Robinson Regulatory News (RBN)

23 Aug 2006 07:01

Robinson PLC23 August 2006 FOR IMMEDIATE RELEASE 23 August 2006 Robinson plc INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 Robinson plc ("Robinson" or "the Company"; stock code: RBN), the custommanufacturer of paperboard and plastic packaging, has announced its unauditedinterim results for the six months ended 30 June 2006. Key features: • Sales up 4% to £11.8 million, partly reflecting higher input costs, which were passed on to customers, and volume growth in the plastics division • Exceptional costs of £661,000 (vs. exceptional income of £194,000 in 2005), as a result of investment in Lodz factory, the acquisition of Stanton Hill and reorganisation costs in paperboard • Pre-exceptional pre-tax loss of £715,000 (2005: £164,000 profit) • Interim dividend maintained at 1.5p per share Commenting on the results, Chairman, Richard Clothier said: "Despite a challenging operating environment during the first half of 2006,Robinson continues to make good progress towards our strategic objectives. Themost notable events this year have been the start-up of the new factory inPoland and the acquisition of a complementary injection-moulding business atStanton Hill. However the benefits of both initiatives will not be fullyreflected in the financial results until 2007." "Although the paperboard division is facing increasing competition in thecosmetic & toiletry sectors from producers in the Far East, the Board believesthat this will be more than offset by the growth expected in the plasticdivision." About Robinson Based in Chesterfield, and with additional manufacturing facilities inKirkby-in-Ashfield and in Stanton Hill, Nottinghamshire, in Toronto, Canada, andin Lodz, Poland, Robinson currently employs over 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 rigid paperpackaging and injection moulded plastic packaging. Robinson operates primarilywithin the food, drink, confectionery, cosmetic and toiletry sectors, providingniche or custom manufacture to major players in the fast moving consumer goodsmarket, such as Nestle, Lever Faberge and Chivas. The Company also has asubstantial property portfolio with significant development potential. For further information, please contact: Jon Marx, Chief Executive, Robinson plc 01246 220022Guy Robinson, Finance Director, Robinson plc 01246 220022 www.r1son.co.uk Sue Scott/Daniela Hale, Bankside Consultants 020 7367 8888 CHAIRMAN'S STATEMENT The 2006 interim results have been affected by the increases in raw material andenergy prices. Some of these cost increases have been recovered in price risesto our customers and this has contributed to the higher turnover, up 4 percent.The first half was also significantly affected by a loss of sales in thepaperboard businesses and the exceptional costs of developing the plasticsbusinesses. Although trading overall has resulted in a loss, there has been goodprogress on strategic developments. The increase in sales is also due to the first contribution from the StantonHill operation. This was acquired in May for £2.8 million with a further£300,000 purchase of assets in June. The costs of this purchase (£230,000),together with the start-up costs of establishing the new factory in Poland(£277,000) and the reorganisation costs in Paperboard (£154,000) make up theexceptional costs of £661,000. Last year we reported an exceptional profit of£311,000 on the sale of surplus plant and machinery. After a taxation credit of £402,000 (2005: £86,000 tax charge), the loss aftertax in the first half of this year was £974,000 (2005: £272,000 profit). TheStanton Hill acquisition and a further £1.6 million of capital expenditureincreased borrowings by £4.5 million to £6.8 million. Plastics Sales increased substantially in the first half, of which the majority wasvolume growth and the balance a pass through of input price rises. The growth isattributable to business gained during the second half of 2005 and furtherbusiness won in the UK in 2006 that will more than offset the business beingtransferred to Poland. Plastic resin prices increased by 24 percent in 2005 and by a further 7.5percent during the first half of 2006. In addition, after a 22 percent rise inelectricity prices last year, they have risen by a further 50 percent this year.Whilst these largely have been passed on, we have suffered some margin erosion.We continue to seek to offset this by productivity improvements throughautomation in the factory. On 4 May Robinson acquired the business of VR Plastics, based at Stanton Hill inNottinghamshire, for a cash consideration of £2.8 million, which broadly equatedto the book value of the assets which include a freehold property valued at £1.4million. This is a plastic injection moulding business, established in 1996, andwhose principal client is a major international branded goods company. StantonHill employs approximately 85 people at its premises 4 miles from our Kirkbyplant and broadly broke-even in the year to 31 December 2005 on sales of £4.7million. The acquisition is expected to be earnings enhancing in 2007. Costs of£230,000 relating to the acquisition have been written off in these accounts.Subsequent to the