REG - Coral Products PLC - Final results for year ended 30 April 2022
07/09/2022 07:00
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RNS Number : 5040Y Coral Products PLC 07 September 2022
7 September 2022
CORAL PRODUCTS PLC
('Coral' or the 'Company' or the 'Group')
Final results for year ended 30 April 2022
Coral Products PLC, a specialist in the design, manufacture and supply of
injection moulded plastic products based in Wythenshawe, Manchester, announces
its audited final results for the year ended 30 April 2022.
KEY FINANCIALS
2022 2021
£
Group revenue on continuing activities 14,391,000 10,714,000
Underlying operating profit* 1,574,000 867,000
Separately disclosed non-cash items (348,000) (292,000)
Gross Margin 36.7% 35.5%
Underlying Profit for the year before taxation* 1,492,000 756,000
Profit/(loss) for the year before taxation 1,330,000 (316,000)
Underlying EBITDA* 1,779,000 1,284,000
EBITDA 1,944,000 496,000
Basic earnings per share 1.19p (0.29)p
Diluted earnings per share 1.17p (0.29)p
Dividend paid per share for year ended April 2022 0.50p 0.00p
Dividend paid per share for year ended April 2021 1.00p -
* Underlying results are reported before separately disclosed items, as shown
in note 2. Such underlying results are not intended to be a substitute for, or
superior to, IFRS measures of profit.
HEADLINES
· Much improved performance in our continuing operations during the
year.
· Underlying operating profit increased to £1.6m (2021: £0.9m) and
underlying EBITDA increased to £1.8m (2021: £1.3m).
· Gross margin increased to 36.7% (2021: 35.5%).
· The sale of the land and buildings at Haydock completed bringing in
a further £3.5m of cash.
· Cash reserves in the Group total £7.6m (2021: £3.8m).
· An interim dividend of 0.5p per share was paid on 3 December 2021
with a further 0.4p per share paid on 1 June 2022. A final dividend of 0.2p is
proposed to be paid on 30 November 2022, making a full year dividend of 1.1p
(2021: 1.0p) per share.
POST YEAR END HEADLINES
· Acquisition of Film and Foil on 4 May 2022 for a total
consideration of £3,000,000.
· Acquisition of Alma on 30 May 2022 for a total consideration of
£1,500,000.
· Review of all group energy contractual relationships to confirm all
group energy needs are of a fixed and long-term nature agreed prior to the
current energy crisis
Commenting on the results, Joe Grimmond, Chairman, said:
"2021/22 was an exceptionally productive year for Coral Products plc as we
continue to adapt and develop our business to enable us to maximise the
opportunities available."
"We enter the 2022/23 financial period with confidence for the outlook for our
business and its ability to continue its successful evolution. The effects of
the pandemic are ongoing and we remain mindful of macroeconomic and
geopolitical risks. However, our continued investment over many years in our
people and our systems has generated strong and resilient results in the past
year and we believe will continue to do so. Our continuing priority is to do
all we can to keep our workplaces as safe as possible for staff. We have
planned our business to be flexible, in all areas, to meet fluctuating levels
of demand. We have robust financial controls that will ensure we maintain our
working capital requirements whilst meeting all our agreed parameters with our
financial partners and due to contracts already negotiated all its operations
will remain relatively unaffected by the current turmoil in energy prices."
"The Group continues with its strategic progress of increasing focus on
value-added and innovative products. Our aim is to build a significant
specialist plastic business with a bias towards using recycled materials."
"We have enjoyed a strong start to our current financial year and we look
forward to a satisfactory outturn for the year given the prevailing
conditions."
For further information, please contact:
Coral Products plc
Joe Grimmond, Chairman Tel: 07703 518 148
Nominated Adviser & Broker
Cenkos LLP Tel: 020 7397 1966
Stephen Keys
Charlie Combe
Capital Markets Consultants Tel: 07515 587 184
Richard Pearson
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
CHAIRMAN'S STATEMENT
Chairman's Corporate Governance Statement
As Chairman of the Board, my role is to set the strategy for the company,
monitor the ongoing performance of the companies within the Group to ensure
that they are meeting our requirements and also identify potential acquisition
targets.
In addition, my role also encompasses overseeing the functioning of the Board
and its effectiveness and ensuring sound corporate governance practices are
followed.
All the Directors of Coral believe strongly in the importance of good
corporate governance for the creation of shareholder value over the medium to
long-term and to engender trust and support amongst the Group's wider
stakeholders.
