REG - Robinson PLC - Final Results
22/03/2024 07:00
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RNS Number : 8741H Robinson PLC 22 March 2024
Robinson
plc
22 March 2024
Final Results for the year ended 31 December 2023
Robinson plc ("Robinson", the "Company" 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 2023.
Financial highlights
· Operating profit before exceptional items and amortisation of
intangible assets increased to £2.2m (2022: £2.0m)
· Revenue down 2% to £49.7m (2022: £50.5m)
· Gross margin increased to 19% (2022: 17%)
· Exceptional items of £1.1m including £0.7m of restructuring and
rationalisation costs (2022: £1.7m profit)
· Loss before tax of £0.7m (2022: profit £2.3m)
· Net debt of £6.3m (2022: £9.2m), after receipt of £0.7m proceeds
on sale of surplus property and £3.3m return of pension escrow funds
· Final dividend retained at 3.0p per share
Operational highlights
· Implemented a restructuring program in June with exceptional costs of
£0.4m and annual savings of £0.7m, of which £0.4m benefitted 2023
· Paperbox operations and Group head office impacted by flooding in
October
· Achieved important new business wins with leading FMCG customers
Alan Raleigh, Chairman, commented:
"Robinson ended 2023 with a much stronger business. We improved adjusted
operating profits*, achieved surplus property sales, and secured the return of
the pension escrow account funds to reduce gearing and strengthen our balance
sheet.
We have largely renewed our manufacturing asset base, won important new
business with leading FMCG customers and are now seeing sales volumes recover.
We have taken the necessary actions to make Robinson more resilient, more
competitive, and more responsive. As market conditions begin to improve, we
are well placed to generate sustainable long-term value for our shareholders.
Following improved momentum in the second half of 2023, and reflecting the
effect of new customer projects and the full year impact of cost savings, the
Company expects revenue, and operating profit (before amortisation of
intangible assets and any exceptional items), for the 2024 financial year to
be ahead of 2023. We remain committed in the medium-term to delivering
above-market profitable growth and our target of 6-8% adjusted operating
margin**."
For further information, please contact:
Robinson plc www.robinsonpackaging.com (http://www.robinsonpackaging.com)
Sara Halton, Interim CEO Tel: 01246 389280
Mike Cusick, Finance Director
Cavendish Capital Markets Limited
Ed Frisby / Seamus Fricker, Corporate Finance Tel: 020 7220 0500
Tim Redfern, Corporate Broking
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 Procter &
Gamble, Reckitt Benckiser, SC Johnson and Unilever.
Headquartered in Chesterfield, UK, Robinson has plants in the UK, Poland and
Denmark. 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.
*Operating profit before exceptional items and amortisation of intangible
assets
**Operating profit margin before exceptional items and amortisation of
intangible assets
Chairman's Statement
Market conditions remained difficult in 2023 with persistent high inflation
and sharp increases in central bank interest rates across our countries of
operation. The continuing cost-of-living crisis has impacted consumer buying
habits and consequentially created volatility and uncertainty in customer
demand.
Performance in the first half of the year was impacted by lower sales volumes.
Demand notably reduced across the premium products in our customers' portfolio
because of inflation and the cost-of-living crisis. In addition to this
general trend, a large UK customer experienced issues after making supply
chain changes, which caused a substantial in-year reduction in sales with
them.
Our strong customer relationships allowed us to increase sales prices to
recover the majority of input cost increases and therefore protect gross
margins, however, those increases were not sufficient to cover all the fixed
operating cost increases.
In the second half of the year, plastics sales volumes recovered as large new
projects came on stream. With a strong pipeline of further projects, we
believe we have now passed the worst of the downturn.
To secure competitive operating costs, we implemented a restructuring program
in June which, together with increased sales volumes, helped to increase
underlying profits in the second half.
