RNS Number : 3775W
Robinson PLC
18 August 2020
Robinson plc
Half-year Report
Interim Results for the six months ended 30 June 2020
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 2020.
Financial highlights
· Revenue up 5% to £17.9m (2019: £17.1m)
· Gross margin increased to 23.6% from 19.7% in 2019
· Operating profit before amortisation of intangible assets up 100% to £1.6m (2019: £0.8m)
· Profit before tax of £1.1m (2019: £0.3m)
· Second interim dividend of 2.0p per share announced
· Net debt of £5.6m (31/12/2019: £6.9m), after capital expenditure of £2.1m
Operational highlights
· All sites have continued to trade safely throughout the period
· Successfully installed 6 new production lines in the UK to increase the efficiency and capacity of the operation
· Refurbishment of a manufacturing building in Kirkby-in-Ashfield to support future growth ambitions
Alan Raleigh, Chairman, commented:
"We are very happy with this continued progress in the first half, despite the challenging conditions arising from the Covid-19 pandemic. The main market sectors for which we supply packaging have shown resilience throughout the pandemic, with notable increases in demand for our products used in liquid hand soap, sanitiser and household cleaning.
All our sites have continued to trade throughout the period, operating in line with local hygiene and social distancing requirements to ensure the safety and wellbeing of our colleagues. The majority of our sales and administration activities are being very effectively carried out by staff working from home.
Despite the uncertain economic environment, we expect to report mid to high single digit revenue growth in the full year, whilst continuing to drive further efficiencies across all aspects of our operations in order to compete and win in the market.
We are committed to investing in new production equipment and additional capabilities to grow the business in the second half of 2020, including developing our go-to-market approach and reinforcing our sustainability proposition. As a result, operating costs will be significantly higher than the same period in 2019. Notwithstanding this increase and subject to any disruption to trading that may arise from the ongoing pandemic, we expect full year earnings to be slightly higher than last year and remain committed to ongoing delivery of our target of 6-8% return on sales*."
* operating profit margin before exceptional items and amortisation of intangible assets
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
For further information, please contact:
Robinson plc
www.robinsonpackaging.com
Guy Robinson, Finance Director
Tel: 01246 389283
finnCap Limited
Ed Frisby / Giles Rolls, corporate finance Tim Redfern / Tim Harper, ECM
Tel: 020 7220 0500
Note for Editors:
Headquartered in Chesterfield, with manufacturing facilities in Kirkby-in-Ashfield, Stanton Hill (Nottinghamshire), Chesterfield, Warsaw and Lodz (Poland), Robinson currently employs around 320 people. It was formerly a family business, with its origins dating back over 181 years. Today the Group's main activity is the manufacture and sale of injection and blow moulded plastic packaging as well as rigid paperboard premium gift packaging. Robinson operates primarily within the food, household, drink, confectionery, cosmetic and toiletry sectors, providing niche or custom manufacture to major brands in the fast-moving consumer goods market, such as Unilever, Proctor & Gamble, Reckitt Benckiser, SC Johnson, and McBride. The Group also has a substantial property portfolio with development potential.
Robinson plc, Chesterfield, S40 2AB, UK. Registered number 39811 (England) AIM code "RBN"
Chairman's Statement
Dear Shareholders
I am pleased to report a 5% increase in revenues for the first half of 2020, compared to the prior year comparative, with growth in all divisions. We are very happy with this continued progress in the first half, despite the challenging conditions arising from the Covid-19 pandemic. The main market sectors for which we supply packaging have shown resilience throughout the pandemic, with notable increases in demand for our products used in liquid hand soap, sanitiser and household cleaning.
Gross margins, at 23.6% (2019: 19.7%), have continued the positive trend experienced in the second half of 2019 due to further reductions in resin prices and increased efficiency in operations. Operating costs were 2% higher than the previous year.
Operating profit before amortisation of intangible assets has doubled to £1.6m versus the same period last year and profit before tax increased to £1.1m (2019: £0.3m).
People
All our sites have continued to trade throughout the period, operating in line with local hygiene and social distancing requirements to ensure the safety and wellbeing of our colleagues. The majority of our sales and administration activities are being very effectively carried out by staff working from home.
A small number of UK staff, principally those most vulnerable and some in our Paperbox division, were furloughed through the Coronavirus Job Retention Scheme. Considering the better than expected trading performance, we do not intend to make any further claims under the scheme and in the second half of the year we will repay sums already received.
On behalf of the Board, I would like to express again my thanks to all our staff for their continued dedication during these challenging times.
Property
Negotiations are progressing for disposal of parts of the surplus property in Chesterfield. Subject to the necessary planning approvals, we would expect 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
Improved profitability and working capital management has resulted in net borrowings reducing to £5.6m (31/12/2019: £6.9m), albeit with the benefit of government support schemes, and dividend and senior management bonus deferrals, which have now been re-instated. With available credit facilities of £13.5m and no formal covenants, the Group considers it has sufficient headroom for the foreseeable future.
