Coral Products Share Discussion Threads

[base7] 23/8/2019 07:42

In respect of the free float I would also point out that although this is not a particularly active discussion board that the few "regular" contributors here probably speak for over 3% of the issued share capital ,which is a significant % of the free floating shares

[base7] 23/8/2019 07:39

My understanding is that Mick wood has never been a fan of Auto & in that respect has had to make the best of a bad job.I reckon that ill fated venture has cost substantial amounts & we would be best cutting our losses in that respect - unless we can demonstrate growing exports to global Auto manufacturers-which is very unlikely.
Our best hope for a short term recovery in our share price is if JG ,other Directors & PDMRs buy substantial numbers of shares-notwithstanding the fact that our freefloat is very low

[charo] 22/8/2019 22:53

Rns 16 th jan 2018 clearly admitted failures of management re auto and stated that they had asked for some business to be resourced.
JG had retaken control between March 17 and Sept 17. MW ceo from Jan18. Clearly JG had identified prob and negotiated transfer with customer.
Unlike say Carlco who allowed losses to drain life of company.The auto business can make or break you and especially if you don't say enough.
Lets all attend AGM and question board. JG will not shirk, I have attended AGM, s over years he is open and unafraid to answer and blunt.

[charo] 22/8/2019 18:31

Clocktower
I may have missed the write off of "several hundreds of thousands" related to write down of machines purchased can you point out Rns or other statement from company to this write down.

[charo] 22/8/2019 17:55

Maybe prevented from dealing ???

[base7] 22/8/2019 17:32

I retain the view that the only way we will get a decent exit is if CRU can avoid disasters for a year or two ,growing revenues & profitability,while reducing debt & then,maybe,with a firmer SP, JG may get the exit which he requires to go & the only way he can dispose of his holding is either by way of a complete takeover or to a strategic investor ,pending a takeover.If JG believes he could achieve a 20p+ exit in the next year or two ( & while he is still alive....& us) he will buying more shares (& hopefully more than 50k)following todays Results.
I am not averse to the odd bolt on acquisition,but definitely not in low margin high risk sectors like Auto !
Good luck all & back into hibernation for yet another few months .

[charo] 22/8/2019 16:56

I fail to understand the negative comments on acqs.Without Interpack tatra gop neinman all bought by jg between 2012 and 2016.Cora would be where.???
JG effectively handed control to new CEO s in 2016 ?Now on second; possibly to conform to governance concerns.
Since when we have gone nowhere.So called CEO s with stellar reps from larger groups have reorganised refocused and retreated.
The board needs JG to impose himself and do what he has always done grow the business cheaply.
He has made no excuses ,"endured"tels you how he feels.
Board needs to persuade him to give it another push.

[clocktower] 22/8/2019 16:14

In the past JG has bought stock when the share price was low, so far this time nothing or from him or the CEO and CFO.

[aleman] 22/8/2019 15:53

Talking about strategic acquisitions in the short term suggests H1 numbers will be good. It would be daft to mention it otherwise.

[clocktower] 22/8/2019 15:51

The one part of the report I do not like is "supported by strategic acquisitions in the short to medium term"

I think JG needs to get back on the straight and narrow before thinking about making any acquisitions, it would be better to be acquired than to acquire, as there have been issues with doing that in the past, as we all know to our cost.

[clocktower] 22/8/2019 15:34

I could buy 500k much cheaper than that, I guess I would have to pay no more than 10p

Not that I want buy more to but I am underwater on these as I have paid between 7p and 13p for my holding but I am happy to hold as I believe we will soon return to dividends, see the debt reduced and most importantly see profits in line with what were were expecting after H1 results. Also, in the current climate its a decent home for the money imo.

[atholl91] 22/8/2019 15:04

Clocktower. If JG went the stock I would double my holding. Otherwise you could have my 500k at 12p any day of the week.

[aleman] 22/8/2019 14:38

The price of sourced polymers in Europe generally rose in Feb - March but have since declined further. Also, I think the faux-Brexit and auto shutdowns might have raised a few issues through H2. Maybe there'll be some unwind in the current H1? This might have coloured the company's outlook a bit when making the trading updates. Polymer prices are definitely looking much better at the moment than for some time. I think there's still a chance of £3m EBITDA this year and a debt reduction. It's all pretty unpredictable stuff, with Brexit and Trump and oil, but I'm hoping at least H1 numbers could look good.

[clocktower] 22/8/2019 14:37

"The UK's biggest protective packaging distributor is seeing increasing requests from customers wanting to cut carbon.

Macfarlane Group boss Peter Atkinson said there there was rising demand for reusable food labels, and firms wanting to use more recyclable packaging.

His comments came as US retail giant Amazon has been criticised by customers for increasing its use of plastic.

Glasgow-based Macfarlane has increased sales, despite industry challenges.

Its sales grew 5.4% to £107.5m in the first half of the year, with pre-tax profits at £3.8m."



Comments like these show the potential for Coral`s products and look at the profits that can be achieved.

Maybe Macfarlance could fancy buying CRU.

[clocktower] 22/8/2019 14:19

Maybe JG gets a better perspective of the company from Spain.

