Trading Statement

Macfarlane Group PLC
31 October 2002


DOCUMENT TO: RNS

Trading Statement                             

In our interim statement dated 10 September 2002 we indicated that our view for
the remainder of the year was that the seasonal uplift usually expected in the
second half could not be predicted with any certainty. This seasonal uplift,
which would have returned the Group to a trading profit in the second half of
the year has not materialised, resulting in pressure on sales and margins in
September and October. Any significant improvement in the remainder of the year
is unlikely and our previous trading expectations will therefore not be met.

We anticipate that the Group will make a trading loss before property gains and
exceptional costs for the year ended 31 December 2002. However, as a result of
restructuring actions implemented throughout the year and the completion of the
programme in 2003, we expect our Distribution business to minimise its monthly
losses throughout the final quarter, thereafter incrementally restoring
profitability in 2003. With the major transitioning of our business now well
under way, we believe that the business will be robust enough to withstand any
prolonged period without economic growth. Our packaging, labels and injection
moulding businesses continue to trade profitably.

Our property disposal programme continues and will generate significant gains.
Although the exact timing of some of the principal gains cannot yet be
determined, we shall not accelerate gains where this may reduce the amounts
realised and shall seek to optimise the benefit for shareholders. Gains already
achieved will, as a minimum, offset the current estimate of restructuring
charges of £1.7m in the year. The anticipated proceeds from asset disposals and
the trading benefits from restructuring, support the Board's current dividend
policy.

Following a review of operations, Iain Duffin, Chief Executive of Macfarlane
Group PLC, has taken day to day control of the Distribution business.

FROM: MACFARLANE GROUP PLC



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