The Group continues to invest in property, plant and equipment to improve efficiency and support our future growth ambitions. Expenditure of £2.1m in the first six months of the year included refurbishment of a manufacturing building in Kirkby-in-Ashfield, and the installation of 6 new production lines to improve efficiency and expand capacity. We expect to invest a larger amount in the second half of the year.
Dividend
A first interim dividend of 3.5p (2019: 2.5p) per share was paid to shareholders on 30 July 2020. The Board is pleased to announce a second interim dividend of 2.0p (2019: nil) per share to be paid on 1 October 2020 to shareholders on the register at 4 September 2020 (record date). The ordinary shares ex-dividend date is 3 September 2020.
Subject to any negative impact on trading in the second half of the year, the intention of the Board is to pay a total dividend of 8.5p (2019: 2.5p) per share for the year ended 31 December 2020.
Outlook
Despite the uncertain economic environment, we expect to report mid to high single digit revenue growth in the full year, whilst continuing to drive further efficiencies across all aspects of our operations in order to compete and win.
We are committed to investing in new production equipment and additional capabilities to grow the business in the second half of 2020, including developing our go-to-market approach and reinforcing our sustainability proposition. As a result, operating costs will be significantly higher than the same period in 2019. Notwithstanding this increase and subject to any disruption to trading that may arise from the ongoing pandemic, we expect full year earnings to be slightly higher than last year and remain committed to ongoing delivery of our target of 6-8% return on sales*.
* operating profit margin before exceptional items and amortisation of intangible assets
Alan Raleigh
Chairman
17 August 2020
Condensed consolidated income statement and statement of comprehensive income
Condensed consolidated income statement
£'000
Six months to 30.06.20
Six months to 30.06.19
Year to 31.12.19
Revenue
17,860
17,085
35,085
Cost of sales
(13,648)
(13,721)
(27,593)
Gross profit
4,212
3,364
7,492
Operating costs
(2,633)
(2,576)
(4,971)
Operating profit before amortisation of intangible assets
1,579
788
2,521
Amortisation of intangible assets
(400)
(375)
(810)
Operating profit
1,179
413
1,711
Finance costs
(63)
(104)
(205)
Profit before taxation
1,116
309
1,506
Taxation
(263)
(86)
(296)
Profit for the period
853
223
1,210
Earnings per ordinary share (EPS)
p
p
p
Basic earnings per share
5.1
1.3
7.3
Diluted earnings per share
5.1
1.3
7.3
Condensed consolidated statement of comprehensive income
£'000
Six months to 30.06.20
Six months to 30.06.19
Year to 31.12.19
Profit after tax for the period
853
223
1,210
Items that will not be reclassified subsequently to the Income Statement:
Re-measurement of net defined benefit liability
79
98
145
Deferred tax relating to items not reclassified
(15)
(19)
(28)
64
79
117
Items that may be reclassified subsequently to the Income Statement:
Exchange differences on retranslation of foreign currency goodwill and intangibles
116
428
148
Exchange differences on retranslation of foreign currency deferred tax balances
(16)
-
(23)
Exchange differences on translation of foreign operations
339
117
(579)
439
545
(454)
Other comprehensive income/(expense) for the period
503
624
(337)
Total comprehensive income/(expense) for the period
1,356
847
873
Condensed consolidated statement of financial position
£'000
30.06.20
30.06.19
31.12.19
Non-current assets
Goodwill
1,175
1,215
1,144
Other intangible assets
3,301
4,261
3,616
Property, plant and equipment
19,893
19,222
18,338
Deferred tax asset
1,001
895
937
25,370
25,593
24,035
Current assets
Inventories
3,287
3,485
2,765
Trade and other receivables
9,454
9,720
9,646
Cash at bank and on hand
2,093
1,490
1,403
14,834
14,695
13,814
Total assets
40,204
40,288
37,849
Current liabilities
Trade and other payables
6,794
5,090
5,063
Borrowings
5,539
5,982
3,710
Current tax liabilities
78
122
255
12,411
11,194
9,028
Non-current liabilities
Borrowings
2,110
4,617
4,639
Deferred tax liabilities
1,232
1,008
1,090
Provisions
169
174
169
3,511
5,799
5,898
Total liabilities
15,922
16,993
14,926
Net assets
24,282
23,295
22,923
Equity
Share capital
83
83
83
Share premium
732
732
732
Capital redemption reserve
216
216
216
Translation reserve
811
1,371
372
Revaluation reserve
4,145
4,122
4,134
Retained earnings
18,295
16,771
17,386
Equity attributable to shareholders
24,282
23,295
22,923
Condensed consolidated statement of changes in equity
£'000
Share capital
Share premium
Capital redemption reserve
Translation reserve
Revaluation reserve
Retained earnings
Total
At 31 December 2018
83
732
216
826
4,126
16,945
22,928
Profit for the period
223
223
Other comprehensive income
545
79
624
Total comprehensive income for the period
-
-
-
545
-
302
847
Dividends paid
(485)
(485)
Credit in respect of share based payments
5
5
Transactions with owners
-
-
-
-
-
(480)
(480)
Transfer from revaluation reserve as a result of property transactions
(4)
4
-
At 30 June 2019
83
732
216
1,371
4,122
16,771
23,295
Profit for the period
