REG - Coral Products PLC - Preliminary Results <Origin Href="QuoteRef">CRU.L</Origin>
06/09/2014 14:42
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Coral Products PLC
11 July 2014
11 July 2014
CORAL PRODUCTS PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 APRIL 2014
Coral Products PLC, (the "Company" or the "Group") a specialist in the design,
manufacture and supply of injection moulded plastic products based in Haydock,
Merseyside, announces its preliminary results for the year ended 30 April
2014.
KEY FINANCIALS
2014 £ 2013 £ Change
Revenue 17.2m 17.3m -
Operating profit * 664,000 496,000 33.9%
(Loss)/profit for the year after tax and non-cash exceptional item (785,000) 427,000 -
EBITDA before non-cash exceptional item* 1,395,000 1,588,000 (12.2%)
Underlying earnings per share * 1.21p 1.08p 12.0%
Dividend per share 0.5p 0.5p -
* Operating profit, EBITDA and underlying EPS are reported before an
exceptional operating charge in 2014 of £1,291,000 as the Directors are of the
opinion that these give a more accurate picture of underlying performance
HEADLINES
· Significant underlying earnings increase arising from greater cost
control and lower depreciation.
· Sales of food packaging containers continue to rise to £6.1m in 2014
(£5.4m in 2013).
· Exceptional non-cash charge relating to the write-down of media assets
in line with strategic plan.
· Underlying EBITDA remains strong at £1.4m maintaining improvement in
operating cash flow.
· Major investment in a new 1,150 tonne machine earmarked for new
containers for online retail distribution customer.
· Revenues from non-media products increased to £10.9m (£9.2m in 2013).
· Ten year supply agreement with a leading national on-line retailer for
a range of totes with expected revenues of £8m over first two years.
· Early conclusion of our 3 year strategic plan.
· Post year-end acquisition of Tatra Plastics Manufacturing Limited and
placing of new equity raising £1.7 million.
· Proposed final dividend of 0.5p reflecting the Board's confidence in
the future.
Commenting on the results, Joe Grimmond, Chairman, said:
"Last year was a challenging year for our company as the media packaging
industry continued its relentless decline in turnover largely due to the
increase in electronic media downloading. The successful implementation of our
strategy has enabled us to more than offset this decline. The improved trading
and financial position of our group allowed us to greatly reduce our reliance
on the media sector.
"The non-cash charge in respect of our remaining media assets and the
acquisition of Tatra completed after the year-end means we can conclude our 3
year strategic plan early.
"Your Board is now developing our next 3 year plan starting from a much
improved position.
"The year ahead looks promising as we start to supply new products for retail
distribution and continue to develop in-house food packaging and waste
disposal containers. We have an agreement with a large retail distribution
company to manufacture new containers to be introduced at purpose built
depots. On the strength of this we have added a larger machine to our
portfolio to adequately manage the increased tonnage required. We are
expecting additional supply agreements as further opportunities arise.
"Interpack is performing strongly and the acquisition of Tatra post year end
provides us with access to new markets, increased customer opportunities and
an expanded product range. This gives us considerable confidence for the
future.
"We believe the opportunity exists for us to create a significant plastic
moulding business and we remain confident in our ability to implement our
strategic vision and improve business performance to increase our customer
base and market share and drive financial results over the medium term".
For further information, please contact:
Coral Products plcJoe Grimmond, Non-Executive ChairmanWarren Ferster, Chief Executive & Managing Director Tel: 07703 518 148Tel: 01942 272 882
Nominated AdviserCairn Financial Advisers LLPAvi Robinson / Tony Rawlinson Tel: 020 7148 7900
BrokerHume Capital plcDavid Lawman / Guy Peters Tel: 020 3693 1470
Bankside ConsultantsRichard Pearson Tel: 07515 587 184
CHAIRMAN'S STATEMENT
Last year was a challenging year for our company as the media packaging
industry continued its relentless decline in turnover largely due to the
increase in electronic media downloading. The successful implementation of our
strategy has enabled us to more than offset this decline. The improved trading
and financial position of our group allowed us to greatly reduce our reliance
on the media sector.
