Robinson rallies as profits rise, outlook upbeat

Rigid plastic and paperboard packaging company Robinson reported an 8.7% jump in 2018 pre-tax profit on Friday, thanks in part to tighter control of operating costs, as it struck an upbeat note on the outlook for this year.

In the year to the end of December 2018, pre-tax profit rose to £685m from £630m in 2017, with revenue up 10% to £32.8m. Operating profit before exceptional items and amortisation of intangible assets increased to £1.5m from £1.3m, while operating costs declined by 2% to £4.37m.

Robinson said it had passed on some but not all input price increases to customers in a "very challenging" retail environment, leading to a drop in the gross margin to 18% from 19%.

The company recommended a final dividend of 3p a share, in line with 2017, taking the total dividend to 5.5p, also in line.

Chairman Alan Raleigh said: "I am pleased to report improved revenues and profits for 2018. This was achieved through greater focus on improved service to our customers, controlling material costs and managing overheads.

"We also agreed to a change in leadership to drive this even harder in 2019 and to engage more effectively in shaping the plastics sustainability agenda through our contribution to the circular economy.

"Consequently, we feel the business is in a much stronger position to face the challenges in front of us and we expect to achieve double-digit sales growth again in 2019. We also expect a marked step-up in profitability, ahead of market expectations, arising from our 'Strategy into Action' program which will drive faster, better execution of our plans. Central Europe will continue to play an important role in driving profitable growth."

Robinson said its pipeline of future business is now much stronger and more advanced than in previous years. This, along with even stronger customer partnerships, gives it confidence that it can achieve double-digit sales growth again in 2019.

At 1055 GMT, the shares were up 18% to 78p.