REG - Coral Products PLC - Half-year Report
27/01/2025 07:00
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RNS Number : 6462U Coral Products PLC 27 January 2025
CORAL PRODUCTS PLC
("Coral" or the "Group")
Interim Results
Coral Products plc, a specialist in the design, manufacture and supply of
plastic products, announces its results for the six months to 31 October 2024.
Financial headlines Six months to Six months to
31 October 31 October
2024 2023
Group sales £15.8 million £17.2 million
Gross profit £4.8 million £6.0 million
Reported (loss)/profit before taxation £(1.1) million £0.8 million
Underlying reported (loss)/profit before taxation * £(0.4) million £1.2 million
Underlying basic (loss)/earnings per share * (0.35)p 1.27p
Underlying operating profit (excluding finance expenses) * £157,000 £1,697,000
Underlying EBITDA * £872,000 £2,326,000
Dividend per share paid during the period 0.25p 0.50p
* The financial headlines disclosed as underlying represent the reported
metrics excluding separately disclosed items (being share based payment
charges, amortisation of intangible assets and other one-off costs in each
period), see note 7.
Operational and Financial Highlights
H1 Trading
· The challenging trading conditions referenced in our results announcement of
17 September 2024 and our trading update of 14 October 2024, are evidenced in
our interim results to 31 October 2024.
· Reduced order levels from our core customers continued throughout the period.
· Problems with new machines and tooling contributed to major manufacturing
issues during the period. These have been addressed and resolved.
· Overall net asset position of the business remains strong.
· Operational cost includes the inflationary effect in wages (mandatory minimum
wage increases) and salaries along with increased organisational costs in
anticipation of sales growth in H1.
· The Eco Deck in-house manufacturing investments that fully launched in June 24
are now operating as of January 2025, 24-hour production, improving gross
margin in this business line.
· The BRC accredited food container manufacturing investments will be optimised
in time to materialise on the busy season starting in March '25.
· Lance Burn Group CEO left the business on 31(st) October following appointment
on 2(nd) January 2024
Sustainability Objectives
· The Group is proud of its continued focus on sustainability:
o Adoption of bio-based materials.
o Increasing move to re-cyclable materials.
o Increasing use of recycled materials in the manufacturing processes.
o Supply chain tracking and transparency.
Joe Grimmond, Non-Executive Chairman, commented:
"Acknowledging the disappointing first half result the board took swift and
effective actions. Whilst the group is trading in line with expectations the
actions resulted in exceptional costs circa £600,000. The cost savings,
operational improvements and strengthened financial position provide the Group
with the financial resilience needed to navigate the current difficult
economic landscape. With much reduced borrowings and greatly strengthened
liquidity a sharper focus on core capabilities and strategic investments, the
Group is well positioned, notwithstanding the difficult macro-economic
climate, to deliver a much improved performance."
Enquiries: www.coralproducts.com Tel:
Coral Products plc Executive Chairman 07703 518 148
Joe Grimmond
Cavendish Capital Markets Limited NOMAD and Broker 020 7397 8900
Adrian Hadden (Corporate Finance)
Charlie Combe (ECM)
Novella Communications Financial PR 020 3151 7008
Tim Robertson/Safia Colebrook
coral@novella-comms.com
Regulatory Information
The information contained within this announcement is deemed to constitute
inside information for the purposes of Article 7 of EU Regulation 596/2014
(Market Abuse Regulations) which is part of UK law by virtue of the European
Union (Withdrawal) Act 2018. Upon publication of this announcement, this
inside information is now considered to be in the public domain.
Caution regarding 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 Coral's 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 because of new information, future events or
otherwise, save as required by law and regulations.
Chairman's Statement
The Group has taken decisive actions to address the challenging trading
conditions experienced during the first half of the year. These measures
include:
· Leadership: A streamlined and fortified senior leadership team led by Ian
Hillman, who was appointed as Group Chief Operating Officer on November 1,
2024.
· Organisational Restructuring: Comprehensive reorganisation across all levels
and businesses, delivering cost savings and creating a leaner, more agile
management structure suited to current market conditions.
