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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 |
|
Sara Halton, Interim CEO Mike Cusick, Finance Director |
Tel: 01246 389280 |
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|
Cavendish Capital Markets Limited |
|
Ed Frisby / Seamus Fricker, Corporate Finance Tim Redfern, Corporate Broking |
Tel: 020 7220 0500 |
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 |
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|
|
|
|
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 intangibles |
|
|
44 |
176 |
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) 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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