Robinson PLC 24 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 custom manufacturer of paperboard and plastic packaging, has announced its unaudited interim results for the six months ended 30 June 2005. Prior year figures have been restated to reflect new accounting reporting standards, particularly with respect 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 from customers, despite higher production costs and the slowdown in the UK retail sector. With a stronger order book and price increases in place, we remain confident of the seasonal improvement in the remainder of the year." "Robinson continues to invest in process improvements and automation, the benefits of which yet are to be reflected in the financial results. Moreover, our entry into the Central European marketplace, we believe, represents a significant opportunity for the Company in the medium term." About Robinson Based in Chesterfield, and with additional manufacturing facilities in Kirkby-in-Ashfield, Nottinghamshire, and in Toronto, Canada, Robinson currently employs over 400 people. It was formerly a family business, with its origins dating back some 165 years. Today the Company's main activities are in the manufacture and sale of rigid paper packaging and injection moulded plastic 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 Nestle, Lever Faberge and Whyte & Mackay. The Company also has a substantial property portfolio with significant development potential. For further information, please contact: Jon Marx, Chief Executive, Robinson plc 01246 220022 Guy Robinson, Finance Director, Robinson plc 01246 220022 www.r1son.co.uk Barry Saint, Arbuthnot Securities 020 7012 2000 Sue Scott/Michael Padley, Bankside Consultants 020 7367 8888 CHAIRMAN'S STATEMENT I am pleased to report a satisfactory first half result in difficult market conditions. The first half of the year is traditionally 'quieter' for our packaging businesses and the depressed retail sector, coupled with increased raw material and energy costs, have been reflected in our results. The increase in sales is due largely to the pass through of increased raw material prices. Underlying volumes were maintained as 2004 despite the retail slowdown particularly in the second quarter. Gross profit was reduced by the increased raw material and energy costs that could not all be passed through to customers in the period, but was offset by productivity improvements. Overheads were increased with extra spending on marketing and product innovation. Exceptional items included a profit of £311,000 on the sale of surplus plant and machinery against which we spent £117,000 on acquisition costs for our manufacturing 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 latest accounting reporting standards and these have resulted in a restatement of the comparative numbers. The biggest single change is to the treatment of our pension fund. The fund is a separate entity but we are required to show the surplus in the fund on Robinson's balance sheet. In addition, we are required to show a notional interest credit in the profit & loss account to represent earnings attributable to the surplus. The net effect of these adjustments has been to add £3.7m to our shareholders' funds in the balance sheet (as at the start of this year) and a further £0.3m to the profit after tax in the 6 months to June 2005. The fund was subject to its triennial actuarial valuation in April this year and, whilst it was still shown to be in a healthy position, the surplus in the balance sheet was reduced by £1m, after allowing for increased mortality 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 capital increased in line with seasonal patterns resulting in a reduction of cash and equivalents 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 with underlying volumes maintained at 2004 levels - the increase being driven by higher plastic resin and electricity costs passed on to customers. Sales growth has been achieved with several existing customers and we have acquired new business worth around £0.5m per annum from Cryovac Sealed Air. The average purchase cost of plastic resins in the first half was 31% higher than the previous year and our electricity prices increased by 22% in April. Most of these increases have been passed on to customers, although there has been some resultant margin erosion, which has partially been offset by productivity improvements with investment in process improvements and automation. Over £1m was spent in the first six months on capital equipment, including £318,000 for a new United Biscuits container and £200,000 on equipment for the Cryovac Sealed Air business, the benefits of which may be expected in coming periods. Robinson Paperboard Packaging (UK) sales were down 4% mostly as a result of our decision to drop some smaller customers at the ends of 2003, which were still running off in early 2004. This business normally experiences 'churn' each year as customers launch and de-list products, particularly in the toiletries and cosmetics sector. This year is no exception, but so far we have managed to win more business than has been lost. A patent is in application for a new product innovation, the COOL-AIR tube, which was launched into Sainsbury's for a promotion of the Fetzer Rose wine brand. A new rectangular rigid box making machine was installed that will expand the range of boxes that we can produce and improve production efficiencies. Robinson Paperboard Packaging (North America) sales were at a similar level to the previous year with slightly improved margins as a result of productivity improvements. Major accounts have performed well but some business has been lost to competition from China. We have transferred a complete tube production line from Chesterfield to Toronto and this is being used to increase efficiencies and expand sales opportunities. Ron Zieske, who had been President of this operation for 6 years resigned to take up a position in a larger organisation in his home town of Cleveland, Ohio and we have appointed a local man, Stephen Wilkie, to take over. Steve brings to Robinson over 20 years of paper packaging experience and a successful record in general management. We have very recently announced the purchase for £1.3m of a factory site in Poland that we intend to adapt for the manufacture of