We suffered flooding at our Chesterfield site in October and despite the
substantial efforts of our employees, some damage was caused to facilities,
materials and equipment. The flood halted production in our Paperbox business
and impacted premises that are let to tenants whilst the clean-up and
reinstatement of production equipment were carried out.
We have made important progress on raising our level of recycled material
content in recent years, but at 18% in 2023, we have not yet achieved our
target of 30%. Our pipeline of new projects will support a further increase in
this ratio and, excluding products for food, where there is restrictive
legislation, we expect to achieve our goal in 2024.
We would like to thank our employees for their continued commitment and
excellent contribution during the year, with a special mention for those in
the Paperbox business that have expertly dealt with the aftermath of a serious
flood event.
Financial and operating performance
Revenues were 2% lower than 2022. After adjusting for price changes and
foreign exchange, sales volumes were 6% lower than 2022.
Gross margins of 19% (2022: 17%) were 2% above 2022, despite the operational
gearing effect of 6% lower sales volumes and continued inflation in input
costs.
Operating costs excluding exceptional items were 10% higher than in 2022. The
restructuring program implemented in June resulted in exceptional costs of
c.£0.4m and annual savings of c.£0.7m, of which £0.4m benefited 2023.
Operating profit before amortisation of intangible assets and exceptional
items has increased to £2.2m (2022: £2.0m). After £0.7m restructuring and
rationalisation costs and £0.1m of uninsured costs related to the flood in
Chesterfield, loss before tax was £0.7m (2022: profit £2.3m). Income of
£3.3m from the return of the escrow account funds has gone through the
statement of comprehensive income.
Finance costs increased to £0.8m (2022: £0.5m) as a result of the sharp
increases in market interest rates across our countries of operation,
partially offset by the lower net debt during the year.
Cash generated by operations was £5.0m (2022: £7.6m). Working capital
inflows normalised after a very strong year in 2022, which included improved
payment terms with suppliers and customers.
Capital investment, financing, and pension
During the year, we invested a net £4.0m in property, plant and equipment, of
which £2.3m was related to a previously communicated large new project in
Denmark. Surplus property sales proceeds of £0.7m were received in May and
£3.3m was received from the return of the pension escrow account in August.
Consequently, net debt at 31 December 2023 was £6.3m (2022: £9.2m). With
total credit facilities of £15m (2022: £19m), the necessary headroom is
available for the Group to operate effectively.
The IAS 19 valuation of our pension plan at 31 December 2023 reported a
surplus of £3.6m (2022: £7.0m). This surplus is not recoverable and so is
not included in the Group's assets.
In December 2022, the Robinson & Sons' Limited Pension Fund (the "Scheme")
completed a buy-in of all the Group's defined benefit pension scheme
liabilities with a plan to complete a full buy-out within 12 months. A data
cleanse exercise was completed, the administration and payroll functions were
handed over to Legal and General Assurance Society Limited ("L&G") from 1
August 2023 and a final balancing payment of £0.1m, was made by L&G to
the Scheme on 19 February 2024, completing the buy-in process. The surplus
remaining in the Scheme, currently £3.6m, will be used to augment member
benefits. We are pleased that this important buy-in transaction has de-risked
the Group's defined benefit pension obligations and we expect the final
buy-out to be completed shortly.
Non-cash exceptional costs of £0.3m were incurred in 2023, including the
costs of enhancing the benefits of active members and the expenses of moving
towards buy-out. These costs are payable by the Scheme but accounted for in
the Company under IAS19.
During the year, the Company reached agreement with the trustees of the Scheme
for the funds held in the pension escrow account, totalling c.£3.3m, to be
returned to the Group of which, £2.7m was already loaned to the Company.
These funds have been received and used to reduce net indebtedness.
CEO position
Dr Helene Roberts resigned as CEO and a Director of the Company on 1 September
2023, at which point Sara Halton assumed responsibility as the Interim CEO for
a transitional period whilst the Board conducts a search for a new CEO. We
thank Helene again for her enormous contribution to the business.