· Management Adjustments: The responsibilities of Phil Allen, former Managing
Director of the Rigids Division, have been seamlessly integrated into the
existing team following his departure.
· Manplas Restructuring: Operational losses in the Manplas business are being
addressed through restructuring initiatives. Plans to consolidate operations
within a single site are underway, promising further cost savings and
efficiencies.
· Operational Synergies: Significant progress has been made in resource
optimisation and the elimination of duplication, resulting in meaningful cost
savings.
· Capital Investments: A dedicated project plan is in progress to enhance the
performance of our previous £3 million machinery investment. Incremental
revenue improvements are anticipated from Q4 2024 and into FY25.
· Strategic Focus Areas:
o Rigorous cost control and operational efficiencies.
o Organic growth from existing products and capabilities.
o Enhanced business development efforts across all sectors.
· Insurance Settlement: A legacy insurance claim from a 2020 fire has been
settled at £1.5 million, with the remaining £900,000 received in January
2025.
· Property Transactions: Contracts for the sale and leaseback of two Haydock
properties were exchanged in December 2024, with completion expected in
mid-February 2025. Proceeds of £1.7 million will strengthen working capital
and reduce debt.
· Market Outlook: While pipeline orders have stabilised at H1 levels, we remain
cautiously optimistic about recovery in key markets such as house building,
supported by government priorities.
Operational Review:
Tatra-Rotalac:
H1 saw subdued demand in the telecoms sector, impacting sales. Technical and
operational challenges with new machine investments are being resolved,
showing early signs of improvement. The restructuring efforts will further
enhance operational focus.
Global One-Pak:
This leading supplier of lotion pumps, triggers, and mist sprayers faced
logistical cost pressures and operational delays in launching UK-produced caps
and enclosures. These challenges are being addressed to support future growth.
Manplas:
Unforeseen challenges following the 2023 merger led to operational losses.
However, restructuring since October has yielded improvements, positioning the
business for profitability and growth within a single-site model.
Film & Foil Solutions:
Capital investments aimed at expanding manufacturing capabilities have faced
delays, with revenue generation expected to commence in February 2025. These
investments represent a vital component of the company's strategic growth
plan.
Alma Products:
While demand in the dairy sector has been disappointing, new projects are
poised to drive growth from FY26 onwards. Synergies with Film & Foil offer
opportunities for portfolio selling, and commercial strategies are evolving
well.
Ecodeck and Ecodeck Spain:
Strong growth in B2B sales complements established B2C channels. Operational
challenges with new machinery investments are being resolved, with full
production capacity expected by February 2025.
Dividends
A final dividend of 0.25p for the year ended April 2024 was paid on 17 January
2025 taking the total dividend for the year to 0.5p. The board have not
declared an interim dividend for the current year, a final dividend will be
reviewed and determined following the publication of the FY'25 results.
Outlook
Acknowledging the disappointing first half result the board took swift and
effective actions. Whilst the group is trading in line with expectations the
actions resulted in exceptional costs circa £600,000. The cost savings,
operational improvements, and strengthened financial position (through the
insurance settlement and property transactions) provide the resilience needed
to navigate current challenges.
With much reduced borrowings and greatly strengthened liquidity a sharper
focus on core capabilities and strategic investments, the Group is well
positioned, notwithstanding the difficult macro-economic climate, to deliver a
much improved performance.
