Robinson reinstates dividend, shares surge
Robinson has re-instated its dividend after the packaging specialist saw sales nudge ahead in the first half despite the impact of the Covid-19 pandemic.
Updating on trading ahead of the Chesterfield-based firm's annual general meeting, chairman Alan Raleigh said the outlook remained "uncertain" but that Robinson was confident it can "prosper" and continues "to explore and develop the opportunities that will emerge".
"In March we decided, because of the uncertainties facing the business due to the Covid-19 pandemic, not to declare a final dividend in respect of 2019 to conserve cash," it said. "As we have gained greater clarity on the impact on the business, the board is pleased to effectively reinstate this and announces a first 2020 interim dividend of 3.5p." That compares to 2019’s interim dividend of 3.5p.
As at 1230 BST, shares in Robinson - which supplies both retailers and consumer goods companies - had surged 17% to 102.0p.
Raleigh said the crisis had presented "both challenges and opportunities" for the firm. End consumer demand resulted in a net positive effect on sales, but plans to sell surplus properties were hit by the outbreak, and it now expects delays of at least six months.
However, despite the challenging market conditions, sales grew 5% in the first half, while margins "maintained the momentum experienced in the second half". Operating costs were also at a similar level, with a consequent increase in operating profits.
Russ Mould, investment director at AJ Bell, said: "Robinson may be not be a household name, but its profile may go up a notch or two after its decision to reinstate dividend payments.
"The company joined AIM in 2004 and has always made a dividend payment of some form or other, until the board felt obliged to cancel the final payment for 2019."
He added: "Income investors will draw comfort from the company’s ability to return to the dividend list so promptly, after over 380 individual dividend cut announcements so far in 2020, at a costs to shareholders of £32bn. However, not all firms will be as soundly financed as Robinson, or be as well positioned in relatively stable end markets."