Interim Results
Robinson PLC
22 August 2007
FOR IMMEDIATE RELEASE 22 August 2007
Robinson plc
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007
Robinson plc ('Robinson' or 'the Group'; AIM: RBN), the custom manufacturer of
paperboard and plastic packaging, has announced its unaudited interim results
for the six months ended 30 June 2007.
Key features:
• Revenues increased 3% to £12.1 million, thanks largely to the first
full-year contribution from the Stanton Hill business, acquired in May 2006;
• Gross profit margins improved by over 1 percentage point as a result
both of recouping raw material cost increases and operational efficiencies;
• Overall, Robinson swung from a pre-tax loss of £1.4 million in 2006 to a
pre-tax profit of £1.1 million in 2007, thanks to:
• Exceptional income of £1.1 million (vs. exceptional costs of £0.7 million
in 2006), due to profits on disposal of surplus property;
• Improved operational performance; and
• Reduced interest charges
• Interim dividend maintained at 1.5p per share
• These are the Group's first financial statements to be prepared
according to International Financial Reporting Standards ('IFRS'). This has
had a minimal impact on the Group P&L account but has reduced shareholders'
funds by £1 million due to full provisioning for deferred tax in the
revaluation reserve.
Commenting on the results, Chairman, Richard Clothier said:
'Given the backdrop of sustained increases in raw material and energy costs, it
is encouraging that we have been able to enhance the underlying profitability of
the business, as well as reducing indebtedness, over the period.'
'Our move to Poland is an example of our pre-emptive response to adverse market
trends which should facilitate profitable growth for Robinson longer term. The
surplus property portfolio continues to provide income and asset backing for the
Group and will, in time, be used to reduce debt and provide funding for further
expansion opportunities.'
About Robinson
Based in Chesterfield, and with additional manufacturing facilities in
Kirkby-in-Ashfield and in Stanton Hill, Nottinghamshire, in Toronto, Canada, and
in Lodz, Poland. Robinson currently employs over 400 people. It was formerly a
family business, with its origins dating back some 165 years. Today the Group's
main activities are in the manufacture and sale of injection moulded plastic and
rigid paperboard packaging. Robinson operates primarily within the food, 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, Nestle, Cadbury, Trebor Bassett, Masterfoods, Unilever, Avon
and Chivas. The Group also has a substantial property portfolio with significant
development potential.
For further information, please contact:
Robinson plc 01246 220022
Adam Formela, Chief Executive,
Guy Robinson, Finance Director, Robinson plc
www.r1son.co.uk
Bankside Consultants 020 7367 8888
Sue Scott/Louise Davis
CHAIRMAN'S STATEMENT
After a challenging year in 2006, I am pleased to report progress in improving
the profitability of the underlying packaging businesses and a reduction in
debt.
Revenue increased by 3% predominantly as a result of the full year effect of the
Stanton Hill acquisition (May 2006) which has more than offset the downturn in
the paperboard business. Gross margins have improved by 1 percentage point as we
have sought to recover material price increases from our customers combined with
cost reduction initiatives completed at the end of 2006.
The successful completion of the sale of one of our surplus properties has added
£1.2million to the profit before tax.
Overall, the pre-tax result improved from a loss of £1.4million in the first
half of 2006 to a profit of £1.1million in 2007. The major factors behind this
swing were:
• The profit on sale of surplus property - £1.2million
• A reduction in exceptional costs - £0.6million
• Improved operating results - £0.6million
• Net reduced financing costs - £0.1million
Capital expenditure of £0.5 million decreased in comparison to 2006 levels but
remained focused on the development of our plant in Poland. This, which was less
than the £1million depreciation charge for the period, combined with the
proceeds of the property sale, reduced the Group's net bank overdraft from
£6.7million at the start of the year to £4.3million at the interim stage.
The low tax charge for the period reflects the fact that the capital gain on the
sale of the surplus property has been offset by brought forward capital losses.
These are the first financial statements that the Group has prepared under the
IFRS convention. Details of the impact of the transition are included in the
notes attached. The effect on the profit and loss account is minor; however,
shareholders' funds in the balance sheet have been reduced by £1million as a
result of the full provision for deferred taxation on the revaluation of assets.
