TIDMRBN
RNS Number : 1028J
Robinson PLC
19 August 2021
Robinson plc
Half-year Report
Interim Results for the six months ended 30 June 2021
Robinson plc ("Robinson" or the "Group" stock code: RBN), the
custom manufacturer of plastic and paperboard packaging based in
Chesterfield, announces its interim results for the six months
ended 30 June 2021.
Financial highlights
-- Revenue up 19% to GBP21.2m (2020: GBP17.9m)
-- Gross margin decreased to 16.7% from 23.6% in 2020
-- Operating profit before amortisation of intangible assets reduced to GBP0.1m (2020: GBP1.6m)
-- Loss before tax of GBP0.6m (2020: profit of GBP1.1m)
-- Interim dividend of 2.5p per share announced
-- Net debt(1) of GBP13.7m (31/12/2020: GBP6.6m), after net
capital expenditure of GBP2.0m, consideration for the Schela Plast
acquisition of GBP1.4m and net debt acquired of GBP3.5m
Operational highlights
-- Successfully secured resin supply to allow continued operations in a very tight market
-- Acquisition of Schela Plast A/S completed on 10 February,
with integration progressing to plan
-- Recent business wins in the UK and Denmark with major FMCG
brand owners provide confidence for the future
-- "Packaging with purpose" sustainability pledge launched in
February based on five pillars and 15 ambitious commitments
-- Continued progress with the sale of surplus properties
Alan Raleigh, Chairman, commented:
"Resin prices have now stabilised and shown the first signs of a
reduction in July, however, we are not expecting a significant
reduction before the end of the year. We are also experiencing
price inflation in other areas including secondary packaging and
transport which will continue to impact on the second half of the
year.
Across our markets we are seeing a lower-than-normal level of
demand in the third quarter due to the ongoing uncertainty across
FMCG supply networks and a varying pace of recovery following the
pandemic. We are now expecting this to continue for the second
half, so we are accelerating our plans to improve our operations
for additional cost savings and profitability.
We expect full year operating profit before amortisation of
intangible assets to be in the region of GBP2.0m (2020:
GBP2.7m).
We remain committed in the medium term to delivering
above-market profitable growth and our target of 6-8% of adjusted
operating margin (2) ."
Robinson plc www.robinsonpackaging.com
Helene Roberts, CEO Tel: 01246 389280
Mike Cusick, Finance Director
finnCap Limited
Ed Frisby / Seamus Fricker, Corporate Tel: 020 7220 0500
Finance
Tim Redfern / Barney Hayward, ECM
About Robinson:
Being a purpose-led business, Robinson specialises in custom
packaging with technical and value-added solutions for food and
consumer product hygiene, safety, protection, and convenience;
going above and beyond to create a sustainable future for our
people and our planet. Its main activity is in injection and blow
moulded plastic packaging and rigid paperboard luxury packaging,
operating within the food and beverage, homecare, personal care and
beauty, and luxury gift sectors. Robinson provides products and
services to major players in the fast-moving consumer goods market
including McBride, Procter & Gamble, Reckitt Benckiser, SC
Johnson and Unilever.
Headquartered in Chesterfield, UK, Robinson has 3 plants in the
UK, 2 in Poland and recently acquired a plant in Denmark, Schela
Plast. Schela Plast specialises in the design and manufacture of
plastic blow moulded containers, serving a number of the major FMCG
brands in Denmark and neighbouring countries.
Robinson was formerly a family business with its origins dating
back to 1839, currently employing nearly 400 people. The Group also
has a substantial property portfolio with development
potential.
(1) cash less borrowings (excludes IFRS 16 lease
liabilities)
(2) operating profit margin before exceptional items and
amortisation of intangible assets
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU No. 596/2014) which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
Chairman's Statement
Dear Shareholders
The interim results we report today reflect the very challenging
circumstances we are continuing to experience in 2021 across
materials price inflation, customer demand and the ongoing
uncertainty resulting from the Covid-19 pandemic.
We indicated in March that a lack of resin availability and
consequential sharp increase in prices were likely to create
volatility in 2021. Since 1 January the market price of resins used
in the Group have increased on average by 60% and we have
experienced substantial challenge to secure raw materials in a
market where resin unavailability has caused some competitors to
shut down production lines.
The dedication of the Robinson team in acting decisively to
procure resin supply and, where possible, to agree price increases
with customers has mitigated some of the impact of these extreme
market conditions.
