LONDON (ShareCast) - Shares in AIM-listed packaging group Robinson sank sharply on Wednesday after the company reported flat revenues and a sharp drop in profits in the first half, though it did say that current trends are pointing to an improvement in the second half.

The company specialises in custom injection-moulded plastic and rigid paperboard packaging, supplying a range consumer-market sectors including food and drink, toiletries and cosmetics and home care.

Both grocery and major brand sales came under pressure from discounters during the period, meaning that the 8% sales growth in the first quarter was reversed in the second, leading to a broadly unchanged top line of £10.9m in the six months to 30 June.

However, a number of factors dampened the bottom line: margins slipped as a result of cost increases that couldn't be passed on to customers, property rental income fell after the sale of a building in 2013, the prior year benefitted from non-repeating credits, while the acquisition of Polish plastic packaging group Madrox added to costs.

As such, pre-tax profits sank to just £0.3m in the first half, down from £2.2m previously. However, on an adjusted basis, Robinson said that underlying operating profits were "broadly comparable with the previous year".

Despite the tough first half, the company expressed its confidence in the future with a 12% increase in the interim dividend to 2.25p.

"Trends as we begin the second half indicate some improvement and, if sustained, we expect to show growth in sales in the underlying business by the end of this year," it said.

The stock was down 15.6% at 190p by 08:10.

BC

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