Disposal & trading update

Macfarlane Group PLC
12 January 2006


                 Macfarlane Group PLC('Macfarlane' or 'Group')


Macfarlane Group PLC to dispose of its Hungarian operations


In line with the Group's strategy to concentrate on and develop its core
businesses, Macfarlane Group PLC ('Macfarlane') announces that it has today
concluded an agreement to sell its Hungarian packaging manufacture and assembly
operation, Macfarlane Packaging Kft to Nefab AB, a Swedish based company, for a
total cash consideration of £2.3 million after attributable expenses. £2.1
million of the consideration will be paid immediately, with the retained
consideration becoming payable in March 2008. The proceeds will be used to
further reduce Group borrowings.


The gross assets disposed of were £1.9 million (unaudited) at 31 December 2005
and the net assets being sold totalled £1.4 million at the same date. The
business made an operating profit of £0.7 million on turnover of £3.6 million in
the year to 31 December 2005 (unaudited). The Directors estimate that the
disposal will produce a realised gain of £0.9 million in the current financial
year to 31 December 2006.


Trading update


In advance of the Group's preliminary statement of final results for the year to
31 December 2005, to be released on 28th March 2006, Macfarlane is pleased to
give the following update.


The Board's expectations as to trading results for 2005, prior to net property
gains, remain broadly unchanged. Despite unfavourable market conditions, the
momentum in the Group's recovery plan has continued in the second half of 2005.


Two years ago, the Board indicated that nothing would be allowed to interfere
with the establishment of the strongest possible platform for recovery and
return to profitability. The Board does not underestimate the challenges ahead.
However the business is now positioned for growth and the Board anticipates a
further significant improvement in trading results and cash generation in 2006.
In the light of this progress, the Board will outline its objectives for
dividend policy prior to the Annual General Meeting in May 2006.



Further information:
Archie S. Hunter            Chairman                     0141 333 9666
Peter D. Atkinson           Chief Executive              0141 333 9666
John Love                   Finance Director             0141 333 9666




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