987
987
Other comprehensive income/(expense)
(999)
38
(961)
Total comprehensive income for the period
-
-
-
(999)
-
1,025
26
Dividends paid
(405)
(405)
Credit in respect of share based payments
7
7
Transactions with owners
-
-
-
-
-
(398)
(398)
Transfer from revaluation reserve as a result of property transactions
12
(12)
-
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
Condensed consolidated cash flow statement
£'000
Six months to 30.06.20
Six months to 30.06.19
Year to 31.12.19
Cash flows from operating activities
Profit for the period
853
223
1,210
Adjustments for:
Depreciation of property, plant and equipment
988
915
1,959
Impairment of property, plant and equipment
-
-
43
Profit on disposal of other plant and equipment
(5)
(16)
(31)
Amortisation of intangible assets
400
375
810
Decrease in provisions
-
-
(5)
Finance costs
63
104
205
Taxation charged
263
86
296
Other non-cash items:
Pension current service cost and expenses
79
98
145
Charge for share options
5
5
12
Operating cash flows before movements in working capital
2,646
1,790
4,644
(Increase)/decrease in inventories
(488)
(513)
144
Decrease in trade and other receivables
316
979
807
Increase in trade and other payables
1,601
(819)
(744)
Cash generated by operations
4,075
1,437
4,851
Corporation tax paid
(285)
(95)
(127)
Interest paid
(63)
(104)
(205)
Net cash generated by operating activities
3,727
1,238
4,519
Cash flows from investing activities
Acquisition of plant and equipment
(2,085)
(1,041)
(1,726)
Proceeds on disposal of property, plant and equipment
18
21
62
Net cash used in investing activities
(2,067)
(1,020)
(1,664)
Cash flows from financing activities
Net proceeds from sale and leaseback transactions
245
1,279
1,697
Finance lease capital repayments
(302)
(256)
(506)
Dividends paid
-
(485)
(890)
Net cash used in financing activities
(57)
538
301
Net increase/(decrease) in cash and cash equivalents
1,603
756
3,156
Cash and cash equivalents at 1 January
(1,678)
(4,820)
(4,820)
Effect of foreign exchange rate changes
29
3
(14)
Cash and cash equivalents at end of period
(46)
(4,061)
(1,678)
Cash
2,093
1,490
1,403
Overdraft
(2,139)
(5,551)
(3,081)
Cash and cash equivalents at end of period
(46)
(4,061)
(1,678)
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 2019, the Group prepared consolidated financial statements under International Financial Reporting Standards ('IFRS') as adopted by the European Union (EU). 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 issue as adopted by the European Union (EU) which are effective from 1 January 2020.
Standards effective from 1 January 2020
None of the standards, interpretations and amendments effective for the first time from 1 January 2020 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 2019.
The financial information for the six months ended 30 June 2020 and 30 June 2019 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 2019 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 www.robinsonpackaging.com.
Going concern
The Directors have performed a robust assessment, including review of the forecast for the 12 month period ending 31 December 2020 and longer term strategic forecasts and plans, including consideration of the principal risks faced by the Group and the Covid-19 related stress testing of the business, as detailed in the 2019 Annual Report (page 57). 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 2019.
Notes to the condensed consolidated financial statements (continued)
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 2019 Annual Report on pages 8-9. The principal risks set out in the 2019 Annual Report were: Covid-19 coronavirus pandemic; Customer relationships; Fluctuations in input prices; Foreign currency risk; Unavailability of raw materials; Brexit and People.
The Board considers that the principal risks and uncertainties set out in the 2019 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 to 30.06.20
Six months to 30.06.19
Year to 31.12.19
Profit for the period (£'000)
853,000
223,000
1,210,000
Weighted average number of ordinary shares in issue
16,613,389
16,613,389
16,613,389
Effect of dilutive share option awards
59,799
58,213
61,159
Weighted average number of ordinary shares for calculating diluted earnings per share
16,673,188
16,671,602
16,674,548
Basic earnings per share (pence)
5.1
1.3
7.3
Diluted earnings per share (pence)
5.1
1.3
7.3
5. Dividends
£'000
Six months to 30.06.20
Six months to 30.06.19
Year to 31.12.19
Ordinary dividend paid:
2018 final of 3.0p per share
-
485
485
2019 interim of 2.5p per share
-
-
405
-
485
890
A first interim dividend of 3.5p (2019: 2.5p) per share was paid to shareholders on 30 July 2020. A second interim dividend of 2p (2019: nil) is proposed to be paid on 1 October 2020. Neither the first nor second interim dividend have been included as a liability in the financial statements.
6. Related parties
There have been no significant changes in the nature of related party transactions in the period ended 30 June 2020 from that disclosed in the 2019 Annual report.
7. 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 www.robinsonpackaging.com.
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