plastic packaging products for manufacturers in Central Europe. This has been in response to some customers relocating a part of their production to this developing region and which we believe offers an opportunity for Robinson. Manufacturing will commence when relocation has been completed and is currently planned for the first quarter of next year. The site is 2.3 hectares with around 12,000 m2 of buildings, built in the 1970's to 90's, located in Lodz - in the centre of Poland, around and close to the proposed new motorway North-South/East-West intersection. Relocation and associated costs could amount to £0.5m over the next two years. With a stronger order book and with price increases in place, we anticipate that the 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 3 October 2005 to shareholders registered on 2 September 2005. This is 50% higher than the first interim dividend paid at the same time last year but, as stated in my review of the 2004 report and accounts, it is our intention to pay two dividends a year, the final dividend being in June 2006. Richard Clothier 24 August 2005 Chairman Robinson plc GROUP PROFIT AND LOSS ACCOUNT FOR 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 25,949 Cost of sales (10,021) (9,730) (21,919) ------ ------ ------ Gross profit 1,276 1,338 4,030 Overheads, excluding exceptional items (1,562) (1,344) (3,571) Exceptional items 3 194 (236) (430) Overheads 2 (1,368) (1,580) (4,001) ----- ------ ------- Operating (loss)/ (92) (242) 29 profit Profit on disposal of land and buildings - 236 236 ----- ----- ----- (Loss)/profit (92) (6) 265 on ordinary activities before interest Interest received 20 133 146 Other finance income in respect of Pension Fund 430 520 1,040 ---- ---- ----- Profit on 358 647 1,451 ordinary activities before taxation ---- ---- ----- Taxation 4 (86) (67) (430) Profit on 272 580 1,021 ordinary activities after taxation Dividends (279) (228) (368) ---- ----- ---- Retained (loss)/ (7) 352 653 profit ===== ===== ==== Earnings per ordinary share 5 1.71p 2.99p 6.41p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR 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 1,021 Actuarial loss (959) (860) (1,721) Currency translation differences on foreign currency net investments - - (25) ----- ------ ------- Total losses (687) (280) (725) recognised GROUP BALANCE SHEET AS 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 assets Stocks 2,546 2,551 1,640 Debtors 6,013 5,439 5,437 Current asset investments - - 1,002 Cash at bank and in hand 85 811 813 ----- ----- ----- 8,644 8,801 8,892 Creditors: amounts falling due 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 18,482 liabilities Provisions for liabilities (615) (714) (614) and charges ------ ------ ------ Net assets excluding pension 17,725 17,321 17,868 asset Pension asset (net of deferred tax) 2,513 4,405 3,318 ------ ------ ------ Net assets including pension asset 20,238 21,726 21,186 Capital and reserves Called up share capital 80 80 80 Share premium account 398 398 398 Capital redemption reserve 216 216 216 Revaluation reserve 5,130 5,539 5,138 Profit and loss account 14,414 15,493 15,354 ------ ------ ------ Equity Shareholders' Funds 20,238 21,726 21,186 GROUP CASH FLOW STATEMENT FOR 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) 29 Depreciation charges and write-down of fixed assets 813 913 1,795 (Profit)/loss on sale of other tangible fixed assets (311) 4 100 Other non-cash items 236 203 423 (Increase) in stocks (906) (947) (36) (Increase)/decrease in debtors (598) 86 448 Increase/(decrease) in creditors 654 330 (190) (Decrease)/increase in provisions (22) 171 (40) Net cash (outflow)/inflow ---- --- ----- from operating activities (226) 518 2,529 ===== === ===== Returns on investments and servicing of finance Interest received 22 177 194 Interest paid - - (5) -- --- --- Net cash inflow from returns 22 177 189 on investments and servicing == === === of finance Taxation UK corporation tax refunded - 35 3 Capital expenditure and financial investment Acquisition of tangible fixed assets (1,592) (705) (1,596) Sale of non-operational properties - 686 686 Sales of other tangible fixed 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 1,503 before use of liquid ======= ==== ===== resources and financing Management of liquid resources Decrease in short-term cash deposits with UK banks 1,002 8,081 7,580 Net cash inflow from management of liquid ----- ----- ----- resources 1,002 8,081 7,580 ===== ===== ===== Financing Repurchase 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 85 310 813 Balance at 31 December 2004 813 727 727 ---- ---- --- Net cash (outflow)/inflow (728) (417) 86 ==== ==== === Notes to the financial statements 1. Basis of preparation The interim report, for a 26 week period, which was approved by the directors on 24 August 2004, does not comprise full accounts within the meaning of the Companies Act 1985. The interim financial information is not audited. There have been 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 a consistent basis using the same accounting policies set out in the audited accounts for the year to 31 December 2004. Comparative figures for the year ended 31 December 2004 have been extracted from the statutory accounts which have been filed with the Registrar of Companies and on which the auditors gave an unqualified report, restated for the changes to accounting 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 and distribution costs 653 513 1,191 Administrative expenses including exceptional items 826 1,211 2,948 Net income from let properties (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 and acquisition costs (117) - (194) Costs of listing on AIM - (236) (236) ---- ----- ---- 194 (236) (430) ==== ===== ===== 4. Taxation The taxation credit for the six months to 30 June 2005 has been calculated on the basis of the estimated effective tax rate on profits before tax for the year to 31 December 2005. 5. Earnings per share The calculation of earnings per ordinary share is based on profit on ordinary activities after taxation (£272,000) divided by the weighted average number of shares in issue (15,918,501). 6. Interim Report The Interim Report will be posted to shareholders shortly and further copies are available 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