TIDMCRU
RNS Number : 2572L
Coral Products PLC
04 September 2023
4 September 2023
CORAL PRODUCTS PLC
('Coral' or the 'Company' or the 'Group')
Final Results
Coral Products PLC, a specialist in the design, manufacture and
supply of injection moulded plastic products based in Wythenshawe,
Manchester, announces its audited final results for the year ended
30 April 2023.
2023 2022 %
Financial headlines GBPm GBPm Change
---------------------------------------- ------ ------ --------
Group sales 35.2 14.4 144%
Gross profit 10.5 5.3 98%
---------------------------------------- ------ ------ --------
Gross margin % 29.7% 36.7%
* From existing operations 39.6% 36.7% 8%
* From the four acquisitions 23.3% -
---------------------------------------- ------ ------ --------
Underlying results *
* Operating profit 2.7 1.6 69%
* Profit before taxation 2.3 1.5 53%
* EBITDA 3.9 1.8 117%
* Basic earnings per share 2.60p 1.39p 87%
---------------------------------------- ------ ------ --------
Statutory Results
* Operating profit 1.7 1.4 21%
* Profit before taxation 1.3 1.3 0%
* EBITDA 3.4 1.9 79%
* Basic earnings per share 1.44p 1.19p 21%
---------------------------------------- ------ ------ --------
Dividend paid per share 0.5p 1.1p
Proposed final dividend payment
per share 0.6p -
---------------------------------------- ------ ------ --------
* Underlying results are reported before separately disclosed
items, as shown in note 2. Such underlying results are not
intended to be a substitute for, or superior to, IFRS measures
of profit.
Operational headlines
-- Completed a successful year more than doubling both sales and
underlying EBITDA through a mix of organic and acquisition led
growth.
-- Revenues increased by 144% to GBP35.2 million of which
GBP21.3 million was derived from the four acquisitions completed
during the year.
-- Underlying operating profit increased to GBP2.7m (2022:
GBP1.6m) and underlying EBITDA increased to GBP3.9m (2022:
GBP1.8m). Gross margins from existing operations increased by 8%
from 36.7% to 39.6%.
-- Strong cash position with cash and cash equivalents in the
Group totalling GBP4.8m (2022: GBP7.6m) after investing:
o GBP4.3 million of cash completing four acquisitions during the
year; and
o GBP2.1 million of capex in new machinery, costs associated
with re-tooling for future projects and re-configuring warehouse
space to expand manufacturing capacity.
-- An interim dividend of 0.5p per share was paid on 16 December
2022. A final dividend of 0.6p is proposed to be paid on 30
November 2023, making a full year dividend of 1.1p (2022: 1.1p) per
share.
-- Sustainability remains a core focus across all operations with specific targets around:
o Adoption of bio-based materials;
o Increasing move to re-cyclable materials; and
o Supply chain tracking and transparency.
-- In March 2023 the Group entered into a new banking facility
with Virgin Money. The new facility gives the Group a banking
facility of GBP10.35 million comprising GBP7.35 million for invoice
discounting and GBP3 million for trade financing.
Post year end
-- Customised Packaging Limited was merged into Manplas Limited.
This should allow synergies between the two companies to be
realised.
-- Group acquired 100% of the share capital of Ecotatou SL, a
reseller/distributor in Spain, for a total consideration of
EUR18,000 satisfied in cash. This acquisition gives the Group a
foothold in Spain for the sale and distribution of Ecodeck
Grids.
-- Group sold the land and building in Parr, St Helens for
GBP225,000. This unencumbered property was valued at GBP200,000 on
the balance sheet at year end.
-- In July 2023 the Group paid an earn-out of GBP1,275,000 to
the Vendors of Alma Products Limited. This earn-out completes the
full consideration for the acquisition of Alma Products Limited
taking the total consideration to GBP3,002,000.
-- In July 2023 the Group purchased 400,000 of its own shares
into treasury at an average cost of 16.5p. The issued share capital
following the purchase is now 89,877,589 shares
Commenting on the results, Joe Grimmond, Chairman, said:
"We are pleased to have a completed a successful year for the
business. We have invested in both organic and acquisition led
growth, whilst maintaining our commitment to sustainability.
