Coral Products Share Discussion Threads

[gengulphus] 13/2/2004 13:55

You're into them in a bigger way than I am! 38k would be nearly my entire holding...

And yes, I think a vote of thanks is due to IC! ;-)

Gengulphus

[fortyfive] 13/2/2004 09:16

IC article very positive:- up 12% today...
CORAL PRODUCTS (CRU)

58p - media packaging - The fact that DVDs are gaining in popularity by the day can only be good news for packaging company Coral. And, with the capacity to further boost its position in a growing packaging market, there is plenty of room for additional upside. That, plus the combination of a strong asset base, good levels of cash-generation and a near-complete programme of capital expenditure, means that Coral is an attractive prospect.

What's more, the company currently trades on just 7 times forecast earnings for 2005 with a chunky prospective dividend yield of 6 per cent. So, when you consider that the dividend is unlikely to be cut - because the founding Ferster family owns more than 40 per cent of Coral - the investment argument speaks for itself.

Coral is already one of Europe's leading manufacturers and suppliers of media packaging for the DVD, video and CD markets. So it comes as no real surprise that the group's product mix is changing. Although the CD market is relatively flat, and the video market is expected to fall away, the growing DVD market should underpin continued sales and profits growth.

Results for the six months ended 31 October 2003 revealed a 10 per cent rise in sales to £11m, and profits up slightly to £1.04m. Volume sales of DVD cases increased significantly during the period, CD-case sales were in line with expectations and video box demand reached full capacity by the end of October. Sales of photo-finishing products also remained strong.

Significantly, the group has installed three new DVD lines in order to meet growing demand, at a cost of around £2.8m. With no more large-scale capital expenditure outstanding, this should enable profits to flow through onto the bottom line, and help reduce the debt burden. Now it is just a case of aligning demand with capacity as the group moves forwards.

However, the cost of raw materials is a concern. During the first half, this meant that overall operating margins declined by nearly one percentage point to 10.2 per cent. Although further upward movements in the cost of raw materials cannot be ruled out, Coral is shielded to some extent by agreements with customers that enable it to raise prices if this happens. As things stand, the biggest issue facing its DVD business is the fact that there are a number of competitors in Europe, forcing prices down, which is impacting margins.

To help combat this, Coral continues to look at new products. For example, its patent for security DVD boxes gives it a massive market to exploit. These boxes have security tags built-in, and will help shops combat growing levels of shoplifting. Coral has already tapped the UK market and, if it breaks into Europe, there is huge potential for future sales.

The company will continue to grow its DVD business as demand on the video side falls away. This will result in a move to more automated production, and falling labour costs should also help to boost margins. Given its infrastructure and capabilities, and strong market position, Coral remains an attractive proposition. Buy.

[monty burns] 13/2/2004 08:46

the sods - not holding and was hoping for a drift back due to lack of activity......

[humdinger] 13/2/2004 08:38

Chart still looks good - even better if you put the dividend payments back in the chart.

Don't take much notice of IC but they can be helpful :)

(edit - on me own, so really just for my reference - sold 12% (38k) of holding as it is so strong - value of holding the same after sale. Still key holding for income/growth.

[richard xi] 13/2/2004 08:33

thanks for that. wondered what had happened!

[ntv] 13/2/2004 08:08

ic tip today

[felix99] 08/2/2004 19:46

Cheap agreed but no news now till resutls in July.

Not going anywhere fast.

Am holding a few but will offload on any spike. Then just wait for a few bad days no the mkts and watch thi get creamed back to 50p - thats whent o buy not up here IMHO.

Banked the penny divi last week and price up a penny on bid to boot. Nice buy Friday too

[ntv] 08/2/2004 18:11

still 2 cheap

[ntv] 29/12/2003 12:33

still too cheap

[ntv] 02/12/2003 20:24

bought some today
looks a solid business and share buy back will help
excellent yield

[clocktower] 02/12/2003 10:43

Full year figures should be outstanding.Agreed Humdinger. Should see great EPS for full year.

They will nodoubt be buying back more to use the cash.

[humdinger] 02/12/2003 07:55

Capital expenditure finished - now watch the profits rise :-)

[felix99] 28/11/2003 20:57

Results should be next week. Be interesting to see how they are doing. Missed 47p but bought a few at 51.5p that silly day.Alas didn;t pick anymore up before it rose again.

Should see company buying backa gain after results anything upto 60p I would hope

[humdinger] 27/11/2003 12:36

FWIW - I did ring the FD on the day - they then spoke to broker and hey presto it recovered. Note the price back where it was. Announcement due early Dec.

[upside] 19/11/2003 14:25

Lowest point was offer @ 47p and bid @ 42p. MM's did their usual spread widening...

[monty burns] 19/11/2003 14:06

cor life.....

What did the offer price get down to?

Not holding but down 18%, I would have been tempted had I seen it earlier.

On top of recent drift down, something appears to be wrong, not all that surprising given their most recent trading comments. But what usually happens is that they get overly clobbered and provide a nice buy op.

[upside] 19/11/2003 13:58

Strange. Only volume is someone's buy, that went through over the offer. Hindsight is (as always) a wonderful thing :) Oh well. Will go back to other things for now...

[strudwick] 19/11/2003 13:41

i have seen this happen before on other stocks i own, GDO was one several months ago. They fall significantly for no reason and then bounce straight back up.

[upside] 19/11/2003 13:29

Still no word? Tempted to make a very small punt on this.

[upside] 19/11/2003 13:21

strudwick - exactly the same here! Looks like we may have missed the window of opportunity...

[aderemi] 19/11/2003 13:18

No volume and down 18%, could the dollar weakness be the responsible?

[strudwick] 19/11/2003 13:17

i almost bought some more when they were down, but was too nervous without an answer.

[upside] 19/11/2003 13:15

strudwick - good stuff. Seems to have recovered a little - maybe the company is responding to your call and is doing a deal to buy up its own stock! :)

[strudwick] 19/11/2003 13:12

waiting for company to call me back

[upside] 19/11/2003 13:11

Looks very odd. I'm out of CRU at the moment but having traded it successfully in the past I was keeping an eye on it. No volume so can only guess that someone is trying to offload stock and, given the low liquidity, the price is dropping like a stone. Looks too risky to buy without news as to what's going on.