REG - Robinson PLC - Interim Results & CEO Appointment
15/08/2024 07:00
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RNS Number : 5101A Robinson PLC 15 August 2024
Robinson
plc
Interim Results for the six months ended 30 June 2024
and
Appointment of CEO
Robinson plc ("Robinson" the "Company" 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 2024.
Financial
· Revenue up 11% to £27.1m (2023: £24.3m)
· Gross margin higher than the prior year at 21% (H1 2023: 18%)
· Operating profit before exceptional items and amortisation of
intangible assets increased to £1.6m (2023: £0.5m)
· Exceptional costs of £0.1m (2023: £0.5m)
· Profit before tax of £0.7m (2023: loss of £0.9m)
· Interim dividend of 2.5p per share announced (2023: 2.5p)
· Net debt of £7.9m (31/12/2023: £6.3m), after capital expenditure of
£1.9m
Operational
· John Melia to be appointed as Group CEO following thorough
recruitment and selection process
· Large project in Denmark now supplying substantial volumes
· Doubled PET bottle capacity in UK business and implemented new
business projects
· Progress on ratio of recycled material content in our packaging to
24% (2023: full year 18%)
Alan Raleigh, Chairman, commented:
"The results for the first half of 2024 reflect the positive momentum that we
have experienced since July 2023. Whilst market conditions remain challenging,
I am very pleased that our approach to partnering with major fast moving
consumer goods ("FMCG") brand owners, our investment in new technology and our
ability to deliver packaging made from post-consumer recycled material is
delivering increased sales volume and improved performance.
I am delighted that John Melia has chosen to join Robinson as our new Chief
Executive. John is currently Director of Strategy and Innovation at DS Smith
Recycling and has held senior positions at Tata Chemicals, where he oversaw
major business transformation initiatives. He has an in-depth understanding
of what is required to drive shareholder value in a business like Robinson and
we look forward to him joining the team in December. I would also like to
place on record the Board's appreciation for the excellent contribution that
Sara Halton has made as interim Chief Executive.
The Company expects revenue and profit for the 2024 financial year to be in
line with current market expectations. We remain committed in the medium-term
to delivering above-market profitable growth and our target of 6-8% adjusted
operating margin(*)."
*Operating profit margin before amortisation of intangible assets and
exceptional items
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
INFORMATION REQUIRED UNDER RULE 17 AND SCHEDULE 2, PARAGRAPH (G) OF THE AIM
RULES FOR COMPANIES ("AIM RULES")
Full name: John Stephen Melia
Age: 53
RBN shares held: None
Current directorships: DS Smith Recycling Ireland Limited
Historic directorships in previous 5 years: DS Smith Recycling UK Limited
There is no further information to be disclosed in relation to the appointment
of John Melia pursuant to Rule 17 and Schedule 2, paragraph (g) of the AIM
Rules.
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.
Chairman's Statement
Dear Shareholders
The results for the first half of 2024 reflect the positive momentum that we
have experienced since July 2023. Whilst market conditions remain challenging,
I am very pleased that our approach to partnering with major FMCG brand
owners, our investment in new technology and our ability to deliver packaging
made from post-consumer recycled material is delivering increased sales volume
and improved performance.
Sales in the first half of the year are 11% above the comparative period in
2023. After adjusting for price changes and foreign exchange, sales volumes
were 14% higher. Although the comparative reflects the cost-of-living crisis
in 2023 and a major customer experiencing a supply chain issue, volumes in
2024 have benefitted from new business projects introduced in the last 12
months, including the previously announced large new project in Denmark. With
a strong pipeline of further projects, we are well positioned for future sales
growth.
The operational gearing effect of 14% higher sales volumes and lower rate of
input cost inflation have led to improved gross margins of 21% (H1 2023: 18%)
in the period. This is despite experiencing start-up issues with production on
the project in Denmark which has led to higher direct costs in the short term.
Operating costs in the first half were £4.0m (2023: £4.0m) which was in line
with 2023 and includes:
· £0.2m of inflation in wages and salaries in response to market
inflation and substantial mandatory minimum wage increases across our three
countries of operation.
