Robinson Regulatory News (RBN)

23 Mar 2007 07:00

Robinson PLC23 March 2007 FOR IMMEDIATE RELEASE 23 March 2007 Robinson plc PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 Robinson plc ("Robinson" or "the Group"; stock code: RBN), the custommanufacturer of paperboard and plastic packaging based in Chesterfield, hasannounced its audited results for the year ended 31 December 2006. Highlights: • 2006 has been a year of significant structural reorganisation of the business • The loss before tax was £1.2m (2005: profit £1.3m) • The acquisition of the Stanton Hill business from VR Plastics in 2006 increased total sales to £28.8m (2005: £26.6m). However, sales in the paperboard business declined from the previous year • Exceptional operating costs of £1.4m were incurred due to the acquisition of Stanton Hill, the establishment of the Polish manufacturing facility and redundancy and reorganisation costs • Net borrowings increased by £4.2m to £6.6m during the year, mainly as a result of the acquisition of Stanton Hill • Agreements, subject inter alia to planning consents, to sell surplus properties are expected to permit a reduction in borrowings in 2007 • The Board will be recommending a final dividend for the year of 1.75p per share (2005 final: 1.75p) Commenting on the results, Chairman, Richard Clothier, stated: "Robinson has responded quickly to adverse market trends and substantial changesin policy by some major customers. The prompt reorganisation undertaken in 2006by Jon Marx will allow his successor Adam Formela to concentrate on driving thebusiness forward." About Robinson Based in Chesterfield with additional manufacturing facilities inKirkby-in-Ashfield and Stanton Hill, Nottinghamshire, in Toronto, Canada, and inLodz, 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 Northern Foods, Premier International Foods, Unilever,Masterfoods, RHM, Cadbury, Kraft, United Biscuits, Nestle, and Pernod Ricard.The Company also has a substantial property portfolio with significantdevelopment potential. Adam Formela was appointed Chief Executive in February2007. For further information, please contact: Robinson plc 01246 220022Adam Formela, Chief Executive www.r1son.co.ukGuy Robinson, Finance Director Bankside ConsultantsSue Scott/Daniela Hale 020 7367 8888 CHAIRMAN'S STATEMENTSales Total sales were £2.2m higher than in the previous year. The growth wasattributable to the acquisition of the plastics business at Stanton Hill in May2006 (which contributed sales of £4.2m in 2006) which offset a decline in saleswithin the paperboard business. The sales from our newly established Polishplastic manufacturing business amounted to £0.9m and sales growth at our Kirkbyplant was sufficient to replace the business transferred to Poland. Paperboard revenues declined due to contract losses in the Drinks, Toiletriesand Food sectors in the UK whilst the North American business suffered from theloss of the packaging contract for tooth whitening strips. Most notable was theloss in the UK of the Goldenfry gravy granules tube contract worth £3m perannum, that we announced in November 2006. Trading Results There were very significant increases in input costs, with plastic polymerprices rising by 15% and energy costs by 50%, and the lag in passing thesethrough to our customers resulted in the gross margin falling from 16% to 9%.Our commitment to recover margins has contributed to some loss of business. Overheads were at a similar level to the previous year, although steps weretaken at the end of the year to reduce future costs in line with the anticipatedloss of business. The operating loss before exceptional items was £0.9m (2005:profit £0.5m). Exceptional operating costs of £1.4m incurred in 2006 included: • Redundancy costs of £0.5m and £0.3m of accelerated depreciation of fixed assets, mainly as a response to the loss of Goldenfry's business in Paperboard • The costs of setting up the Polish manufacturing facility, which were largely incurred in the first half of the year, amounting to £0.3m • £0.1m associated with the acquisition of Stanton Hill, including goodwill written off • £0.1m of tooling costs relating to a project that has not lived up to expectations The operating loss after exceptional items was £2.3m (2005: profit £0.5m). There was a profit on disposal of land and buildings which related in the mainto the sale of two residential properties amounting to £0.3m. Interest payable was £0.3m (2005: £0.04m), reflecting the investment in StantonHill and fixed assets (including Poland) in the period, coupled with the tradingloss. Other financial income in respect of the