REG - Robinson PLC - Trading Statement

RobinsonAnnouncement

18/01/2024 07:00

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RNS Number : 0708A  Robinson PLC  18 January 2024

Robinson
plc

18 January 2024

 

YEAR END TRADING STATEMENT

 

Robinson plc ("Robinson", the "Company" or the "Group" stock code: RBN), the
custom manufacturer of plastic and paperboard packaging based in Chesterfield,
is pleased to issue the following trading statement, prior to the announcement
of its final results for the year ended 31 December 2023, which are scheduled
to be released on 22 March 2024.

Revenue for 2023 is anticipated to be £49.6m, which is 1.8% below the prior
year. After adjusting for price changes and foreign exchange, sales volumes
are 6% lower than in 2022. However, the Company is pleased to report that 2023
operating profit before exceptional items and amortisation of intangible
assets is expected to be ahead of 2022, and in line with current market
expectations.

We anticipated that sales volumes would come under further pressure because of
inflation, the cost-of-living crisis, the de-listing of some products by our
customers, and certain of our customers continuing to prioritise existing
business over innovation projects, a characteristic which started during the
Covid-19 pandemic. These factors have manifested in lower sales in 2023,
notably in the first half of the financial year. As previously announced, with
the lower demand and continued inflationary pressures, we implemented a
restructuring program in June, which resulted in exceptional costs of c.£0.4m
and annual savings of c.£0.7m, of which £0.4m benefited 2023.

We believe we have now passed the worst of the downturn with our customers;
sales volumes in the second half of 2023 were 1% above the comparative period
in 2022, as implemented new projects began to take effect. As a result of
successful sales activity, we expect a substantial increase in sales volume in
the plastics business in 2024.

Net debt at 31 December 2023 is expected to be £6.3m (31/12/2022: £9.2m)
including the receipt of £0.7m proceeds on sale of surplus property and the
return of the defined benefit pension escrow funds of £3.3m in the period.

Impact of Storm Babet

The Company announced on 24 October 2023 that the River Hipper, which flows
through our premises in Chesterfield, had risen to its highest ever recorded
level and flooded part of the site. Part of the premises are occupied by the
Group, including the Paperbox manufacturing business and the Group head
office; the remainder is let to tenants. The Paperbox business represented
4.5% of the Group's revenues in 2023 (2022: 4.0%). The Group's plastics
business was unaffected.

Despite the substantial efforts of our employees, some damage was caused to
facilities, materials and equipment and manufacturing operations were paused.
Our insurance covers facilities, materials, equipment and business
interruption, with an excess of £100,000. The insurers' liability for the
loss was confirmed in November and subsequently an interim payment of
£450,000 was received by Robinson in December. The impact on the 2023 results
is expected to be an exceptional cost of £0.1m.

The majority of the cleaning activities are now complete, but on-site
manufacturing continues to be disrupted due to the scale of the clean-up
operations and complications in re-instating damaged plant and machinery.
Customer orders are being met through sub-contracting.

CEO position

As previously announced, 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. The selection process is underway, and the
Directors expect to make an announcement on the appointment of a permanent CEO
in due course.

Property

As previously announced, part of the Walton Works surplus property in
Chesterfield, known as "Mill Lane", was sold on 30 May 2023. The consideration
of £0.7m was received in cash and used to reduce bank debt.

On 11 August 2023, the Company also exchanged contracts for the sale of c.1.3
acres of the Walton Works surplus property. Completion is subject to
conditions, notably including 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 Company costs of £0.4m. The net
proceeds of £1.1m would be used by the Company to reduce current bank debt or
invested in the listed Walton Mill buildings to enhance their saleability.
Including this 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.

We expect further sales of surplus property in Chesterfield to be achieved in
the next 12 months. The intention of the Group is, over time, to realise value
from the disposal of surplus properties and use the proceeds to reduce
indebtedness and develop our packaging business.

Defined benefit pension scheme

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 during 2023. A data cleanse
exercise was completed, and the administration and payroll functions were
handed over to Legal and General Assurance Society Limited from 1 August 2023.
Whilst the final buy-out has been delayed slightly, full completion is now
expected to take place very shortly. Any surplus remaining in the Scheme after
the full buy-out would be used to augment member benefits. Non-cash
exceptional costs are estimated to be approximately £0.3m in 2023, including
the costs of enhancing the benefits of active members and the expenses of
moving towards buyout. These costs are payable by the Scheme but accounted for
in the Company under IAS19.

As announced on 14 August 2023, 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), and this was included in the reduced net debt at 31
December 2023. The Group will recognise an exceptional profit of c.£3.3m for
this item in its income statement for 2023.

2024 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.

 Robinson plc                                   www.robinsonpackaging.com (about:blank)
 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.

 

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU No.
596/2014) which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.

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