In accordance with the changes to AIM Rule 26 the Company applies the revised
QCA Corporate Governance Code published earlier in 2018. I work with key
executives throughout the organisation to instil good corporate governance
practices in accordance with the Code.
The Board monitors our corporate governance practices and will always
implement improvements which further enhance performance and/or benefit
stakeholders.
Trading
2021/22 was an exceptionally productive year for Coral Products plc as we
continue to adapt and develop our business to enable us to maximise the
opportunities available. An analysis of our performance and our outlook for
the year ahead are covered in detail in the following pages, but, looking back
on the year, among the highlights are:
· The Board remains committed to its long-term progressive dividend
policy, which takes account of the underlying growth, whilst acknowledging the
requirement for continuing investment and short-term fluctuations in profit.
Having made two interim dividend payments totalling 0.9p for this financial
period the Board are proposing a final dividend of 0.2 pence per share.
· The sale of the land and building in Haydock completed in November
2021, following the completion of the roof replacement works.
· Customised Packaging Limited is now fully integrated into the Group
and performing well. An earnout was paid in February 2022 as per the sale and
purchase agreement following better than expected results for the period
January to December 2021.
· Tatra Rotalac Limited saw a significant increase in turnover and
net profit. Output has improved following operational efficiencies and
investment in new machinery.
· Global One Pak Limited has strengthened its management team
following the departure of the original directors. The team is focusing on
future growth and researching new innovative products and markets.
· The Board is continuing to consider the most effective use of the
very strong cash rich asset base. We recognise that in today's low interest
rate climate cash is a poor substitute for profit earning assets.
I am very proud to see how everyone within the business has embraced our
challenges, opportunities and ambitions. We are reliant on the expertise,
professionalism and commitment of our people. I would like to thank them for
this, and also for the continued commitment that they have shown over the past
two years whilst having to deal with disruption to both their work and
personal lives due to the pandemic.
Outlook
We enter the 2022/23 financial period with confidence for the outlook for our
business and its ability to continue its successful evolution. The effects of
the pandemic are ongoing and we remain mindful of macroeconomic and
geopolitical risks. However, our continued investment over many years in our
people and our systems has generated strong and resilient results in the past
year and we believe will continue to do so. Our continuing priority is to do
all we can to keep our workplaces as safe as possible for staff. We have
planned our business to be flexible, in all areas, to meet fluctuating levels
of demand. We have robust financial controls that will ensure we maintain our
working capital requirements whilst meeting all our agreed parameters with our
financial partners and due to contracts already negotiated all its operations
will remain relatively unaffected by the current turmoil in energy prices.
The Group continues with its strategic progress of increasing focus on
value-added and innovative products. Our aim is to build a significant
specialist plastic business with a bias towards using recycled materials.
We have enjoyed a strong start to our current financial year and we look
forward to a satisfactory outturn for the year given the prevailing
conditions.
Joe Grimmond
Chairman
6 September 2022
Group Income Statement
for the year ended 30 April 2022
2022 2021
£'000 £'000
Revenue 14,391 10,714
Cost of sales (9,104) (6,913)
Gross profit 5,287 3,801
Operating costs
Distribution expenses (787) (761)
Administrative expenses before impairment and other separately disclosed items (2,926) (2,173)
Other separately disclosed items (162) (1,072)
Administrative expenses (3,088) (3,245)
Operating profit/(loss) 1,412 (205)
Finance costs (82) (111)
Profit/(loss) for the financial year before taxation 1,330 (316)
Taxation (363) 76
Profit/(loss) for the financial year attributable to the equity holders of the 967 (240)
parent on continuing activities
Profit/(loss) on discontinued activities (see note 3) - 715
Profit/(loss) for the financial year attributable to the equity holders of the 967 475)
parent
Basic earnings loss per ordinary share 1.19p (0.29)p