Plastics
Revenue increased by £2million in comparison with the prior-year period mainly
due to the acquisition of Stanton Hill in May 2006. The Stanton Hill business
continues to perform well and has benefited from extended business that was due
to transfer to our plant in Poland. Revenue for the Kirkby plastics business
unit was 7% down on the previous half year as we have not yet replaced the
business transferred from Kirkby to Poland in this period.
Plastic resin prices have increased by 24% in 2005, 15% in 2006 and by a further
12% to this half-year. It is anticipated that prices will remain high for the
rest of the year. Electricity prices in the UK have fallen back slightly
following an 83% increase in the past two years but remain at a significant
premium to those in Central Europe. The lag in recovering margins continues to
affect the results; however, some ground has been made up during the first half
of this year.
Paperboard
Revenue in the Paperboard businesses was £1.6million down on the same period
last year. This is predominantly due to loss of the gravy granule tube business
at the end of 2006. New business is being actively pursued for the Chesterfield
plant and we remain confident of progress in the second half.
Sales at Paperboard North America were £360,000 below the first half of 2006.
This has been due to a change in ownership of a major customer at the start of
the year resulting in some interruption to the supply chain. The strong Canadian
dollar relative to the weak US dollar continues to impact on our margins.
Property
During the first half we completed the sale of land at Wheatbridge Mills for
£1.6million. This resulted in a profit of £1.2million over book value. We remain
at an advanced stage for the sale of Walton Works site (8 acres) which is vacant
and this should complete, subject to planning, during the second half of 2007.
Proceeds will be used to reduce debt.
Management
Adam Formela took over as Chief Executive from Jon Marx in February this year.
Jon has agreed to remain an executive director until at least the end of 2007,
primarily to assist with the development of the Polish business.
Dividend
The Board has approved an unchanged interim dividend of 1.5 pence per share. The
dividend is payable on 1 October 2007 to shareholders registered on 31 August
2007.
Outlook
Revenues are normally stronger in the second half for our business and we
anticipate this will be the case in 2007. We continue to face challenges from
the volatility in input costs, our customers move to manufacturing offshore and
the need to innovate to improve our competitive position. Our move to Poland is
an example of our pre-emptive response to adverse market trends which should
facilitate profitable growth for Robinson longer term. The surplus property
portfolio continues to provide income and asset backing for the Group and will,
in time, be used to reduce debt and provide funding for further expansion
opportunities.
Richard Clothier 21 August 2007
Chairman
Robinson plc
GROUP INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Notes Unaudited Unaudited Unaudited
Six months Six months Year ended
to 30 June to 30 June 31 December
2007 2006 2006
£'000 £'000 £'000
Revenue 12,131 11,777 28,978
Cost of sales (10,759) (10,600) (25,724)
------- ------- -------
Gross profit 1,372 1,177 3,254
Operating costs (1,799) (2,202) (4,194)
------ ------ ------
Operating loss before
exceptional items (427) (1,025) (940)
Exceptional items 3 1,091 (661) (1,104)
----- ------ -------
Operating profit/(loss)
after exceptional items 664 (1,686) (2,044)
Finance costs (211) (120) (340)
Finance income in respect
of pension fund 636 430 1,120
---- ---- ------
Profit/(loss) before
taxation 1,089 (1,376) (1,264)
Taxation 4 (149) 416 250
---- ------ ------
Profit/(loss) after
taxation 940 (960) (1,014)
==== ===== =======
Earnings/(loss) per
ordinary share (basic and
diluted (p)) 6 11.8 (6.1) (6.4)
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Unaudited Unaudited Unaudited
Six months Six months Year ended
to 30 June to 30 June 31 December
2007 2006 2006
£'000 £'000 £'000
Actuarial (loss)/gain on retirement
benefit obligations (1,259) (188) 429
Currency translation differences 80 (119) 123
------ ----- ----
Net (expense)/income recognised
directly in equity (1,179) (307) 552
Profit/(loss) for the period 940 (960) (1,014)