· £0.1m of additional costs incurred in Denmark as part of the
introduction of the large new business project.
· Offset by the remaining £0.3m annual benefit of the restructuring
program actioned in June 2023.
Operating profit before exceptional items and amortisation of intangible
assets increased to £1.6m compared to the prior year (2023: £0.5m).
Including the exceptional items of £0.1m related to the ongoing costs of
surplus property disposals and the closure of the defined benefit pension
scheme, the Group made a profit before tax of £0.7m (2023: loss before tax
£0.9m).
We have made important progress on raising our level of recycled material
content; in the first half of the year 24% of material processed was from
recycled sources (2023: full year 18%). Excluding products for food contact,
where there is restrictive legislation, 32% of material processed was recycled
material (2023: full year 24%). We expect that our pipeline of new projects
will support a further increase in this ratio.
We continue to work with insurers on the reinstatement of the Paperbox
business and the property in Chesterfield following the serious flood in
October 2023. The offices refurbishment is expected to take a further six
months, but the Paperbox business is close to full operation, with a healthy
sales pipeline.
CEO position
I am very pleased to announce that John Melia has agreed to join the Company
and Board as Chief Executive Officer, effective 1 December 2024.
John is an accomplished business leader who has a track record of delivery at
senior level across both SMEs and multinational businesses. He brings
extensive experience of business development, operational performance
improvement, a deep understanding of the circular economy and significant
manufacturing expertise.
John is currently Director of Strategy and Innovation at DS Smith Recycling
and has held senior positions at Tata Chemicals, where he oversaw major
business transformation initiatives. John has an MEng in Chemical Engineering
from the University of Cambridge.
Sara Halton, who has served as Robinson plc Interim Chief Executive Officer
since September 2023, will step down from that position and return to her
Non-Executive Director role also effective 1 December 2024.
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. 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. A full buy-out is expected to be
completed before the end of 2024, which will incur additional exceptional
costs of up to £0.2m, whilst these costs are incurred and paid by the Scheme
they are accounted for in the Company under IAS19. The £3.4m surplus
remaining in the Scheme after buy-out costs, will be used to augment member
benefits. In 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. Those funds were received and used to reduce net indebtedness.
Property
We are continuing to pursue the sale of surplus properties in Chesterfield.
Based on professional independent valuations, the Directors estimate that the
current market value of those properties is approximately £7.4m, and this
includes the previously announced c.1.3 acres of Walton Works where exchange
of contracts has occurred, and completion remains subject to satisfactory
planning approval. The surplus properties and other UK land and buildings are
pledged as security for Group credit facilities, of which £3.8m was drawn on
30 June 2024.
Subject to the necessary planning approvals, we would expect further sales of
surplus property 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.
Net debt and capital expenditure
Net debt has increased to £7.9m (31/12/2023: £6.3m) including capital
expenditure of £1.9m (2023: £1.1m). With total credit facilities of £14.1m
at 30 June 2024, the Group considers it has sufficient headroom for the
foreseeable future.
Dividend
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 13 October 2024 to shareholders on the register at 20
September 2024 (record date). The ordinary shares ex-dividend date is 19
September 2024.
The current intention of the Board is to pay a total dividend of 5.5p (2023:
5.5p) per share for the year ending 31 December 2024.
Outlook
The Company expects revenue and profit for the 2024 financial year to be in
line with current market expectations.
Our close partnerships with major customers have led to a significantly
improved sales pipeline, which will lead to growth opportunities in future
years. We will continue to focus on improving profitability across our
operations as the effects of inflation subside and our premium brand owner
customers respond to the new market situation.
We are progressing our surplus property disposal agenda, which along with the
buy-out of the defined benefit pension scheme will reduce indebtedness and
result in a simpler and more streamlined organisation which is able to compete
and win in a volatile marketplace.
