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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Coral Products Plc | LSE:CRU | London | Ordinary Share | GB0002235736 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 9.85 | 9.70 | 10.00 | 9.85 | 9.85 | 9.85 | 16,372 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Plastics Products, Nec | 35.22M | 1.26M | 0.0141 | 6.99 | 8.78M |
From Apr 2019 to Apr 2024
TIDMCRU
RNS Number : 0307C
Coral Products PLC
16 January 2018
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 2017.
Hot Features
Premium
Financial headlines Six months Six months
to to
31 October 31 October
2017 2016 % change
GBP11.91 GBP10.75
Group sales million million +10.8%
GBP3.51
Gross profit GBP4.04 million million +15.1%
Underlying operating margin* 34% 33%
Underlying operating profit* GBP371,000 GBP1,030,000 -64.0%
Reported (loss)/profit before
taxation GBP(7,000) GBP718,000 -100.1%
Underlying EBITDA* GBP982,000 GBP1,413,000 -30.5%
Underlying basic earnings
per share* 0.23p 1.03p -77.7%
Proposed interim dividend
per share 0.0p 0.33p
*The financial headlines disclosed as underlying represent the reported metrics excluding separately disclosed items (being share based payment charges and amortisation of intangible assets in each period).
Operational and financial highlights
- Successful integration of Tambour shutter division from PAL Group (Operations) Ltd (PAL) into Tatra-Rotalac Ltd.
- Successful integration of plant and machinery from Industrial & Commercial Mouldings Ltd (ICM) into Coral Products (Mouldings) Ltd.
- Successful introduction of some 75 new automotive injection moulded parts.
- Gained new business from Renault and Vauxhall for Van Door Handles, delivery of which began in November 2017.
- Major telecoms business contract renewed for a further three years at Tatra-Rotalac. - Strong net assets position has been maintained.
- Interim dividend suspended in line with stated strategy to apply cash towards accelerating organic growth.
- New sales team commenced work at Coral Products (Mouldings) Ltd in November 2017 bringing added focus to sales for the second half of the year.
- An operations review at Coral Products (Mouldings) Ltd identified non-recurring costs of GBP425,000 related to one-off set up costs for the automotive business and write off of slow moving and obsolete stock.
Commenting on today's results, Joe Grimmond, Coral's Chairman, said:
"Trading in the first half of the current year shows revenue and gross profits both substantially ahead of the same period for last year.
Coral Products continues to make good progress against our 5-year 2015 strategic plan. We have increased investment in business development, new products, production capacity and employee capabilities, which has strengthened our position in injection moulding and at the same time expanded the range of plastic moulded services we supply.
Results to date in the current financial year have been disappointing mainly due to the continuing losses at Coral Products (Mouldings) Haydock facility. Following the appointment of Mick Wood, COO, a comprehensive review of operations at the Haydock facility has been carried out. Problems have been identified and actions taken to resolve them during this financial year. The review highlighted non-recurring costs of GBP425,000, related to one-off set-up costs for our automotive business, as well as the write off of obsolete and slow-moving inventory identified during the implementation of the new ERP system. As a result of these losses at Haydock it is unlikely that the group will do better than break-even in the current financial year. All the other subsidiaries remain substantially profitable and as a result of the actions being taken at Haydock we remain confident of the Group's future prospects."
Enquiries
Coral Products plc Tel: 01942 272882 Joe Grimmond, Chairman Mick Wood, COO Nominated Adviser Cairn Financial Advisers LLP Tel: 020 7213 Tony Rawlinson / Liam Murray 0880 Broker Daniel Stewart & Company Limited Tel: 020 7776 David Lawman 6550 Capital Markets Consultants Limited Tel: 07515 587184 Richard Pearson
Chairman's Statement
Results
Trading in the first half of the current year shows revenue and gross profits both substantially ahead of the same period for last year. Reported revenue increased to GBP11,911,000 (six months to 31 October 2016: GBP10,752,000).
Gross margins remained high at 33.9% (2016: 32.6%) resulting in a gross profit of GBP4,037,000 (2016: GBP3,506,000) in the six months to 31 October 2017.
There was an increase in operating costs from the previous year to GBP3,666,000 (2016: GBP2,476,000). This resulted in a reduced underlying profit from operations of GBP371,000 (2016: GBP1,030,000). This was mainly from a GBP244,000 increase in depreciation charge, to GBP611,000 (2016: GBP367,000) as we increased investment to meet projected demand, the benefit of which is expected to flow through in the coming months. Finance costs increased to GBP182,000 (2016: GBP124,000), as part of the increase in investment. We also suffered a negative currency variance of GBP36,000.