The non-cash charge in respect of our remaining media assets and the
acquisition of Tatra completed after the year-end means we can conclude our 3
year strategic plan early.
Your Board is now developing our next 3 year plan starting from a much
improved position.
The year ahead looks promising as we start to supply new products for retail
distribution and continue to develop in-house food packaging and waste
disposal containers. We have an agreement with a large retail distribution
company to manufacture new containers to be introduced at purpose built
depots. On the strength of this we have added a larger machine to our
portfolio to adequately manage the increased tonnage required. We are
expecting additional supply agreements as further opportunities arise.
Our subsidiary Interpack has continued to perform in line with expectations
and recent sales are particularly encouraging as new customers come on side.
Interpack's turnover has risen by 48% since acquisition and profitability has
more than doubled.
Trade moulding revenues showed a small increase to £2.7 million and a number
of products are being moulded for new customers. A recent order has been
placed which is expected to produce significant additional revenue over the
next 12 months.
Recycling product sales remained fairly constant at £1.8 million over the year
as a whole. The revenues were affected by local authorities' ability to
determine their available spend and policy towards waste management. This area
is significant to the Group and we continue to commit resources to developing
products and partnerships with local authorities and waste management
companies.
Results
Group revenue remained constant for the year at £17,222,000 (2013:
£17,279,000). Margins declined only slightly as the gains from a more
favourable mix of better added value products were offset by increases in raw
materials. EBITDA for the group remained strong at £1,395,000 (2013:
£1,588,000). Overheads in the group decreased to £3,423,000 (2013: £3,753,000)
as a result of the ongoing management of our cost base and a decrease in
depreciation charges. This resulted in an underlying operating profit of
£664,000 (2013: £496,000). Exceptional costs resulting from the write-off of
media assets were £1,291,000 (2013: £nil) and finance costs amounted to
£158,000 (2013: £146,000). The loss for the financial year after exceptional
items and before taxation was £785,000 compared with a profit for 2013 of
£350,000.
Underlying earnings per share were 1.21 pence (2013: 1.08 pence) and the loss
per share after exceptional items was 1.87 pence (2013: earnings of 1.08
pence).
Net debt at 30 April 2014 was £3,968,000 (2013: £3,950,000) giving gearing of
52% (2013: 46%). Interest cover before exceptional costs was 4.2 times (2013:
3.4 times). Net assets per share were 18.2p (2013: 20.6p).
Dividends
The board remains committed to its long-term progressive dividend policy,
which takes account of the underlying growth in earnings, whilst acknowledging
the requirement for continuing investment and short-term fluctuations in
profit.
Having considered the results for the year, the outlook for the new financial
year and the ongoing requirements of the business, the board has recommended
the total dividend be maintained at 0.5 pence per share. The ex-dividend date
will be Wednesday 23 July 2014 and the record date Friday 25 July 2014. This
final dividend will be paid on 17 October 2014.
Strategy
We aim to enhance our position, through organic investment and selective
acquisitions, as a leading plastic moulding group. We have successfully
followed a 3 year strategic plan to replace production of media packaging with
new products with longer and progressive futures. We continue to look at new
markets and develop products and relationships that will enable us to benefit
from the opportunities that will continue to arise from long-term growth in
plastics moulding.
Acquisition and placing
In line with our strategy, we completed the acquisition of Tatra Plastics
Manufacturing Limited earlier this month and successfully raised £1.7 million
with new and existing investors via a placing of new equity.
