Robinson Regulatory News (RBN)

14 Mar 2008 07:00

Robinson PLC14 March 2008 14 March 2008 Robinson plc PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007 Robinson plc ("Robinson" or "the Group"; stock code: RBN), the custommanufacturer of plastic and paperboard packaging based in Chesterfield,announces its results for the year ended 31 December 2007. Highlights: • Revenue in the year reduced by 12% to £25.5m (2006: £29.0m).• The loss of the gravy granule can business at the end of 2006 accounted for the majority of the reduction in revenue (£3.1m).• The Group's operating profit before exceptional items and depreciation was £1.6m (2006: £0.9m), as margins improved, despite the lower revenues.• Exceptional costs relating mainly to the restructuring of our UK Plastic packaging operations amounted to £1.3m.• There was an exceptional profit on the sale of surplus properties of £1.1m.• The net borrowings of the Group decreased from £6.6m to £3.3m during the year, including proceeds of £1.6m from the sale of surplus properties.• The Group's pension fund remains in a healthy position and the notional interest credit in the income statement (required by the financial reporting standards) was £1.3m (2006: £1.1m).• The profit before tax was £0.3m (2006: loss £1.2m).• The Board will be recommending an unchanged final dividend for the year of 1.75p per share (2006 final: 1.75p). Commenting on the results, Chairman, Richard Clothier stated: "Robinson has responded to a challenging year in 2007 with some significantrestructuring of the business and its management. We are pleased to reportimproved margins and a return to profits with an expectation of further progressin 2008." About Robinson Based in Chesterfield with additional manufacturing facilities inKirkby-in-Ashfield and Stanton Hill, Nottinghamshire, in Toronto, Canada, and inLodz, Poland, Robinson currently employs around 400 people. It was formerly afamily business, with its origins dating back some 165 years. Today theCompany's main activities are in the manufacture and sale of injection mouldedplastic packaging and rigid paper packaging. Robinson operates primarily withinthe food, drink, confectionery, cosmetic and toiletry sectors, providing nicheor custom manufacture to major players in the fast moving consumer goods market,such as Procter & Gamble, Nestle, Cadbury, Kraft, Unilever, Masterfoods,Premier, Avon, Northern Foods and Chivas. The Company also has a substantialproperty portfolio with significant development potential. Adam Formela wasappointed Chief Executive in February 2007 taking over from Jon Marx who retiredfrom the business at the end of 2007. For further information, please contact: Adam Formela, Chief Executive, Robinson plc 01246 220022Guy Robinson, Finance Director, Robinson plc 01246 220022 www.r1son.co.ukRichard Tulloch, Arbuthnot Securities 020 7012 2000Libby Moss/Louise Davis, Bankside Consultants 020 7367 8888 CHAIRMAN'S REPORT After successive years of rising input costs in a highly competitive market, weare pleased to report a recovery in our margins and despite a 12% reduction inrevenue the operating performance has significantly improved. This has beenachieved through increasing selling prices and by cost reduction initiatives. UKmanufacturers continue to face stiff competition from foreign imports andpolymer costs and energy costs are higher in the UK than in most CentralEuropean countries. We continue to see our customers relocating manufacturing toCentral Europe to take advantage of lower costs and this will continue to have abeneficial impact on our Polish manufacturing plant. Conversely, filling thevoid left by this migration at our UK plants has been challenging and we fellshort of our target to maintain the status quo in 2007. Revenue Total revenue in 2007 was £3.5m lower than in the previous year. The reductionwas mainly attributable to the loss of the gravy granule can business atRobinson Paperboard UK, which accounted for £3.1m of revenue in 2006. Revenuebenefited from the full year effect of the May 2006 Stanton Hill acquisition andour newly established Polish manufacturing business saw revenue nearly double to£1.6m. Revenue at our Kirkby plant was insufficient to replace the businesstransferred to Poland and we also lost some contracts including the Pringlesovercap business to a single source supply agreement in Europe. Profitability The profit before tax of £0.3m (2006: loss £1.2m), includes £1.3m exceptionalreorganisation costs offset by a £1.1m profit on sale of surplus properties. Italso includes a notional interest credit in respect of the surplus in thePension Fund of £1.3m (2006: £1.1m). Increases in input costs, particularly polymer and energy costs were passed onto our customers, with the result that the gross margin recovered from 9.0% in2006 to 12.0% in 2007. Operating costs (fixed overheads) reduced by 6% and as aresult the operating loss was reduced despite the reduction in revenue. Cash & Finances Our bank borrowings decreased from £6.6m to £3.3m during the year. Theunderlying operations were cash positive, working capital was substantiallyreduced and the proceeds from the sale of surplus property brought in £1.6m. Weinvested £0.8m on the acquisition of fixed assets compared to a depreciationcharge of £2m. The main investments were in expanding the plastics plant inPoland. Dividends The Board considers that despite