A few years ago, we had some fun with this stock as it more than trebled, now the shares of Robinson at 117.50p, look ready for another run upwards, analyst TP is 149p

31.01.2025

I first spotted the shares of Robinson (LON:RBN) as an interesting situation way back in April 2020, just as Covid started to ravage the land, if not the globe.

The shares of the custom manufacturer of plastic and paperboard packaging group were then just 55.50p, with me setting a Target Price of 80p.

Within the next year they touched 173p, with subscribers able to have more than trebled their money.

The subsequent lockdowns impacted the group’s business, with its shares easing back to 75p by the end of 2022.

What appealed to me most when I first alighted on the group was its latent property value.

It had some surplus land and factory space that with planning permission being granted was worth considerably more than its book values.

In 2021 the group experienced £46.0m (£37.2m) sales but with adjusted pre-tax profits falling from £2.6m in 2020 to just £0.9m that year, slashing earnings from 13.5p to just 4.4p per share.

Since then, it has been on the recovery tack – and that advancing is well underway for the 2024 Trading Year results to be announced in March.

That is why alert investors should keep this stock on their ‘watch screens’ should they ease back from the 117.50p that they jumped to after last week’s Trading Update, there could well be some profit-taking and if so then subscribers should nip in and take a few out.

The Business

With its origins dating back to 1839, the Chesterfield-based group has manufacturing plants in the UK, Poland and Denmark.

It is a manufacturer specialising in custom packaging with technical and value-added solutions for food and consumer product hygiene, safety, protection, and convenience.

Its main activity is in injection and blow-moulded plastic packaging and rigid paperboard luxury packaging, operating within the food and beverage, homecare, beauty and personal care, and luxury gift sectors.

The group provides products and services to major players in the fast-moving consumer goods market including McBride, Procter & Gamble, Reckitt Benckiser, SC Johnson and Unilever.

Year End Trading Statement

Last Thursday morning, 23rd January, the group updated the market with guidance for its year to end-December 2024.

Revenue for 2024 is expected to be £56.5m, which is 14% ahead of the prior year.

After adjusting for price changes and foreign exchange, sales volumes are also 14% higher than in 2023.

The company reported that its 2024 operating profit before exceptional items and amortisation of intangible assets is expected to be significantly ahead of 2023, and moderately ahead of current market expectations.

Management Outlook

The group stated that its 2025 Trading Year will be following on from last year’s strong progress.

“Reflecting the effect of known new customer projects, the company expects revenue, and operating profit (before amortisation of intangible assets and any exceptional items), for the 2025 financial year to be ahead of 2024.”

The Equity

There are some 17,687,223 shares in issue, of which 933,778 are held in Treasury.

Larger holders include Guy Robinson, Director, with 1,372,527 shares (8.2%) and Peter Gyllenhammar AB holds 557,464 shares (3.33%).

Broker’s View

At Cavendish Capital Markets, its analyst Edward Stacey has upped his Target Price for the group’s shares from 135p to 149p following the Update.

For the 2024 year his increased estimates are for revenues of £56.5m (£49.7m), with adjusted pre-tax profits of £2.4m (£1.5m), earnings of 10.9p (7.5p) and paying a maintained 5.5p dividend per share.

The estimates for 2025 are for £58.0m sales, £2.5m profits, 11.5p earnings and that 5.5p dividend.

My View

This group is a little cracker, dealing with some major global nationals, while also having surplus property to sell off in due course.

I would expect Cavendish to revise upward their current year estimates, come the March Finals.

After the Update was announced the group’s shares rose from 107.50p to the current 117.50p and have held that price but on minimal dealing activity.

I would suggest that they could well slip back in price, enabling subscribers to take out a few ahead of the end March Final Results announcement.

I now set a new Target Price of 140p for the shares.

(Profile 02.04.2020 @ 55.50p set a Target Price of 80p*)

(Profile 31.01.2025 @ 117.50p set a Target Price of 140p)