REG - Coral Products PLC - Half yearly report six months ended 31 Oct 2021
29/11/2021 08:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20211129:nRSc8530Ta&default-theme=true
RNS Number : 8530T Coral Products PLC 29 November 2021
CORAL PRODUCTS PLC
("Coral" or the "Group")
HALF YEARLY REPORT
Coral Products plc, a specialist in the design, manufacture and supply of
plastic products, is pleased to report its half yearly report for the six
months ended 31 October 2021.
Financial headlines Six months to Six months to % change
31 October 31 October
2021 2020
restated
Group sales £7.1 million £4.5 million 57.8%
Gross profit £2.5 million £1.7 million 47.1%
Gross profit margin 35.7% 38.0% -6.1%
Underlying operating profit (excluding finance expenses)* £759,000 £563,000 34.8%
Reported profit before taxation £510,000 £ 286,000 78.3%
Underlying EBITDA* £1,014,000 £771,000 31.5%
Underlying basic earnings per share* 0.81p 0.60p 35.0%
Interim dividend per share 0.50p 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
- Strong net assets position has been maintained.
- Interim dividend of 0.5p declared.
- Cash and cash equivalents of £5.5m (2020: £1.3m). Cash and cash
equivalents are defined as cash of £4.8m (2020: £1.3m) plus treasury shares
of £0.7m (2020: £nil). The cash receipt from the sale of the Haydock
property of £3.5m will be recognised in the second half of the financial
year.
- The first half of the year has seen an increase in
revenue and profit, despite the on-going impact of Covid-19, Brexit, the
China-USA trading challenges, volatile currency fluctuations and variable
trading conditions.
- Ensuring that the business is Covid-19 secure for
employees and visitors is paramount. As a critical supplier the Group
continued to operate under strict Covid-19 Government guidelines.
- The newly developed extruded fire retardant click &
fix product is expected to positively impact the business in the final quarter
of this year.
- The sale of the land and building at Haydock completed
on 19 November 2021 with the gain of approximately £0.9m being accounted for
in the annual results to 30 April 2022.
Commenting on today's results, Joe Grimmond, Coral's Chairman, said:
"I am delighted with the performance of the business in the first half of the
financial year. I am pleased to report that the results to date are well ahead
of the same period last year, in spite of the prevailing uncertainties of
Brexit and the Covid-19 pandemic. With our enhanced cash position arising from
the sale of the Haydock property which completed on 19 November 2021 for
£3.5m, we remain confident of the Group's future prospects".
Enquiries
Coral Products plc Tel: 07703 518 148
Joe Grimmond, Executive Chairman
Nominated Adviser & Broker
WH Ireland Advisers LLP Tel: 020 7220 1751
Adrian Hadden, Darshan Patel, Megan Liddell
Capital Markets Consultants Limited Tel: 07515 587 184
Richard Pearson
Chairman's Statement
Results and Financial Position
Trading in the first half of the current year shows revenue substantially
ahead of the same period for last year, with gross profit % decreasing
slightly as a consequence of higher than usual transport and raw material
costs. Reported revenue was £7,103,000 (six months to 31 October 2020:
£4,531,000), gross margins were 35.7% (2020: 38.0%) resulting in a gross
profit of £2,534,000 (2020: £1,720,000) in the six months to 31 October
2021. Underlying EBITDA was £1,014,000 (2020: £771,000). Underlying
operating profits increased to £759,000 (2020: £563,000).
Separately disclosed expenses of £188,000 (2020: £208,000) comprised the
amortisation of intangibles acquired on acquisition, share based payment
charges over employee options and redundancy costs.
Finance costs dropped slightly to £61,000 (2020: £69,000).
Profit before tax after including all the above items was £510,000 (2020:
£286,000).
The balance sheet net asset position remains strong at £12,376,000, net of
£693,000 treasury shares (2020: £12,645,000). This represents a solid asset
platform for developing the business.
The Group has cash and cash equivalents of £5,473,000 (2020: £1,292,000)
which includes cash of £4,780,000 (2020: £1,292,000) and treasury shares of
£693,000 (2020: £nil). This figure does not include the benefit of the cash
receipts from the sale of the Haydock property in November 2021 of £3.5
million as this will be accounted for in the annual accounts.
The Group's net funds has increased to £1,677,000 (2020: £7,192,000 net
debt).
Operations
Tatra-Rotalac Ltd
Tatra-Rotalac has exceeded the board's expectations during the first half of
the financial year with sales and profits well above budget. The recent
capital expenditure is expected to generate additional improvements to
performance in the following six months.
Global One-Pak Ltd
This business has been hit especially hard during the six months to 31 October
2021 due to logistical cost increases in Chinese trading. This has been
compounded by the continuing ill health of the managing director. The global
shortage of containers, increased shipping times and delays at customs have
all contributed to higher than usual transport costs.
Performance in the second half of the financial year is expected to improve
given the business is now experiencing more enquiries as customers' stock
levels are returning to pre-pandemic levels.
