Disposal

Macfarlane Group PLC
27 October 2003

27 October 2003




      Macfarlane Group to sell Northern packaging manufacturing operations



This will         Eliminate annualised trading losses of approximately £1.8m

                  Result in a loss on disposal of £3.2m in the 2003 accounts

                  Be cash neutral



Macfarlane Group PLC ('Macfarlane') has signed a conditional agreement for the
disposal of the business and certain assets and liabilities of Macfarlane's
Northern packaging manufacturing operations in Dundee, Govan and North Shields
('the business') to DS Smith PLC ('DS Smith') for a cash consideration of £0.9m.


In the year ended 31 December 2002, the business incurred losses before interest
and tax of £1.5m on turnover of £12.9m. In the nine-month period to September
2003, the business incurred losses before interest and tax of £1.3m on turnover
of £7.3m. The business employed a total of 108 staff at 30 September 2003. Net
assets of the business amounted to £4.1m at 30 September 2003. (31 December 2002
- £5.4m) Macfarlane will record a book loss on disposal of £3.2m in its accounts
to 31 December 2003, primarily due to asset write-downs. Completion is subject
to employee consultation and other legal conditions and is likely to conclude in
November. The transaction is expected to be cash neutral.


Sir John Ward, Chairman of Macfarlane Group today said 'I indicated in our
half-year announcement that all aspects of the business would be reviewed to
reduce losses and this agreement helps us meet that objective. This agreement
will also help strengthen the strong trading partnership between Macfarlane and
DS Smith.'



Press & Media:
Gordon Beattie              Beattie Media              07768 588163



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