Separately disclosed expenses of GBP196,000 (2016: GBP188,000) comprised the amortisation of intangibles acquired on acquisition, share based payment charges over employee options and a settlement agreement with an outgoing sales manager.
The loss before tax after separately disclosed items was GBP7,000 (2016: GBP718,000 profit). The reduction in profit before tax from the previous period was as a result of necessary actions taken during this period, which resulted in a one-off non-recurring cost of GBP425,000 arising from the set-up costs relating to our automotive business and the write off of obsolete and slow-moving items identified during the implementation of the new ERP system. This is in addition to increased depreciation and interest costs referred to earlier of GBP302,000. Taking these items into consideration the profit before tax excluding these extra costs would have been GBP720,000 in the period (2016: GBP718,000).
Operations
Tatra-Rotalac Ltd
During the six-month period ended 31 October 2017 we successfully integrated the recently acquired PAL business into the Tatra-Rotalac site. The introduction was seamless with a 100% PAL customer retention and the bonus of additional sales, coming from the introduction. This is having a positive impact on efficiencies in the plant. Additional work with strategic European customers is also coming through. The second half is expected to remain substantially profitable.
Interpack Ltd
Interpack's sales and margins have been negatively affected by the emergence of stiff competition from new low-cost entrants into the market. A recent focus re-aligning the sales team onto higher margin lower volume business is beginning to positively impact margins. Interpack were also negatively impacted by currency movements which meant the business reported profitability behind budget. However, the business remains substantially profitable.
Global One-Pak Ltd
Sales were ahead of the same period last year and we are confident of further improvement.
Notwithstanding the volatility in currencies our Global One-Pak business has maintained its budgeted profitability for the first half. This profitability is expected to be maintained through the second half of the financial period.
Coral Products (Mouldings) Ltd
Sales at Coral Products (Mouldings) showed a considerable increase over the same period last year mostly from the introduction of the new automotive activity. We introduced into production during the period some 90 new components or 75 new complete parts. This as expected has negatively impacted on contribution during the period as introductive production and technical issues were resolved.
A new general sales team was introduced in November 2017 bringing added focus to sales.
The following factors impacted inventories during this period:
-- The new automotive business required a rapid build-up of 75 new parts, with very expensive polymers and start-up costs. Coral Products (Mouldings) experienced costs for refurbishment of ICM's tools (GBP100k), initial quality issues (GBP40k) and one major issue which we could not resolve resulting in our asking the customer to resource, this resulted in a one-off loss (GBP60k). We had automotive stock at the period end of GBP452k.
-- Shortages of certain polymers meant stockpiling where we could to avoid production run outs.
-- Our concerns that rationing of supply led us to accelerate supplier payments cementing supplier confidence and relationships.
Capital expenditure
Total capital expenditure in the first six months was GBP1,277,000 (2016: GBP1,143,000) of which GBP201,000 was spent at Tatra-Rotalac, Wythenshawe and the balance expended on the continued improvements to the capabilities at Coral Mouldings, Haydock which included a further 750 tonne injection moulding machine specifically for the larger crates, trays and totes.
Financial position
The balance sheet asset position remains strong at GBP13,493,000 (2016: GBP13,787,000). This represents a solid asset platform for developing the business.
Underlying EBITDA although lower than last year, remains strong at GBP982,000 (2016: GBP1,413,000).
The Group had undrawn bank facilities of GBP1.7 million which, together with its asset based finance lines at 31 October 2017, enable it to invest internally or in further acquisitions and businesses for growth which will then enable better returns for our shareholders.
Dividends
Given the increased investment together with the disappointing first half result the board has decided to defer any decision on dividend for the current year until we see the outcome for the full year.
Outlook
Coral Products continues to perform well against our 5-year 2015 strategic plan. We have increased investment in business development, new products, production capacity and employee capabilities, which has strengthened our position in injection moulding and at the same time expanded the range of plastic moulded services we supply.
Results to date in the current financial year have been disappointing mainly due to the continuing losses at Coral Products (Mouldings) Haydock facility. Following the appointment of Mick Wood, COO, a comprehensive review of operations at the Haydock facility has been carried out. Problems have been identified and actions taken to resolve them during this financial year. The review highlighted non-recurring costs of GBP425,000 as referred to earlier in my report. As a result of these losses at Haydock it is unlikely the group will do better than break-even in the current financial year. All the other subsidiaries remain substantially profitable and as a result of the actions being taken at Haydock we remain confident of the Group's future prospects.
