Last checked at 23 Mar 2018 07:00
Robinson plc
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2017
Robinson plc ("Robinson" or the "Group" stock code: RBN), the custom manufacturer of rigid plastic and paperboard packaging based in Chesterfield, announces its audited results for the year ended 31 December 2017.
Highlights:
· Revenue increased by 9% to £29.8m (2016: £27.5m)
· Gross margin reduced from 23% to 19%
· Operating costs increased by £0.3m mainly because of investments in people
· Operating profit before exceptional items and amortisation of intangible assets reduced to £1.3m (2016: £2.1m)
· The Board recommends a final dividend for the year of 3.0p per share (2016: 3.0p) - the total dividend per share declared in respect of 2017 is 5.5p (2016: 5.5p)
· Triennial actuarial valuation of pension fund has concluded it remains in surplus
Commenting on the results, Chairman, Richard Clothier said:
"The Board's medium-term plan to strengthen the capabilities of the business by recruitment of people and investing in manufacturing capability coincided in 2016 with the effects of the earlier loss of two major pieces of business. The resulting drop in revenues and increase in expenses has made 2017 a particularly challenging transitional year, however, I am pleased to report that new business has been secured that has offset the previously lost trade and is the basis for growth that has started to come through.
New business now in the pipeline will require more investment in plant and this will use more of our borrowing capacity. Higher earnings to justify this will be essential and we are actively working to achieve the efficiencies that are needed to rebuild margins. This is receiving close attention and will take time but we do expect higher sales in 2018."
For more information please contact:
Robinson plc | |
Guy Robinson, Finance Director | Tel: 01246 389283 |
www.robinsonpackaging.com | |
finnCap | |
Ed Frisby / Giles Rolls, corporate finance Stephen Norcross / Sultan Awan, corporate broking | Tel: 020 7220 0500 |
Note for Editors:
Headquartered in Chesterfield, with manufacturing facilities in Kirkby-in-Ashfield, Stanton Hill (Nottinghamshire), Warsaw and Lodz (Poland), Robinson currently employs around 310 people. It was formerly a family business, with its origins dating back some 179 years. Today the Group's main activity is the manufacture and sale of injection and blow moulded plastic packaging. Robinson operates primarily within the food, household, drink, confectionery, cosmetic and toiletry sectors, providing niche or custom manufacture to major players in the fast-moving consumer goods market, such as Proctor & Gamble, McBride, Sonoco, Bakkavor, Two Sisters and British Pepper & Spice. The Group also has a substantial property portfolio with development potential.
Robinson plc, Chesterfield, S40 2AB, UK. Registered number 39811 (England) AIM code "RBN"
CHAIRMAN'S STATEMENT
The Board's medium-term plan to strengthen the capabilities of the business by recruitment of people and investing in manufacturing capability coincided in 2016 with the effects of the earlier loss of two major pieces of business. The resulting drop in revenues and increase in expenses has made 2017 a particularly challenging transitional year, however, I am pleased to report that new business has been secured that has offset the previously lost trade and is the basis for growth that has started to come through.
Revenues
The 9% increase in revenues to £29.8m is mainly attributable to exchange rate movements and increased resin prices which are passed on to our customers. Nevertheless, there has been some increase in volumes as the new business came into production and this is expected to become more evident in 2018.
Profits
The gross margin reduced from 23% to 19%, partly because of the lag effect of increasing resin prices passed on to our customers but also because of higher input costs, partly driven by the weakness of sterling and adverse product mix. Operating expenses increased by 8% (£0.3m) reflecting the investment in the new people we have recruited to deliver business growth. The result of these two effects is a reduction in operating profit before exceptional items and amortisation of intangible assets from £2.1m to £1.3m.
Cash, finances, dividend and pension
There was a net decrease in cash and cash equivalents of £2.0m in the year as we invested £3.2m (2016: £1.8m) in new plant and equipment to support new business and maintained the dividend at £0.9m (2016: £0.9m). Borrowings ended the year at £6.7m (2016: £5.8m), safely within our £10m facility and shareholders' funds increased from £22.6m to £23.1m. The Board proposes a final dividend of 3.0p per share to be paid on 1 June 2018 (2017: 3.0p) to shareholders on the register at the close of business on 18 May 2018. The ordinary shares become ex-dividend on 17 May 2018. This brings the total dividend declared in respect of 2017 to 5.5p per share (2016: 5.5p). The triennial actuarial valuation of our pension fund as at 5 April 2017 showed a surplus of 2%, whilst the IAS19 valuation at the year end reported a surplus of £8.5m (2016: £5.2m).