Whilst over the medium-term the Group is protected from resin
price movements through contractual arrangements with most
customers, there is a short-term lag of typically three months
before prices can be changed. Largely as a result of this lag
impact, gross margins were 16.7% (2020: 23.6%) in the first half of
2021.
The pandemic has also created significant operational
challenges. Whilst we have had a small number of positive Covid-19
cases amongst our employees, the controls that we've implemented
have prevented onward transmission and no severe illness has
resulted. This has enabled us to continue to operate the business
safely and to service our customers effectively.
Revenues were 19% higher in the first half of 2021, 3% higher
excluding the Schela Plast business acquired in February. After
adjusting for price changes and foreign exchange, sales volumes in
the underlying(1) business, which have been affected by changes in
consumer behaviour and intermittent lockdowns, are in line with
2020, which included additional demand due to the Covid-19
pandemic.
Operating costs are in line with the second half of 2020, during
which we added resources to partner with key customers and
accelerate our sustainability agenda. Following this investment,
underlying(1) operating costs are 22% higher than the same period
in 2020.
Operating profit before amortisation of intangible assets has
reduced by GBP1.5m versus the same period last year, to GBP0.1m.
The Group made a loss before tax of GBP0.6m (2020: profit before
tax GBP1.1m).
Property
Work has continued on the potential disposals that we announced
had reached heads of agreement in March. We expect completion in
the second half of 2021, for a gross value of GBP3.4m for two plots
of land with a book value of less than GBP1m.
Subject to the necessary planning approvals, we would expect
further sales to be achieved in the latter part of 2021 or early
2022. The intention of the Group remains, over time, to realise the
maximum value from the disposal of surplus properties and to
reinvest the proceeds in developing our packaging business.
Net debt and capital expenditure
Net debt(2) has increased to GBP13.7m (31/12/2020: GBP6.6m)
following the acquisition of Schela Plast and the resin price
impact on profitability and working capital. In addition, deferred
consideration of GBP2.3m is payable to the former owners of Schela
Plast in 2022, this is provided for in Trade and Other Payables.
With total credit facilities of GBP22.6m, the Group considers it
has comfortable headroom for the foreseeable future.
The Group continues to invest in its property, plant and
equipment to improve efficiency and support our future growth
ambitions. Net capital expenditure in the first half year was
GBP2.0m (2020: GBP2.1m) including new production equipment,
previously announced, and now installed in Schela Plast to service
a major FMCG brand owner.
Dividend
Despite the short-term market challenges we face, the Board has
confidence in the medium term prospects for the business and
therefore announces an interim dividend of 2.5p per share to be
paid on 8 October 2021 to shareholders on the register at 10
September 2021 (record date). The ordinary shares ex-dividend date
is 9 September 2021.
The current intention of the Board is to pay a total dividend of
5.5p (2020: 8.5p including the 3.0p deferred 2019 final dividend)
per share for the year ended 31 December 2021.
Outlook
Resin prices have now stabilised and shown the first signs of a
reduction in July, however, we are not expecting a significant
reduction before the end of the year. We are also experiencing
price inflation in other areas including secondary packaging and
transport which will continue to impact on the second half of the
year.
Across our markets we are seeing a lower-than-normal level of
demand in the third quarter due to the ongoing uncertainty across
FMCG supply networks and a varying pace of recovery following the
pandemic. We are now expecting this to continue for the second
half, so we are accelerating our plans to improve our operations
for additional cost savings and profitability.
We expect full year operating profit before amortisation of
intangible assets to be in the region of GBP2.0m (2020:
GBP2.7m).
We remain committed in the medium term to delivering
above-market profitable growth and our target of 6-8% of adjusted
operating margin (3) .
