Half-year Results

Full year outlook in line with market expectations

1 See note 2 for reconciliation of Alternative Performance Measures (before charging amortisation and deferred contingent consideration adjustments) to Statutory Measures.

Key Financial Highlights

• Group revenue increased by 13% to £146.6m (H1 2024: £129.6m).
• Group adjusted operating profit reduced by 22% to £9.8m (H1 2024: £12.5m).
• Basic and diluted earnings per share were 2.32p per share (H1 2024: 4.55p per share) and 2.32p per share (H1 2024: 4.51p per share) respectively.
• Distribution generated revenues of £110.4m (H1 2024: £110.9m) with adjusted operating profit of £4.8m (H1 2024: £9.3m).
• Manufacturing Operations increased revenues to £39.2m (H1 2024: £21.3m) and reported adjusted operating profit of £5.0m (H1 2024: £3.2m).
• Net cash inflow from operating activities of £12.4m (H1 2024: £14.1m) reflects continued management of working capital.
• Net bank debt was £15.2m on 30 June 2025, following a net cash outflow of £13.3m since 31 December 2024, after £16.5m (H1 2024: £5.0m) attributable to acquisitions and capital expenditure.
• The Group is operating well within its bank facility of £40.0m which runs until 30 November 2027 with options to extend to November 2029.
• Pension scheme surplus of £9.2m on 30 June 2025 (31 December 2024: £9.6m) with the Group not required to make any further contributions.
• Interim dividend of 0.96p per share (H1 2024: 0.96p per share) - to be paid on 9 October 2025 to shareholders on the register as at 12 September 2025 (ex-dividend date 11 September 2025).

2025 Trading Outlook

Performance improvement expected in H2 2025 through seasonal trading uplift and actions the management team is taking to manage input cost changes, mitigate operating cost increases, convert our strong pipeline of new business and deliver synergies from the Pitreavie acquisition. The full year outlook for 2025 is in line with market expectations.

Aleen Gulvanessian, Chair of Macfarlane Group PLC, commented on the interim results: "As noted in the trading update on 10 July, market conditions have been challenging in H1 2025 due to economic headwinds and uncertainty.

"Whilst Distribution has experienced weaker than expected demand, delays in new business decision-making and pressure on profit margins, Manufacturing Operations has performed more robustly. Manufacturing Operations' performance was driven by good contributions from the acquisitions of Polyformes Limited in July 2024 ("Polyformes") and The Pitreavie Group Limited in January 2025 ("Pitreavie") combined with stronger demand from customers, particularly in the defence and aerospace sectors.

"The recently launched share buyback programme will continue as planned.

"Despite the current market conditions, the Board remains confident that our strengthened sales team, differentiated customer proposition and proven executional skills mean the medium-term prospects for the Group are positive."

Interim Results - Management Report

Macfarlane Group's trading activities comprise Packaging Distribution and Manufacturing Operations.

Macfarlane's Packaging Distribution business is the UK's leading specialist distributor of protective packaging materials, with a growing presence in Europe. Macfarlane operates in the UK, Ireland, the Netherlands and Germany from 27 Regional Distribution Centres ("RDCs") and three satellite sites, supplying industrial and retail customers with a comprehensive range of protective packaging materials on a local, regional and national basis.

• See note 2 for reconciliation of Alternative Performance Measures (before charging amortisation and deferred contingent consideration adjustments) to Statutory Measures.

The main features of Packaging Distribution performance in H1 2025 were as follows:

• Weak customer demand across most sectors has resulted in revenue being marginally lower than H1 2024.
• Despite a strong pipeline, new business in H1 2025 was £3.7m compared to £4.5m in H1 2024, reflecting delays in customer decision-making.
• Gross margins were lower in H1 2025 at 35.6% (H1 2024: 37.9%), but more consistent with H2 2024 (36.4%). This reflects the timing of the pass-through of increased input prices, the competitive environment in a weak market and one of our second-tier corrugate suppliers going into administration.
• Operating expenses at 31.2% of revenue (H1 2024: 29.5%) due to investment in the quality of our sales team, the deployment of our new website, the well-documented increases in National Insurance and National Minimum Wage, additional property costs relating to higher-than-expected rent increases and excess costs associated with the East Midlands consolidation which was completed at the end of July 2025.
• As a consequence, adjusted operating profit as a percentage of revenue decreased to 4.3% (H1 2024: 8.4%).