Customised Packaging Ltd
This business is experiencing strong demand in UK manufacturing. They
currently have no supply issues and have assisted a major customer in
recycling its end of life plastic.
Capital Expenditure
Total capital expenditure in the first six months was £375,000 (2020:
£314,000) of which £375,000 (2020: £nil) related to Tatra-Rotalac.
Dividends
The board have declared an interim dividend of 0.50 pence per share (2020:
0.50p). The ex-dividend date and the record date for the interim dividend was
11 November 2021 and 12 November 2021 respectively. The interim dividend will
be paid on 3 December 2021. This continues to reflect our confidence in the
positive performance and profitable results of the Group.
Outlook
I am delighted with the performance of the business in the first half of the
financial year. I am pleased to report that the results to date are well ahead
of the same period last year, in spite of the prevailing uncertainties of
Brexit and the Covid-19 pandemic. With our enhanced cash position arising from
the sale of the Haydock property which completed on 19 November 2021 for
£3.5m, we remain confident of the Group's future prospects.
Joe Grimmond
Non-Executive
Chairman
29 November 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months to 31 October 2021
Six months to Year to
Six months to 31 October 30 April
31 October 2020 2021
Notes 2021 restated (audited)
(unaudited) (unaudited)
£000
£000 £000
Revenue 3 7,103 4,531 10,714
Cost of sales (4,569) (2,811) (6,913)
Gross profit 2,534 1,720 3,801
Operating costs
Distribution expenses (334) (224) (761)
Administrative expenses before separately disclosed items (1,441) (933) (2,173)
Underlying operating profit 759 563 867
Separately disclosed items:
Share based payment credit/(charge) (25) - (8)
Amortisation of intangible assets (163) (138) (284)
Reorganisation costs - (70) (780)
(188) (208) (1,072)
Operating profit/(loss) 571 355 (205)
Finance expense (61) (69) (111)
Profit/(loss) before taxation 510 286 (316)
Taxation 4 - - 76
Total comprehensive income/(loss) on continuing operations 510 286 (240)
Profit on discontinued operations - 255 715
Total comprehensive income/(loss) 510 541 475
Earnings per ordinary share 5
Basic and diluted (pence) 0.59 0.35 (0.29)
Underlying basic (pence) 0.81 0.60 1.00
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 October 2021
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
£000 £000 £000
Non-current assets
Goodwill 1,945 5,145 1,945
Other intangible assets 1,079 986 1,243
Property, plant and equipment 1,133 2,768 630
Right of use assets 1,117 4,058 1,496
Total non-current assets 5,274 12,957 5,314
Current assets
Inventories 1,752 3,395 1,828
Trade and other receivables 3,371 4,575 4,453
Cash and cash equivalents 4,780 1,292 3,843
Total current assets 9,903 9,262 10,124
Assets held for sale 2,500 2,520 2,500
Current liabilities
Bank overdrafts and borrowings (1,832) (2,526) (1,353)
Trade and other payables (1,906) (3,212) (2,039)
Lease liabilities (405) (1,393) (459)
Corporation tax - - -
Total current liabilities (4,143) (7,131) (3,851)
Liabilities on assets held for sale - (1,706) -
Non-current liabilities
Borrowings - (1,000) -
Lease liabilities (866) (1,859) (1,035)
Deferred taxation (292) (398) (315)
Total non-current liabilities (1,158) (3,257) (1,350)
Total liabilities (5,301) (12,094) (5,201)
Total net assets 12,376 12,645 12,737
Equity
Share capital 859 826 859
Share premium 5,621 5,288 5,621
Treasury shares (693) - (218)
Other reserves 1,567 1,567 1,567
Retained earnings 5,022 4,964 4,908
Total equity 12,376 12,645 12,737
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the six months to 31 October 2021 (unaudited)
Share Share Treasury shares Other Retained Total
capital premium reserves earnings equity
£000 £000 £000 £000 £000 £000
At 1 May 2021 859 5,621 (218) 1,567 4,908 12,737
Total comprehensive loss - - - - 510 510
Credit for share based payment - - - - 25 25
Purchase of treasury shares - - (475) - - (475)
Dividend paid - - - - (421) (421)
At 31 October 2021 859 5,621 (693) 1,567 5,022 12,376
For the six months to 31 October 2020 (unaudited)
Share Share Treasury shares Other Retained Total
capital premium reserves earnings equity
£000 £000 £000 £000 £000 £000
At 1 May 2020 826 5,288 - 1,567 4,425 12,106
Total comprehensive income - - - - 541 541
Charge for share based payment - - - - (2) (2)
At 31 October 2020 826 5,288 - 1,567 4,964 12,645
For the year ended 30 April 2021 (audited)
Share Share Treasury shares Other Retained Total
capital premium reserves earnings equity
£000 £000 £000 £000 £000 £000
At 1 May 2020 826 5,288 - 1,567 4,425 12,106
Total comprehensive profit - - - - 475 475
Credit for share based payment - - - - 8 8
Issue of new shares 33 333 - - - 366
Purchase of treasury shares - - (218) - - (218)
At 30 April 2021 859 5,621 (218) 1,567 4,908 12,737
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months to 31 October 2021
Six months to Six months to Year to
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
£000 £000 £000
Cash flow from operating activities
Profit for the period after tax 510 541 475
Adjustments for:
Depreciation of property, plant and equipment 122 321 487