If the CEO is doing a great job (which I think he is) I do not see the need for JG to be on his heels. While it might now be better off under new ownership, as would most shareholders, I think there is still huge potential for CRU in view of all the steps they have taken develop new products and find new customers. It was good to hear about the ongoing support from the tote buyer.

I think the new multi purpose recycling bin could be a huge success next year and as its a new product and out on its own leading the field, the price can be set to cover any material costs that may or may not occur due to the movement of the GBP.

If Boris gets a deal the GBP will rebound and profits should flow, if not then it may take a few months but I have not doubt that this time next year the Pound will be much stronger.Not so good for those that rely on exports I guess but CRU does not at present.

[atholl91] 22/8/2019 14:05

Base. JG is the problem as I have said before until he is removed the underperformance will continue. He spends 9 months a year in Spain. The enterprise value ( Market Cap + Net Debt) is £15m with the price at 8.25p. Ebitda of £2.2m is multiple of 6.8x. You can pick up private companies in this sector at 5x . And people think JG wants 20p a share. Whats he vaping.

[base7] 22/8/2019 13:34

The underlying tone is an intriguing combination of optimism & caution.Cru has let The Market down in recent years by expressing optimism only to be let down by an unkown future & i suspect that JG is trying to manage expectations more prudently now-while hoping that all the positives play out & non of the negatives.A hard Brexit could see a further 15%+ off the £ ,resulting in substantial increased costs & reduced margins,so he is right to be cautious.Creating our own raw material in house via our recycling plant could prove to be an inspired move as our reliance on imports will be reduced.In truth ,Cru has been & continues to be a lousy investment & I am holding,partly as our market is very illiquid so would struggle to sell & in the belief that JG will want to cash his chips in some time soon & sell to a larger rival,who would be glad for our revenue & customers & who could reduce a whole layer of senior & middle management costs.To achieve a reasonable price we need a period of stable growth with no shock/horror profits warnings.
JG still clearly running the show, as I see it & Mick is effectively a COO

[clocktower] 22/8/2019 09:37

Very true Aleman about screwing it up. LoL

Hopefully, the stock building will not result in write off later this year (at least they can recycle any items now). However, it is more likely to be the extra stocks they had built up previously when Brexit was due 31.03.19 as they had suggested that a buffer had been built up for customers.

A stock of Roof Tiles could also be a factor I guess.

"6. Post Balance Sheet Event

The land and buildings at Haydock were refinanced in May 2019 raising GBP500,000 in cash, this was used to clear a temporary overdraft balance in Coral Products (Mouldings) Ltd."

At least refinancing is being done at a time of very low interest rates.

Margins improving even with the adverse factors of the weak Pound, so before long I expect the directors will be buying more stock to show their confidence.

[aleman] 22/8/2019 09:07

Somewhat curious results and some number crunching necessary, I think. Underlying EBITDA rose from £2.1m to £2.5m. Operating cashflow before working cap rose form £1.4m to £2.3m. They're good numbers - yet all the cash got used up. 1/4 went into stockbuild. Hopefully some of that will come back but the business is growing and needs cash. A bit went on reorganisation - we seem to be doing a lot of that. Net debt to underlying EBITDA fell from 3.5 to 3.3. They could have highlighted that but it's still high when the expectation was it would fall very sharply last year.

The business is growing and investing and they look forward to a satisfactory outturn - but what happened last winter that was suddenly very bad then not so bad? Ah, the joys of small cap ups and downs. Well, at least were nearly 4 months into H1 and it sounds to be growing and doing okay. They've only got two months to screw it up!

[clocktower] 22/8/2019 08:44

I have had a quick scan of the results and I see many positives - number one being:

"Underlying EBITDA increased by 18.6% to GBP2.5m (2018: GBP2.1m)"

The only missing thing is comments about the Automotive (which I think may have caused the big issues in the first four months of H2). Hopefully this is behind the company now.

I was interested to see that they are to supply "screening" for motorways and of course the new recycling bin that should be a big hit in 2020.

I cannot understand why they may want authority to buy back shares though.

I am pleased they have not borrowed more to pay a dividend.

So at first sight, very positive going forward bearing in mind all factors.

CEO doing a good job.

[charo] 22/8/2019 08:21

Likitorma
Or accept that the board recognises the serious dangers that may arise and are planning for such.
Debt is no real concern with strong cash flow from the high depreciation more than sufficient to meet repayments.

[likitorma] 22/8/2019 08:05

Worrying times based on this statement: "Whilst we have confidence in our development strategy and the prospects of the Group, the very real uncertainties over Brexit are a cause for concern. The decline in sterling against the dollar and euro, our major trading currencies, leads to increases in our costs of materials."

Debt is a massive issue as well.

[pugugly] 22/8/2019 07:31

First read sounds OK

"We therefore anticipate significant sales growth over the current financial year. I was pleased with the increase in revenue up 5.7% to £24.7m (2018: £23.4m) and underlying operating profit up 13.5% to £1.0m (2018: £0.9m). (Note that a reconciliation of underlying profit is provided in note 2)."