acquisition, we spent £300,000 on assets that were previouslyleased by VR Plastics. Stanton Hill is being integrated into our PlasticsDivision. During the first quarter of 2006 the first injection moulding machines weretransferred from Kirkby to the refurbished factory in Lodz and were successfullycommissioned. During the second quarter, we transferred further machines and wenow have all the necessary approvals to operate a high quality food packagingbusiness in Poland. The costs of setting up the business have been treated inthe accounts as exceptional during this phase. Production efficiencies arealready approaching the levels experienced at Kirkby and we are confident thisbusiness can make a significant contribution to the Group in future years. Paperboard Both the UK and Canadian paperboard operations have lost significant toiletryand cosmetic business to cheaper packaging formats available from China. Theoutlook made it necessary to reduce the cost base which has involved a number ofredundancies. The cost of these actions has been included in exceptional costsand the reorganisation will benefit the second half. We have recently gained newbusiness with a major international branded toiletries company which involvessimultaneously packing their products into our containers as they are made. The Canadian operation's fall in sales is a result of the loss of the toothwhitening strips business that was reported in our annual results. This wasexacerbated by the further strengthening of the Canadian dollar to a 30 yearhigh against the US dollar. Our costs are incurred in Canada whereas sales arelargely in US dollars. Property The addition of the Stanton Hill factory brings the total value of properties(at revaluation in 2003 or cost for later additions) to £13.3 million. Thisincludes around £5.5 million of properties not used in the business and which weare seeking to sell. Some of these are currently let out to tenants yielding agross rental income of £0.6 million. We remain at an advanced stage ofdiscussions for the sale of both the Walton Works site (8 acres) and theWheatbridge Mill site (1.5 acres), both of which are vacant. Proceeds will beused to reduce debt. Dividend The Board's approval of an interim dividend of 11/2 pence per share reflects ourview that the growth expected in Plastics from Stanton Hill and Lodz will morethan offset the adverse trends in Paperboard. The dividend is payable on 2October 2006 to shareholders registered on 1 September 2006. Outlook The Paperboard division's sales in the second half of the year are expected toreturn to the same level as last year and thus considerably strengthen thedepressed margins seen in this first half. Looking further ahead, Robinson'sstrategic focus remains on developing our packaging business in territories withwhich we are familiar. The initial response from our multinational customersindicates that we have achieved an early mover advantage in our shift ofproduction to Poland. In the UK, Robinson is focusing on product innovation, inboth paperboard and plastic, to maintain its competitive advantage. We continueto seek additional earnings-enhancing acquisitions, and the surplus propertyportfolio offers the potential to reduce debt as it is liquidated. Richard Clothier 23 August 2006ChairmanRobinson plc GROUP PROFIT AND LOSS ACCOUNTFOR THE SIX MONTHS TO 30 JUNE 2006 Notes Unaudited Unaudited Audited Six months Six months Year ended to 30 June to 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Turnover 11,777 11,297 26,648Cost of sales (11,097) (10,021) (22,512) ------ ------ ------Gross profit 680 1,276 4,136 Overheads, excluding exceptionalitems (1,705) (1,562) (3,608) Exceptional items 3 (661) 194 (9) ----- ----- -------Overheads 2 (2,366) (1,368) (3,617) ----- ------ -------Operating (loss)/profit (1,686) (92) 519 Interest (paid)/received (120) 20 (40)Other finance income in respect ofPension Fund 430 430 870 ----- ----- ------(Loss)/profit on ordinary (1,376) 358 1,349activities before taxation Taxation 4 402 (86) (320) ----- ----- ------(Loss)/profit on ordinary (974) 272 1,029activities after taxation ===== ===== ====== (Loss)/Earnings per ordinary share(p) 6 (6.1) 1.7 6.5 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFOR THE SIX MONTHS TO 30 JUNE 2006 Unaudited Unaudited Audited Six months Six months Year ended to 30 June to 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 (Loss)/profit for the period (974) 272 1,029Actuarial (loss)/gain in respect ofpension fund net of deferred tax (188) (959) 297Currency translation differences onforeign currency net investments - - 82 ------ ----- -----Total (losses)/profits recognised (1,162) (687) 1,408 ====== ===== ===== GROUP BALANCE SHEETAS AT 30 JUNE 2006 Unaudited Unaudited Audited Six months to Six months to Year ended 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Tangible fixed assets 20,222 15,761 17,440 Current assetsStocks 3,144 2,546 1,997Debtors 7,164 6,013 7,246Cash at bank and in hand 40 85 28 ----- ----- ----- 10,348 8,644 9,271 Creditors: amounts fallingdue within one year (14,014) (6,065) (8,588) ------ ----- -----Net current assets (3,666) 2,579 683 Total assets less current ------- ------ ------liabilities 16,556 18,340 18,123 Provision for liabilities (607) (615) (607) Net assets excluding pension ------ ------ ------asset 15,949 17,725 17,516Pension asset (net ofdeferred tax) 4,760 2,513 4,705 ------ ------ ------Net assets including pensionasset 20,709 20,238 22,221 Capital and reservesCalled up share capital 80 80 80Share premium account 398 398 398Capital redemption reserve 216 216 216Revaluation reserve 4,991 5,130 5,136Profit and loss account 15,024 14,414 16,391 ------ ------ ------Shareholders' Funds 20,709 20,238 22,221 ====== ====== ====== GROUP CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 30 JUNE 2006 Unaudited Unaudited Audited Six months to Six months to Year to 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Cash (outflow)/inflow from operatingactivities Operating (loss)/profit (1,686) (92) 519Depreciation charges and write-downof fixed assets 965 813 1,705Reversal of impairment of fixedassets - (296) (296)Profit on sale of other tangiblefixed assets - (15) (5)Write-off of acquired goodwill 155 - -Increase in stocks (940) (906) (357)Decrease/(increase) in debtors 794 (598) (1,732)Increase in creditors 867 654 928Decrease in provisions - (22) (7)Non-cash items: - Increase in net pension asset charged to operating profit 120 215 400 - Cost of share options 39 21 65 - Transfer to pension escrow account - - (822) Net cash inflow/(outflow) from --- ---- ----operating activities 314 (226) 398 Returns on investments and servicingof financeInterest received - 22 24Interest paid (58) - (62) ---- --- ----Net cash inflow from returns oninvestments and servicing of finance (58) 22 (38) Taxation ---- ---- ----UK corporation tax paid (2) - (229) Capital expenditure and financialinvestmentAcquisition of business (see note 5) (3,102) - -Acquisition of tangible fixed assets (1,640) (1,592) (4,119)Sale of other tangible fixed assets 247 345 315 ----- ------- ------Net cash outflow from capital (4,495) (1,247) (3,804)expenditure and financial investment Dividends paid (244) (279) (488) ----- ------- ------Net cash outflow before use ofliquid resources and financing (4,485) (1,730) (4,161) Management of liquid resourcesDecrease in short-term cash depositswith UK banks - 1,002 1,002 ------ ----- -----Net cash inflow from management ofliquid resources - 1,002 1,002 ----- ----- ------Decrease in cash (4,485) (728) (3,159) ====== ===== ====== Analysis of changes in cash duringthe year Balance at 31 December 2005 (2,346) 813 813Net cash outflow (4,485) (728) (3,159) ------ ----- ------Balance at 30 June 2006 (6,831) 85 (2,346) ====== ===== ====== Notes to the financial statements 1. Basis of preparation The interim report, for a 26 week period, which was approved by the directors on22 August 2006, does not comprise full accounts within the meaning of theCompanies Act 1985. The interim financial information is not audited. The interim financial information has been prepared on a consistent basis usingthe same accounting policies set out in the audited accounts for the year to 31December 2005. Comparative figures for the year ended 31 December 2005 have beenextracted from the statutory accounts which have been filed with the Registrarof Companies and on which the auditors gave an unqualified report. 2. Overheads Unaudited Unaudited Audited Six months to Six months to Year to 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Selling, marketing and distributioncosts 562 653 1,278Administrative expenses includingexceptional items 1,906 826 2,549Net income from let properties (102) (111) (210) ------ ----- ----- 2,366 1,368 3,617 ====== ===== ===== 3. Exceptional items Unaudited Unaudited Audited Six months to Six months to Year to 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Redundancies (154) - -Cost of acquisition of Stanton Hillbusiness (including write-off ofacquired goodwill) (230) - -Cost of setting up Polishmanufacturing facility (277) (70) (267)Reversal of impairment of fixedassets - 296 296Costs of aborted acquisition - (47) (38)Profit on sale of machinery - 15 - ----- ---- --- (661) 194 (9) ===== ==== === 4. Taxation The taxation credit for the six months to 30 June 2006 has been calculated onthe basis of the estimated effective tax rate on profits before tax for the yearto 31 December 2006. 5. Acquisition of business During the period the Company acquired part of the plastic injection mouldingbusiness of VR Plastics Ltd at Stanton Hill for a cash consideration of£3,102,000. The net assets acquired were as follows: Unaudited Six months to 30 June 2006 £'000Tangible fixed assets 2,425Stocks 207Debtors 315 ----- 2,947Goodwill 155 ----- 3,102 ===== The goodwill has been written off during the period. 6. Earnings per share The calculation of earnings per ordinary share is based on the loss on ordinaryactivities after taxation (£974,000) divided by the weighted average number ofshares in issue (15,919,243). 7. Interim Report The Interim Report will be posted to shareholders shortly and further copies areavailable from Robinson plc's Registered office: Bradbury House, Goyt Side Road,Chesterfield, S40 2PH. ENDS This information is provided by RNS The company news service from the London Stock Exchange