------ ----- ------
Total recognised expense for the
period (239) (1,267) (462)
====== ====== ======
GROUP BALANCE SHEET
AS AT 30 JUNE 2007
Unaudited Unaudited Unaudited
Six months Six months Year ended
to 30 June to 30 June 31 December
2007 2006 2006
£'000 £'000 £'000
Non-current assets
Property, plant and
equipment 17,129 18,522 17,680
Intangible assets - - -
Pension asset 6,334 6,800 7,636
------- ------ ------
23,463 25,322 25,316
Current assets
Inventories 2,341 3,144 2,031
Trade and other receivables 5,207 6,261 7,076
Deferred taxation 619 903 625
Cash and cash equivalents 290 40 196
----- ------ -----
8,457 10,348 9,928
Non-current assets held for sale 1,250 1,700 1,700
------ ------ ------
Total assets 33,170 37,370 36,944
====== ====== ======
Current liabilities
Trade and other payables (5,923) (7,143) (6,719)
Bank overdraft (4,617) (6,871) (6,761)
------- -------- -------
(10,540) (14,014) (13,480)
Non-current liabilities
Provision for deferred
taxation (3,211) (3,534) (3,602)
Provision for liabilities (204) (252) (208)
-------- ------- -------
(3,415) (3,786) (3,810)
-------- ------- -------
Total liabilities (13,955) (17,800) (17,290)
-------- ------- -------
Net assets 19,215 19,570 19,654
======== ======= =======
Capital and reserves
Ordinary shares 80 80 80
Share premium account 402 398 402
Other reserves 3,839 4,267 4,185
Profit and loss account 14,894 14,825 14,987
------ ------ ------
Shareholders' Funds 19,215 19,570 19,654
====== ====== ======
GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Unaudited Unaudited Unaudited
Six months Six months Year to
to 30 June to 30 June 31 December
2007 2006 2006
£'000 £'000 £'000
Cash flows from operating activities
Profit/(loss) after taxation 940 (960) (1,014)
Adjustments for:
Depreciation charges and write-down
of fixed assets 1,027 965 1,986
Reversal of impairment of fixed
assets - - 317
Profit on disposal of land and
buildings (1,151) - (252)
Profit on sale of other tangible
assets - - (19)
Impairment of acquired goodwill - 155 79
Decrease in provisions (4) - (44)
Other finance income in respect of
Pension Fund (636) (430) (1,120)
Finance costs 211 120 340
Taxation charged/(credited) 149 (416) (250)
Non-cash items:
- Increase in net pension asset
charged to operating profit 139 120 440
- Cost of share options 46 39 79
Transfer to pension escrow account - - (159)
--- ---- ------
Operating cash flows before
movements in working capital 721 (407) 383
(Increase)/decrease in inventories (310) (940) 173
Decrease in trade and other
receivables 1,757 794 242
(Decrease)/increase in trade and
other payables (796) 867 620
----- --- -----
Cash generated by operations 1,372 314 1,418
UK Corporation tax received/(paid) 132 (2) (129)
Interest paid (211) (58) (340)
----- --- -----
Net cash generated from operating
activities 1,293 254 949
===== === =====
Cash flows from investing activities
Sale of surplus properties 1,601 - 332
Acquisition of tangible fixed assets (452) (1,640) (1,995)
Acquisition of business - (3,102) (3,102)
Sale of other tangible fixed assets 40 247 46
Issue of share capital - - 4
----- ------- -------
Net cash generated from/(used in)
investing activities 1,189 (4,495) (4,715)
===== ======= =======
Cash flows from financing activities
Dividends paid (244) (244) (453)
----- ----- ----
Net cash used in financing activities (244) (244) (453)
===== ===== ====
Net decrease/(increase) in cash,
cash equivalents and bank overdrafts 2,238 (4,485) (4,219)
Cash, cash equivalents and bank (6,565) (2,346) (2,346)
overdrafts at 1 January
------ ------ ------
Cash, cash equivalents and bank (4,327) (6,831) (6,565)
overdrafts at end of period ====== ====== ======
Notes to the financial statements
1. Basis of preparation
The interim report, for a 26 week period, which was approved by the directors on
21 August 2007, does not comprise full accounts within the meaning of the
Companies Act 1985. The interim financial information is not audited.
These interim financial statements adopt the recognition and measurement
requirements of those Standards expected to be applied in the Group's first
financial statements prepared under International Financial Reporting Standards
('IFRS'). The resulting accounting policies have been set out in note 8. A
reconciliation of equity and profit under UK GAAP with equity and profit under
IFRS is also presented in note 7.
