REG - Coral Products PLC - Trading Update

Coral ProductsAnnouncement

14/05/2020 09:45

RNS Number : 9046M
  
Coral Products PLC
  
14 May 2020
  
 

14 May 2020
CORAL PRODUCTS PLC
('Coral' or the 'Company' or the 'Group')
 
Trading Update - Year to 30 April 2020
 
The board of Coral Products PLC, a specialist in the design, manufacture and supply of plastic products is pleased to provide the following update to its previous announcement of 24 March 2020.
 
Summary of results
 
The board reports that on sales of circa £22.3m (2019: £24.7m) it expects, a small loss before taxation and intangibles for the full year and a small drop in EBITDA from the previous year as stated in our half-year statement, notwithstanding the negative effects of the ongoing Covid-19 crisis.
 
Operations
 
The unaudited annual results were marginally affected by the Covid-19 pandemic in March 2020 but a significant impact was noted in April 2020 as the following sales analysis shows:
 



April Sales as a % of Pre Covid-19 Average:
 


 




Group


70%








Coral Products (Mouldings) Ltd


90%


Injection and Blow Moulding




Interpack Ltd


60%


Food Packaging




Tatra Rotalac Ltd


60%


Extrusions




Global One Pak Ltd


40%


Nozzles, Sprays and Caps









 
We are planning for a medium-term level return of demand as a group of around 65% of pre Covid-19 levels though the mix may vary.
 
A good example is Global One Pak Ltd, who are reliant on Chinese imports, where management has moved quickly to change product mix and negotiated new supply terms with customers and suppliers resulting in a record order intake during late April 2020 for delivery from August 2020 and well into 2021.
 
As the restrictions on the general populace are eased, we believe there will be improved demand for our food packaging operations.
 
Moulding operations remain somewhat reduced as regards to injection moulding demand but this is being partially offset by an increased demand in blow moulding.
 
Extrusions is more difficult to forecast as this is determined by economic activity generally.
 
With the uncertainty remaining from the current pandemic we feel unable, with any confidence, to offer guidance for financial performance for the new financial year to 30 April 2021. We continue to monitor and update our performance and are encouraged by our Group's resilient performance to date.
 
Covid-19
 
We are grateful for the government support on offer and where appropriate have availed ourselves of the assistance offered by the payroll protection furlough scheme as well as VAT deferral.
 
Where possible we have also encouraged staff, who remain on the payroll to work from home.  All staff members and your board have reduced salaries by 20% for April 2020 and May 2020 which may continue subject to review.
 
In addition, we have negotiated capital holidays ranging from 3 to 6 months with the majority of our asset finance and other lenders. We appreciate this support.
 
We have negotiated a three-year CBIL (Coronavirus Business Interruption Loan) for £1 million pounds, with a 7-month capital repayment holiday, at an interest rate of 4.5% over base, 12 months interest free from the Company's existing bank - Barclays.  The existing security arrangements with Barclays will continue, no additional security has been provided by the Company.
 
The loan proceeds were received in our account on 13 May 2020.
 
 
We would like to express our thanks to our Barclays bank relationship counterparts whose guidance and assistance were invaluable.
 
Your board had already taken steps to improve the Company's working capital to aid our pre Covid-19 forecast demand by determining to sell and leaseback the freehold Haydock premises.  The subsequent crisis and the inability of surveyors and prospective purchasers to inspect has meant the sale is now on hold until the crisis passes.  The book value of this property is £2.5 million and carries a bank loan of £1.75 million.  The Company expect to realise sale proceeds in excess of the property's book value.
 
Outlook
 
The actions taken by the board, the continuing resilience of our employees and in the absence of any future government mandated shutdown, give us confidence that we have the means to come through this current crisis.
 
The board recognise its responsibility to provide safe and healthy working conditions to all of the Company's stakeholders and will work to ensure such conditions are forefront when we return to more normal working conditions.
 
We will continue to monitor the performance of our Group and the economic circumstances in general as this crisis unfolds. We will provide updates to the market as appropriate.
 
 
 
This announcement contains inside information for the purpose of Article 7 of the EU Regulation 596/2014 and has been arranged for release by Sharon Gramauskas, Finance Director of the Company.
 
 
For further information, please contact:
 



Coral Products plc
Michael (Mick) Wood, Chief Executive Officer              
 


 
Tel: 07788 565 154
 




Nominated Adviser & Broker
Cairn Financial Advisers LLP
Liam Murray
Tony Rawlinson
David Lawman (Corporate Broking)


 
Tel: 020 7213 0880













 


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