1281 0234
Supply and distribution of all forms of packaging materials and equipment.
Ireland
PackMann Gesellschaft f\u00fcr Verpackungen und Dienstleistungen mbH5
Eppelheim Tel: 00 49-6221 759090
Supply and distribution of all forms of packaging materials and equipment.
Germany
A.E. Sutton Limited6
Chatteris\tTel: 01354 693171
Design and manufacture of specialist packaging.
England
Gottlieb Packaging Materials Limited1
Manchester\tTel: 0161 872 0983
Supply and distribution of all forms of packaging materials and equipment.
England
Barum & Dewar Limited4
Barnstaple\tTel: 01271 375197
Design and manufacture of specialist packaging.
Scotland
B&D Foam Limited4
Southampton\tTel: 02380 811180
Design and manufacture of specialist packaging.
Scotland
Allpack Packaging Supplies Limited1
Bury St Edmunds\tTel: 01359 242116
Supply and distribution of all forms of packaging materials and equipment.
England
Polyformes limited1
Leighton Buzzard\tTel: 01525 852444
Design and manufacture of specialist packaging.
England
All the above subsidiaries are wholly owned either by Macfarlane Group PLC or one of its subsidiary companies and operate in the country of registration. The Group controls 100% of the ordinary share capital of each subsidiary.
The Group\u2019s other related undertakings are the dormant subsidiary undertakings disclosed below. Dormant subsidiaries are exempt from preparing individual accounts by virtue of s394A of the Companies Act. In all cases the Company listed as owner controls 100% of the issued share capital of the dormant subsidiary undertaking.
Company name
Company number
Country of registration
Owned by Macfarlane Group PLC
National Packaging Group Limited1Adhesive Labels Limited1
0135586700723320
EnglandEngland
Owned by Macfarlane Group UK Limited
Online Packaging Limited1Macfarlane Packaging Limited4Abbott\u2019s Packaging Limited1Mitchell Packaging Limited1Greenwoods Stock Boxes Limited4Network Packaging Limited1One Packaging Limited1Tyler Packaging (Leicester) Limited1Harrisons Packaging Limited1Leyland Packaging Company (Lancs) Limited1 Carnweather Limited1Ecopac (U.K.) Limited1
02903657SC0416780037283100535311SC57682503400627096470450346083006999588037750770863853202783546
EnglandScotlandEnglandEnglandScotlandEnglandEnglandEnglandEnglandEnglandEnglandEngland
Owned by GWP Group Limited
Eastman Packaging Limited1The Great Western Packaging Co. Limited1Corstat Containers Limited1
038374500245509502454197
EnglandEnglandEngland
Owned by Harrisons Packaging Limited
Temperature Controlled Packaging Limited1
06896225
England
Owned by Network Packaging Limited
Networkpack Limited1
07076439
England
Registered offices
1\u00a0Siskin Parkway East, Middlemarch Business Park, Coventry, CV3 4PE
2\u00a0Siriusdreef 17, 2132 WT, Hoofddorp, The Netherlands
3\u00a06th Floor, South Bank House, Barrow Street, Dublin 4
4\u00a03 Park Gardens, Glasgow, G3 7YE
5\u00a0Wasserturmstra\u00dfe 79, 69214 Eppelheim, Germany
6\u00a0Station House, Station Road, Betchworth, Surrey, RH3 7BZ