Interim Results - Management Report (continued)

The priorities for Packaging Distribution in H2 2025 are to:

• Accelerate new business momentum through effective application of our leading sales tools, processes, World Class Sales training and the recent sales recruitment programme.
• Continue to effectively manage raw material input price changes.
• Reduce operating costs through efficiency programmes in sales, logistics and administration and, where possible, mitigate the impact of increases in National Insurance Contributions, National Minimum Wage and property rent.
• Realise the benefits of the new distribution centre in the East Midlands.
• Support our customers to manage the impact of Extended Producer Responsibility legislation and reduce their carbon footprint through offering more sustainable packaging solutions.
• Strengthen our key supplier relationships.
• Develop both sales and cost synergies through the relationship with our Manufacturing Operations, including Pitreavie.
• Achieve benefits from information technology investments and our relaunched web-based solutions offer to provide customers with more effective online access to our full range of products and services.
• Accelerate the progress we have made in Europe through our "Follow the Customer" programme.
• Continue to develop a pipeline of high-quality acquisitions in the UK and Europe.

Manufacturing Operations comprises our nine Macfarlane Packaging Design and Manufacture business units focused on design, manufacture and assembly of bespoke protective packaging solutions for customers requiring cost-effective methods of protecting high value products in storage and transit.

The primary components we use are corrugate, timber, foam and specialist cases. The businesses supply both directly to customers and through the national RDC network of the Packaging Distribution business.

Key market sectors are aerospace, space, medical equipment, electronics, automotive, e-commerce retail, household equipment, food and drink. The markets we serve are highly fragmented, with a range of locally based competitors. We differentiate our market offering through technical expertise, design capability, industry accreditations and national coverage through the Packaging Distribution business.

• See note 2 for reconciliation of Alternative Performance Measures (before charging amortisation and deferred contingent consideration adjustments) to Statutory Measures.

Interim Results - Management Report (continued)

The main features of Manufacturing Operations performance in H1 2025 were:

• Increase in revenue of £17.9m to £39.2m due to:
• £17.8m of revenue from the acquisitions of Polyformes in July 2024 and Pitreavie in January 2025.
• organic growth of 0.3% including increases in internal supply to Distribution.
• Gross margins have decreased to 41.0% (H1 2024: 44.3%) due primarily to the effect of Pitreavie, which operates at lower margins and, to a lesser extent, the impact of increasing input prices.
• Operating expenses remain well controlled.
• 55% increase in adjusted operating profit.
• Reduction in adjusted operating profit as a percentage of revenue to 12.7% (H1 2024: 15.1%).

The priorities for Manufacturing Operations in H2 2025 are to:

• Increase momentum of new business growth in target sectors, e.g. medical, aerospace and space.
• Prioritise new sales activity in our higher added-value bespoke composite pack product range.
• Work with our customers to effectively manage raw material price changes.
• Achieve both sales and cost synergies through closer working with the recently-acquired businesses.
• Develop a pipeline of further high-quality acquisitions in the UK.

Interim Results - Management Report (continued)

Risks and Uncertainties

The Group operates a formal framework for the identification and evaluation of the major business risks faced by each business and determines an appropriate course of action to manage these risks.

