Robinson Regulatory News (RBN)

24 Aug 2005 07:00

Robinson PLC24 August 2005 FOR IMMEDIATE RELEASE 24 August 2005 Robinson plc INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005 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 2005. Prior year figures havebeen restated to reflect new accounting reporting standards, particularly withrespect to the treatment of the Company's pension fund. Highlights: • Despite difficult market conditions, sales in the plastic packaging division increased by 6%, reflecting higher raw material and energy costs which were passed on to customers • Net new business gains in paperboard packaging, despite an ongoing strategic shift away from smaller customers • Improved margins in North America as a result of productivity gains • £1.3 million acquisition of factory site in Poland to supply existing and developing customer demand in the region • Profit after tax £272k (2004: £580k) • Interim dividend of 1.5p (2004: 1p) Commenting on the results, Chairman, Richard Clothier said: "With our commitment to product innovation, we are winning new business fromcustomers, despite higher production costs and the slowdown in the UK retailsector. With a stronger order book and price increases in place, we remainconfident of the seasonal improvement in the remainder of the year." "Robinson continues to invest in process improvements and automation, thebenefits of which yet are to be reflected in the financial results. Moreover,our entry into the Central European marketplace, we believe, represents asignificant opportunity for the Company in the medium term." About RobinsonBased in Chesterfield, and with additional manufacturing facilities inKirkby-in-Ashfield, Nottinghamshire, and in Toronto, Canada, Robinson currentlyemploys over 400 people. It was formerly a family business, with its originsdating back some 165 years. Today the Company's main activities are in themanufacture and sale of rigid paper packaging and injection moulded plasticpackaging. Robinson operates primarily within the food, drink, confectionery,cosmetic and toiletry sectors, providing niche or custom manufacture to majorplayers in the fast moving consumer goods market, such as Nestle, Lever Fabergeand Whyte & Mackay. The Company also has a substantial property portfolio withsignificant 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 Barry Saint, Arbuthnot Securities 020 7012 2000Sue Scott/Michael Padley, Bankside Consultants 020 7367 8888 CHAIRMAN'S STATEMENT I am pleased to report a satisfactory first half result in difficult marketconditions. The first half of the year is traditionally 'quieter' for ourpackaging businesses and the depressed retail sector, coupled with increased rawmaterial and energy costs, have been reflected in our results. The increase in sales is due largely to the pass through of increased rawmaterial prices. Underlying volumes were maintained as 2004 despite the retailslowdown particularly in the second quarter. Gross profit was reduced by theincreased raw material and energy costs that could not all be passed through tocustomers in the period, but was offset by productivity improvements. Overheadswere increased with extra spending on marketing and product innovation. Exceptional items included a profit of £311,000 on the sale of surplus plant andmachinery against which we spent £117,000 on acquisition costs for ourmanufacturing site in Poland and reviewing a potential acquisition in the UK. There have been a number of changes to the accounts as a result of the latestaccounting reporting standards and these have resulted in a restatement of thecomparative numbers. The biggest single change is to the treatment of ourpension fund. The fund is a separate entity but we are required to show thesurplus in the fund on Robinson's balance sheet. In addition, we are required toshow a notional interest credit in the profit & loss account to representearnings attributable to the surplus. The net effect of these adjustments hasbeen to add £3.7m to our shareholders' funds in the balance sheet (as at thestart of this year) and a further £0.3m to the profit after tax in the 6 monthsto June 2005. The fund was subject to its triennial actuarial valuation in Aprilthis year and, whilst it was still shown to be in a healthy position, thesurplus in the balance sheet was reduced by £1m, after allowing for increasedmortality rates. After these adjustments, the profit before tax reduced from £647,000 (last year)to £358,000 in the first half of this year. We invested £1.6m in the first half on capital equipment and working capitalincreased in line with seasonal patterns resulting in a reduction of cash andequivalents from £1.8m to £0.1m. Shareholders' funds overall reduced by 5%,which was almost entirely due to the reduction in the pension surplus. Robinson Plastic Packaging sales increased by 6% in the first half withunderlying volumes maintained at 2004 levels - the increase being driven byhigher plastic resin and electricity costs passed on to customers. Sales growthhas been achieved with several existing customers and we have acquired newbusiness worth around £0.5m per annum from Cryovac Sealed Air. The averagepurchase cost of plastic resins in the first half was 31% higher