Diluted earnings loss per ordinary share 1.17p (0.29)p
Group Statement of Comprehensive Income
for the year ended 30 April 2022
2022 2021
£'000 £'000
Profit/(loss) for the financial year 967 475
Total other comprehensive income - -
Total comprehensive (loss)/income for the year attributable to equity holders 967 475
of the parent
Balance Sheet
as at 30 April 2022
As at 30 April As at 30 April
2022 2021
£'000 £'000
ASSETS
Non-current assets
Goodwill 1,945 1,945
Other intangible assets 916 1,243
Property, plant and equipment 749 630
Right of use assets 1,393 1,496
Investments in subsidiaries - -
Total non-current assets 5,003 5,314
Current assets
Inventories 1,781 1,828
Trade and other receivables 3,237 4,453
Cash and cash equivalents 7,589 3,843
Total current assets 12,607 10,124
Assets held for sale - 2,500
LIABILITIES
Current liabilities
Other borrowings 1,389 1,353
Lease liabilities 416 459
Trade and other payables 2,800 2,039
Total current liabilities 4,605 3,851
Net current assets/(liabilities) 8,002 8,773
Non-current liabilities
Lease liabilities 907 1,035
Deferred tax 391 315
Total non-current liabilities 1,298 1,350
NET ASSETS 11,707 12,737
SHAREHOLDERS' EQUITY
Share capital 859 859
Share premium 5,621 5,621
Treasury shares (1,008) (218)
Other reserves 1,061 1,567
Retained earnings 5,174 4,908
TOTAL SHAREHOLDERS' EQUITY 11,707 12,737
Statement of Changes in Shareholders' Equity
for the year ended 30 April 2022
Called Up Share
Share Premium Treasury Shares Other Reserves Retained Total
Capital Reserve £'000 £'000 Earnings Equity
£'000 £'000 £'000 £'000
Group
At 1 May 2020 826 5,288 - 1,567 4,425 12,106
Profit for the year - - - - - 475 475
Other comprehensive income - - - - - - -
Total comprehensive loss - - - - - 475 475
Contributions by and distributions to owners
Equity settled share-based payments - - - - 8 8
Issue of new shares 33 333 - - - 366
Purchase of treasury shares - - (218) - - (218)
Equity settled share-based payments - - - - 8 8
Dividend paid - - - - - -
At 1 May 2021 859 5,621 (218) 1,567 4,908 12,737
Profit for the year - - - - 967 967
Other comprehensive loss - - - - - -
Total comprehensive loss - - - - 967 967
Contributions by and distributions to owners
Equity settled share-based payments - - - - 21 21
Purchase of treasury shares - - (790) - - (790)
Revaluation reserve - - - (506) 506 -
Dividend paid - - - - (1,228) (1,228)
At 30 April 2022 859 5,621 (1,008) 1,061 5,174 11,707
Cash Flow Statement
for the year ended 30 April 2022
Group
2022 2021
£'000 £'000
Cash flows from operating activities
Profit for the year 967 475
Adjustments for:
Depreciation of property, plant and equipment 165 487
Depreciation of right of use assets under IFRS16 296 666
Amortisation of intangible assets 327 284
Share based payment charge 21 8
Profit on disposal of subsidiary - (1,133)
Profit on disposal of building (424) -
Interest payable 82 329
Taxation charge/(credit) 363 (48)
Operating cash flows before movements in working capital 1,797 1,068
(Increase)/decrease in inventories 47 (382)
Decrease/(increase) in trade and other receivables 82 433
Increase/(decrease) in trade and other payables 761 422
Cash generated by operations 2,687 1,541
UK corporation tax received - 299
Net cash generated from/(used in) operating activities 2,687 1,840
Cash flows from investing activities
Net cash on disposal of subsidiary - 7,771
Net cash on disposal of building 3,500 -
Acquisition of subsidiary - (937)
Acquisition of property, plant and equipment (206) (454)
Net cash generated from/(used in) investing activities 3,294 6,380
Cash flows from financing activities
New bank borrowings raised - 1,000
Dividends paid (1,228) -
New lease liabilities 274 -
Interest paid on bank borrowings - (70)
Interest paid on invoice discounting (22) (49)
Interest paid on lease liabilities (60) (210)
Repayments of bank borrowings - (2,765)
Repayments of obligations under lease liabilities (445) (893)
Purchase of treasury shares (790) (218)
Drawdowns on invoice discounting facility 14,799 23,288
Repayments of invoice discounting facility (14,763) (24,913)
Net cash used in financing activities (2,235) (4,830)
Net increase in cash and cash equivalents 3,746 3,390
Cash and cash equivalents at 1 May 3,843 453
Cash and cash equivalents at 30 April 7,589 3,843
Notes
for the year ended 30 April 2022
1. Basis of preparation
The financial information set out above does not constitute the Group's
statutory accounts for the years ended 30 April 2022 or 2021 within the
meaning of Section 434 of the Companies Act 2006 but is derived from those
accounts. Statutory accounts for 2021 have been delivered to the Registrar of
Companies and those for 2022 will be delivered following the company's Annual
General Meeting.