The principal risks and uncertainties which could impact on the performance of the Group, together with the mitigating actions, were outlined on pages 26 to 30 in our Annual Report and Accounts for 2024 (available on our website at www.macfarlanegroup.com). These remain the same for the remaining six months of the current financial year with those considered highest priority for the Group summarised below:

• Given the range of prolonged geopolitical and economic uncertainties within the UK and other markets, there is an ongoing risk this will adversely affect our ability to deliver upon agreed strategic initiatives. We may also need to adapt our business quickly in order to limit the impact upon the Group's results, prospects and reputation.
• The markets we operate in are changing, with: customers increasingly aware of the environmental impact of their packaging; increasing environmental regulatory requirements for packaging suppliers, such as the Plastic Tax introduced in 2022 and the introduction of the Extended Producer Responsibility ("EPR") levy in 2025; increasing likelihood of disruption to the operations of the Group through extreme weather events such as flooding, storm damage and water stress, impacting the business directly and disrupting supply chains; investors looking to invest in companies that demonstrate strong environmental credentials; and UK Government's commitment to net zero carbon emissions by 2050 and the profound changes that is likely to drive across the economy.
• Failure to respond to strategic shifts in the market, including the impact of weaknesses in the economy as well as disruptive behaviour from competitors, changing customer needs (e.g. changing customer priorities between online and physical buying) and the increasing regulatory interventions targeted at improving sustainability could limit the Group's ability to continue to grow revenues or potentially contribute to a failure to meet market expectations.
• The Group's businesses are impacted by disruption to our supply chains as well as inflationary pressures. In particular, changes to commodity-based raw material prices, manufacturer energy costs, foreign exchange movements as well as increased bureaucracy, freight and tariff costs related to imports; lead to increases to supplier input pricing and the potential for erosion of profitability within the Group's businesses if we are unable to pass these onto customers.
• The increasing frequency and sophistication of cyber-attacks is a risk which potentially threatens the confidentiality, integrity and availability of the Group's data and IT systems. These attacks could also cause reputational damage and fines in the event of personal data being compromised.

Interim Results - Management Report (continued)

Gulvanessian Chair

P.D. Atkinson Chief Executive

Gray Finance Director

J.W.F. Baird Non-Executive Director

D.L. Whyte Non-Executive Director

D.B. Stirling Non-Executive Director

The Directors confirm that, to the best of their knowledge:-

• the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting;
• the interim management report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
• the interim management report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

Approved by the Board of Directors on 28 August 2025 and signed on its behalf by

………………………….. ………………………

Peter D. Atkinson Ivor Gray

Chief Executive Finance Director

MACFARLANE GROUP PLC

CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)

FOR THE SIX MONTHS ENDED 30 JUNE 2025

Items that will not be reclassified to profit or loss

MACFARLANE GROUP PLC SIX MONTHS ENDED 30 JUNE 2025 NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED) Reconciliation to condensed consolidated cash flow statement

Basis of preparation

Macfarlane Group PLC is a public company listed on the London Stock Exchange, incorporated and domiciled in the United Kingdom and registered in Scotland.

The Group's annual financial statements for the year ended 31 December 2024 were prepared in accordance with United Kingdom adopted international accounting standards. This condensed set of interim financial statements has been prepared in accordance with United Kingdom adopted International Financial Reporting Standard IAS 34 Interim Financial Reporting.

This condensed set of interim financial statements has been prepared applying the accounting policies that were applied in the preparation of the company's published consolidated financial statements for the year ended 31 December 2024. There were no major changes from the adoption of new IFRS's in 2024.

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. The Directors have assessed the impact of climate change and consider that this does not have a significant impact on these financial statements. The key sources of estimation uncertainty that have a significant effect on the carrying amounts of assets and liabilities are discussed below:

Retirement benefit obligations

The determination of any defined benefit pension scheme liability is based on assumptions determined with independent actuarial advice. The key assumptions used include discount rate and inflation rate, for which a sensitivity analysis is provided in Note 11. The Directors consider that those sensitivities represent reasonable sensitivities which could occur in the next financial period.

