Coral Products PLC – Half-year Report

Coral Products PLC – Half-year 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 2019.

 

 

Financial headlines

 

 

Six months to

31 October

2019

Six months to

31 October

2018

% change

Six months to

30 April

2019

% change

Group sales

 £12.14 million

 £13.08 million

-7.2%

 £11.65 million

+4.2%

Gross profit

 £4.60 million

 £5.04 million

-8.7%

 £3.83 million

+20.1%

Underlying operating margin*

 37.9%

 38.5%

-1.6%

32.9%

+15.2%

Underlying operating profit (excluding finance expenses)*

 £485,000

 £1,009,000

-51.9%

 £9,000

+5,288.9%

Reported profit before taxation

£25,000

 £ 582,000

-95.7%

 £ (541,000)

+104.6%

Underlying EBITDA*

   £1,341,000

   £1,747,000

-23.2%

   £732,000

+83.2%

Underlying basic earnings per share*

 0.26p

 0.87p

-70.1%

 (0.12)p

+316.7%

Proposed interim dividend per share

0.00p

0.25p

0.00p

 

*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 

 

–        Following a disappointing second half last year I am pleased to report that the first half of this year is improved in terms of sales and a return to profit. This is despite volatile currency fluctuations and variable trading conditions.

 

–           New product development partnership with Rotite has resulted in two new products being developed, the tools of which are due for delivery in March 2020. In addition, some current recycling products have benefited from design changes making for cost savings. Our customers have shown high interest in these new and improved products.

 

–           New business expected to impact during the final quarter of the current financial year includes:

New and improved food packaging,

New lightweight 23lt and 55lt caddies,

Extruded highway sound barriers,

Fire retardant click & fix product, and

Increased contribution from recycling unit.

 

–           Further new business expected in the first half of the next financial period includes:

Flame retardant plastic moulded roof tiles, this was originally expected during the final quarter of the current financial year but has been pushed back by the customer until September 2020 due to customer’s logistical issues.

Multi box recycling system (MBRS), due to logistical issues the MBRS tooling will be received a month late, as a result the first deliveries to customers, which we previously announced would be in this financial year, are now expected in the early part of the next financial year. Three orders have now been received for the MBRS.

–           Strong net assets position has been maintained.

 

–          The recently added state-of-the-art plastic recycling system is operating to expectations on an 8-hour, 5 day per week basis and contributing to the business. Due to customer demand it is planned to extend the operation to a 24-hour, 5 day per week by the end of this financial period.

 

–          The Recycling plant has been granted reprocessing accreditation. This gives the opportunity to generate our own PRN’s (packaging recovery notes) to mitigate the Government waste packaging levy incurred on the business.

 

–            Extension to the on-line tote supply gained for the rest of this financial period and into the next.

 

–          Due to operational changes the Haydock site is now more competitive when bidding for trade work. This has been proved with the recent trade orders gained from some high-profile customers.

 

–            Additional European food packaging suppliers are now on stream and contributing.

 

 

Commenting on today’s results, Joe Grimmond, Coral’s Chairman, said:

“In my Chairman’s statement that accompanied the release of the 2019 accounts I expressed concerns over the uncertainties associated with the ongoing Brexit situation. Despite these concerns I am encouraged with the level of sales and profitability achieved over the period.

However, there was a softening of demand during November and December 2019, possibly related to General Election uncertainties, whilst January 2020 shows a renewed strengthening of demand.

Whilst the second half is encouraging with the recycling business moving to a 24-hour, 5 day a week operation, new lightweight products introduced to the market and the new plastic sound barrier, the delay in the delivery of the MBRS tooling and the continued uncertainties mean that we are likely to report a small loss before taxation overall for the full year and a small drop in EBITDA from the previous year. We are confident that we can build on this base and in our future performance.”

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