This financial information has been prepared in accordance with International
Financial Reporting Standards ("IFRSs") and International Financial Reporting
Interpretations Committee (IFRIC) interpretations as adopted by the European
Union and with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
2. Underlying operating profit and separately disclosed items
Underlying profit - the Company believes that underlying profit and underlying
earnings provide additional useful information for shareholders. The term
underlying earnings is not a defined term under IFRS and may not therefore be
comparable with similarly titled profit measurements reported by other
companies.
2022 2021
On continuing operations £'000 £'000
Operating profit/(loss) 1,412 (205)
Separately disclosed items within administrative expenses
Share based payment charge 21 8
Amortisation of intangible assets (customer relationships and brands) 327 284
Profit on sale of land and building (383) -
Reorganisation costs 158 780
Cost of living payment to all staff 39 -
Total separately disclosed items 162 1,072
Underlying operating profit 1,574 867
Depreciation 205 417
Underlying EBITDA 1,779 1,284
Separately disclosed items (excluding amortisation and impairment) 165 (788)
EBITDA 1,944 496
Profit/(loss) before tax 1,330 (316)
Separately disclosed items 162 1,072
Underlying profit/(loss) before tax 1,492 756
3. Earnings per share
Basic and underlying earnings per share
Number of Shares 2022 2021
Weighted average number of shares 85,942,534 83,143,645
Effect of weighted average number of treasury shares (4,828,836) (111,192)
Weighted average number of shares for the purposes of basic earnings per share 81,113,698 83,032,453
Effect of share options 1,369,230 2,138,460
Weighted average number of shares for the purposes of diluted earnings per 82,482,928 85,170,913
share
2022 2021
Weighted average number of shares Earnings per share Weighted average number of shares (Loss)/
(pence) (Loss)/ earnings earnings per share
Earnings £'000 (pence)
Continuing Operations £'000
Profit/(loss) for the year 967 81,113,698 1.19 (240) 83,032,453 (0.29)
Separately disclosed items (note 6) 162 - - 1,072 - -
Underlying profit/(loss) for the period 1,129 81,113,698 1.39 832 83,032,453 1.00
5. Dividends
An interim dividend for the year ended 30 April 2022 of 0.5p per share was
paid 3 December 2021. A second dividend of 0.4p per share was paid 1 June
2022.
A final dividend payment for the year ended 30 April 2022 of 0.2p per share is
recommended.
6. Group reconciliation of net cash flow to movement in net debt
2022 2021
£'000 £'000
Net increase in cash and cash equivalents 3,746 3,390
Decrease/(increase) on invoice discounting facility (36) 1,625
Decrease/(increase) in bank loans and other loans - 1,765
Decrease in lease liabilities 171 2,206
Movement in net debt for the period 3,881 8,986
Net debt at beginning of period 996 (7,990)
Net funds/(debt) at end of period 4,877 996
7. Post Balance Sheet Event
In May 2022 the group acquired 100% of the share capital of Film & Foil
Solutions Ltd for a total consideration of £3.0 million satisfied by £2.25
million in cash and £0.75 million of shares of Coral Products at 15.5p. The
purchase price allocation has not yet been performed on this acquisition. In
the most recent reporting period of 31 December 2020, revenues were £10.4m
and profit before taxation was £61,000.
In May 2022 the group acquired 100% of the share capital of Alma Products Ltd
for £1.5 million satisfied by cash. In addition, an earn out agreement is
payable for the year ended 30 April 2023 if the EBITDA is greater than
£300,000. The purchase price allocation has not yet been performed on this
acquisition. In the most recent reporting period of 31 December 2021, revenues
were £12.3m and profit before taxation was £145,000.
8. Publication of Annual Report
A copy of the 2022 Report & Accounts will be sent to all shareholders.
Further copies will be available to the public at the company's registered
address at Southmoor Road, Wythenshawe, Manchester, M23 9DS and on the
Company's website at www.coralproducts.com.
9. Forward looking statements
This announcement contains unaudited information and forward-looking
statements that are based on current expectations or beliefs, as well as
assumptions about future events. These forward-looking statements can be
identified by the fact that they do not relate only to historical or current
facts and undue reliance should not be placed on any such statement because
they speak only as at the date of this document and are subject to known and
unknown risks and uncertainties and can be affected by other factors that
could cause actual results, and Corals plans and objectives, to differ
materially from those expressed or implied in the forward-looking statements.
Coral undertakes no obligation to revise or update any forward-looking
statement contained within this announcement, regardless of whether those
statements are affected as a result of new information, future events or
otherwise, save as required by law and regulations.
The Directors of the Group take responsibility for this announcement.
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