Joe Grimmond Chairman 16 January 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months to 31 October 2017
Six months Six months
to to Year to
31 October 31 October 30 April
2017 2016 2017
Notes (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Revenue 3 11,911 10,752 21,432
Cost of sales (7,874) (7,246) (14,114)
------------- ---------------- --------------
Gross profit 4,037 3,506 7,318
Operating costs
Distribution expenses (546) (427) (1,000)
Administrative expenses
before separately disclosed
items (3,120) (2,049) (5,225)
------------- ---------------- --------------
Underlying operating profit 371 1,030 1,093
Separately disclosed items:
-------------
Share based payment charge (8) (14) 4
Amortisation of intangible
assets (174) (174) (352)
Compensation for loss of
office (14) - (189)
Release earn-out agreement
provision - - 93
Impairment loss on trade
receivables - - 44
------------- ---------------- --------------
(196) (188) (400)
Operating profit 175 842 693
Finance expense (182) (124) (228)
------------- ---------------- --------------
(Loss)/Profit before taxation (7) 718 465
Taxation 4 - (55) (7)
------------- ---------------- --------------
Total comprehensive income (7) 663 458
------------- ---------------- --------------
Earnings per ordinary share 5
Basic and diluted (pence) 0.00 0.80 0.55
Underlying basic (pence) 0.23 1.03 1.04
------------- ---------------- --------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 October 2017
31 October 31 October 30 April
2017 2016 2017
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Non-current assets
Goodwill 5,495 5,495 5,495
Other intangible assets 1,864 2,214 2,038
Property, plant and equipment 9,111 7,293 8,411
Total non-current assets 16,470 15,002 15,944
------------- -------------- ------------
Current assets
Inventories 3,162 2,716 2,883
Trade and other receivables 5,172 5,283 5,529
Cash and cash equivalents 464 214 673
Total current assets 8,798 8,213 9,085
------------- -------------- ------------
Total assets 25,268 23,215 25,029
------------- -------------- ------------
Current liabilities
Bank overdrafts and borrowings (4,199) (3,405) (3,808)
Trade and other payables (3,657) (3,360) (4,406)
Corporation tax (90) (223) (81)
Total current liabilities (7,938) (6,998) (8,295)
------------- -------------- ------------
Non-current liabilities
Borrowings (3,375) (1,960) (2,475)
Deferred taxation liability (462) (470) (462)
------------- -------------- ------------
Total non-current liabilities (3,837) (2,430) (2,937)
------------- -------------- ------------
Total liabilities (11,775) (9,428) (11,232)
------------- -------------- ------------
Total net assets 13,493 13,787 13,797
------------- -------------- ------------
Equity
Share capital 826 826 826
Share premium 5,288 5,288 5,288
Other reserves 1,567 1,061 1,567
Retained earnings 5,812 6,612 6,116
------------- -------------- ------------
Total equity 13,493 13,787 13,797
------------- -------------- ------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the six months to 31 October 2017 (unaudited)
Share Share Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2017 826 5,288 1,567 6,116 13,797
Total comprehensive
income - - - (6) (6)
Credit for share based
payment - - - 8 8
Dividend paid - - - (306) (306)
----- --------- ---------- ---------- --------
At 31 October 2017 826 5,288 1,567 5,812 13,493
----- --------- ---------- ---------- --------
For the six months to 31 October 2016 (unaudited)
Share Share Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2016 826 5,288 1,061 6,513 13,688
Total comprehensive
income - - - 663 663
Credit for share based
payment - - - 14 14
Dividend paid - - (578) (578)
--------- ---------- ---------- -------------- --------
At 31 October 2016 826 5,288 1,061 6,612 13,787
--------- ---------- ---------- -------------- --------
For the year ended 30 April 2017 (audited)
Share Share Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2016 826 5,288 1,061 6,513 13,688
Total comprehensive
income - - - 458 458
Other comprehensive
income - - 506 - 506
Debit for share based
payment - - - (4) (4)
Dividend paid - - - (851) (851)
--------- --------- ---------- ---------- ---------------
At 30 April 2017 826 5,288 1,567 6,116 13,797
--------- --------- ---------- ---------- ---------------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months to 31 October 2017
Six months Six months
to to Year to
31 October 31 October 30 April
2017 2016 2017
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Cash flow from operating activities
Profit for the period after tax 39 663 458
Adjustments for:
Depreciation 611 367 821
Loss on disposal of fixed assets - - 44
Intangibles amortisation 174 176 352
Share based payment charge 8 14 (4)
Taxation charge 8 55 7
Release of earn-out provision - - 93
Interest payable 182 124 228