Pension Fund (FRS17) produced acredit of £1.1m compared with £0.9m in 2005: the increase was due to higherreturns on assets and lower scheme liabilities. The loss before taxation was £1.2m (2005: profit £1.3m). Cash & Finances Net bank borrowings increased by £4.2m to end the year at £6.6m. The acquisitionof the Stanton Hill plastics business totalled £3.1m, which included £1.4m inrespect of freehold land and buildings. Other capital expenditure was in linewith the annual depreciation figure and included investments in the new plasticsplant in Poland (£0.9m). Dividends The Board is recommending a final dividend of 1.75p per share (2005 final:1.75p) to be paid on 8 June 2007 to shareholders on the register at the close ofbusiness on 11 May 2007. Pensions Our pension fund remains in a healthy position. The latest actuarial valuationat 5 April 2005 indicated a surplus of 8%. The FRS17 valuation indicates thefund has assets with a market value of £56m and liabilities of £45m, giving asurplus of £11m in the fund at the end of 2006. The market value of assets roseby 7% in the year whilst liabilities remained static. At the end of the year,the Group had paid over contributions amounting to £999,000 into an escrowaccount which will either be paid to the pension fund or returned to the Groupdepending on the outcome of the actuarial valuation of the fund due in April2008. Property We are entering into agreements, completion of which is subject to obtaining thenecessary planning consents and certain other matters, to sell both the WaltonWorks (7.6 acres) and the Wheatbridge (1.5 acres) sites. If the planningapplications are successful and proceed according to our expected timetable thenwe should complete both contracts during 2007. The proceeds will be used to paydown our borrowings. Outlook The loss of the Goldenfry paperboard business, which accounted for over 10% ofthe Group turnover, is a significant loss. However, the action already taken toreduce operating costs will do much to mitigate this. We continue to seek todevelop the business both through organic growth and acquisition. Adam Formela,who was appointed Chief Executive in February, will bring a new perspective tothe management team and we expect to restore profitability in the coming year. Richard Clothier 23 March 2007ChairmanRobinson plc GROUP PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 DECEMBER 2006 Notes 2006 2005 £'000 £'000 Turnover 28,800 26,648Cost of sales (26,084) (22,512) ------ ------Gross Profit 2,716 4,136 ------ ------Net operating costs, excluding exceptional items (3,633) (3,608)Exceptional items (1,356) (9) ------ ------Net operating costs (4,989) (3,617) ------ ------Operating (loss)/profit (2,273) 519Profit on disposal of land and buildings 252 - ------ ------(Loss)/profit on ordinary activities before (2,021) 519interestInterest (335) (40)Other finance income in respect of pension fund 1,120 870 ------ -----(Loss)/profit on ordinary activities before (1,236) 1,349taxationTaxation 2 222 (320) ----- -----(Loss)/profit on ordinary activities after taxation (1,014) 1,029 ===== =====(Loss)/profit per 0.5p shareBasic and diluted (p) 4 (6.4) 6.5 All amounts relate to continuing operations The accounting policies and notes form an integral part of the financialstatements STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31 DECEMBER 2006 2006 2005 £'000 £'000 (Loss)/profit for the financial year (1,014) 1,029Actuarial gain in respect of the Pension Fund net ofdeferred tax 53 297Currency translation differences on foreign currencynet investments (111) 82 ----- ----- Total (losses)/gains recognised since last annual (1,072) 1,408report ===== ===== GROUP BALANCE SHEETAS AT 31 DECEMBER 2006 Notes 2006 2005 £'000 £'000 Fixed assetsIntangible assets - -Tangible fixed assets 19,380 17,440 ------ ------ 19,380 17,440 Current assetsStocks 2,031 1,997Debtors 7,701 7,246Cash 196 28 ----- ----- 9,928 9,271 Creditors: amounts falling due within one year (13,480) (8,588) ------- ------Net current (liabilities)/assets (3,552) 683 Total assets less current liabilities 15,828 18,123 Provisions for liabilities (394) (607) ------ ------Net assets excluding pension asset 15,434 17,516Pension asset (net of deferred tax) 5,345 4,705 ------ ------Net assets including pension asset 20,779 22,221 ====== ====== Capital and reservesCalled up share capital 80 80Share premium account 402 398Capital redemption reserve 216 216Revaluation reserve 4,880 5,136Profit and loss account 15,201 16,391 ------ ------Shareholders' Funds 6 20,779 22,221 ====== ====== GROUP CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2006 