Robinson plc                                                         

Interim Results for the six months ended 30 June 2024

and

Appointment of CEO

Robinson plc ("Robinson" the "Company" or the "Group" stock code: RBN), the custom manufacturer of plastic and paperboard packaging based in Chesterfield, announces its interim results for the six months ended 30 June 2024.

Financial

·    Revenue up 11% to £27.1m (2023: £24.3m)

·    Gross margin higher than the prior year at 21% (H1 2023: 18%)

·    Operating profit before exceptional items and amortisation of intangible assets increased to £1.6m (2023: £0.5m)

·    Exceptional costs of £0.1m (2023: £0.5m)

·    Profit before tax of £0.7m (2023: loss of £0.9m)

·    Interim dividend of 2.5p per share announced (2023: 2.5p)

·    Net debt of £7.9m (31/12/2023: £6.3m), after capital expenditure of £1.9m

Operational

·    John Melia to be appointed as Group CEO following thorough recruitment and selection process

·    Large project in Denmark now supplying substantial volumes

·    Doubled PET bottle capacity in UK business and implemented new business projects

·    Progress on ratio of recycled material content in our packaging to 24% (2023: full year 18%)

Alan Raleigh, Chairman, commented:

"The results for the first half of 2024 reflect the positive momentum that we have experienced since July 2023. Whilst market conditions remain challenging, I am very pleased that our approach to partnering with major fast moving consumer goods ("FMCG") brand owners, our investment in new technology and our ability to deliver packaging made from post-consumer recycled material is delivering increased sales volume and improved performance.

I am delighted that John Melia has chosen to join Robinson as our new Chief Executive. John is currently Director of Strategy and Innovation at DS Smith Recycling and has held senior positions at Tata Chemicals, where he oversaw major business transformation initiatives.  He has an in-depth understanding of what is required to drive shareholder value in a business like Robinson and we look forward to him joining the team in December. I would also like to place on record the Board's appreciation for the excellent contribution that Sara Halton has made as interim Chief Executive.

The Company expects revenue and profit for the 2024 financial year to be in line with current market expectations. We remain committed in the medium-term to delivering above-market profitable growth and our target of 6-8% adjusted operating margin^*."

*Operating profit margin before amortisation of intangible assets and exceptional items

INFORMATION REQUIRED UNDER RULE 17 AND SCHEDULE 2, PARAGRAPH (G) OF THE AIM RULES FOR COMPANIES ("AIM RULES")

There is no further information to be disclosed in relation to the appointment of John Melia pursuant to Rule 17 and Schedule 2, paragraph (g) of the AIM Rules.

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.

Chairman's Statement

Dear Shareholders

The results for the first half of 2024 reflect the positive momentum that we have experienced since July 2023. Whilst market conditions remain challenging, I am very pleased that our approach to partnering with major FMCG brand owners, our investment in new technology and our ability to deliver packaging made from post-consumer recycled material is delivering increased sales volume and improved performance.

Sales in the first half of the year are 11% above the comparative period in 2023. After adjusting for price changes and foreign exchange, sales volumes were 14% higher. Although the comparative reflects the cost-of-living crisis in 2023 and a major customer experiencing a supply chain issue, volumes in 2024 have benefitted from new business projects introduced in the last 12 months, including the previously announced large new project in Denmark. With a strong pipeline of further projects, we are well positioned for future sales growth.

The operational gearing effect of 14% higher sales volumes and lower rate of input cost inflation have led to improved gross margins of 21% (H1 2023: 18%) in the period. This is despite experiencing start-up issues with production on the project in Denmark which has led to higher direct costs in the short term.

Operating costs in the first half were £4.0m (2023: £4.0m) which was in line with 2023 and includes:

·    £0.2m of inflation in wages and salaries in response to market inflation and substantial mandatory minimum wage increases across our three countries of operation.

·    £0.1m of additional costs incurred in Denmark as part of the introduction of the large new business project.

·    Offset by the remaining £0.3m annual benefit of the restructuring program actioned in June 2023.

Operating profit before exceptional items and amortisation of intangible assets increased to £1.6m compared to the prior year (2023: £0.5m).

