TIDMRBN
RNS Number : 6901Y
Robinson PLC
08 September 2022
Robinson plc
Half-year Report
Interim Results for the six months ended 30 June 2022
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 2022.
Financial highlights
-- Revenue up 19.8% to GBP25.4m (2021: GBP21.2m)
-- Gross margin increased to 18.3% from 16.7% in H1 2021
-- Operating profit before exceptional items and amortisation of
intangible assets increased to GBP1.5m (2021: GBP0.1m)
-- Profit before tax of GBP2.8m (2021: loss of GBP0.6m)
-- Exceptional items of GBP2.0m - including profit on sale of properties of GBP2.1m (2021: nil)
-- Interim dividend of 2.5p per share announced
-- Net debt of GBP12.2m (31/12/2021: GBP13.1m), after net
capital expenditure excluding disposal of properties of GBP1.1m,
deferred consideration for the Schela Plast acquisition of GBP2.3m
and proceeds on sale of property of GBP3.5m
Operational highlights
-- The Danish business operated profitably in the first half as
the local markets opened post-pandemic and the major new Unilever
business performed to plan. Schela Plast products now include
packaging produced from 100% locally recycled plastic waste
-- Sutton-in-Ashfield factory sold in April, relocation of production to existing premises in Kirkby-in-Ashfield will complete as planned during the fourth quarter of 2022
-- Sale of part of surplus property in Chesterfield completed in March
Alan Raleigh, Chairman, commented:
"We expect the substantial uncertainty and volatility
experienced since the beginning of 2021 to continue throughout
2022. Sales volumes will be under further pressure in the second
half due to: the effect of inflation, which averaged 11% in June,
the cost-of-living crisis, the de-listing of some products by our
customers and certain of our customers prioritising existing
business over innovation projects during the pandemic. We are now
st arting to see more new business activity with our existing and
potential customers, which provides opportunities for growth in
2023 and beyond.
Whilst resin prices have reduced over the summer from the peak
seen during the initial phase of the Ukraine invasion, we have
already experienced and expect to see further increases in energy
and reduced availability of skilled labour.
We are taking actions to drive business performance and respond
as necessary to events across our geographical locations.
Given the ongoing uncertainty, we expect profits in the 2022
financial year (excluding the uplift from the profits on disposal
of properties) to be in line with market expectations and
comfortably ahead of 2021. We remain committed in the medium-term
to delivering above-market profitable growth and our target of 6-8%
adjusted operating margin(1) ."
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 acquired a plant in Denmark in 2021, 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.
Chairman's Statement
Dear Shareholders
I am pleased to report that following a difficult year in 2021,
the Group has returned to profitability in the first half of 2022.
The prior year was heavily impacted by resin and other cost
inflation and we have been largely successful in passing this
through to sales prices in 2022.
Revenues were 19.8% higher in the first half of 2022, 5% higher
excluding the Schela Plast business acquired in February 2021.
After adjusting for price changes and foreign exchange, sales
volumes in the underlying business, which have been affected by
changes in consumer behaviour and reduced customer demand are 11%
below the comparative period in 2021.
As a consequence of the cost inflation experienced in the last
18 months, we agreed substantial sales price increases with our
customers in the first quarter of the year. However, following the
Russian invasion of Ukraine in February, we have seen further
increases in global oil and energy costs flow through to polymer
resin and other raw material prices, which in turn has impacted our
costs.
Gross margins, at 18.3% (2021: 16.7%) are improved due to the
reduced impact of resin lag but remain lower than our historical
norm due to the overall weighting of material prices in the sales
price, the structurally lower gross margin in Schela Plast and the
operational gearing effect of reduced sales volume in the
underlying business.
Operating costs are 9.1% lower than the first half of 2021
despite the impact of the Schela Plast acquisition. This reduction
includes the effect of previously announced restructuring actions
taken in the final quarter of 2021 and first quarter of 2022.
Operating profit before exceptional items and amortisation of
intangible assets has increased by GBP1.4m versus the same period
last year, to GBP1.5m. Including the profit on sale of two
properties in the period, the Group made a profit before tax of
GBP2.8m (2021: loss before tax GBP0.6m).
Schela Plast
After a challenging 2021 which included suppressed sales volumes
due to Covid-19 related lockdowns, the core business in Schela
Plast has stabilised in 2022. The strategic supply partnership with
Unilever is at full run rate and had a substantial positive effect
on sales in the first half. However, input costs, particularly
those relating to energy and labour, continue to increase
significantly.