Alan Raleigh
Chairman
18 August 2021
(1) excluding the results from the Schela Plast business
acquired on 10 February
(2) cash less borrowings (excludes IFRS 16 lease
liabilities)
(3) operating profit margin before exceptional items and
amortisation of intangible assets
Condensed consolidated income statement and statement of comprehensive
income
Six months Six months Year to
Condensed consolidated income statement GBP'000 to 30.06.21 to 30.06.20 31.12.20
Revenue 21,231 17,860 37,203
Cost of sales (17,689) (13,648) (28,637)
-------------------------------------------------------- ------------- ------------- ----------
Gross profit 3,542 4,212 8,566
Operating costs (3,491) (2,633) (5,878)
-------------------------------------------------------- ------------- ------------- ----------
Operating profit before amortisation of
intangible assets 51 1,579 2,688
Amortisation of intangible assets (479) (400) (809)
-------------------------------------------------------- ------------- ------------- ----------
Operating (loss)/profit (428) 1,179 1,879
Finance income - interest receivable 12 - 1
Finance costs (165) (63) (128)
(Loss)/profit before taxation (581) 1,116 1,752
Taxation 44 (263) (343)
-------------------------------------------------------- ------------- ------------- ----------
(Loss)/profit for the period (537) 853 1,409
-------------------------------------------------------- ------------- ------------- ----------
Earnings per ordinary share (EPS) p p p
Basic earnings per share (3.2) 5.1 8.5
Diluted earnings per share (3.2) 5.1 8.4
Condensed consolidated statement Six months Six months Year to
of comprehensive income GBP'000 to 30.06.21 to 30.06.20 31.12.20
(Loss)/profit after tax for the
period (537) 853 1,409
-------------------------------------------------------- ------------- ------------- ----------
Items that will not be reclassified
subsequently to the Income Statement:
Re-measurement of net defined benefit
liability 98 79 180
Deferred tax relating to items not
reclassified (19) (15) (34)
-------------------------------------------------------- ------------- ------------- ----------
79 64 146
Items that may be reclassified subsequently
to the Income Statement:
Exchange differences on retranslation
of foreign currency goodwill and
intangibles (221) 116 (55)
Exchange differences on retranslation
of foreign currency deferred tax
balances 31 (16) 7
Exchange differences on translation
of foreign operations (397) 339 (163)
-------------------------------------------------------- ------------- ------------- ----------
(587) 439 (211)
------------------------------------------------------- ------------- ------------- ----------
Other comprehensive (expense)/income
for the period (508) 503 (65)
-------------------------------------------------------- ------------- ------------- ----------
Total comprehensive (expense)/income for
the period (1,045) 1,356 1,344
-------------------------------------------------------- ------------- ------------- ----------
Condensed consolidated statement of financial position
GBP'000 30.06.21 30.06.20 31.12.20
Non-current assets
Goodwill 1,694 1,175 1,127
Other intangible assets 4,945 3,301 2,769
Property, plant and equipment 24,356 19,893 20,873
Deferred tax asset 984 1,001 978
31,979 25,370 25,747
----------------------------------------------- --------- --------- ---------
Current assets
Inventories 5,918 3,287 3,110
Trade and other receivables 10,699 9,454 9,185
Cash at bank and on hand 2,471 2,093 1,386
19,088 14,834 13,681
----------------------------------------------- --------- --------- ---------
Total assets 51,067 40,204 39,428
------------------------------------------------ --------- --------- ---------
Current liabilities
Trade and other payables 10,377 6,794 6,489
Borrowings 5,504 5,539 3,260
Current tax liabilities 126 78 69
16,007 12,411 9,818
----------------------------------------------- --------- --------- ---------
Non-current liabilities
Borrowings 10,899 2,110 4,991
Deferred tax liabilities 1,516 1,232 1,042
Provisions 173 169 173
12,588 3,511 6,206
----------------------------------------------- --------- --------- ---------
Total liabilities 28,595 15,922 16,024
------------------------------------------------ --------- --------- ---------
Net assets 22,472 24,282 23,404
------------------------------------------------ --------- --------- ---------
Equity
Share capital 84 83 83
Share premium 828 732 732
Capital redemption reserve 216 216 216
Translation reserve (426) 811 161
Revaluation reserve 4,118 4,145 4,133
Retained earnings 17,652 18,295 18,079
Equity attributable to shareholders 22,472 24,282 23,404
------------------------------------------------ --------- --------- ---------
Condensed consolidated statement of changes in equity
Capital
Share Share redemption Translation Revaluation Retained
GBP'000 capital premium reserve reserve reserve earnings Total
At 31 December 2019 83 732 216 372 4,134 17,386 22,923
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Profit for the period 853 853
Other comprehensive income 439 64 503
Total comprehensive income for