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
14 August 2024
*Operating profit margin before amortisation of intangible assets and
exceptional items
Condensed consolidated income statement and statement of comprehensive income
Condensed consolidated income statement £'000 Six months Six months Year to
to 30.06.24
to 30.06.23
31.12.23
Revenue 27,137 24,348 49,670
Cost of sales (21,512) (19,911) (40,039)
Gross profit 5,625 4,437 9,631
Operating costs (3,987) (3,968) (7,420)
Operating profit before amortisation of intangible assets and exceptional 1,638 469 2,211
items
Amortisation of intangible assets (506) (476) (990)
Exceptional items (86) (492) (1,116)
Operating profit/(loss) 1,046 (499) 105
Finance income - interest receivable 18 4 40
Finance costs (405) (379) (805)
Profit/(loss) before taxation 659 (874) (660)
Taxation (205) (33) (160)
Profit/(loss) for the period 454 (907) (820)
Earnings per ordinary share (EPS) p p p
Basic and diluted earnings per share 2.7 (5.4) (4.9)
Condensed consolidated statement of comprehensive income £'000 Six months Six months Year to
to 30.06.24
to 30.06.23
31.12.23
Profit/(loss) after tax for the period 454 (907) (820)
Items that will not be reclassified subsequently to the Income Statement:
Re-measurement of net defined benefit liability 62 99 289
Deferred tax relating to items not reclassified (16) (19) (68)
Return of pension escrow - - 3,290
Deferred tax on pension escrow - - (774)
46 80 2,737
Items that may be reclassified subsequently to the Income Statement:
Exchange differences on retranslation of foreign currency goodwill and (65) (17) 44
intangibles
Exchange differences on retranslation of foreign currency deferred tax 8 7 3
balances
Exchange differences on translation of foreign operations (226) 198 527
(283) 188 574
Other comprehensive (expense)/income for the period (237) 268 3,311
Total comprehensive (expense)/income for the period 217 (639) 2,491
Condensed consolidated statement of financial position
£'000 30.06.24 30.06.23 31.12.23
Non-current assets
Goodwill 1,593 1,583 1,621
Other intangible assets 1,384 2,401 1,927
Property, plant and equipment 23,954 22,458 23,920
Deferred tax asset 498 1,272 508
27,429 27,714 27,976
Current assets
Inventories 5,470 4,622 4,747
Trade and other receivables 11,407 9,623 10,635
Cash at bank and on hand 2,071 3,975 3,576
18,948 18,220 18,958
Total assets 46,377 45,934 46,934
Current liabilities
Trade and other payables 9,959 8,146 10,114
Borrowings 4,328 5,281 3,527
Current tax liabilities 27 69 172
14,314 13,496 13,813
Non-current liabilities
Borrowings 5,610 7,701 6,350
Deferred tax liabilities 1,074 1,299 1,119
Provisions 98 116 98
6,782 9,116 7,567
Total liabilities 21,096 22,612 21,380
Net assets 25,281 23,322 25,554
Equity
Share capital 84 84 84
Share premium 828 828 828
Capital redemption reserve 216 216 216
Translation reserve (76) (179) 207
Revaluation reserve 3,474 3,498 3,487
Retained earnings 20,755 18,875 20,732
Equity attributable to shareholders 25,281 23,322 25,554
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 2022 84 828 216 (367) 3,856 19,325 23,942
Profit for the period (907) (907)
Other comprehensive income 188 80 268
Total comprehensive income for the period - - - 188 - (827) (639)
Credit in respect of share based payments 19 19
Transactions with owners - - - - - 19 19
Transfer from revaluation reserve as a result of property transactions (358) 358 -
At 30 June 2023 84 828 216 (179) 3,498 18,875 23,322
Profit for the period 87 87
Other comprehensive income/(expense) 386 2,657 3,043
Total comprehensive income for the period - - - 386 - 2,744 3,130
Dividends paid (898) (898)
Transactions with owners - - - - - (898) (898)
Transfer from revaluation reserve as a result of property transactions (11) 11 -
At 31 December 2023 84 828 216 207 3,487 20,732 25,554
Loss for the period 454 454
Other comprehensive income (283) 46 (237)
Total comprehensive income for the period - - - (283) - 500 217
Dividends paid (490) (490)
Transactions with owners - - - - - (490) (490)
Transfer from revaluation reserve as a result of property transactions (13) 13 -
At 30 June 2024 84 828 216 (76) 3,474 20,755 25,281
Condensed consolidated cash flow statement
£'000 Six months Six months Year to
to 30.06.24
to 30.06.23
31.12.23
