Trading Statement

Robinson PLC

18 January 2024

 

Robinson plc                                                         

18 January 2024

YEAR END TRADING STATEMENT

Robinson plc ("Robinson", the "Company" or the "Group" stock code: RBN), the custom manufacturer of plastic and paperboard packaging based in Chesterfield, is pleased to issue the following trading statement, prior to the announcement of its final results for the year ended 31 December 2023, which are scheduled to be released on 22 March 2024.

Revenue for 2023 is anticipated to be £49.6m, which is 1.8% below the prior year. After adjusting for price changes and foreign exchange, sales volumes are 6% lower than in 2022. However, the Company is pleased to report that 2023 operating profit before exceptional items and amortisation of intangible assets is expected to be ahead of 2022, and in line with current market expectations.

We anticipated that sales volumes would come under further pressure because of inflation, the cost-of-living crisis, the de-listing of some products by our customers, and certain of our customers continuing to prioritise existing business over innovation projects, a characteristic which started during the Covid-19 pandemic. These factors have manifested in lower sales in 2023, notably in the first half of the financial year. As previously announced, with the lower demand and continued inflationary pressures, we implemented a restructuring program in June, which resulted in exceptional costs of c.£0.4m and annual savings of c.£0.7m, of which £0.4m benefited 2023.

We believe we have now passed the worst of the downturn with our customers; sales volumes in the second half of 2023 were 1% above the comparative period in 2022, as implemented new projects began to take effect. As a result of successful sales activity, we expect a substantial increase in sales volume in the plastics business in 2024.

Net debt at 31 December 2023 is expected to be £6.3m (31/12/2022: £9.2m) including the receipt of £0.7m proceeds on sale of surplus property and the return of the defined benefit pension escrow funds of £3.3m in the period.

Impact of Storm Babet

The Company announced on 24 October 2023 that the River Hipper, which flows through our premises in Chesterfield, had risen to its highest ever recorded level and flooded part of the site. Part of the premises are occupied by the Group, including the Paperbox manufacturing business and the Group head office; the remainder is let to tenants. The Paperbox business represented 4.5% of the Group's revenues in 2023 (2022: 4.0%). The Group's plastics business was unaffected.

Despite the substantial efforts of our employees, some damage was caused to facilities, materials and equipment and manufacturing operations were paused. Our insurance covers facilities, materials, equipment and business interruption, with an excess of £100,000. The insurers' liability for the loss was confirmed in November and subsequently an interim payment of £450,000 was received by Robinson in December. The impact on the 2023 results is expected to be an exceptional cost of £0.1m.

The majority of the cleaning activities are now complete, but on-site manufacturing continues to be disrupted due to the scale of the clean-up operations and complications in re-instating damaged plant and machinery. Customer orders are being met through sub-contracting.

CEO position

As previously announced, Dr Helene Roberts resigned as CEO and a Director of the Company on 1 September 2023, at which point Sara Halton assumed responsibility as the Interim CEO. The selection process is underway, and the Directors expect to make an announcement on the appointment of a permanent CEO in due course.

Property

As previously announced, part of the Walton Works surplus property in Chesterfield, known as "Mill Lane", was sold on 30 May 2023. The consideration of £0.7m was received in cash and used to reduce bank debt.

On 11 August 2023, the Company also exchanged contracts for the sale of c.1.3 acres of the Walton Works surplus property. Completion is subject to conditions, notably including satisfactory planning approval, and is currently expected to take up to 18 months. The consideration payable on completion would be £1.5m in cash, with estimated Company costs of £0.4m. The net proceeds of £1.1m would be used by the Company to reduce current bank debt or invested in the listed Walton Mill buildings to enhance their saleability. Including this property transaction, which is not yet completed, the Directors estimate that the current market value of the remaining surplus properties held by the Group is approximately £7.4m.

We expect further sales of surplus property in Chesterfield to be achieved in the next 12 months. The intention of the Group is, over time, to realise value from the disposal of surplus properties and use the proceeds to reduce indebtedness and develop our packaging business.

Defined benefit pension scheme

In December 2022, the Robinson & Sons' Limited Pension Fund (the "Scheme") completed a buy-in of all the Group's defined benefit pension scheme liabilities with a plan to complete a full buy-out during 2023. A data cleanse exercise was completed, and the administration and payroll functions were handed over to Legal and General Assurance Society Limited from 1 August 2023. Whilst the final buy-out has been delayed slightly, full completion is now expected to take place very shortly. Any surplus remaining in the Scheme after the full buy-out would be used to augment member benefits. Non-cash exceptional costs are estimated to be approximately £0.3m in 2023, including the costs of enhancing the benefits of active members and the expenses of moving towards buyout. These costs are payable by the Scheme but accounted for in the Company under IAS19.

As announced on 14 August 2023, the Company reached agreement with the trustees of the Scheme for the funds held in the pension escrow account, totalling c.£3.3m, to be returned to the Group (of which, £2.7m was already loaned to the Company), and this was included in the reduced net debt at 31 December 2023. The Group will recognise an exceptional profit of c.£3.3m for this item in its income statement for 2023.

2024 Outlook

Following improved momentum in the second half of 2023 and reflecting the effect of new customer projects and the full year impact of cost savings, the Company expects revenue, and operating profit (before amortisation of intangible assets and any exceptional items), for the 2024 financial year to be ahead of 2023.

Robinson plc	www.robinsonpackaging.com
Sara Halton, Interim CEO Mike Cusick, Finance Director	Tel: [phone]
Cavendish Capital Markets Limited
Ed Frisby / Seamus Fricker, Corporate Finance Tim Redfern, Corporate Broking	Tel: [phone]

About Robinson:

Being a purpose-led business, Robinson specialises in custom packaging with technical and value-added solutions for food and consumer product hygiene, safety, protection, and convenience; going above and beyond to create a sustainable future for our people and our planet. Its main activity is in injection and blow moulded plastic packaging and rigid paperboard luxury packaging, operating within the food and beverage, homecare, personal care and beauty, and luxury gift sectors. Robinson provides products and services to major players in the fast-moving consumer goods market including Procter & Gamble, Reckitt Benckiser, SC Johnson and Unilever.

Headquartered in Chesterfield, UK, Robinson has plants in the UK, Poland and Denmark. Robinson was formerly a family business with its origins dating back to 1839, currently employing nearly 400 people. The Group also has a substantial property portfolio with development potential.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU No. 596/2014) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

END