Joe Grimmond
Non-Executive Chairman
27 January 2025
CONSOLIDATED INCOME STATEMENT
Year to
Six months to Six months to 30 April
31 October 31 October 2024
2024 2023 (audited)
(unaudited) (unaudited)
£000
£000 £000
Revenue Note 3 15,807 17,177 30,991
Cost of sales (10,997) (11,203) (20,315)
Gross profit 4,810 5,974 10,676
Operating costs
Distribution expenses (697) (744) (1,383)
Administrative expenses before separately disclosed items (3,956) (3,533) (7,449)
Underlying operating profit 157 1,697 1,844
Separately disclosed items:
Share based payment credit/(charge) 29 (18) (43)
Amortisation of intangible assets (128) (268) (535)
Reorganisation costs (676) (95) (233)
Acquisition costs - - (50)
Impairment of goodwill & intangibles - - (875)
Impairment of building - - (34)
(775) (381) (1,770)
Operating profit/(loss) (618) 1,316 74
Finance expense (517) (480) (1,021)
Profit/(loss) before taxation (1,135) 836 (947)
Taxation Note 4 50 (84) 33
Total comprehensive income/(loss) (1,085) 752 (914)
Earnings per ordinary share Note 5
Basic and diluted (pence) (1.21) 0.84 (1.02)
Underlying basic (pence) (0.35) 1.27 0.96
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 October 31 October 30 April
2024 2023 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Non-current assets
Goodwill 4,074 4,402 3,973
Other intangible assets 1,831 2,689 1,958
Property, plant and equipment 5,922 7,162 7,053
Right of use assets 2,713 2,476 2,077
Total non-current assets 14,540 16,729 15,061
Current assets
Inventories 4,361 4,702 4,743
Trade and other receivables 6,993 7,220 6,644
Cash and cash equivalents 858 2,927 2,014
Assets held for sale 1,300 740 1,706
Total current assets 13,512 15,589 15,107
Current liabilities
Bank overdrafts and borrowings (6,435) (5,710) (6,534)
Trade and other payables (5,012) (4,872) (5,466)
Lease liabilities (1,233) (632) (721)
Corporation tax 32 - -
Total current liabilities (12,648) (11,214) (12,721)
Net current assets 864 4,375 2,386
Non-current liabilities
Borrowings (1,490) (3,865) (3,298)
Lease liabilities (2,009) (1,751) (891)
Deferred taxation (986) (1,040) (986)
Total non-current liabilities (4,485) (6,656) (5,175)
Total net assets 10,919 14,448 12,272
Shareholders' Equity
Share capital 903 903 903
Investment in Own shares (186) (170) (170)
Retained earnings 10,202 13,715 11,539
Total equity 10,919 14,448 12,272
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share Share Treasury shares Other Retained Total
capital premium reserves earnings equity
£000 £000 £000 £000 £000 £000
At 1 May 2024 903 - (170) - 11,539 12,272
Total comprehensive loss - - - - (1,085) (1,085)
Debit for share based payment - - - - (29) (29)
Purchase of treasury shares - - (16) - - (16)
Dividend paid - - - - (223) (223)
At 31 October 2024 903 - (186) - 10,202 10,919
For the six months to 31 October 2023 (unaudited)
Share Share Treasury shares Other Retained Total
capital premium reserves earnings equity
£000 £000 £000 £000 £000 £000
At 1 May 2023 903 - - - 12,945 13,848
Total comprehensive income - - - - 752 752
Charge for share based payment - - - - 18 18
Purchase of treasury shares - - (170) - - (170)
At 31 October 2023 903 6,272 - 2,050 5,656 14,881
For the year ended 30 April 2024 (audited)
Share Share Treasury shares Other Retained Total
capital premium reserves earnings equity
£000 £000 £000 £000 £000 £000
At 1 May 2023 903 - - - 12,945 13,848
Total comprehensive loss - - - - (914) (914)
Credit for share based payment - - - - 43 43
Purchase of treasury shares - - (170) - - (170)
Dividend paid - - - - (535) (535)
At 30 April 2024 903 - (170) - 11,539 12,272
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months to Six months to Year to
31 October 31 October 30 April
2024 2023 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Cash flow from operating activities
(Loss)/Profit for the period after tax (1,085) 752 (914)
Adjustments for:
Depreciation of property, plant and equipment 336 296 638
Depreciation of right of use assets under IFRS16 378 333 718