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' best estimate using the information available at the effective dates outlined above. However, there remains a risk that the actual payment differs from the amount assumed as consideration within the PPA accounting as detailed in note 9 and from the amount recorded as a liability at the balance sheet date. Deferred contingent considerations are recognised as a liability in trade and other payables and are remeasured to fair value of £6.3m at the balance sheet date, all due within one year, based on a range of outcomes between £Nil and £8.8m. Trading in the post-acquisition period supports the remeasured value of £6.3m.

MACFARLANE GROUP PLC

SIX MONTHS ENDED 30 JUNE 2025

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Basis of preparation

Critical accounting judgements

Property provisions

Property provisions of £1.5m have been recognised as at 30 June 2025 (2024: £1.6m), representing the Directors' 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.

Business activities, risks and financing

The Group's business activities, together with the factors likely to affect its future development, performance and financial position, are set out in the Interim Management Report.

The Group's principal financial risks in the medium term relate to liquidity and credit risk. Liquidity risk is managed by ensuring that the Group's 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's operations. The Group has a committed borrowing facility of £40m 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's trade receivables. The Directors believe that the Group is adequately placed to manage its financial risks effectively, despite any economic uncertainty.

The Directors have reviewed the Group's cash and profit projections, which they believe are based on prudent market data and past experience taking account of reasonably possible changes in trading performance given current market and economic conditions. The Directors are of the opinion that these projections show that the Group should be able to operate within its current facilities and comply with its banking covenants.

In assessing the going concern basis, the Directors have considered the Group's business activities, the financial position of the Group and the Group's risks and uncertainties. The Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of this report. For this reason, this condensed set of financial statements has been prepared on the going concern basis.

Approval and review of condensed financial statements

These condensed financial statements were approved by the Board of Directors on 28 August 2025. As in previous years, the set of condensed financial statements for the half-year is unaudited.

Alternative performance measure

In measuring the financial performance and position, the financial measures used in certain limited cases are derived from the reported results in order to eliminate factors which due to their unusual nature and size distort year-on-year comparisons to a material extent and/or provide useful information to stakeholders. Where such items arise, the Directors will classify such items as separately disclosed and provide details of these items to enable users of the accounts to understand the impact on the financial statements. To the extent that a measurement under Generally Accepted Accounting Principles ("GAAP") is adjusted for a separately disclosed item, this is referred to as an Alternative Performance Measure ("APM"). We believe that the APMs defined below, and the comparable GAAP measurement, provides a useful basis for measuring the underlying financial performance and position of the Group and its businesses when compared to similar companies.

Adjusted diluted earnings per share is defined as diluted earnings per share before, customer relationships and brand values amortisation per share and related tax per share and deferred contingent consideration adjustments per share.

MACFARLANE GROUP PLC

SIX MONTHS ENDED 30 JUNE 2025

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

General information

Comparative figures for the year ended 31 December 2024 are extracted from Macfarlane Group's statutory accounts for 2024. The information for the year ended 31 December 2024 does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been reported on by the Company's auditor and delivered to the Registrar of Companies. The report of the auditor on 27 February 2025 was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

MACFARLANE GROUP PLC

SIX MONTHS ENDED 30 JUNE 2025

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Segmental information

The Group's principal business segment is Packaging Distribution, comprising the distribution of packaging materials in the UK, Ireland and Europe. This comprises 75% of Group revenue and 46% of Group operating profit. The Group's Manufacturing Operations segment comprises the design, manufacture and assembly of timber, corrugated and foam-based packaging materials in the UK. This comprises 25% of Group revenue and 54% of Group operating profit.

Tax for the six months ended 30 June 2025 has been charged at 25% (2024 - 25%) representing the best estimate of the effective tax charge for the full year. Deferred tax assets and liabilities at 30 June 2025 have been calculated based on the long-term corporation tax rate of 25%, which had been substantively enacted at that date.

MACFARLANE GROUP PLC

SIX MONTHS ENDED 30 JUNE 2025

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Amounts recognised as distributions to equity holders in the period

An interim dividend of 0.96p per share, payable on 9 October 2025, was declared on 28 August 2025 and has therefore not been included as a liability in these condensed financial statements.