Property
Finding suitable buyers for the Boythorpe Works residential site and Walton Works mixed use site has been challenging in the current market. Large retail developments are now in low demand and residential development opportunities in the locality are in good supply.
Outlook
New business now in the pipeline will require more investment in plant and this will use more of our borrowing capacity. Higher earnings to justify this will be essential and we are actively working to achieve the efficiencies that are needed to rebuild margins. This is receiving close attention and will take time but we do expect higher sales in 2018.
Richard Clothier
Chairman
22 March 2018
Group income statement
FOR THE YEAR ENDED 31 DECEMBER
2017 | 2016 | ||||||||
£'000 | £'000 | ||||||||
Revenue | 29,813 | 27,459 | |||||||
Cost of sales | (24,035) | (21,201) | |||||||
Gross profit | 5,778 | 6,258 | |||||||
Operating costs | (4,457) | (4,120) | |||||||
Operating profit before exceptional items and amortisation of intangible assets | 1,321 | 2,138 | |||||||
Exceptional items | 65 | 190 | |||||||
Amortisation of intangible assets | (783) | (783) | |||||||
Operating profit after exceptional items | 603 | 1,545 | |||||||
Finance income - interest receivable | 1 | 6 | |||||||
Finance costs - bank interest payable | (104) | (122) | |||||||
Finance income in respect of pension fund | 130 | 189 | |||||||
Profit before taxation | 630 | 1,618 | |||||||
Taxation | (317) | (390) | |||||||
Profit attributable to the owners of the Company | 313 | 1,228 | |||||||
Basic earnings per share | 1.9p | 7.5p | |||||||
Diluted earnings per share | 1.9p | 7.3p | |||||||
Statement of comprehensive income
FOR THE YEAR ENDED 31 DECEMBER
2017 | 2016 | ||||||||
£'000 | £'000 | ||||||||
Profit for the year | 313 | 1,228 | |||||||
Items that will not be reclassified subsequently to profit or loss: | |||||||||
Re-measurement of net defined benefit liability | 61 | (3,774) | |||||||
Deferred tax relating to items not reclassified | (11) | 683 | |||||||
50 | (3,091) | ||||||||
Items that may be reclassified subsequently to profit or loss: | |||||||||
Exchange differences on translation of foreign operations | 818 | 766 | |||||||
Other comprehensive expense for the year | 868 | (2,325) | |||||||
Total comprehensive income for the year attributable to the owners of the Company | 1,181 | (1,097) | |||||||
Statement of financial position
AS AT 31 DECEMBER
2017 | 2016 | |||||
£'000 | £'000 | |||||
Non-current assets | ||||||
Goodwill | 1,115 | 1,115 | ||||
Other intangible assets | 5,089 | 5,872 | ||||
Property, plant and equipment | 17,011 | 14,834 | ||||
Deferred tax asset | 95 | 188 | ||||
23,310 | 22,009 | |||||
Current assets | ||||||
Inventories | 2,838 | 2,471 | ||||
Trade and other receivables | 9,905 | 8,722 | ||||
Cash | 283 | 881 | ||||
13,026 | 12,074 | |||||
Total assets | 36,336 | 34,083 | ||||
| ||||||
Trade and other payables | (5,612) | (4,518) | ||||
Corporation tax payable | (250) | (234) | ||||
Borrowings | (6,662) | (5,570) | ||||
(12,524) | (10,322) | |||||
Non-current liabilities | ||||||
Borrowings | - | (201) | ||||
Other payables | (87) | (78) | ||||
Deferred tax liabilities | (488) | (660) | ||||
Provisions | (181) | (185) | ||||
(756) | (1,124) | |||||
Total liabilities | (13,280) | (11,446) | ||||
Net assets | 23,056 | 22,637 | ||||
Equity | ||||||
Share capital | 83 | 82 | ||||
Share premium | 732 | 610 | ||||
Capital redemption reserve | 216 | 216 | ||||
Translation reserve | 964 | 146 | ||||
Revaluation reserve | 4,321 | 4,402 | ||||
Retained earnings | 16,740 | 17,181 | ||||
Equity attributable to shareholders | 23,056 | 22,637 | ||||
Statement of changes in equity
FOR THE YEAR ENDED 31 DECEMBER
Share capital | Share premium | Capital redemption reserve | Translation reserve | Revaluation reserve | Retained earnings | Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 January 2016 | 82 | 610 | 216 | (620) | 4,510 | 19,759 | 24,557 |
Profit for the year | 1,228 | 1,228 | |||||