Cash flows from operating activities
Profit/(loss) for the period 455 (907) (820)
Adjustments for:
Depreciation of property, plant and equipment 1,571 1,617 3,280
Impairment of property, plant and equipment - - 51
(Profit)/loss on disposal of property, plant and equipment (1) (3) 11
Profit on disposal of assets held for sale - (58) (58)
Amortisation of intangible assets 506 492 990
Finance income (18) (4) (40)
Finance costs 405 379 805
Taxation charged 205 33 160
Other non-cash items:
Pension current service cost and expenses 62 99 289
Charge for share options - 19 19
Operating cash flows before movements in working capital 3,185 1,667 4,687
(Increase)/decrease in inventories (781) 533 472
Increase in trade and other receivables (874) (43) (938)
Increase/(decrease) in trade and other payables 72 (1,022) 835
Decrease in provisions - - (18)
Cash generated by operations 1,602 1,135 5,038
Corporation tax (paid)/received (371) 53 (210)
Interest paid (401) (379) (826)
Net cash generated by operating activities 830 809 4,002
Cash flows from investing activities
Interest received 18 4 40
Acquisition of property, plant and equipment (1,911) (1,112) (4,034)
Proceeds on disposal of property, plant and equipment 36 23 26
Proceeds on disposal of assets held for sale - 700 700
Net cash used in investing activities (1,857) (385) (3,268)
Cash flows from financing activities
Loans repaid (216) (805) (1,578)
Loans drawn down 41 236 1,359
Proceeds from return of pension escrow - - 585
Capital element of lease payments (749) (1,005) (1,828)
Dividends paid (490) - (898)
Net cash used in financing activities (1,414) (1,574) (2,360)
Net decrease in cash and cash equivalents (2,441) (1,150) (1,626)
Cash and cash equivalents at 1 January 3,576 5,096 5,097
Effect of foreign exchange rate changes 26 29 105
Cash and cash equivalents at end of period 1,161 3,975 3,576
Cash at bank and on hand 2,071 3,975 3,576
Bank overdrafts (952) - -
Cash and cash equivalents at end of period 1,119 3,975 3,576
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 2023, 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 2024
None of the standards, interpretations, and amendments effective for the first
time from 1 January 2024 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 2023.
The financial information for the six months ended 30 June 2024 and 30 June
2023 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 2023 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 (https://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 2024 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 2023 Annual Report (page 73). 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 2023.
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
2023 Annual Report on pages 18-19. The principal risks set out in the 2023
Annual Report were: Investment; Customers; Raw material supply and input
prices; IT and digital security; Environment; People; and Supply Continuity.
The Board considers that the principal risks and uncertainties set out in the
2023 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 30.06.24 Six months to 30.06.23 Year to 31.12.23
Profit/(loss) for the period (£'000) 454,000 (907,000) (820,000)
Weighted average number of ordinary shares in issue 16,753,445 16,753,445 16,753,445
Effect of dilutive share option awards* - - -
Weighted average number of ordinary shares for calculating diluted earnings 16,753,445 16,753,445 16,753,445
per share
Basic earnings/(loss) per share (pence) 2.7 (5.4) (4.9)
Diluted earnings/(loss) per share (pence) 2.7 (5.4) (4.9)
*In the six months to 30.06.24 and six months to 30.06.23 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.
5. Dividends
£'000 Six months Six months Year to
to 30.06.24
to 30.06.23
31.12.23
Ordinary dividend paid: 2022 final of 3.0p per share - - 490
2023 interim of 2.5p per share - - 408
2023 final of 3.0p per share 490 - -
490 - 898
The 2023 final dividend of 3.0p (2023: 3.0p) per share was paid to
shareholders on 21 June 2024. An interim dividend of 2.5p (2023: 2.5p) is
proposed to be paid on 11 October 2024. 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 be sent on 15 August 2024 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/) .
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