than theprevious year and our electricity prices increased by 22% in April. Most ofthese increases have been passed on to customers, although there has been someresultant margin erosion, which has partially been offset by productivityimprovements with investment in process improvements and automation. Over £1mwas spent in the first six months on capital equipment, including £318,000 for anew United Biscuits container and £200,000 on equipment for the Cryovac SealedAir business, the benefits of which may be expected in coming periods. Robinson Paperboard Packaging (UK) sales were down 4% mostly as a result of ourdecision to drop some smaller customers at the ends of 2003, which were stillrunning off in early 2004. This business normally experiences 'churn' each yearas customers launch and de-list products, particularly in the toiletries andcosmetics sector. This year is no exception, but so far we have managed to winmore business than has been lost. A patent is in application for a new productinnovation, the COOL-AIR tube, which was launched into Sainsbury's for apromotion of the Fetzer Rose wine brand. A new rectangular rigid box makingmachine was installed that will expand the range of boxes that we can produceand improve production efficiencies. Robinson Paperboard Packaging (North America) sales were at a similar level tothe previous year with slightly improved margins as a result of productivityimprovements. Major accounts have performed well but some business has been lostto competition from China. We have transferred a complete tube production linefrom Chesterfield to Toronto and this is being used to increase efficiencies andexpand sales opportunities. Ron Zieske, who had been President of this operationfor 6 years resigned to take up a position in a larger organisation in his hometown of Cleveland, Ohio and we have appointed a local man, Stephen Wilkie, totake over. Steve brings to Robinson over 20 years of paper packaging experienceand a successful record in general management. We have very recently announced the purchase for £1.3m of a factory site inPoland that we intend to adapt for the manufacture of plastic packaging productsfor manufacturers in Central Europe. This has been in response to some customersrelocating a part of their production to this developing region and which webelieve offers an opportunity for Robinson. Manufacturing will commence whenrelocation has been completed and is currently planned for the first quarter ofnext year. The site is 2.3 hectares with around 12,000 m2 of buildings, built inthe 1970's to 90's, located in Lodz - in the centre of Poland, around and closeto the proposed new motorway North-South/East-West intersection. Relocation andassociated costs could amount to £0.5m over the next two years. With a stronger order book and with price increases in place, we anticipate thatthe second half of the year will see at least its usual seasonal improvement,such that the overall performance in 2005 will be in line with our expectations. The Board has approved an interim dividend of 11/2 p per share, payable on 3October 2005 to shareholders registered on 2 September 2005. This is 50% higherthan the first interim dividend paid at the same time last year but, as statedin my review of the 2004 report and accounts, it is our intention to pay twodividends a year, the final dividend being in June 2006. Richard Clothier 24 August 2005ChairmanRobinson plc GROUP PROFIT AND LOSS ACCOUNTFOR THE SIX MONTHS ENDED 30 JUNE 2005 Notes Unaudited Unaudited Audited Six months Six months Year to to 30 June to 30 June 31 December 2005 2004 2004 (restated) (restated) £'000 £'000 £'000 Turnover 11,297 11,068 25,949Cost of sales (10,021) (9,730) (21,919) ------ ------ ------Gross profit 1,276 1,338 4,030 Overheads,excludingexceptionalitems (1,562) (1,344) (3,571) Exceptionalitems 3 194 (236) (430) Overheads 2 (1,368) (1,580) (4,001) ----- ------ ------- Operating (loss)/ (92) (242) 29profit Profit ondisposal ofland andbuildings - 236 236 ----- ----- ----- (Loss)/profit (92) (6) 265on ordinaryactivitiesbeforeinterest Interestreceived 20 133 146 Other financeincome inrespect ofPension Fund 430 520 1,040 ---- ---- -----Profit on 358 647 1,451ordinaryactivitiesbeforetaxation ---- ---- -----Taxation 4 (86) (67) (430) Profit on 272 580 1,021ordinaryactivitiesafter taxation Dividends (279) (228) (368) ---- ----- ----Retained (loss)/ (7) 352 653profit ===== ===== ==== Earnings perordinary share 5 1.71p 2.99p 6.41p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFOR THE SIX MONTHS ENDED 30 JUNE 2005 Unaudited Unaudited Audited Six months Six months Year ended to 30 June to 30 June 31 December 2005 2004 2004 (restated) (restated) £'000 £'000 £'000 Profit for the period 272 580 1,021Actuarial loss (959) (860) (1,721)Currency translationdifferences on foreigncurrency netinvestments - - (25) ----- ------ -------Total losses (687) (280) (725)recognised GROUP BALANCE SHEETAS AT 30 JUNE 2005 Unaudited Unaudited Audited Six months Six months to Year ended to 30 June to 30 June 31 December 2005 2004 2004 (restated) (restated) £'000 £'000 £'000 Tangible fixed assets 15,761 15,092 15,001 Current assetsStocks 2,546 2,551 1,640Debtors 6,013 5,439 5,437Current asset investments - - 