Other comprehensive income/(expense) | 766 | (3,091) | (2,325) | ||||
Transfer from revaluation reserve as a result of property transactions | (123) | 123 | - | ||||
Tax on revaluation | 15 | 15 | |||||
Credit in respect of share based payments | 39 | 39 | |||||
Total comprehensive income for the year | - | - | - | 766 | (108) | (1,701) | (1,043) |
Dividends paid | (877) | (877) | |||||
Transactions with owners | - | - | - | - | - | (877) | (877) |
At 31 December 2016 | 82 | 610 | 216 | 146 | 4,402 | 17,181 | 22,637 |
Profit for the year | 313 | 313 | |||||
Other comprehensive income/(expense) | 818 | 50 | 868 | ||||
Transfer to revaluation reserve as a result of property transactions | (81) | 81 | - | ||||
Credit in respect of share based payments | 16 | 16 | |||||
Total comprehensive income for the year | - | - | - | 818 | (81) | 460 | 1,197 |
Shares issued | 1 | 122 | 123 | ||||
Dividends paid | (901) | (901) | |||||
Transactions with owners | 1 | 122 | - | - | - | (901) | (778) |
At 31 December 2017 | 83 | 732 | 216 | 964 | 4,321 | 16,740 | 23,056 |
Statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER
2017 | 2016 | ||||
£'000 | £'000 | ||||
Cash flows from operating activities | |||||
Profit for the year | 313 | 1,228 | |||
Adjustments for: | |||||
Depreciation of property, plant and equipment | 1,492 | 1,385 | |||
Profit on disposal of other plant and equipment | (85) | (189) | |||
Impairment/amortisation of goodwill and customer relationships | 783 | 932 | |||
Increase/(decrease) in provisions | (4) | 2 | |||
Other finance income in respect of Pension Fund | (130) | (189) | |||
Finance costs | 104 | 122 | |||
Finance income | (1) | (6) | |||
Taxation charged | 317 | 390 | |||
Other non-cash items: | |||||
Pension current service cost and expenses | 191 | 162 | |||
Charge for share options | 16 | 39 | |||
Operating cash flows before movements in working capital | 2,996 | 3,876 | |||
Increase in inventories | (263) | (399) | |||
(Increase)/decrease in trade and other receivables | (875) | 222 | |||
Increase/(decrease) in trade and other payables | 411 | (499) | |||
Cash generated by operations | 2,269 | 3,200 | |||
Corporation tax paid | (405) | (466) | |||
Interest paid | (104) | (122) | |||
Net cash generated by operating activities | 1,760 | 2,632 | |||
Cash flows from investing activities | |||||
Interest received | 1 | 6 | |||
Deferred consideration paid on acquisition | - | (4,265) | |||
Acquisition of plant and equipment | (2,614) | (1,782) | |||
Proceeds on disposal of property, plant and equipment | 151 | 481 | |||
Net cash used in investing activities | (2,462) | (5,560) | |||
Cash flows from financing activities | |||||
Loans repaid | (531) | (1,226) | |||
Shares issued | 123 | - | |||
Finance lease payments | (28) | - | |||
Dividends paid | (901) | (877) | |||
Net cash used in financing activities | (1,337) | (2,103) | |||
Net decrease in cash and cash equivalents | (2,039) | (5,031) | |||
Cash and cash equivalents at 1 January | (4,206) | 825 | |||
Effect of foreign exchange rate changes | 87 | - | |||
Cash and cash equivalents at 31 December | (6,158) | (4,206) | |||
Cash | 283 | 881 | |||
Overdraft | (6,441) | (5,087) | |||
Cash and cash equivalents at 31 December | (6,158) | (4,206) | |||
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 2017 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") as adopted by the EU, and interpretations issued by the IFRS Interpretations Committee, and Companies Act 2006 applicable to companies reporting under IFRS. The Group's financial statements are also consistent with IFRS as issued by the IASB as they apply to accounting periods ended 31 December 2017.
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 audit 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) and posted to shareholders on 17 April 2018. 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 at Chesterfield Football Club on 10 May 2018.
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.