Comparative figures for the year ended 31 December 2006 are based on the
statutory accounts prepared under UK GAAP which have been filed with the
Registrar of Companies and on which the auditors gave an unqualified report, as
adjusted for the first time adoption of IFRS.
The financial information set out in this interim report does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
Group's statutory financial statements for the year ended 31 December 2006,
prepared under UK GAAP, have been filed with the Registrar of Companies. The
auditors' report on those financial statements was unqualified and did not
contain a statement under Section 237(2) of the Companies Act 1985.
2. Group Income Statement
The directors have re-assessed the allocation of costs between cost of sales and
operating costs as a result of which prior year allocations have been re-stated
on a consistent basis.
3. Exceptional items
Unaudited Unaudited Unaudited
Six months to Six months to Year to
30 June 30 June 31 December
2007 2006 2006
£'000 £'000 £'000
Sale of surplus properties 1,151 - 252
Redundancies (60) (154) (465)
Reversal of impairment of fixed
assets - - (317)
Costs of setting up Polish
manufacturing facility - (277) (296)
Costs relating to acquisition of
Stanton Hill business - (230) (143)
Write-off of tooling costs - - (135)
------ ----- ------
(1,091) (661) (1,104)
====== ===== ======
4. Taxation
The taxation credit for the six months to 30 June 2007 has been calculated on
the basis of the estimated effective tax rate on profits before tax for the year
to 31 December 2007. The low taxation charge is due the utilisation of capital
losses brought forward in respect of the property gain.
5. Dividends
Six months to Six months to Year to
30 June 30 June 31 December
2007 2006 2006
£'000 £'000 £'000
Ordinary:
Final 244 244 244
Interim - - 209
--- --- ---
244 244 453
=== === ===
6. Earnings per share
The calculation of earnings per ordinary share is based on the loss on ordinary
activities after taxation (£940,000) divided by the weighted average number of
shares in issue (15,923,501).
7. First time adoption of IFRS
The following changes have been made to the profit and loss account and balance
sheet as a result of the adoption of IFRS:
IAS 12 Income taxes
Additional deferred tax has been provided on the revaluation of assets, which
now constitutes a taxable temporary difference.
IAS 19 Employee benefits
The pension asset is now shown gross of deferred tax, which has been added back
to the deferred tax balance.
IAS 21 The effects of changes in foreign exchange rates
The profit and loss accounts of the Group's foreign subsidiaries have been
translated at the average rate of exchange ruling during the period rather than,
as previously, the closing rate. Changes have also been made to reverse previous
cumulative exchange adjustments.
The effect of the changes on profit, on equity and on the other elements of the
Group's balance sheet at the opening balance sheet date for the comparative
figures, 1 January 2006, 30 June 2006 and 31 December 2006 are as follows:
Six months to Year to
30 June 31 December
2006 2006
£'000 £'000
Loss after taxation under UK GAAP (974) (1,014)
----- ------
IAS 12 - 28
IAS 21 14 (28)
-- ----
Total differences 14 -
----- ------
Loss after taxation under IFRS (960) (1,014)
===== ======
Balance sheet Balance sheet Balance sheet
at 31 December at 30 June at 1 January
2006 2006 2006
£'000 £'000 £'000
Shareholders' funds under UK
GAAP 20,779 20,709 22,221
IAS 12 (1,125) (1,139) (1,057)
------- ------ ------
Shareholders funds under IFRS 19,654 19,570 21,164
======= ====== ======
Pension asset under UK GAAP 5,345 4,760 4,705
IAS 19 2,291 2,040 2,016
----- ----- -----
Pension asset under IFRS 7,636 6,800 6,721
===== ===== =====
Provisions for deferred
taxation under UK GAAP 186 355 355
IAS 12 1,125 1,139 1,057
IAS 19 2,291 2,040 2,016
----- ----- -----
Provisions under IFRS 3,602 3,534 3,428
===== ===== =====
In accordance with IAS 7 the cash flow statement has been re-presented.
The Company has elected to implement the provisions of paragraph 17 of IFRS 1
and has included previously revalued land and buildings at deemed cost.
8. Accounting policies
The consolidated financial statements have been prepared under International
Financial Reporting Standards (IFRS) as adopted by the European Union. The
financial statements have been prepared under the historical cost convention.