the period - - - 439 - 917 1,356
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Credit in respect of
share-based payments 5 5
Transactions with owners - - - - - 5 5
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Transfer from revaluation
reserve as a result
of property transactions 13 (13) -
Tax on revaluation (2) (2)
At 30 June 2020 83 732 216 811 4,145 18,295 24,282
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Profit for the period 556 556
Other comprehensive
income/(expense) (650) 82 (568)
Total comprehensive income for
the period - - - (650) - 638 (12)
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Dividends paid (890) (890)
Credit in respect of
share-based payments 26 26
Transactions with owners - - - - - (864) (864)
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Transfer from revaluation
reserve as a result
of property transactions (12) 10 (2)
At 31 December 2020 83 732 216 161 4,133 18,079 23,404
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Loss for the period (537) (537)
Other comprehensive income (587) 79 (508)
Total comprehensive income for
the period - - - (587) - (458) (1,045)
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Issue of ordinary shares under
employee share
option scheme 1 96 97
Credit in respect of
share-based payments 25 25
Transactions with owners 1 96 - - - 25 122
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Transfer from revaluation
reserve as a result
of property transactions (6) 6 -
Tax on revaluation (9) (9)
At 30 June 2021 84 828 216 (426) 4,118 17,652 22,472
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Condensed consolidated cash flow statement
Year
Six months Six months to
GBP'000 to 30.06.21 to 30.06.20 31.12.20
Cash flows from operating activities
(Loss)/profit for the period (537) 853 1,409
Adjustments for:
Depreciation of property, plant and
equipment 1,361 988 2,164
Impairment of property, plant and equipment - - 98
Profit on disposal of other plant and
equipment (24) (5) (24)
Amortisation of intangible assets 479 400 809
Decrease in provisions - - 4
Finance income (12) - (1)
Finance costs 165 63 128
Taxation charged (44) 263 343
Other non-cash items:
Pension current service cost and expenses 98 79 180
Charge for share options 25 5 31
Operating cash flows before movements
in working capital 1,511 2,646 5,141
Increase in inventories (1,834) (488) (363)
(Increase)/decrease in trade and other
receivables (50) 316 296
Increase in trade and other payables 351 1,601 1,512
Cash (used in)/generated by operations (22) 4,075 6,586
Corporation tax paid (93) (285) (529)
Interest paid (165) (63) (128)
Net cash (used in)/generated by operating
activities (280) 3,727 5,929
--------------------------------------------------------- ------------- ------------- ----------
Cash flows from investing activities
Interest received 12 - 1
Acquisition of plant and equipment (2,014) (2,085) (4,673)
Proceeds on disposal of property, plant
and equipment 47 18 81
Cash outflow on acquisition of subsidiary (1,832) - -
net of cash acquired
--------- ------------- ----------
Net cash used in investing activities (3,787) (2,067) (4,591)
--------------------------------------------------------- ------------- ------------- ----------
Cash flows from financing activities
Loans repaid (57) - -
Loans drawndown 6,633 - -
Net proceeds from sale and leaseback
transactions 1,481 245 1,061
Finance lease capital repayments (859) (302) (710)
Proceeds from issue of ordinary shares 97 - -
Dividends paid - - (890)
------------- ----------
Net cash generated by/(used in) financing
activities 7,295 (57) (539)
--------------------------------------------------------- ------------- ------------- ----------
Net increase in cash and cash equivalents 3,228 1,603 799
Cash and cash equivalents at 1 January (896) (1,678) (1,678)
Effect of foreign exchange rate changes (23) 29 (17)
Cash and cash equivalents at end of period 2,309 (46) (896)
--------------------------------------------------------- ------------- ------------- ----------
Cash 2,471 2,093 1,386
Overdraft (162) (2,139) (2,282)
------------- ------------- ----------
Cash and cash equivalents at end of period 2,309 (46) (896)
--------------------------------------------------------- ------------- ------------- ----------
Notes to the condensed consolidated financial statements
1. Basis of preparation
Robinson plc (the Company) is a public limited company
incorporated and domiciled in the United Kingdom and its ordinary
shares are admitted to trading on the AIM market of the London
Stock Exchange. For the year ended 31 December 2020, the Group
prepared consolidated financial statements in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006. These condensed
consolidated interim financial statements (the interim financial
statements) have been prepared under the historical cost convention
adjusted for the revaluation of certain properties. They are based
on the recognition and measurement principles of IFRS in accordance
with international accounting standards in conformity with the
requirements of the Companies Act 2006.