Tatra is one of the UK's longest established specialists in PVC and plastic
injection moulding and extrusion. Based near Halifax, West Yorkshire, Tatra is
an approved supplier to, and holds current contracts with, major corporations
in the telecommunications and rail industries and has, for the last 5 years,
been developing and manufacturing products for the fibre optic market. The
acquisition will provide Coral with an entry into, inter alia, the rail and
telecoms markets and expand Coral's range of products. In the year ended 31
December 2013, Tatra's audited sales and profit before tax were approximately
£3.2 million and £0.2 million respectively. The net asset value of Tatra as at
31 December 2013 was £0.9 million.
People
We are reliant on the expertise, professionalism and commitment of our people
and their contribution to the business during a challenging year.
Outlook
Interpack is performing strongly and the acquisition of Tatra post year end
provides us with access to new markets, increased customer opportunities and
an expanded product range. This gives us considerable confidence for the
future.
We believe the opportunity exists for us to create a significant plastic
moulding business and we remain confident in our ability to implement our
strategic vision and improve business performance to increase our customer
base and market share and drive financial results over the medium term.
Joe Grimmond
Chairman
11 July 2014
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 30 APRIL 2014
Unaudited2014 Audited2013
£'000 £'000
Continuing operations
Revenue 17,222 17,279
Cost of sales (13,135) (13,030)
Gross profit 4,087 4,249
Operating costs (3,423) (3,753)
Underlying operating profit 664 496
Exceptional items * (1,291) -
(Loss)/profit from operations (627) 496
Finance costs (158) (146)
(Loss)/profit for the financial year before taxation (785) 350
Taxation - 77
(Loss)/profit for the year attributable to equity holders (785) 427
Earnings/(loss) per share Note 2
Basic per ordinary share from continuing operations (1.87)p 1.08p
Underlying per ordinary share from continuing operations 1.21p 1.08p
* Exceptional items are impairment losses on media asset values. The losses
comprise a write-down of £1,187,000 in fixed assets and £104,000 in stock.
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2014
Unaudited2014 Audited2013
£'000 £'000
(Loss)/profit for the financial year (785) 427
Total comprehensive income for the year attributable to the company's shareholders (785) 427
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2014
Unaudited2014 Audited2013
£'000 £'000
Non-current assets
Goodwill 3,868 3,868
Other intangible assets 42 144
Property, plant and equipment 5,198 6,286
9,108 10,298
Current assets
Inventories 1,725 1,377
Trade and other receivables 4,233 3,874
Corporation tax repayable - 107
5,958 5,358
Total assets 15,066 15,656
Current liabilities
Trade and other payables (3,434) (3,047)
Borrowings (2,199) (2,259)
Finance lease liabilities (192) (163)
Term loan (111) (142)
(5,936) (5,611)
Non-current liabilities
Finance lease liabilities (285) (128)
Term loans (1,181) (1,258)
Deferred tax (32) (32)
(1,498) (1,418)
Total liabilities (7,434) (7,029)
Net assets 7,632 8,627
Equity
Share capital 419 419
Share premium 409 409
Retained earnings 6,804 7,799
Equity attributable to shareholders 7,632 8,627
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2014
Share capital Share premium account Capital redemption reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000
Group
At 1 May 2012 381 6,977 7 579 7,944
Net profit for the year - - - 427 427
Cancellation of share premium and capital redemption reserve - (6,977) (7) 6,984 -
Share issue 38 409 - - 447
Dividend paid - - - (191) (191)
At 30 April 2013 (audited) 419 409 - 7,799 8,627
Net profit for the year - - - (785) (785)
Dividend paid - - - (210) (210)
At 30 April 2014 (unaudited) 419 409 - 6,804 7,632
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2014
Unaudited2014 Audited2013
£'000 £'000
Cash flows from operating activities
(Loss)/profit for the year (785) 427
Adjustments for:
Depreciation of property, plant and equipment 681 1,019
Profit on disposal of fixed assets (31) -
Amortisation of intangible assets 50 73
Impairment provision 1,187 -
Taxation recovered - (77)
Interest expense 158 146
Operating cash flows before movements in working capital 1,260 1,588