Following successful participation in a consortium to create a
circular economy for plastics in Denmark, Schela Plast is now
producing HDPE packaging from 100% Danish household sorted plastic
waste. We are excited about the opportunities for both existing
business and future growth this will provide.
Deferred consideration of GBP2.3m was paid to the former owners
of Schela Plast in June 2022.
Property
As previously announced, the Group has completed on the sale of
two properties in the period. The first was a sale of surplus land
and buildings in Chesterfield on 31 March 2022, for consideration
of GBP975,000. The second an operational property in
Sutton-in-Ashfield which completed on 27 April 2022, for
consideration of GBP2,475,000. The proceeds have been used to
reduce bank debt. The Group will continue to leaseback the
operational property until the end of 2022 and during this period,
production will be relocated to existing Robinson premises in
Kirkby-in-Ashfield. As previously announced, it is expected that
the relocation will require investment of approximately
GBP600,000.
Subject to the necessary planning approvals, we would expect
further sales of surplus property, in Chesterfield, to be achieved
in the next 15 months. 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 has decreased to GBP12.2m (31/12/2021: GBP13.1m)
following the payment of GBP2.3m deferred consideration on the
Schela Plast acquisition and the receipt of GBP3.5m proceeds on
sale of two properties in the period. With total credit facilities
of GBP20.9m, the Group considers it has comfortable headroom for
the foreseeable future. Net capital expenditure (excluding disposal
of properties) in the first half was GBP1.1m (2021: GBP2.0m).
Dividend
Despite the short-term market challenges we face, the Board has
confidence in the medium-term prospects for the business and
therefore announces that it intends to pay an interim dividend of
2.5p per share to be paid on 14 October 2022 to shareholders on the
register at 23 September 2022 (record date). The ordinary shares
ex-dividend date is 22 September 2022.
The current intention of the Board is to pay a total dividend of
5.5p (2021: 5.5p) per share for the year ending 31 December
2022.
Outlook
We expect the substantial uncertainty and volatility experienced
since the beginning of 2021 to continue throughout 2022. Sales
volumes will be under further pressure in the second half due to:
the effect of inflation, which averaged 11% in June, the
cost-of-living crisis, the de-listing of some products by our
customers and certain of our customers prioritising existing
business over innovation projects during the pandemic. We are now
starting to see more new business activity with our existing and
potential customers, which provides opportunities for growth in
2023 and beyond.
Whilst resin prices have reduced over the summer from the peak
seen during the initial phase of the Ukraine invasion, we have
already experienced and expect to see further increases in energy
and reduced availability of skilled labour.
We are taking actions to drive business performance and respond
as necessary to events across our geographical locations.
Given the ongoing uncertainty, at this stage we expect profits
in the 2022 financial year (excluding the uplift from the profits
on disposal of properties) to be in line with market expectations
and comfortably ahead of 2021. We remain committed in the
medium-term to delivering above-market profitable growth and our
target of 6-8% adjusted operating margin(1) .
Alan Raleigh
Chairman
7 September 2022
Condensed consolidated income statement and statement of comprehensive
income
Six months Six months Year to
Condensed consolidated income statement GBP'000 to 30.06.22 to 30.06.21 31.12.21
Revenue 25,444 21,231 45,954
Cost of sales (20,781) (17,689) (38,204)
---------------------------------------------------- ------------- ------------- ----------
Gross profit 4,663 3,542 7,750
Operating costs (3,172) (3,491) (6,568)
---------------------------------------------------- ------------- ------------- ----------
Operating profit before amortisation
of intangible assets 1,491 51 1,182
Exceptional items 1,967 - -
Amortisation of intangible assets (472) (479) (957)
---------------------------------------------------- ------------- ------------- ----------
Operating profit/(loss) 2,986 (428) 225
Finance income - interest receivable - 12 1
Finance costs (232) (165) (374)
Profit/(loss) before taxation 2,754 (581) (148)
Taxation (25) 44 176
---------------------------------------------------- ------------- ------------- ----------
Profit/(loss) for the period 2,729 (537) 28
---------------------------------------------------- ------------- ------------- ----------
Earnings per ordinary share (EPS) p p p
Basic and Diluted earnings per share 16.3 (3.2) 0.2
Condensed consolidated statement Six months Six months Year to
of comprehensive income GBP'000 to 30.06.22 to 30.06.21 31.12.21
Profit/(loss) for the period 2,729 (537) 28
---------------------------------------------------- ------------- ------------- ----------
Items that will not be reclassified
subsequently to the Income Statement:
Remeasurement of net defined benefit
liability 96 98 192
Deferred tax relating to items not
reclassified (18) (19) (36)
---------------------------------------------------- ------------- ------------- ----------
78 79 156
Items that may be reclassified
subsequently to the Income Statement:
Exchange differences on translation
of foreign currency goodwill and
intangibles 52 (221) (367)
Exchange differences on translation
of foreign currency deferred tax
balances (9) 31 54
Exchange differences on translation
of foreign operations 45 (397) (846)
---------------------------------------------------- ------------- ------------- ----------
88 (587) (1,159)
--------------------------------------------------- ------------- ------------- ----------
Other comprehensive income/(expense)
for the period 166 (508) (1,003)
---------------------------------------------------- ------------- ------------- ----------
Total comprehensive income/(expense)
for the period 2,895 (1,045) (975)
---------------------------------------------------- ------------- ------------- ----------
Condensed consolidated statement of financial position
GBP'000 30.06.22 30.06.21 31.12.21
Non-current assets
Goodwill 1,526 1,694 1,514
Other intangible assets 3,320 4,945 3,751
Property, plant and equipment 23,467 24,356 24,892
Deferred tax asset 1,145 984 1,188
29,458 31,979 31,345
----------------------------------------------- --------- --------- ---------
Current assets
Inventories 5,458 5,918 5,067
Trade and other receivables 10,972 10,699 10,033
Cash at bank and on hand 2,148 2,471 2,775
Assets classified as held for
sale - - 238
------------------------------------------------ --------- --------- ---------
18,578 19,088 18,113
----------------------------------------------- --------- --------- ---------
Total assets 48,036 51,067 49,458
------------------------------------------------ --------- --------- ---------
Current liabilities
Trade and other payables 7,652 10,377 10,273
Borrowings 1,530 5,504 1,681
Current tax liabilities 115 126 109
9,297 16,007 12,063
----------------------------------------------- --------- --------- ---------
Non-current liabilities
Borrowings 12,782 10,899 14,221
Deferred tax liabilities 1,235 1,516 1,376
Provisions 128 173 128
14,145 12,588 15,725
----------------------------------------------- --------- --------- ---------
Total liabilities 23,442 28,595 27,788
------------------------------------------------ --------- --------- ---------
Net assets 24,594 22,472 21,670
------------------------------------------------ --------- --------- ---------
Equity
Share capital 84 84 84
Share premium 828 828 828
Capital redemption reserve 216 216 216
Translation reserve (910) (426) (998)
Revaluation reserve 3,865 4,118 4,107
Retained earnings 20,511 17,652 17,433
Equity attributable to shareholders 24,594 22,472 21,670
------------------------------------------------ --------- --------- ---------
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 2020 83 732 216 161 4,133 18,079 23,404
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Loss for the period - - - - - (537) (537)
Other comprehensive
(expense)/income - - - (587) - 79 (508)
Total comprehensive expense 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
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Profit for the period - - - - - 565 565
Other comprehensive
income/(expense) - - - (572) - 77 (495)
Total comprehensive
(expense)/income for the
period - - - (572) - 642 70
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Dividends paid - - - - - (898) (898)
Credit in respect of share
based payments - - - - - 25 25
Transactions with owners - - - - - (873) (873)
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Transfer from revaluation
reserve as a result
of property transactions - - - - (11) 12 1
At 31 December 2021 84 828 216 (998) 4,107 17,433 21,670
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Profit for the period - - - - - 2,729 2,729
Other comprehensive income - - - 88 - 78 166
Total comprehensive income for
the period - - - 88 - 2,807 2,895
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Credit in respect of share
based payments - - - - - 25 25
Transactions with owners - - - - - 25 25
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Transfer from revaluation
reserve as a result
of property transactions - - - - (246) 246 -
Tax on revaluation - - - - 4 - 4
At 30 June 2022 84 828 216 (910) 3,865 20,511 24,594
-------------------------------- --------- --------- ------------ ------------ ------------ ---------- --------
Condensed consolidated cash flow statement
Year
Six months Six months to
GBP'000 to 30.06.22 to 30.06.21 31.12.21
Cash flows from operating activities
Profit/(loss) for the period 2,729 (537) 28
Adjustments for:
Depreciation of property, plant and
equipment 1,576 1,361 2,963
Profit on disposal of property, plant
and equipment (2,275) (24) (87)
Amortisation of intangible assets 472 479 957
Decrease in provisions - - (45)
Finance income - (12) (1)
Finance costs 232 165 374
Taxation charged/(credited) 25 (44) (176)
Other non-cash items:
Pension current service cost and expenses 96 98 192
Charge for share options 25 25 50