MACFARLANE GROUP PLC

SIX MONTHS ENDED 30 JUNE 2025

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Acquisitions

On 10 January 2025, MGUK acquired 100% of The Pitreavie Group Limited ("Pitreavie"), for a total potential consideration of £18.0m less completion adjustments of £3.4m. Full potential contingent consideration of £4.0m is payable in the first quarters of 2026 and 2027, subject to certain trading targets being met in the twelve-month period ending on 31 December 2025 and 31 December 2026 respectively.

£0.55m was paid in 2025 to the sellers of A & G Holdings Limited ("Gottlieb"), acquired in 2023, as the profit target was met for the twelve-month period ending 30 April 2025.

£0.65m was paid in 2025 to the sellers of Allpack Packaging Supplies Limited ("Allpack Direct"), acquired in 2024, as the profit target was partially met for the twelve-month period ending 28 February 2025.

Contingent considerations are recognised as a liability in trade and other payables and are remeasured to fair value of £6.3m at the balance sheet date, all due within one year, based on a range of outcomes between £Nil and £8.8m. Trading in the post-acquisition period supports the remeasured value of £6.3m. The £6.3m relates to the acquisitions of Polyformes Limited (£4.7m) and Pitreavie (£1.6m). 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.

Fair values assigned to net assets acquired and consideration paid and payable are set out below:

Cash and cash equivalents (which are presented as a single class of asset on the balance sheet) comprise cash at bank and other short-term highly liquid investments with maturity of three months or less.

MACFARLANE GROUP PLC

SIX MONTHS ENDED 30 JUNE 2025

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Retirement benefit obligations

The figures below have been prepared by Aon based on the results of the triennial actuarial valuation as at 1 May 2023 updated to 30 June 2024, 31 December 2024 and 30 June 2025. The scheme investments and the scheme's net surplus position as calculated under IAS 19 are as follows:

These amounts were calculated using the following principal assumptions as required under IAS 19:

MACFARLANE GROUP PLC

SIX MONTHS ENDED 30 JUNE 2025

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Retirement benefit obligations (continued)

Sensitivity to key assumptions

Key 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. Assuming all other assumptions are held static then a movement in the following key assumptions would affect the level of the surplus as shown below:-

Positive figures reflect a reduction in scheme liabilities and therefore an increase in the scheme surplus.

Basis of recognition of surplus

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 Macfarlane Group PLC Pension & Life Assurance Scheme (1974) (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.

Investments

The Trustees review the Scheme investments regularly and consult with the Company regarding any changes.

Funding

Following the completion of the triennial actuarial valuation at 1 May 2023, Macfarlane Group PLC is not required to pay further deficit reduction contributions.

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 ("the Virgin Media case") 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.

MACFARLANE GROUP PLC

SIX MONTHS ENDED 30 JUNE 2025

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Related party transactions

Related party transactions for 2024 are disclosed in note 26 of the 2024 Annual Report. The Directors are satisfied that, other than the changes in the Retirement Benefit Obligations disclosed in note 11 above, there have been no changes which could have a material effect on the financial position of the Group in the first six months of the financial year.

Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed.

Details of individual and collective remuneration of the Company's Directors and dividends received by the Directors for calendar year 2025 will be disclosed in the Group's 2025 Annual Report. Peter Atkinson and Ivor Gray hold option awards over 750,068 and 371,241 ordinary shares respectively under the Macfarlane Group PLC Long Term Incentive Plan awarded in 2023 and 2024.

There are no other related party transactions during the six-month period which require disclosure.

MACFARLANE GROUP PLC

SIX MONTHS ENDED 30 JUNE 2025

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Post balance sheet events

There are no post balance sheet events requiring disclosure.

Interim Report

The interim report will be posted to shareholders on 15 September 2025. Copies will be available from the registered office, 3 Park Gardens, Glasgow G3 7YE and available on the Company's website, www.macfarlanegroup.com, from that date.