Depreciation of right of use assets under IFRS16 133 307 666
Amortisation of intangible assets 163 138 284
Share based payment (credit)/charge 25 (2) 8
Profit on disposal of subsidiary - - (1,133)
Interest payable 61 223 329
Taxation charge/(credit) - - (48)
(Increase)/decrease in inventories 76 (27) (382)
Decrease/(increase) in trade and other receivables 505 386 433
(Decrease)/increase in trade and other payables (133) (537) 422
UK corporation tax received - - 299
Net cash generated from operating activities 1,462 1,350 1,840
Cash flow from investing activities
Net cash on disposal of subsidiary - - 7,771
Acquisition of subsidiary - - (937)
Acquisition of property, plant and equipment (375) (314) (454)
Net cash (used in)/generated from investing activities (375) (314) 6,380
Cash flow from financing activities
Interest paid on bank borrowings and invoice discounting (61) (223) (119)
Interest paid on lease liabilities - - (210)
Repayments of bank borrowings - (60) (2,765)
Repayments of obligations under lease liabilities (93) (462) (893)
Purchase of treasury shares (475) - (218)
New bank loans raised - 1,000 1,000
Movements on invoice discounting facility 479 (452) (1,625)
Net cash used in financing activities (150) (197) (4,830)
Net increase in cash and cash equivalents 937 839 3,390
Cash and cash equivalents at the start of the period 3,843 453 453
Cash and cash equivalents at the end of the period 4,780 1,292 3,843
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.
The Group's statutory financial statements for the year ended 30 April 2021,
prepared under IFRS, have been filed with the Registrar of Companies. The
auditor's report on those statutory accounts was qualified with respect to
opening inventory as the audit evidence available was limited because, given
the global Covid-19 pandemic, no inventory count was undertaken and the
auditor did not observe the physical inventory as at 30 April 2020.
The interim financial information has been prepared in accordance with the
recognition and measurement principles of International Financial Reporting
Standards (IFRS) and on the same basis and using the same accounting policies
as used in the financial statements for the year ended 30 April 2021.
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.
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 2021.
The six months to 31 October 2020 have been restated to show the results of
continuing operations only.
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 2021 31 October 2020 30 April 2021
(unaudited) restated (audited)
£000 (unaudited) £000
£000
United Kingdom 6,827 4,050 9,811
Rest of Europe 186 386 94
Rest of the World 90 95 809
7,103 4,531 10,714
Turnover by business activity
Sale and manufacture of plastic products 7,103 4,531 10,714
4. Taxation
The taxation charge for the six months to 31 October 2021 is based on the
effective taxation rate, which is estimated will apply to earnings for the
year ending 30 April 2022. The rate used is below the applicable UK
corporation tax rate of 19% 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 85,942,534 (31 October 2020: 82,614,865 and 30 April 2021:
83,032,453).
Six months to Six months to Year to
31 October 2021 31 October 2020 30 April
(unaudited) (unaudited) 2021
restated (audited)
£000 p £000 p £000 p
Basic and diluted earnings per ordinary share
Profit/(loss) for the period after tax 510 0.59 286 0.35 (240) (0.29)
Underlying earnings per ordinary share
Underlying profit/(loss) for the period after tax 698 0.81 494 0.60 832 1.00
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
2021 2020 2021
(unaudited) (unaudited) (audited)
£000 £000 £000
Net increase in cash and cash equivalents 458 839 5,015
Decrease/(increase) in bank and other loans - 510 1,765
(Decrease)/increase in lease liabilities 223 (551) 2,206
Movement in net debt in the financial period 681 798 8,986
Net funds/(debt) at beginning of period 996 (7,990) (7,990)
Net funds/(debt) at end of period 1,677 (7,192) 996
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
2021 2020 2021
(unaudited) (unaudited) (audited)
£000 £000 £000
Operating profit/(loss) 571 355 (205)
Separately disclosed items within administration expenses
Share based payment (credit)/charge 25 - 8
Amortisation of intangible assets 163 138 284
Reorganisation costs - 70 780
Total separately disclosed items 188 208 1,072
Underlying operating profit 759 563 867
Depreciation 255 208 417
Underlying EBITDA 1,014 771 1,284
8. 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 as a result of new information, future events or
otherwise, save as required by law and regulations.
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 (MAR). The Directors of the Group take responsibility
for this announcement.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR GRBDBBUDDGBCRecent news on Coral Products
See all newsREG - Coral Products PLC - Director/PDMR Shareholding
AnnouncementREG - Coral Products PLC - Trading Statement
AnnouncementREG - Coral Products PLC - Half-year Report
AnnouncementREG - Coral Products PLC - Trading Update and Directorate Change
AnnouncementREG - Coral Products PLC - Change of Nominated Adviser and Broker
Announcement