REG - Robinson PLC - Interim Results
08/09/2022 07:00
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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 £25.4m (2021: £21.2m)
· Gross margin increased to 18.3% from 16.7% in H1 2021
· Operating profit before exceptional items and amortisation of
intangible assets increased to £1.5m (2021: £0.1m)
· Profit before tax of £2.8m (2021: loss of £0.6m)
· Exceptional items of £2.0m - including profit on sale of properties
of £2.1m (2021: nil)
· Interim dividend of 2.5p per share announced
· Net debt of £12.2m (31/12/2021: £13.1m), after net capital
expenditure excluding disposal of properties of £1.1m, deferred consideration
for the Schela Plast acquisition of £2.3m and proceeds on sale of property of
£3.5m
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 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, 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 (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
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 £1.4m versus the same period last year, to £1.5m.
Including the profit on sale of two properties in the period, the Group made a
profit before tax of £2.8m (2021: loss before tax £0.6m).
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 £2.3m 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 £975,000. The second an
operational property in Sutton-in-Ashfield which completed on 27 April 2022,
for consideration of £2,475,000. 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
£600,000.
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 £12.2m (31/12/2021: £13.1m) following the payment
of £2.3m deferred consideration on the Schela Plast acquisition and the
receipt of £3.5m proceeds on sale of two properties in the period. With total
credit facilities of £20.9m, the Group considers it has comfortable headroom
for the foreseeable future. Net capital expenditure (excluding disposal of
properties) in the first half was £1.1m (2021: £2.0m).
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
Condensed consolidated income statement £'000 Six months Six months Year to
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 of comprehensive income £'000 Six months Six months Year to
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 52 (221) (367)
intangibles
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
£'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
£'000 Share capital Share premium Capital redemption reserve Translation reserve Revaluation reserve Retained 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
£'000 Six months Six months Year to
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 (http://www.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 to 30.06.22 Six months to 30.06.21 Year to 31.12.21
Profit/(loss) for the period (£'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 16,753,445 16,673,745 16,749,474
per share
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
£'000 Six months Six months Year to
to 30.06.22
to 30.06.21
31.12.21
Ordinary dividend paid: 2020 final of 3.0p 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
(https://robinsonpackaging.com/) .
(1) Operating profit margin before amortisation of intangible assets and
exceptional items
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