the poor earnings of the past two years, thecash position and outlook for 2008 supports a final dividend of 1.75p per share(2006 final: 1.75p) which will be paid on 6 June 2008 to shareholders on theregister at the close of business on 9 May 2008. Pensions Our pension fund remains in a healthy position. The latest actuarial valuationat 5 April 2005 indicated a surplus of 8%. The latest annual valuation at theend of 2007 indicates the fund has assets with a market value of £53m andliabilities of £42m giving a surplus of £11m in the fund (2006: £11m). Duringthe year the proportion of assets invested in equities was reduced from 72% to54%. At the end of 2007, the Group had paid over contributions amounting to£1.2m into an escrow account which may be paid to the pension fund, returned tothe Group or remain in situ depending on the outcome of the actuarial valuationof the fund due in April 2008. Property The planning application for residential development of Walton Works (7.6 acres)was refused in October 2007 and it is planned to re-submit a revised applicationin due course. This re-submission has been delayed by the discovery of adverseconditions in the listed building which the planning authority and EnglishHeritage now want investigated further. We expect these investigations to becomplete in the next few months and hope to be in a position to complete thesale of this site later in 2008. Group Development and Outlook There has been significant change in management during 2007. In February AdamFormela joined as Chief Executive replacing Jon Marx who retired as a directorin December. I would like to thank Jon for his considerable contribution to there-shaping of the Group. The senior management responsible for the divisions have been substantiallychanged. The Board is very much focused on improving the quality and scale ofthe business and selective acquisitions at the right price will be part of thisprocess. Product development and innovation remains a priority. The outlook for 2008 remains difficult with further increases in input costs.Much is being done to offset these effects and build on the Group's strengths.We expect to see continued emphasis in the market to reduce packaging waste andare working with a number of customers to achieve their objectives throughlightweighting, recyclability and innovative design. Progress to date in 2008 isin line with the Board's expectations. Richard ClothierChairman14 March 2008 GROUP INCOME STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2007 Unaudited * Unaudited 2007 2006 £'000 £'000--------------------------------------------------------------------------------Revenue 25,505 28,978Cost of sales (22,457) (26,371)--------------------------------------------------------------------------------Gross profit 3,048 2,607Operating costs before exceptional items (3,415) (3,620)--------------------------------------------------------------------------------Operating loss before exceptional items (367) (1,013)Exceptional items (197) (969)--------------------------------------------------------------------------------Operating loss after exceptional items (564) (1,982)Finance costs (371) (340)Finance income in respect of pension fund 1,280 1,120--------------------------------------------------------------------------------Profit/(loss) before taxation 345 (1,202)Taxation (149) 240--------------------------------------------------------------------------------Profit/(loss) after taxation 196 (962)================================================================================Profit/(loss) per ordinary share (basic and diluted) 1.2p (6.0p)-------------------------------------------------------------------------------- All amounts relate to continuing operations STATEMENT OF RECOGNISED INCOME AND EXPENSEFOR THE YEAR ENDED 31 DECEMBER 2007 Actuarial (loss)/gain on retirement benefit obligations (1,373) 75Taxation relating to actuarial gain/(loss) 537 (22)--------------------------------------------------------------------------------Net (expense)/income recognised directly in equity (836) 53Profit/(loss) for the period 196 (962)--------------------------------------------------------------------------------Total recognised expense for the period (640) (909)================================================================================ * Our auditors, Grant Thornton UK LLP, have agreed to this preliminaryannouncement, although they have not yet finally approved and signed off thefinancial statements for the year ended 31 December 2007. The 2006 numbers havebeen restated under IFRS. GROUP BALANCE SHEETAS AT 31 DECEMBER 2007 Unaudited Unaudited 2007 2006 £'000 £'000--------------------------------------------------------------------------------Non-current assetsProperty, plant and equipment 14,350 16,038Deferred taxation 365 243Pension asset 7,281 7,636-------------------------------------------------------------------------------- 21,996 23,917--------------------------------------------------------------------------------Current assetsInventories 1,680 2,031Trade and other receivables 4,928 6,950Taxation recoverable - 126Cash 301 196-------------------------------------------------------------------------------- 6,909 9,303--------------------------------------------------------------------------------Non-current assets held for sale 2,954 3,404--------------------------------------------------------------------------------Total