Consolidation
The Group's financial statements consolidate the financial statements of
Robinson plc and all its subsidiaries. Subsidiaries are consolidated from the
date on which control transfers to the group and are included until the date on
which the group ceases to control them. Transactions between group companies are
eliminated on consolidation.
Revenue
Revenue comprises the fair value of the consideration received or receivable for
the external sales of products, exclusive of value added tax, other sales
related taxes and trade discounts and is recognised when goods have been
supplied.
Foreign currencies
Assets and liabilities of overseas subsidiaries are translated into sterling at
the rate of exchange ruling at the balance sheet date. The results and cash
flows of overseas subsidiaries are translated into sterling using the average
rate of exchange for the year. Exchange movements on the restatement of the net
assets of overseas subsidiaries and the adjustment between the profit and loss
account translated at the average rate and the closing rate are taken directly
to other reserves and reported in the statement of recognised income and
expense. All other exchange differences are dealt with through the consolidated
profit and loss account. By application of an exemption under IFRS1 the
cumulative translation differences for all foreign operations were deemed to be
zero at the transition date to IFRS.
Exceptional items
Exceptional items are disclosed separately on the face of the income statement.
They include any components of financial performance which management consider
significant to the Group's results and/or for which separate disclosure would
assist in better understanding these. Such items may include:
• Major restructuring or rationalisation programs
• The sale or impairment of tangible or intangible assets
• Other non-recurring items.
Property, plant and equipment
Property, plant and equipment are stated at cost less a provision for
depreciation. In the case of property this represents deemed cost less
accumulated depreciation to the date of transition to IFRS. Depreciation is
calculated so as to write off the cost less estimated residual values of the
assets in equal instalments over their expected useful lives. No depreciation is
provided on freehold land. Depreciation is provided on other assets at the
following rates:
Buildings 25 - 40 years
Plant and equipment 3 - 20 years
Non-current assets held for sale
Assets held for sale include assets that the group intends and expects to sell
within one year from the date of classification as held for sale. Assets
classified as held for sale are measured at the lower of their carrying amounts
immediately prior to their classification as held for sale and their fair value
less costs to sell. Assets classified as held for sale are not subject to
depreciation or amortisation.
Goodwill
Purchased positive goodwill arising on the acquisition of a business represents
the difference between the cost of acquisition and the fair value of the
identifiable net assets acquired. No intangible assets were acquired and the
goodwill arising on the acquisition of the Stanton Hill business of VR Plastics
Limited was written off as impaired in full during 2006.
Inventories
Inventories are valued at the lower of cost, including related overheads, and
net realisable value. Cost comprises direct materials and, where applicable,
direct labour costs and the overheads incurred in bringing items to their
present location and condition.
Financial assets
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method,
less any required allowances for uncollectible amounts.
Financial liabilities
Trade and other payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
Deferred taxation
Deferred taxation is provided on taxable and deductible temporary differences
between the carrying amounts of assets and liabilities in the financial
statements and their corresponding tax bases. Deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available against
which temporary differences can be utilised or that they will reverse. Deferred
tax is measured using the tax rates expected to apply when the asset is realised
or the liability settled based on tax rates enacted or substantially enacted by
the balance sheet date.
Employee benefits
The retirement benefit asset recognised in the balance sheet represents the fair
value of defined benefit fund assets less the present value of the defined
benefit obligation, to the extent that this is recoverable by means of a
contribution holiday, payment of money purchase contributions and expenses from
the fund. Operating costs comprise the current service cost. Finance income
comprises the expected return on fund assets less the interest on fund
liabilities. Actuarial gains or losses comprising differences between the actual
and expected return on fund assets, changes in fund liabilities due to
experience and changes in actuarial assumptions are recognised immediately in
the Statement of recognised income and expense.
Pension costs for the members of the money purchase section represent
contributions payable during the year.
Share based payments
The fair value at the date of grant of share options is calculated using the
Black-Scholes pricing model and charged to the profit and loss account on a
straight line basis over the vesting period of the award. The charge to the
profit and loss account takes account of the estimated number of share options
that will vest.
9. Interim Report
The Interim Report will be posted to shareholders shortly and further copies are
available from Robinson plc's Registered office: Bradbury House, Goyt Side Road,
Chesterfield, S40 2PH.
ENDS
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