The selection process for the new CEO is underway, and the Directors expect to
make an announcement on the appointment of a permanent CEO in due course.
Property
We have continued to progress our surplus property disposal agenda during the
year, with movement on two sites.
In May, the Group completed on the sale of part of the Walton Works surplus
property, known as "Mill Lane". Consideration of £0.7m was received in cash
and used to reduce bank debt.
In August, the Group exchanged contracts for the sale of a further c.1.3 acres
of the Walton Works surplus property. Completion is subject to satisfactory
planning approval and is currently expected to take up to 18 months. The
consideration payable on completion would be £1.5m in cash, with estimated
Group costs of £0.4m. The net proceeds of £1.1m would be used by the Group
to reduce current bank debt or to invest in the listed Walton Mill buildings
to enhance their saleability.
Based on professional independent valuations and including the property
transaction which is not yet completed, the Directors estimate that the
current market value of the remaining surplus properties held by the Group is
approximately £7.4m.
Subject to the necessary planning approvals, we would expect further sales of
surplus property in Chesterfield to be achieved in the next 12 months. The
intention of the Group remains, over time, to realise value from the disposal
of surplus properties and use the proceeds to reduce indebtedness and develop
our packaging business.
Dividend
The Board proposes a final dividend of 3.0p per share to be paid on 21 June
2024 to shareholders on the register at the close of business on 7 June 2024.
The ordinary shares become ex-dividend on 6 June 2024. This brings the total
dividend declared for 2023 to 5.5p (2022: 5.5p).
Outlook
Following improved momentum in the second half of 2023, and reflecting the
effect of new customer projects and the full year impact of cost savings, the
Company expects revenue, and operating profit (before amortisation of
intangible assets and any exceptional items), for the 2024 financial year to
be ahead of 2023. We remain committed in the medium-term to delivering
above-market profitable growth and our target of 6-8% adjusted operating
margin*.
Alan Raleigh
Chairman
21 March 2024
*Operating profit margin before exceptional items and amortisation of
intangible assets
Group income statement and statement of comprehensive income
Group income statement £'000 2023 2022
Revenue 49,670 50,529
Cost of sales (40,039) (41,765)
Gross profit 9,631 8,764
Operating costs (8,536) (5,017)
Operating profit before amortisation of intangible assets 1,095 3,747
Amortisation of intangible assets (990) (947)
Operating profit 105 2,800
Finance income - interest receivable 40 -
Finance costs (805) (507)
(Loss)/profit before taxation (660) 2,293
Taxation (160) 51
(Loss)/profit for the period (820) 2,344
(Loss)/earnings per ordinary share (EPS) p p
Basic (loss)/earnings per share (4.9) 14.0
Diluted (loss)/earnings per share (4.9) 14.0
All results are from continuing operations.
