REG - Robinson PLC - Final Results
30/03/2023 07:00
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RNS Number : 6899U Robinson PLC 30 March 2023
Robinson
plc
30 March 2023
Final Results for the year ended 31 December 2022
Robinson plc ("Robinson" or the "Group" stock code: RBN), the custom
manufacturer of plastic and paperboard packaging, is pleased to announce its
audited results for the year ended 31 December 2022.
Financial highlights
· Revenue up 10% to £50.5m (2021: £46.0m)
· Gross margin stable at 17% (2021: 17%)
· Operating profit before amortisation of intangible assets and
exceptional items increased to £2.0m (2021: £1.2m)
· Profit before tax of £2.3m (2021: loss £0.1m)
· Exceptional items of £1.7m profit - including profit on sale of
properties of £2.2m (2021: nil)
· Final dividend of 3.0p per share
· Net debt of £9.2m (2021: £13.1m), after net capital expenditure of
£2.5m on plant and equipment
· Property proceeds of £3.5m received
Operational highlights
· Supported trustees to complete a buy-in of the defined benefit
pension scheme liabilities
· Consolidated UK Plastics operations onto one site in
Kirkby-in-Ashfield
· Won new business projects which will require substantial capital
investment in 2023 and will increase revenues from 2024
Alan Raleigh, Chairman, commented:
"Robinson made good progress in 2022. We were able to improve profits, achieve
a surplus property sale, consolidate our UK plastics operations and with the
support of the pension trustees, move closer to a full buy-out of the scheme
liabilities. I look forward to building on these foundations and delivering
sustainable long-term value for our shareholders.
We expect the substantial macroeconomic uncertainty and volatility experienced
since the beginning of 2021 to continue throughout 2023.
We are seeing more new business activity with our existing and potential
customers, which provides opportunities for growth in 2023 and beyond. We have
recently been awarded a significant new contract in Denmark which will require
substantial capital expenditure in 2023, funded from existing facilities and
will begin to benefit sales and profit from 2024.
As a result of the further cost inflation experienced in 2022, we are seeking
substantial price increases from all customers for 2023. Given the ongoing
pressure on volumes, input prices and margins, the Board will continue to
prioritise the management of costs and cashflow.
Despite the ongoing uncertainty, operating profit 1 (#_edn1) in the 2023
financial year is expected to be ahead of 2022 and in line with current
expectations. We remain committed in the medium-term to delivering
above-market profitable growth and our target of 6-8% adjusted operating
margin 2 (#_edn2) ."
For further information, please contact:
Robinson plc www.robinsonpackaging.com (http://www.robinsonpackaging.com)
Helene Roberts, CEO Tel: 01246 389280
Mike Cusick, Finance Director
finnCap Limited
Ed Frisby / Seamus Fricker, Corporate Finance Tel: 020 7220 0500
Tim Redfern / Barney Hayward, ECM
Graham Cooke / Rosie Pennell, Debt Advisory
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 2 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
In common with many businesses across the Fast-Moving Consumer Goods (FMCG)
Supply Chain, Robinson continued to experience very challenging conditions
through 2022, as the input price inflation already evident was exacerbated by
the Russian invasion of Ukraine in February. Customer demand remained volatile
with the effects of inflation and the cost-of-living crisis impacting
consumers and creating demand uncertainty.
The Group performed strongly in the first half of the year as the strategic
supply partnership with Unilever in Denmark had a substantial positive effect
on sales. Our actions to recover cost increases through increased selling
prices across the Group largely mitigated the impact of increased input costs
on margins. Our strategic choice to build a strong base of high-quality
Blue-Chip customers with strong brands or market positions also provided some
buffer to the effects of the cost-of-living crisis on sales revenues.
In the second half of the year, sales were under increased pressure as the
cost-of-living crisis deepened and customer volumes softened as a result. The
difficult economic environment coupled with inflation at 11.5% in the twelve
months to December, resulted in customers pruning their portfolio and again
delaying innovation projects.
Despite these market challenges, Robinson has won significant new business in
the year that confirms our investment in capabilities, our responsive culture
and our focus on providing cost-effective supply is providing a competitive
advantage.
We have continued to progress our sustainability initiatives in the year and
have higher ambitions for the future. We have increased the level of recycled
material in our packaging, reduced our use of virgin plastic by more than 10%
in advance of our 2025 target, and from 2023 will have successfully phased out
non-recyclable polymers and colourants.
