Business model - Macfarlane Group

Our business model

We design, manufacture and distribute protective
packaging products to business users.

Source – Consolidate – Deliver

We operate a Stock and Serve model from Regional Distribution Centres (RDCs) and satellite sites providing a UK national network to support customers on a local, regional and national basis and three satellite sites linked to RDCs.

Design – Manufacture – Deliver

We operate several manufacturing centres throughout the UK.

New Business

Macfarlane aims to grow its business by increasing the penetration of existing customers and winning new customers.

Our strategy

For many years we have followed a consistent strategy to create
value for shareholders. The Group’s objective is to continue to grow
sales volumes and achieve a return on sales between 7% to 10%.

Strategic priority

Our approach

Sales

Implement a segmental sales strategy to improve customer retention, increase product penetration and accelerate new business. The Group targets new business generation in excess of £12m per annum and aspires to a Net Promoter Score (‘NPS’) of 60.

Sectors

Focus on key sectors with growth potential, particularly E-Commerce Retail National Accounts and Third Party Logistics.

Gross Margin

Maintain gross margins through effective sourcing, operational efficiencies, and management of fluctuations in input prices. The Group targets gross margins of 30%+ for Packaging Distribution and 40%+ for Manufacturing Operations.

Logistics

Ensure operational effectiveness is maximised through efficiencies in logistics. The target for Packaging Distribution is to remain below 2.5%.

Infrastructure

Optimising the costs associated with the physical infrastructure. The Group aims to reduce the Packaging
Distribution costs below 4.0% of sales.

Environment

Reduce the Group’s impact on the Environment through reduction of its internal carbon footprint and supporting customers through its ‘Significant Six’ sales approach. The Group has set a target of reducing its Scope 1 and 2 carbon footprint by 30% by 2030.

Acquisitions

Supplement organic growth with at least two good quality acquisitions each year.