Group statement of comprehensive income £'000 2023 2022
(Loss)/profit for the period (820) 2,344
Items that will not be reclassified subsequently to the income statement:
Remeasurement of net defined benefit liability 289 180
Deferred tax relating to items not reclassified (68) (34)
Return of pension escrow 3,290 -
Deferred tax on pension escrow (774) -
2,737 146
Items that may be reclassified subsequently to the income statement:
Exchange differences on translation of foreign currency goodwill and 44 176
intangibles
Exchange differences on translation of foreign currency deferred tax balances 3 (26)
Exchange differences on translation of foreign operations 527 481
574 631
Other comprehensive income for the period 3,311 777
Total comprehensive income for the period 2,491 3,121
Group statement of financial position
£'000 2023 2022
Non-current assets
Goodwill 1,621 1,570
Other intangible assets 1,927 2,924
Property, plant and equipment 23,920 22,960
Deferred tax assets 508 1,294
27,976 28,748
Current assets
Inventories 4,747 5,155
Trade and other receivables 10,635 9,522
Cash at bank and on hand 3,576 5,097
Current tax asset - 110
Assets classified as held for sale - 642
18,958 20,526
Total assets 46,934 49,274
Current liabilities
Trade and other payables 10,114 9,543
Borrowings 3,527 5,535
Current tax liabilities 172 -
13,813 15,078
Non-current liabilities
Borrowings 6,350 8,743
Deferred tax liabilities 1,119 1,395
Provisions 98 116
7,567 10,254
Total liabilities 21,380 25,332
Net assets 25,554 23,942
Equity
Share capital 84 84
Share premium 828 828
Capital redemption reserve 216 216
Translation reserve 207 (367)
Revaluation reserve 3,487 3,856
Retained earnings 20,732 19,325
Equity attributable to shareholders 25,554 23,942
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 2022 84 828 216 (998) 4,107 17,433 21,670
Profit for the year - - - - - 2,344 2,344
Other comprehensive income - - - 631 - 146 777
Total comprehensive income for the year - - - 631 - 2,490 3,121
Transfer from revaluation reserve as a result of property transactions - - - - (251) 255 4
Credit in respect of share-based payments - - - - - 45 45
Dividends paid - - - - - (898) (898)
At 31 December 2022 84 828 216 (367) 3,856 19,325 23,942
Loss for the year - - - - - (820) (820)
Other comprehensive income - - - 574 - 2,737 3,311
Total comprehensive income for the year - - - 574 - 1,917 2,491
Transfer from revaluation reserve as a result of property transactions - - - - (369) 369 -
Credit in respect of share-based payments - - - - - 19 19
Dividends paid - - - - - (898) (898)
At 31 December 2023 84 828 216 207 3,487 20,732 25,554
Group cash flow statement
£'000 2023 2022
Cash flows from operating activities
(Loss)/profit for the period (820) 2,344
Adjustments for:
Depreciation of property, plant and equipment 3,280 3,151
Impairment of property, plant and equipment 51 -
Loss/(profit) on disposal of property, plant and equipment 11 (1,454)
(Profit)/loss on disposal of assets held for sale (58) (737)
Amortisation of intangible assets 990 947
Finance income (40) -
Finance costs 805 507
Taxation charged/(credited) 160 (51)
Other non-cash items:
Pension current service cost and expenses 289 180
Charge for share options 19 45
Operating cash flows before movements in working capital 4,687 4,932
Decrease in inventories 472 36
(Increase)/decrease in trade and other receivables (938) 671
Increase in trade and other payables 835 1,951
Decrease in provisions (18) (12)
Cash generated by operations 5,038 7,578
Corporation tax paid (210) (317)
Interest paid (826) (492)
Net cash generated by operating activities 4,002 6,769
Cash flows from investing activities
Interest received 40 -
Acquisition of property, plant and equipment (4,034) (2,584)
Proceeds on disposal of property, plant and equipment 26 2,600
Proceeds on disposal of assets held for sale 700 975
Deferred consideration paid - (2,261)
Net cash used in investing activities (3,268) (1,270)
Cash flows from financing activities
Loans repaid (1,578) (1,501)
Loans drawn down 1,359 440
Net proceeds from sale and leaseback transactions - 439
Proceeds from return of escrow 585 -
Capital element of lease payments (1,828) (1,714)
Dividends paid (898) (898)
Net cash used in financing activities (2,360) (3,234)
Net (decrease)/increase in cash and cash equivalents (1,626) 2,265
Cash and cash equivalents at 1 January 5,097 2,775
Effect of foreign exchange rate changes 105 57
Cash and cash equivalents at end of period 3,576 5,097
Cash at bank and on hand 3,576 5,097
Cash and cash equivalents at end of period 3,576 5,097
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 2023 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 2023.
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 22 March 2024 and posted to
shareholders with the Notice of Annual General Meeting on 10 April 2024, 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 9 May 2024 at the Peak Edge Hotel,
Darley Road, Chesterfield S45 0LW.
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