MACFARLANE Group, the Glasgow-based packaging company, has sold its long-standing labels business in a deal worth £6.4 million.

Macfarlane Labels, which designs and prints self-adhesive and re-sealable labels mainly for the FMCG sector (fast-moving consumer goods), and its subsidiaries have been acquired by The Reflex Group, a privately owned company focused on the manufacture of labels and flexible packaging. The 109 employees of Macfarlane Labels will remain with the business further to its sale.

Macfarlane Labels generated £0.3m of profit before tax in 2020, and had gross assets of £15.1m on December 31 of that year. The division had fallen under the umbrella of the Scottish group’s manufacturing operations business, which generated sales of £28.3m in 2020.

Macfarlane Group derives the bulk of its sales from its dominant packaging distribution arm, which generated £202m of the company’s £230m revenue in 2020.

The company said the proceeds from the sale of Macfarlane Labels will be strategically invested in the continuing growth of its protective packaging business, which supplies packaging solutions to help major high street retailers fulfil their e-commerce operations.

Chief executive Peter Atkinson said: “Macfarlane Labels has been a long-standing part of the Group. We believe that its sale to Reflex, with their well-established position and scale in the labels market, creates the best opportunity for Macfarlane Labels to develop.

“The sale will allow the Group to focus resources on growing our protective packaging businesses both in the UK and Europe.”

Shares in Macfarlane Group were up nearly three per cent at 133.82p in early trading.