Increase in inventories (279) (873) (1,040)
Decrease/(Increase) in trade and
other receivables 357 (4) (250)
(Decrease)/increase in trade and
other payables (803) (554) 452
UK corporation tax paid - - (66)
Net cash generated/(used) from
operating activities 297 (32) 1,095
------------- ----------------------- ------------
Cash flow from investing activities
Proceeds from disposal of property,
plant and equipment 13 - 46
Acquisition of subsidiary, net
of cash - - (100)
Acquisition of property, plant
and equipment (1,265) (1,143) (919)
Net cash used in investing activities (1,252) (1,143) (973)
------------- ----------------------- ------------
Cash flow from financing activities
Proceeds of new asset finance 1,291 482 208
Dividend paid (306) (578) (851)
Interest paid (182) (124) (228)
Repayments of bank borrowings (65) (204) (371)
Finance lease principal payments (501) (186) (558)
Repayment of Bank Term Loans (1,462) - -
New Bank Loans raised 1,743 - -
Net cash generated/(used) in financing
activities 518 (610) (1,800)
------------- ----------------------- ------------
Net decrease in cash and cash equivalents (437) (1,785) (1,678)
Cash and cash equivalents at the
start of the period (2,171) (493) (493)
------------- ----------------------- ------------
Cash and cash equivalents at the
end of the period (2,608) (2,278) (2,171)
------------- ----------------------- ------------
1.
1. Basis of preparation
The financial information set out in this Interim Report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 April 2017, prepared under IFRS, have been filed with the Registrar of Companies.
The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
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 2017.
The Interim Report has not been audited 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 2017.
In respect of the new accounting standards, the Directors are specifically reviewing the requirements of IFRS 15, which will become effective for the 30 April 2019 year end. In particular an assessment is ongoing around specific elements within the standard's guidance relating to recognition of revenue, however it is not expected that there will be a material difference to the group's revenue recognition policies given the nature of the group's principal activity and current policies in place. Similarly, the Directors are currently reviewing the impact of IFRS 16 and IFRS 9 which will become effective for the 30 April 2020 and 30 April 2019 year end respectively. At this point it is not practicable for the Directors to provide a reasonable estimate of the effect of IFRS 9 or IFRS 16 as their detailed review of this standard is ongoing.
3. Revenue
All production is based in the United Kingdom. The geographical analysis of revenue is shown below:
Six months Six months
to to Year to
31 October 31 October 30 April
2017 2016 2017
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
United Kingdom 10,764 9,812 19,980
Rest of Europe 967 538 706
Rest of the World 180 402 746
11,911 10,752 21,432
-------------- ------------- -----------
Turnover by business activity
Sale and manufacture of plastic
products 11,911 10,752 21,432
-------------- ------------- -----------
4. Taxation
The taxation charge for the six months to 31 October 2017 is based on the effective taxation rate, which is estimated will apply to earnings for the year ending 30 April 2018.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 82,614,865 (31 October 2016: 82,614,865 and 30 April 2017: 82,614,865).
Six months Six months
to to Year to
31 October 31 October 30 April
2017 2016 2017
(unaudited) (unaudited) (audited)
GBP000 p GBP000 p GBP000 p
Basic and diluted earnings
per ordinary share
(Loss)/Profit for the period
after tax (7) 0.00 663 0.80 458 0.55
-------- ----- -------- ----- ------- -----
Underlying earnings per ordinary
share
Underlying profit for the period
after tax 189 0.23 851 1.03 858 1.04
-------- ----- -------- ----- ------- -----
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 Six months
to to
Year to
31 October 31 October 30 April
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Net decrease in cash and cash
equivalents (437) (1,785) (1,678)
(Increase)/Decrease in bank
and other loans (212) 204 371
Increase in finance leases (851) (296) (1,029)
Increase in net debt in the
financial period (1,500) (1,877) (2,336)
Opening net debt (5,610) (3,274) (3,274)
-------------- ------------- -----------
Closing net debt (7,110) (5,151) (5,610)
-------------- ------------- -----------
7. 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 Corals 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).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFVFLVIRLIT
(END) Dow Jones Newswires
January 16, 2018 09:30 ET (14:30 GMT)
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