Packaging giant forced to restructure amid tumbling first-half profits
£17m plastic and paperboard packaging manufacturer Robinson plc has warned that its profits for the first half of 2023 are likely to be “substantially below” last year’s tally and says it has implemented a restructuring program to help steady the ship.
In a statement to the London Stock Exchange, the company said that despite agreeing “substantial” price increases with customers, it had been unable to cover the full cost of inflation during the period due to an 11% dip in sales, 4% of which was caused by “a major UK customer experiencing a supply chain issue.”
The restructure is expected to produce around £700,000 of annual savings, £400,000 of which will benefit the company this year. The plan is anticipated to cost Robinson £400,000 to carry out, however.
It is unclear precisely what the move will entail.
In May, the Derbyshire firm offloaded a surplus property in Chesterfield for £700,000 – cash it promptly used to reduce its bank debt – and says it will look to develop its packaging business with funds generated from further property disposals over the next 12 months.
Given ongoing pressure on volumes, input prices and margins, Robinson said it would “continue to prioritise the management of costs and cashflow.” Its net debt at 31 May 2023 was £9.8m.
The company also says it is on the hunt for a new CEO after Dr Helene Roberts announced her intention to step down to pursue “a new opportunity.”
Senior independent director Sara Halton has been installed as interim CEO while the search for Roberts’ successor takes place.
Despite expectations that Robinson’s full-year adjusted operating profits will fall in line with guidance, the manufacturer’s share price dipped sharply on Thursday (22 June) off the back of the news.
Robinson is headquartered in Chesterfield and has operations in Kirkby-in-Ashfield, Poland and Denmark. It produces packaging for a range of sectors including food and drink, beauty, home care and the luxury gift market.