(Increase)/decrease in inventories (348) 609
(Increase) in trade and other receivables (359) (357)
Increase/(decrease) in trade and other payables 385 (1,244)
Cash generated by operations 938 596
UK corporation tax paid 109 (141)
Net cash generated from operating activities 1,047 455
Cash flows from investing activities
Acquisition of property, plant and equipment (375) (2,647)
Proceeds from sales of plant 45 -
Acquisition of intangible assets (12) (17)
Net cash used in investing activities (342) (2,664)
Cash flows from financing activities
Proceeds of share issue - 447
Proceeds of term loan - 1,400
Proceeds of director's loan - 150
Dividends paid to equity holders (210) (191)
Proceeds of new asset finance - 350
Repayment of director's loan (4) -
Interest paid (158) (146)
Term loan repayments (104) (1,170)
Finance lease principal payments (169) (179)
Net cash generated from financing activities (645) 661
Net increase/(decrease) in cash and cash equivalents 60 (1,548)
Cash and cash equivalents at 1 May (2,259) (711)
Cash and cash equivalents at 30 April (2,199) (2,259)
Cash - -
Overdraft (2,199) (2,259)
Cash and cash equivalents at 30 April (2,199) (2,259)
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
The financial information set out above does not constitute the Group's
statutory accounts for the years ended 30 April 2014 or 2013 within the
meaning of Section 434 of the Companies Act 2006, but is derived from those
accounts. Statutory accounts for 2013 have been delivered to the Registrar of
Companies and those for 2014 will be delivered following the company's Annual
General Meeting. The auditors' report on the statutory accounts for the year
ended 30 April 2013 was unqualified and does not contain statements under s498
(2) or (3) Companies Act 2006.
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.
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.
2. Earnings per share
The basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders for the financial period by the weighted
average number of shares in issue during the financial period of 41,935,609
(2013: 39,613,965).
Underlying earnings per share is also shown calculated by reference to
earnings before exceptional items. The directors consider that this gives a
useful indication of underlying performance,
Basic and underlying earnings per share:
Unaudited2014 Audited2013
£'000 EPS (p) £'000 EPS (p)
(Loss)/profit for the financial period (785) (1.87) 427 1.08
Exceptional items 1,291 3.08 - -
Underlying profit for the period 506 1.21 427 1.08
3. Taxation
Analysis of the tax credit in the accounts comprises the following:
2014 2013
£'000 £'000
Current income tax credit - 109
Deferred income tax - (32)
- 77
4. Dividends
A final dividend of 0.5p per share was paid on 17 October 2013 to shareholders
on the register on 19 July 2013. This dividend amounted to £209,678.
In respect of the current year the directors propose a final dividend of 0.5p
per share to be paid on 17 October 2014 to shareholders on the register on 25
July 2014. The ex dividend date will be 23 July 2014. The dividend is subject
to approval by the shareholders of the company at the Annual General Meeting.
This dividend equates to £209,678 and has not been included as a liability at
30 April 2014.
5. Group reconciliation of net cash flow to movement in net debt
2014 2013
£'000 £'000
Increase/(decrease) in cash and cash equivalents 60 (1,548)
Decrease/(increase) in bank loans 104 (230)
New director's loan - (150)
Directors loan repayment 4 -
Increase in asset finance (186) (171)
Movement in net debt in the period (18) (2,099)
Net debt at start of the period (3,950) (1,851)
Net debt at end of the period (3,968) (3,950)
6. Publication of Annual Report and Notice of Annual General Meeting
A copy of the 2014 Report & Accounts, together with a notice of the Annual
General Meeting to be held at Haydock Thistle Hotel, Penny Lane, Haydock,
Merseyside WA11 9SG on 27 August 2014 at 12:00 p.m., will be sent to all
shareholders on or around 5 August 2014. Further copies will be available to
the public at the company's registered address at North Florida Road, Haydock
Industrial Estate, Haydock, Merseyside WA11 9TP and on the Company's website
at www.coralproducts.com.
This information is provided by RNS
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