Robinson (RBN) makes plastic tubs and rigid boxes that hide food, drink and toiletries. Customers may be reporting soft demand for top-end products, but winning new contracts has generated double-digit sales growth and a recent property sale gives the company substantial fire-power for earnings-enhancing acquisitions.
Indeed, American packaging company Sonoco decided last month to exercise an option to buy Robinson's freehold property - known as Portland Works - for £4.25m. That generated an exceptional gain of around £1.1m and rather flattered the reported half-year results. Strip that out and operating profit still grew 10 per cent to just over £1m. But that takes into account a 21 per cent increase in net operating costs to £1.2m following a drive to beef up the sales and marketing teams. And management remain optimistic despite the likelihood that markets will remain subdued for the rest of the year. Earnings growth, however, will depend on what Robinson does with its substantial cash pile - broker WH Ireland forecasts year-end net cash of about £6m, worth almost 38p a share - and the subsequent impact on earnings. A number of European packaging businesses are thought to be on management's radar.
WH Ireland expects full-year adjusted pre-tax profit of £2.3m, giving adjusted EPS of 11p (from £2.4m and 10.9p in 2012).
ROBINSON (RBN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 159p | MARKET VALUE: | £25.3m | |
| TOUCH: | 155-162p | 12-MONTH HIGH: | 160p | Low: 114p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 151p* | NET CASH: | £1.1m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 9.5 | 0.65 | 2.3 | 1.75 |
| 2013 | 10.9 | 2.21 | 11.7 | 2.00 |
| % change | +14 | +241 | +409 | +14 |
Ex-div: 28 Aug Payment: 1 Oct | ||||