Operating cash flows before movements
in working capital 2,880 1,511 4,255
Increase in inventories (362) (1,834) (1,237)
(Increase)/decrease in trade and other
receivables (826) (50) 511
(Decrease)/increase in trade and other
payables (168) 351 1,868
Cash generated by/(used in) operations 1,524 (22) 5,397
Corporation tax paid (136) (93) (99)
Interest paid (232) (165) (349)
Net cash generated/(used in) by operating
activities 1,156 (280) 4,949
---------------------------------------------------------- ------------- ------------- ----------
Cash flows from investing activities
Interest received - 12 1
Acquisition of property, plant and equipment (1,132) (2,014) (3,991)
Proceeds on disposal of property, plant
and equipment 3,516 47 128
Deferred consideration paid on acquisition (2,311) - -
Cash outflow on acquisition of subsidiary - (1,832) (1,832)
------------- ----------
Net cash generated/(used in) investing
activities 73 (3,787) (5,694)
---------------------------------------------------------- ------------- ------------- ----------
Cash flows from financing activities
Loans repaid (1,474) (57) (468)
Loans drawndown - 6,633 6,000
Net proceeds from sale and leaseback
transactions 439 1,481 1,721
Proceeds from issue of ordinary shares - 97 97
Capital element of lease payments (830) (859) (1,987)
Dividends paid - - (898)
------------- ----------
Net cash (used in)/generated by financing
activities (1,865) 7,295 4,465
---------------------------------------------------------- ------------- ------------- ----------
Net (decrease)/increase in cash and
cash equivalents (636) 3,228 3,720
Cash and cash equivalents at 1 January 2,775 (896) (896)
Effect of foreign exchange rate changes 9 (23) (49)
Cash and cash equivalents at end of
period 2,148 2,309 2,775
---------------------------------------------------------- ------------- ------------- ----------
Cash at bank and on hand 2,148 2,471 2,775
Bank overdrafts - (162) -
--------- ------------- ------------- ----------
Cash and cash equivalents at end of
period 2,148 2,309 2,775
---------------------------------------------------------- ------------- ------------- ----------
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 2021, the Group
prepared consolidated financial statements in accordance with
UK-adopted 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 2022
None of the standards, interpretations, and amendments effective
for the first time from 1 January 2022 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 2021.The financial information
for the six months ended 30 June 2022 and 30 June 2021 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
2021 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 UK-adopted
international accounting standards in conformity with the
requirements of the Companies Act 2006 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
2022 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 2021 Annual
Report (page 72). 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
2021.
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 2021 Annual Report on pages 18-19. The
principal risks set out in the 2021 Annual Report were: Acquisition
performance; Customer relationships; Raw material supply and input
prices; IT and digital security; Environment; Debt leverage;
Operational gearing; Foreign currency; Market competitiveness; and
People.
The Board considers that the principal risks and uncertainties
set out in the 2021 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 30.06.22 to 30.06.21 31.12.21
Profit/(loss) for the period (GBP'000) 2,729,000 (537,000) 28,000
Weighted average number of ordinary
shares in issue 16,753,445 16,673,745 16,713,589
Effect of dilutive share option awards* - - 35,885
Weighted average number of ordinary
shares for calculating diluted earnings
per share 16,753,445 16,673,745 16,749,474
Basic earnings per share (pence) 16.3 (3.2) 0.2
Diluted earnings per share (pence) 16.3 (3.2) 0.2
------------------------------------------ ------------- ------------- -----------
*In the six months to 30.06.22 there was no difference in the
weighted average number of shares used for the calculation of basic
and diluted earnings per share as all the share options outstanding
were out-of-the-money and not dilutive. In the six months to
30.06.21, there was no difference in the weighted average number of
shares used for the calculation of basic and diluted earnings per
share as the effect of potentially dilutive shares outstanding was
antidilutive.
5. Dividends
Six months Six months Year to
GBP'000 to 30.06.22 to 30.06.21 31.12.21
Ordinary dividend 2020 final of 3.0p
paid: per share - - 490
2021 interim of 2.5p
per share - - 408
- - 898
-------------- ------------------------------------------------------------------- ----------
The 2021 final dividend of 3.0p (2020: 3.0p) per share was paid
to shareholders on 15 July 2022. An interim dividend of 2.5p (2021:
2.5p) is proposed to be paid on 14 October 2022. 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 .
(1) Operating profit margin before amortisation of intangible
assets and exceptional items
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