Amortisation of intangible assets 128 268 535
Share based payment (credit)/charge (29) 18 43
Impairment of buildings - - 34
Impairment of goodwill and intangibles - - 890
Profit on disposal of assets 143 27 -
Interest payable 517 480 1,021
Taxation charge/(credit) (50) 84 (33)
(Increase)/decrease in inventories 102 (382) (423)
Decrease/(increase) in trade and other receivables (349) 473 549
(Decrease)/increase in trade and other payables (215) (2,097) (1,575)
Net cash generated from operating activities 124 252 1,483
Cash flow from investing activities
Acquisition of subsidiaries, net of cash in bank (100) (16) (15)
Proceeds from disposal of property, plant and equipment 1,916 225 -
Acquisition of subsidiaries, payment of earn-out - (1,275) -
Acquisition of property, plant and equipment (50) (544) (2,145)
Net cash (used in)/generated from investing activities 1,766 (1,610) (2,160)
Cash flow from financing activities
Interest paid on bank borrowings and invoice discounting (454) (370) (901)
Interest paid on lease liabilities (63) (111) (120)
Dividends paid (223) - (535)
Repayments of obligations under lease liabilities (430) (505) (903)
Repayments of bank borrowings (1,518) (153) (530)
Purchase of treasury shares (16) (170) (170)
New bank loans raised 313 1,471 2,299
Movements on invoice discounting facility (407) (651) (1,223)
Net cash used in financing activities (2,798) (489) (2,083)
Net (decrease)/increase in cash and cash equivalents (1,156) (1,847) (2,760)
Cash and cash equivalents at the start of the period 2,014 4,774 4,774
Cash and cash equivalents at the end of the period 858 2,297 2,014
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
The financial information set out in this Interim Report does not constitute
statutory accounts as defined in Section 435 of the Companies Act 2006.
These interim financial statements are for the six months ended 31 October
2024. They do not include all the information required for full annual
financial statements and should be read in conjunction with the consolidated
financial statements of the Group for the year ended 30 April 2024. The
Interim Report has not been reviewed by our auditor in accordance with the
International Standard on Review Engagement 2410 issued by the Auditing
Practices Board. IAS 34 'Interim financial reporting' is not applicable to
these half year condensed consolidated financial statements and has therefore
not been applied.
2. Significant accounting policies
The accounting policies applied by the Group in these condensed consolidated
interim financial statements are the same as those applied by the Group in its
consolidated financial statements for the year ended 30 April 2024.
3. Revenue
All production is based in the United Kingdom. The geographical analysis of
revenue is shown below:
Six months to Six months to Year to
31 October 2024 31 October 2023 30 April 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
United Kingdom 15,489 16,977 30,479
Rest of Europe 147 157 173
Rest of the World 171 43 339
15,807 17,177 30,991
Turnover by business activity
Sale and manufacture of plastic products 15,807 17,177 30,991
A breakdown of Group revenues by product group is shown below:
Six months to Six months to Year to
31 October 2024 31 October 2023 30 April 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Rigids 9,379 10,558 11,943
Flexibles 6,428 6,619 19,048
15,807 17,177 30,991
4. Taxation
The taxation charge for the six months to 31 October 2024 is based on the
effective taxation rate, which is estimated will apply to earnings for the
year ending 30 April 2025. The rate used is below the applicable UK
corporation tax rate of 25% due to the utilisation of tax losses in the
period.
5. Earnings per share
Basic and underlying earnings per ordinary share are calculated using the
weighted average number of ordinary shares in issue during the financial
period of 89,428,701 (31 October 2023: 89,556,580 and 30 April 2024:
89,554,180).
