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packagingnews.co.uk
Robinson doubles profits after closing Canada arm
Plastic and paperboard packaging specialist Robinson has nearly doubled its pre-tax profits after the closure of its North American operation.
The Chesterfield-based firm reported that profit before tax was £1.7m in 2010 compared to £1m in 2009. Robinson closed its North American paperboard business in December 2010 “following losses driven largely by the relative strength of the Canadian dollar and weak US demand”.
Robinson said the profit result was influenced by an improvement in its gross margin from 19% to 20%, its overhead costs remaining flat and its notional finance income in respect of its pension fund incresing by £0.1m.
Group revenue also increased by 13% to £24.8m (2009: £21.9m) of which “almost half was the result of volume increases and the remainder a reflection of price increases to cover raw material costs”. The company said resin prices had increased to all-time highs but these costs had been passed on to its customers.
Robinson chairman Richard Clothier said: “We are pleased to report growth in 2010 and also that the current year has started better than last year, in line with management expectations. With the closure of the North American business, we are able to concentrate our efforts in Europe and we are confident that, unless market conditions deteriorate significantly, we will be able to make further progress in 2011.”
Speaking to Packaging News, Robinson chief executive Adam Formela added that he was encouraged by the UK market and said it was “still a relatively vibrant market”. He also said that the firm’s Canada arm, based in Toronto, did not fit into Robinson’s core strategy and was not suited “for us in the long-term”.
“The UK is a good opportunity area for growth as continental Europe is and we anticipate seeing growth in both of these areas.”
Formela also said that more brand owners are becoming “more green” and concentrating on lightweighting their products. He said some are starting to move from glass to paperboard, which has helped Robinson to grow.
He also explained that “volatile” resin price increases were a challenge for the firm and were “very difficult to manage”.
In its financial statement, the firm said that “progress so far in 2011 is in line with the Board’s expectations”. Robinson also said that “market conditions had remained stable for most of our customers”.
The firm said: “We remain consicious of the possible effects of economic trends and Government policy on our costs and consumer demand, but due to the Group’s exposure to the usually resilient food, drink and toiletry sectors we do not expect revenues to be greatly affected.”
Revenue £24.8m (2009: £21.9m)
Pre tax profit £1.7m (2009: £1.0m)
Operating profit £3.7m (2009: £3.6m)
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