assets 31,859 36,624--------------------------------------------------------------------------------Current liabilitiesTrade and other payables (5,914) (6,719)Bank overdraft (3,620) (6,761)-------------------------------------------------------------------------------- (9,534) (13,480)--------------------------------------------------------------------------------Non-current liabilitiesProvisions for deferred taxation (1,664) (1,959)Provisions for liabilities (203) (208)-------------------------------------------------------------------------------- (1,867) (2,167)--------------------------------------------------------------------------------Total liabilities (11,401) (15,647)--------------------------------------------------------------------------------Net assets 20,458 20,977================================================================================EquityOrdinary shares 80 80Share premium 419 402Capital redemption reserve 216 216Translation reserve 692 182Revaluation reserve 4,525 4,972Retained earnings 14,526 15,125--------------------------------------------------------------------------------Equity attributable to shareholders 20,458 20,977================================================================================ GROUP CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2007 Unaudited Unaudited 2007 2006 £'000 £'000--------------------------------------------------------------------------------Cash flows from operating activitiesProfit/(loss) after taxation 196 (962)Adjustments for:Depreciation of property, plant and equipment 1,983 1,924Impairment of plant and equipment 796 317Profit on disposal of land and buildings (12) (252)Profit on disposal of non-current assets held for sale (1,139) -Loss/(profit) on sale of other plant and equipment 188 (19)Impairment of acquired goodwill - 79Decrease in provisions (5) (43)Other finance income in respect of Pension Fund (1,280) (1,120)Finance costs 371 340Taxation charged/(credited) 149 (240)Non-cash items:Increase in net pension asset charged to operatingprofit 262 281Cost of share options 47 79--------------------------------------------------------------------------------Operating cash flows before movements in working capital 1,556 384Decrease in inventories 351 173Decrease in trade and other receivables 2,022 323(Decrease)/increase in trade and other payables (866) 602--------------------------------------------------------------------------------Cash generated by operations 3,063 1,482UK corporation tax received/(paid) 97 (211)Interest paid (295) (322)--------------------------------------------------------------------------------Net cash generated from operating activities 2,865 949================================================================================Cash flows from investing activitiesSale of surplus properties 12 332Sale of non-current assets 1,589 -Acquisition of property, plant & equipment (826) (1,995)Acquisition of business - (3,102)Sale of other plant and equipment 42 46--------------------------------------------------------------------------------Net cash generated from/(used in) investing activities 817 (4,719)================================================================================Cash flows from financing activitiesIssue of share capital 17 4Dividends paid (453) (453)--------------------------------------------------------------------------------Net cash used in financing activities (436) (449)================================================================================Net decrease/(increase) in cash and bank overdrafts 3,246 (4,219)Cash and bank overdrafts at 1 January (6,565) (2,346)--------------------------------------------------------------------------------Cash and bank overdraft at end of period (3,319) (6,565)================================================================================Cash 301 196Overdraft (3,620) (6,761)--------------------------------------------------------------------------------Cash and bank overdraft at end of period (3,319) (6,565)================================================================================ Notes to the financial statements 1. Basis of preparation The consolidated financial statements have been prepared under InternationalFinancial Reporting Standards (IFRS) as adopted by the European Union. Allstandards and interpretations that have been issued and effective at the balancesheet date have been applied in the accounts. The financial statements have beenprepared under the historical cost convention. 2. Publication of non-statutory financial statements The financial information set out in this preliminary announcement does notconstitute statutory financial statements as defined in section 240 of theCompanies Act 1985. The statutory financial statements for the year ended 31 December 2007 areexpected to be posted to shareholders in due course and will be delivered to theRegistrar of Companies after they have been laid before the Company at theAnnual General Meeting planned for 1 May 2008. The auditors have not yetreported on the financial statements for the year ended 31 December 2007. Copieswill also be available from Robinson plc's registered office: Portland, GoytsideRoad, Chesterfield, S40 2PH and on the Group's website at www.r1son.co.uk. This information is provided by RNS The company news service from the London Stock Exchange