In these very difficult times, we would like to pay tribute to our employees
for their continued commitment and excellent contribution during the year. We
will continue to work hard to provide support to our employees as they face
the pressures of the current economic climate and increases in the
cost-of-living.
Financial and operating performance
Revenues were 10% higher than 2021, including 9% related to the Schela Plast
business which was acquired in February 2021. After adjusting for the
acquisition, price changes and foreign exchange, sales volumes in the
underlying business are 10% below 2021.
Gross margins of 17% (2021: 17%) were in line with 2021 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 excluding exceptional items were 3% higher than in 2021. The
effect of the Schela Plast acquisition and inflation were largely offset by
cost-saving initiatives, including the restructuring actions taken in the
final quarter of 2021 and first quarter of 2022.
Operating profit before amortisation of intangible assets and exceptional
items has increased to £2.0m (2021: £1.2m). After taking into account £2.2m
profit on disposal from two properties during the year, profit before tax was
£2.3m (2021: loss of £0.1m).
Cash generated by operations was £7.6m (2021: £5.4m), benefitting
substantially from improved payment terms with suppliers and customers.
Capital investment, financing, and pension
During the year, we invested a net £2.5m in property, plant and equipment, of
which £0.3m was related to the relocation of production from
Sutton-in-Ashfield to the Kirkby-in-Ashfield site. Property proceeds of £3.5m
were received in March and April and deferred consideration of £2.3m was paid
to the former owners of Schela Plast in July. With lower working capital, net
debt at 31 December 2022 was £9.2m (2021: £13.1m). In March 2023, the Group
successfully refinanced a £4.5m commercial mortgage for three years with HSBC
Bank UK. With total credit facilities of £19m (2021: £22m), the necessary
headroom is available for the Group to operate effectively.
The IAS 19 valuation of our pension plan at 31 December 2022 reported a
surplus of £7.0m (2021: £13.2m). This surplus is deemed to be irrecoverable
and so is not included in the Group's assets.
In December, the Robinson & Sons' Limited Pension Fund (the "Scheme")
completed a buy-in of all the Group's defined benefit pension scheme
liabilities. Following completion, the Scheme's liabilities are matched by an
insurance policy and the Group no longer bears any investment longevity,
inflation or interest rate risk associated with the Scheme. As the Scheme is
in surplus, the Group was already benefitting from a contribution holiday and
there is no immediate benefit to cashflow.
The Group and the Scheme trustees have long shared an ambition to achieve a
buy-out of the liabilities when market conditions allow. The buy-in is the
first step towards this goal, with a full buy-out proposed after a data
cleanse exercise, which is expected to be completed by the end of 2023. In
line with the Trust deed, any surplus remaining in the Scheme after the full
buy-out would be used to augment member benefits.
If a surplus remains following completion of a full buy-out, then it is likely
that the funds in the pension escrow account, which are c.£3.2m, of which,
£2.7m are loaned to the Group on commercial terms, will be returned to the
Group. Any funds returned to the Group would be used to reduce net debt.
Property
The Group completed on the sale of two properties in 2022.
In March, a part of the surplus land and buildings in Chesterfield was sold
for consideration of £975,000. The proceeds have been received and were used
to reduce bank debt.
In April, an operational property in Sutton-in-Ashfield was sold for
consideration of £2,475,000. Following the sale, production was relocated to
an existing Robinson premises in Kirkby-in-Ashfield. As planned, £600,000 was
invested in the relocation project, the proceeds have been received and after
the relocation costs, the remaining cash was used to reduce bank debt. This
consolidation of sites will provide opportunities to improve operational
efficiency in the UK plastics business in 2023 and beyond.
After undertaking a professional independent valuation, the fair value of the
surplus properties is now estimated to be £8.1m. The current net book value
is £2.8m.
Subject to the necessary planning approvals, we would expect further sales of
surplus property, in Chesterfield, to be achieved within the next 12 months.
The intention of the Group remains, over time, to realise value from the
disposal of surplus properties and to reinvest the proceeds in developing our
packaging business.
Dividend
The Board proposes a final dividend of 3.0p per share to be paid on 21 July
2023 to shareholders on the register at the close of business on 7 July 2023.
The ordinary shares become ex-dividend on 6 July 2023. This brings the total
dividend declared for 2022 to 5.5p (2021: 5.5p).
Outlook
We expect the substantial macroeconomic uncertainty and volatility experienced
since the beginning of 2021 to continue throughout 2023.
We are seeing more new business activity with our existing and potential
customers, which provides opportunities for growth in 2023 and beyond. We have
recently been awarded a significant new contract in Denmark which will require
substantial capital expenditure in 2023, funded from existing facilities and
will begin to benefit sales and profit from 2024.