Notes 2006 2005 £'000 £'000 Cash inflow from operating activities Operating (loss)/profit (2,273) 519Depreciation charges and write-down of fixed assets 2,161 1,705Impairment/(reversal of impairment) of fixed assets 143 (296)Profit on sale of other tangible fixed assets (19) (5)(Decrease)/increase in stocks 173 (357)(Decrease)/increase in debtors 213 (1,732)Increase in creditors 620 928Decrease in provisions (44) (7)Non-cash items: - Increase in net pension asset charged to operating profit 440 4 - Goodwill written off 79 - - Cost of share options 79 65 - Transfer to pension escrow account (159) (822) ----- ----Net cash inflow from operating activities 1,413 398 ===== ==== Returns on investments and servicing of financeInterest received - 24Interest paid (335) (62) ----- -----Net cash outflow from returns on investments andservicing of finance (335) (38) ===== =====TaxationUK corporation tax (paid)/received (129) (229) ==== ====Capital expenditure and financial investmentAcquisition of business (3,102) -Acquisition of tangible fixed assets (1,995) (4,119)Sale of surplus properties 332 -Sales of other tangible fixed assets 46 315 ----- ------Net cash outflow from capital expenditure andfinancial investment (4,719) (3,804) ===== ====== Equity dividends paid (453) (488) Net cash outflow before use of liquid resources and ----- ------financing (4,223) (4,161) Management of liquid resourcesDecrease in short-term cash deposits with UK banks - 1,002 ----- -----Net cash inflow from management of liquid resources - 1,002 ===== ===== FinancingIssue of share capital 4 - ---- -----Net cash outflow from financing 4 - ----- ------Decrease in cash 7 (4,219) (3,159) ===== ====== Analysis of changes in cash during the yearBalance at 31 December (6,565) (2,346)Balance at 1 January (2,346) 813 ------ ------Net cash outflow (4,219) (3,159) ====== ====== Notes to the financial statements 1. Basis of preparation The accounts have been prepared under the historic cost convention as modifiedby the revaluation of freehold land and buildings. The Group's accounting policies have been applied on a consistent basis. 2. Taxation 2006 2005 £'000 £'000 Current tax:UK corporation tax @ 30% (2005: 30%) - 122Adjustments in respect of prior periods (38) (77)Overseas tax 7 6 ---- ---Total current tax (31) 51 ---- ---Deferred tax:UK tax @ 30% (191) 367Adjustments in respect of prior periods - (98) --- ---Total deferred tax (191) 269 ---- --- (222) 320 ==== === 3. Dividends 2006 2005 £'000 £'000 Ordinary: final 244 140 : interim 209 209 : second interim - 139 --- --- 453 488 === === A final dividend of 1.75p per ordinary share will be proposed at the AnnualGeneral Meeting. 4. Earnings per Share The calculation of basic and diluted earnings per ordinary share is based onprofit on ordinary activities after taxation (£1,014,000) divided by theweighted average number of shares in issue (15,921,372). 5. Reconciliation of movements in shareholders' funds 2006 2005 £'000 £'000Group (Loss)/profit after taxation for the financial year (1,014) 1,029Dividends (453) (488) ------- ----- (1,467) 541Actuarial gain 53 297Exchange difference on translation (111) 133Recognition of share based payments 79 65Share capital issued 4 - ----- -----Net(reduction in)/addition to shareholders' funds (1,442) 1,036Shareholders' funds at 1 January 22,221 21,185 ------ ------Shareholders' funds at 31 December 20,779 22,221 ====== ====== 6. Analysis of net debt At 1 January Cash At 31 December 2006 Flow 2006 £'000 £'000 £'000Cash in hand and deposits repayable ondemand 28 168 196Bank overdraft (2,374) (4,387) (6,761) ----- ----- -----Cash and cash equivalents (2,346) (4,219) (6,565) ===== ===== ===== 7. Publication of non-statutory accounts The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The summarised balance sheet at 31 December 2006 and the summarised profit andloss account, summarised cash flow statement and associated notes for the yearthen ended have been extracted from the Group's 2006 statutory financialstatements upon which the auditors opinion is unqualified and does not includeany statement under Section 237 of the Companies Act 1985. The accounts for the year ended 31 December 2006 are expected to be posted toshareholders in due course and will be delivered to the Registrar of Companiesafter they have been laid before the company at the Annual General Meetingplanned for 3 May 2007. Copies will also be available from Robinson plc'sregistered office: Bradbury House, Goytside Road, Chesterfield, S40 2PH. ENDS This information is provided by RNS The company news service from the London Stock Exchange