1,002Cash at bank and in hand 85 811 813 ----- ----- ----- 8,644 8,801 8,892 Creditors: amounts fallingdue within one year (6,065) (5,858) (5,411) ------ ----- -----Net current assets 2,579 2,943 3,481 ------ ------ ------Total assets less current 18,340 18,035 18,482liabilities Provisions for liabilities (615) (714) (614) and charges ------ ------ ------ Net assets excluding pension 17,725 17,321 17,868asset Pension asset (net ofdeferred tax) 2,513 4,405 3,318 ------ ------ ------Net assets including pensionasset 20,238 21,726 21,186 Capital and reservesCalled up share capital 80 80 80Share premium account 398 398 398Capital redemption reserve 216 216 216Revaluation reserve 5,130 5,539 5,138Profit and loss account 14,414 15,493 15,354 ------ ------ ------Equity Shareholders' Funds 20,238 21,726 21,186 GROUP CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 30 JUNE 2005 Unaudited Unaudited Audited Six months Six months Year ended to 30 June to 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Cash inflow from operating activities Operating (loss)/profit (92) (242) 29Depreciation charges andwrite-down of fixed assets 813 913 1,795(Profit)/loss on sale ofother tangible fixed assets (311) 4 100Other non-cash items 236 203 423(Increase) in stocks (906) (947) (36)(Increase)/decrease indebtors (598) 86 448Increase/(decrease) increditors 654 330 (190)(Decrease)/increase inprovisions (22) 171 (40) Net cash (outflow)/inflow ---- --- -----from operating activities (226) 518 2,529 ===== === =====Returns on investments and servicing offinanceInterest received 22 177 194Interest paid - - (5) -- --- --- Net cash inflow from returns 22 177 189on investments and servicing == === ===of finance TaxationUK corporation tax refunded - 35 3 Capital expenditure and financial investmentAcquisition of tangiblefixed assets (1,592) (705) (1,596)Sale of non-operationalproperties - 686 686Sales of other tangiblefixed assets 345 17 60 ----- --- -----Net cash outflow from (1,247) (2) (850)capital expenditure and ======= === =====financial investment Equity dividends paid (279) (229) (368) ======= ==== =====Net cash (outflow)/inflow (1,730) 499 1,503before use of liquid ======= ==== =====resources and financing Management of liquid resourcesDecrease in short-term cashdeposits with UK banks 1,002 8,081 7,580 Net cash inflow frommanagement of liquid ----- ----- -----resources 1,002 8,081 7,580 ===== ===== ===== FinancingRepurchase of share capital - (8,997) (8,997) ----- ------- -------Net cash outflow from financing - (8,997) (8,997) ===== ======= =======(Decrease)/increase in cash (728) (417) 86 ===== ======= ======= Analysis of changes in cash during the year Balance at 30 June 2005 85 310 813Balance at 31 December 2004 813 727 727 ---- ---- ---Net cash (outflow)/inflow (728) (417) 86 ==== ==== === Notes to the financial statements 1. Basis of preparationThe interim report, for a 26 week period, which was approved by the directors on24 August 2004, does not comprise full accounts within the meaning of theCompanies Act 1985. The interim financial information is not audited. There havebeen three changes to accounting policies since 31 December 2004: a. The requirements of FRS17 on retirement benefits have been adopted in the primary statements. b. The cost of share options has been recognised in the profit and loss account in accordance with FRS 20. c. Dividends are now recognised when declared in accordance with FRS 21. In all other respects the interim financial information has been prepared on aconsistent basis using the same accounting policies set out in the auditedaccounts for the year to 31 December 2004. Comparative figures for the year ended 31 December 2004 have been extracted fromthe statutory accounts which have been filed with the Registrar of Companies andon which the auditors gave an unqualified report, restated for the changes toaccounting policies described above. 2. Overheads Unaudited Unaudited Audited Six months to Six months to Year to 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Selling, marketing anddistribution costs 653 513 1,191Administrative expensesincluding exceptional items 826 1,211 2,948Net income from letproperties (111) (144) (138) ----- ----- ----- 1,368 1,580 4,001 ===== ===== =====3. Exceptional items Unaudited Unaudited Audited Six months to Six months to Year to 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Profit on sale of machinery 311 - -Business start-up andacquisition costs (117) - (194)Costs of listing on AIM - (236) (236) ---- ----- ---- 194 (236) (430) ==== ===== ===== 4. TaxationThe taxation credit for the six months to 30 June 2005 has been calculated onthe basis of the estimated effective tax rate on profits before tax for the yearto 31 December 2005. 5. Earnings per shareThe calculation of earnings per ordinary share is based on profit on ordinaryactivities after taxation (£272,000) divided by the weighted average number ofshares in issue (15,918,501). 6. Interim ReportThe Interim Report will be posted to shareholders shortly and further copies areavailable from Robinson plc's Registered office: Bradbury House, Goytside Road,Chesterfield, S40 2PH. ENDS This information is provided by RNS The company news service from the London Stock Exchange