As a result of the further cost inflation experienced in 2022, we are seeking
substantial price increases from all customers for 2023. Given the ongoing
pressure on volumes, input prices and margins, the Board will continue to
prioritise the management of costs and cashflow.
Despite the ongoing uncertainty, operating profit 3 (#_edn3) in the 2023
financial year is expected to be ahead of 2022 and in line with current
expectations. We remain committed in the medium-term to delivering
above-market profitable growth and our target of 6-8% adjusted operating
margin 4 (#_edn4) .
Alan Raleigh
Chairman
29 March 2023
Group income statement and statement of comprehensive income
Group income statement £'000 2022 2021
Revenue 50,529 45,954
Cost of sales (41,765) (38,204)
Gross profit 8,764 7,750
Operating costs (5,017) (6,568)
Operating profit before amortisation of intangible assets 3,747 1,182
Amortisation of intangible assets (947) (957)
Operating profit 2,800 225
Finance income - interest receivable - 1
Finance costs (507) (374)
Profit/(loss) before taxation 2,293 (148)
Taxation 51 176
Profit for the period 2,344 28
Earnings per ordinary share (EPS) p p
Basic earnings per share 14.0 0.2
Diluted earnings per share 14.0 0.2
All results are from continuing operations.
Group statement of comprehensive income £'000 2022 2021
Profit for the period 2,344 28
Items that will not be reclassified subsequently to the income statement:
Remeasurement of net defined benefit liability 180 192
Deferred tax relating to items not reclassified (34) (36)
146 156
Items that may be reclassified subsequently to the income statement:
Exchange differences on translation of foreign currency goodwill and 176 (367)
intangibles
Exchange differences on translation of foreign currency deferred tax balances (26) 54
Exchange differences on translation of foreign operations 481 (846)
631 (1,159)
Other comprehensive income/(expense) for the period 777 (1,003)
Total comprehensive income/(expense) for the period 3,121 (975)
Group Statement of financial position
£'000 2022 2021
Non-current assets
Goodwill 1,570 1,514
Other intangible assets 2,924 3,751
Property, plant and equipment 22,960 24,892
Deferred tax assets 1,294 1,188
28,748 31,345
Current assets
Inventories 5,155 5,067
Trade and other receivables 9,522 10,033
Cash at bank and on hand 5,097 2,775
Current tax asset 110 -
Assets classified as held for sale 642 238
20,526 18,113
Total assets 49,274 49,458
Current liabilities
Trade and other payables 9,543 10,273
Borrowings 5,535 1,681
Current tax liabilities - 109
15,078 12,063
Non-current liabilities
Borrowings 8,743 14,221
Deferred tax liabilities 1,395 1,376
Provisions 116 128
10,254 15,725
Total liabilities 25,332 27,788
Net assets 23,942 21,670
Equity
Share capital 84 84
Share premium 828 828
Capital redemption reserve 216 216
Translation reserve (367) (998)
Revaluation reserve 3,856 4,107
Retained earnings 19,325 17,433
Equity attributable to shareholders 23,942 21,670
Group statement of changes in equity
£'000 Share capital Share premium Capital redemption reserve Translation reserve Revaluation reserve Retained earnings Total
Group
At 1 January 2021 83 732 216 161 4,133 18,079 23,404
Profit for the year - - - - - 28 28
Other comprehensive income/(expense) - - - (1,159) - 156 (1,003)
Transfer from revaluation reserve as a result of property transactions - - - - (26) 18 (8)
Credit in respect of share-based payments - - - - - 50 50
Total comprehensive income for the year - - - (1,159) (26) 252 (933)
Shares issued 1 96 - - - - 97
Dividends paid - - - - - (898) (898)
Transactions with owners 1 96 - - - (898) (801)
At 31 December 2021 84 828 216 (998) 4,107 17,433 21,670
Profit for the year - - - - - 2,344 2,344
Other comprehensive income - - - 631 - 146 777
Transfer from revaluation reserve as a result of property transactions - - - - (251) 255 4
Credit in respect of share-based payments - - - - - 45 45
Total comprehensive income for the year - - - 631 (251) 2,790 3,170
Dividends paid - - - - - (898) (898)
Transactions with owners - - - - - (898) (898)
At 31 December 2022 84 828 216 (367) 3,856 19,325 23,942
Group Cash flow statement
£'000 2022 2021
Cash flows from operating activities
Profit for the period 2,344 28
Adjustments for:
Depreciation of property, plant and equipment 3,151 2,963
Profit on disposal of property, plant and equipment (1,454) (87)
Profit on disposal of assets held for sale (737) -
Amortisation of intangible assets 947 957
Decrease in provisions (12) (45)
Finance income - (1)
Finance costs 507 374
Taxation credited (51) (176)
Other non-cash items:
Pension current service cost and expenses 180 192