Standards effective from 1 January 2021
None of the standards, interpretations and amendments effective
for the first time from 1 January 2021 have had a material effect
on the financial statements.
There are no standards that are not yet effective and that would
be expected to have a material impact on the Group in the current
or future reporting periods and on foreseeable future
transactions.
Accounting policies
The interim report is unaudited and has been prepared on the
basis of IFRS accounting policies. The accounting policies adopted
in the preparation of this unaudited interim financial report are
consistent with the most recent annual financial statements, being
those for the year ended 31 December 2020.
The financial information for the six months ended 30 June 2021
and 30 June 2020 has not been audited and does not constitute full
financial statements within the meaning of Section 434 of the
Companies Act 2006.
The financial information relating to the year ended 31 December
2020 does not constitute full financial statements within the
meaning of Section 434 of the Companies Act 2006. This information
is based on the Group's statutory accounts for that period. The
statutory accounts were prepared in accordance with International
Financial Reporting Standards ('IFRS') and received an unqualified
audit report and did not contain statements under Section 498(2) or
(3) of the Companies Act 2006. These financial statements have been
filed with the Registrar of Companies, a copy is available upon
request from the Company's registered office: Field House,
Wheatbridge, Chesterfield, S40 2AB, UK or from its website at
robinsonpackaging.com .
Going concern
The Directors have performed a robust assessment, including a
review of the forecast for the 12 month period ending 31 December
2021 and longer term strategic forecasts and plans, including
consideration of the principal risks faced by the Group including
stress testing of the business, as detailed in the 2020 Annual
Report (page 68). Following this review, the Directors have a
reasonable expectation that the Group has adequate resources to
continue in business for the foreseeable future. Thus, they
continue to adopt the going concern basis of accounting in
preparing the condensed consolidated financial statements.
2. Accounting estimates and judgements
The preparation of half year financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the consolidated
financial statements as at and for the year ended 31 December
2020.
3. Risks and uncertainties
The principal risks and uncertainties which may have the largest
impact on performance in the second half of the year are the same
as disclosed in the 2020 Annual Report on pages 16-17. The
principal risks set out in the 2020 Annual Report were: Acquisition
integration; Customer relationships; Fluctuations in input prices;
Raw material supply; IT and digital security; Environment; Plastics
legislations; Market competitiveness; People; Debt leverage and
Foreign currency risk.
The Board considers that the principal risks and uncertainties
set out in the 2020 Annual Report have not changed and remain
relevant for the second half of the financial year.
4. Earnings per share
The calculation of basic and diluted earnings per ordinary share
for continuing operations shown on the income statement is based on
the profit for the period divided by the weighted average number of
shares in issue, net of treasury shares. The potentially dilutive
effect of further shares issued through share options is also
applied to the number of shares to calculate the diluted earnings
per share.
Six months Six months Year to
to 30.06.21 to 30.06.20 31.12.20
(Loss)/profit for the period (GBP'000) (537,000) 853,000 1,409,000
Weighted average number of ordinary
shares in issue 16,673,745 16,613,389 16,613,389
Effect of dilutive share option awards* - 59,799 168,505
Weighted average number of ordinary
shares for calculating diluted earnings
per share 16,673,745 16,673,188 16,781,894
Basic earnings per share (pence) (3.2) 5.1 8.5
Diluted earnings per share (pence) (3.2) 5.1 8.4
------------------------------------------ ------------- ------------- -----------
*In the six months to 30.06.21, t here was no difference in the
weighted average number of shares used for the calculation of basic
and diluted loss per share as the effect of potentially dilutive
shares outstanding was antidilutive.
5. Dividends
Six months Six months Year to
GBP'000 to 30.06.21 to 30.06.20 31.12.20
Ordinary dividend 2020 interim of 3.5p
paid: per share - - 566
2020 interim of 2.0p
per share - - 324
- - 890
-------------- ------------------------------------------------------------------- ----------
The 2020 final dividend of 3.0p (2019: nil) per share was paid
to shareholders on 16 July 2021. An interim dividend of 2.5p (2020:
total interim dividends 5.5p) is proposed to be paid on 8 October
2021. Neither the final nor interim dividend have been included as
a liability in the financial statements.
6. Interim report
Electronic copies of this interim report will shortly be sent to
those shareholders who have requested such copies and this interim
report is also available from Robinson plc's website at
robinsonpackaging.com .
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