Six months to Six months to Year to
31 October 2024 31 October 2023 30 April
(unaudited) (unaudited) 2024
(audited)
£000 p £000 p £000 p
Basic and diluted earnings per ordinary share
Profit/(loss) for the period after tax (1,085) (1.21) 752 0.84 (914) (1.02)
Underlying earnings per ordinary share
Underlying profit/(loss) for the period after tax (310) (0.35) 1,133 1.27 856 0.96
6. Movement in Net Debt
Net debt incorporates the Group's borrowings and bank overdrafts less cash and
cash equivalents. A reconciliation of the movement in the net debt is shown
below:
Six months to Six months to Year to
31 October 31 October 30 April
2024 2023 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Net (decrease)/increase in cash and cash equivalents (1,156) (1,847) (2,760)
Net increase in invoice discounting facilities (570) 651 1,223
(Increase)/decrease in bank and other loans 2,477 (899) (1,729)
(Increase)/decrease in lease liabilities (1,630) 91 863
Movement in net debt in the financial period (879) (2,004) (2,403)
Net funds/(debt) at beginning of period (9,430) (7,027) (7,027)
Net funds/(debt) at end of period (10,309) (9,031) (9,430)
7. Underlying profit and separately disclosed items
Underlying profit before tax, underlying earnings per share, underlying
operating profit, underlying earnings before interest, tax, depreciation and
amortisation are defined as being before share based payment charges,
amortisation of intangibles recognised on acquisition, acquisition costs,
reorganisation costs, compensation for loss of office, impairment of goodwill
and impairment loss on trade receivables. Collectively these are referred to
as separately disclosed items. In the opinion of the directors the disclosure
of these transactions should be reported separately for a better understanding
of the underlying trading performance of the Group.
Six months to Six months to Year to
31 October 31 October 30 April
2024 2023 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Operating profit/(loss) (618) 1,316 74
Separately disclosed items within administration expenses
Share based payment (credit)/charge (29) 18 43
Amortisation of intangible assets 128 268 535
Reorganisation costs 676 95 233
Acquisition costs - - 50
Impairment of goodwill & intangibles - - 875
Impairment of building - - 34
Total separately disclosed items 775 381 1,770
Underlying operating profit 157 1,697 1,844
Depreciation 715 629 1,356
Underlying EBITDA 872 2,326 3,200
8. Company Information
Company contacts
Directors Joe Grimmond
Non-Executive Chairman
Sharon
Tinsley Group Finance Director
Paul
Freud Corporate Development Director
Ian
Hillman COO
Steve
Barber Non-Executive Director
David
Low Senior Non-Executive Director
Secretary Sharon Tinsley
Registered Office Southmoor Road, Wythenshawe, Manchester,
M23 9DS, UK
Registered Number 02429784
Website www.coralproducts.com
(http://www.coralproducts.com)
Nominated Advisor & Broker Cavendish Capital Markets Limited
One Bartholomew Close
London
EC1A 7BL
Auditors Crowe UK LLP Bankers Virgin Money
St George's House 48-50 Market Street
56 Peter Street Manchester
Manchester M1 1PW
M2 3NQ
Registrars Share Registrars Limited Solicitors Legal Clarity Lawyers LLP
3 The Millennium Centre 55 Newhall Street
Crosby Way Birmingham
Farnham, Surrey B3 3RB
GU9 7XX
Trading subsidiaries
Company Business activity Registered office
Tatra Rotalac Limited Manufacture of plastic mouldings and extrusions Southmoor Road, Wythenshawe, Manchester, M23 9DS
Global One-Pak Limited Design, packaging and distribution of lotion pumps, trigger sprays and aerosol Hyde Park House, Cartwright Street, Newton, Hyde, Cheshire, SK14 4EH
caps
Film & Foil Solutions Limited Converter of flexible packaging, print lamination film and speciality plastic, North Florida Road, Haydock Industrial Estate, St Helens, WA11 9UB
paper and aluminium foils
Alma Products Limited Extrusion, thermoforming and container printing Unit 18B, Daresbury Court, Evenwood Close, Runcorn, Cheshire, WA7 1LZ
Manplas Limited Vacuum-formed components and sheet plastic parts Coldfield Drive, Wythenshawe, Manchester, M23 9GG
Ecodeck Limited Eco-friendly driveway grids, plastic shed bases and grass grid reinforcement 123 Saltergate, Chesterfield, Derbyshire, S40 1NH
Ecodeck SL Distribution of Eco-friendly driveway grids Carretera Tortosa-1@Aldea km 2
43500 Tortosa (Tarragona)
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