Charge for share options 45 50
Operating cash flows before movements in working capital 4,920 4,255
Decrease/(Increase) in inventories 36 (1,237)
Decrease in trade and other receivables 671 511
Increase in trade and other payables 1,951 1,868
Cash generated by operations 7,578 5,397
Corporation tax paid (317) (99)
Interest paid (492) (349)
Net cash generated by operating activities 6,769 4,949
Cash flows from investing activities
Interest received - 1
Acquisition of property, plant and equipment (2,584) (3,991)
Proceeds on disposal of property, plant and equipment 2,600 128
Proceeds on disposal of assets held for sale 975 -
Cash outflow on acquisition of subsidiary - (1,832)
Deferred consideration paid (2,261) -
Net cash used in investing activities (1,270) (5,694)
Cash flows from financing activities
Loans repaid (1,501) (468)
Loans drawn down 440 6,000
Net proceeds from sale and leaseback transactions 439 1,721
Proceeds from issue of ordinary shares - 97
Capital element of lease payments (1,714) (1,987)
Dividends paid (898) (898)
Net cash used in financing activities (3,234) 4,465
Net increase in cash and cash equivalents 2,265 3,720
Cash and cash equivalents at 1 January 2,775 (896)
Effect of foreign exchange rate changes 57 (49)
Cash and cash equivalents at end of period 5,097 2,775
Cash at bank and on hand 5,097 2,775
Cash and cash equivalents at end of period 5,097 2,775
Notes to the financial statements
1. Basis of preparation
Robinson prepares its financial statements on a historical cost basis unless
accounting standards require an alternate measurement basis. Where there are
assets and liabilities calculated on a different basis, this fact is disclosed
either in the relevant accounting policy or in the notes to the financial
statements. The financial statements comply with the Companies Act 2006 as
applicable to companies using International Financial Reporting Standards
("IFRS"). The Group's financial statements are prepared on a going concern
basis. The financial information contained in this announcement does not
constitute statutory accounts as defined in Section 434 of the Companies Act
2006. However, the financial statements contained in this announcement are
extracted from audited statutory accounts for the financial year ended 31
December 2022 which will be delivered to the Registrar of Companies. Those
accounts have an unqualified audit opinion.
2. Accounting Standards
Robinson prepares its financial statements in accordance with applicable IFRS,
issued by the International Accounting Standards Board ("IASB") in conformity
with the requirements of the Companies Act 2006, and interpretations issued by
the IFRS Interpretations Committee. The Group's financial statements are also
consistent with IFRS as issued by the IASB as they apply to accounting periods
ended 31 December 2022.
3. Going Concern
The Directors have considered the factors relevant to support a statement of
going concern. In assessing whether the going concern assumption is
appropriate, the Board and the Audit and Risk committee considered the Group
cash flow forecasts under various scenarios, identifying risks and mitigants
and ensuring the Group has sufficient funding to meet its current commitments
as and when they fall due for a period of at least 12 months from the date of
signing these financial statements. The Directors have a reasonable
expectation that the Group will continue in operational existence for this 12
month period and have therefore used the going concern basis in preparing the
financial statements.
4. Publication of statutory financial statements
The Company's financial statements are due to be made available on the
Company's website (www.robinsonpackaging.com
(http://www.robinsonpackaging.com) ) on 30 March 2023 and posted to
shareholders with the Notice of Annual General Meeting on 28 April 2023, at
which time the Notice of Annual General Meeting will be made available on the
Company's website. Copies will also be available at the Company's registered
office, Field House, Wheatbridge, Chesterfield, S40 2AB. The Annual General
Meeting is due to be held at 11.30am on 22 June 2023 at the Peak Edge Hotel,
Darley Road, Chesterfield S45 0LW.
1 (#_ednref1) operating profit before amortisation of intangible assets and
exceptional items
2 (#_ednref2) operating profit margin before amortisation of intangible
assets and exceptional items
3 (#_ednref3) operating profit before amortisation of intangible assets and
exceptional items
4 (#_ednref4) operating profit margin before amortisation of intangible
assets and exceptional items
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