Including the exceptional items of £0.1m related to the ongoing costs of surplus property disposals and the closure of the defined benefit pension scheme, the Group made a profit before tax of £0.7m (2023: loss before tax £0.9m).

We have made important progress on raising our level of recycled material content; in the first half of the year 24% of material processed was from recycled sources (2023: full year 18%). Excluding products for food contact, where there is restrictive legislation, 32% of material processed was recycled material (2023: full year 24%). We expect that our pipeline of new projects will support a further increase in this ratio.

We continue to work with insurers on the reinstatement of the Paperbox business and the property in Chesterfield following the serious flood in October 2023. The offices refurbishment is expected to take a further six months, but the Paperbox business is close to full operation, with a healthy sales pipeline.

CEO position

I am very pleased to announce that John Melia has agreed to join the Company and Board as Chief Executive Officer, effective 1 December 2024.

John is an accomplished business leader who has a track record of delivery at senior level across both SMEs and multinational businesses. He brings extensive experience of business development, operational performance improvement, a deep understanding of the circular economy and significant manufacturing expertise.

John is currently Director of Strategy and Innovation at DS Smith Recycling and has held senior positions at Tata Chemicals, where he oversaw major business transformation initiatives. John has an MEng in Chemical Engineering from the University of Cambridge.

Sara Halton, who has served as Robinson plc Interim Chief Executive Officer since September 2023, will step down from that position and return to her Non-Executive Director role also effective 1 December 2024.

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. A data cleanse exercise was completed, the administration and payroll functions were handed over to Legal and General Assurance Society Limited ("L&G") from 1 August 2023 and a final balancing payment of £0.1m, was made by L&G to the Scheme on 19 February 2024, completing the buy-in process. A full buy-out is expected to be completed before the end of 2024, which will incur additional exceptional costs of up to £0.2m, whilst these costs are incurred and paid by the Scheme they are accounted for in the Company under IAS19. The £3.4m surplus remaining in the Scheme after buy-out costs, will be used to augment member benefits. In 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. Those funds were received and used to reduce net indebtedness.

Property

We are continuing to pursue the sale of surplus properties in Chesterfield. Based on professional independent valuations, the Directors estimate that the current market value of those properties is approximately £7.4m, and this includes the previously announced c.1.3 acres of Walton Works where exchange of contracts has occurred, and completion remains subject to satisfactory planning approval. The surplus properties and other UK land and buildings are pledged as security for Group credit facilities, of which £3.8m was drawn on 30 June 2024.

Subject to the necessary planning approvals, we would expect further sales of surplus property to be achieved in the next 12 months. The intention of the Group remains, over time, to realise value from the disposal of surplus properties and use the proceeds to reduce indebtedness and develop our packaging business.

Net debt and capital expenditure

Net debt has increased to £7.9m (31/12/2023: £6.3m) including capital expenditure of £1.9m (2023: £1.1m). With total credit facilities of £14.1m at 30 June 2024, the Group considers it has sufficient headroom for the foreseeable future.

Dividend

The Board has confidence in the medium-term prospects for the business and therefore announces that it intends to pay an interim dividend of 2.5p per share to be paid on 13 October 2024 to shareholders on the register at 20 September 2024 (record date). The ordinary shares ex-dividend date is 19 September 2024.

The current intention of the Board is to pay a total dividend of 5.5p (2023: 5.5p) per share for the year ending 31 December 2024.

Outlook

The Company expects revenue and profit for the 2024 financial year to be in line with current market expectations.

Our close partnerships with major customers have led to a significantly improved sales pipeline, which will lead to growth opportunities in future years. We will continue to focus on improving profitability across our operations as the effects of inflation subside and our premium brand owner customers respond to the new market situation.

We are progressing our surplus property disposal agenda, which along with the buy-out of the defined benefit pension scheme will reduce indebtedness and result in a simpler and more streamlined organisation which is able to compete and win in a volatile marketplace.

We remain committed in the medium-term to delivering above-market profitable growth and our target of 6-8% adjusted operating margin*.

Alan Raleigh

Chairman

14 August 2024

*Operating profit margin before amortisation of intangible assets and exceptional items