Existing operations generated an 8% improvement in gross margins
reflecting the investment we have made and the drive of our
autonomous business teams. The four acquisitions completed during
the first half of the financial year delivered a significant sales
uplift and, have integrated well, adding complementary expertise
and products lines. Despite investment in acquisitions and our
ongoing capex programme, the Group continues to be highly cash
generative and has retained a strong gross cash position. Our
objective remains focused on capitalising on our position in the
specialists' plastics market where we see significant further
opportunity."
For further information, please contact:
Coral Products plc
Joe Grimmond, Chairman Tel: 07703 518
148
Nominated Adviser & Broker
Cenkos Securities plc Tel: 020 7397
Adrian Hadden, Charlie Combe 8900
Novella Communications Tel: 020 3151
Tim Robertson/Safia Colebrook 7008
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
About Us
Coral Products is a one stop shop for all plastic needs. Coral
Products manufactures and distributes plastic injection, extruded
and vacuum formed moulded products into a diverse range of sectors
including personal care, household, healthcare, automotive,
telecoms and rail. The Group has manufacturing and distribution
facilities across the North West of the UK.
By developing innovative plastic moulded products, providing
excellent customer service and through its hard-working employees,
Coral Products continues to refocus on new markets creating growth
and value for its shareholders.
Sustainability is a core principle of our business. In all
manufacturing processes, any scrap or waste material is reused or
recycled. We offer "end-of-life" recycling and where viable we
adopt and use bio based and re-cyclable materials and provide
supply chain tracking and transparency.
In 2021 the Group adopted a five-year plan aimed at
substantially increasing Group revenue and profitability from our
specialist plastic products manufacturing and distribution
facilities. The Group took the initial step along this plan when it
disposed of Coral Products (Mouldings) Ltd and Interpack Ltd
closely followed by the acquisition of Customised Packaging
Ltd.
CHAIRMAN'S STATEMENT
Introduction
The business has doubled in size during the course of the year
under review. Importantly, this has been achieved through
investment in both organic and acquisition led growth, in line with
our aim to become a UK plastics business of scale. Overall, Group
trading has been strong with sales in line with the upgraded market
guidance given in May 2023 and adjusted EBITDA 9.6% ahead. The
business is stable, cash generative and backed by a solid balance
sheet.
The four acquisitions have integrated well. Each is a specialist
plastics business based in the North West of the UK. We are
confident there is scope to improve the performance of each
business acquired and potential to collaborate across the Group. An
example of this is the recent decision to merge Customised
Packaging Limited into Manplas Limited, two very similar businesses
offering customised product protection solutions. The combination
of these businesses will create several synergies, together with an
improved customer offer.
As ever, the Group is dedicated to moving towards more
sustainable solutions where it is commercially viable to do so and
during the year under review, good progress was made towards
reaching our sustainability goals.
Results and Financial Position
Trading during the year shows a substantial increase on the
prior year. Reported revenue was GBP35,216,000 (2022:
GBP14,391,000), gross margins were 29.7% (2022: 36.7%) resulting in
a gross profit of GBP10,476,000 (2022: GBP5,287,000). Underlying
EBITDA was GBP3,882,000 (2022: GBP1,779,000) and underlying
operating profits increased to GBP2,713,000 (2022:
GBP1,574,000).
The change in gross margin reflects the changes in sales mix
from the acquisitions during the year. After investing
GBP11,571,000 in new subsidiaries the gearing remains comfortable
at 50.7%. The balance sheet net asset position is strong at
GBP13,848,000 (2022: GBP11,707,000). This represents a solid asset
platform for developing the business.
In March 2023, the Group entered into a new banking facility
with Virgin Money. The new facility gives the Group a banking
facility of GBP10.35 million comprising GBP7.35 million for invoice
financing and GBP3 million for trade financing. In addition, the
Group has re-mortgaged the freehold buildings acquired with Film
& Foil Solutions Ltd and Alma Products Ltd for a combined
GBP2.1 million which after repaying existing mortgages improved the
Group's working capital position by circa GBP1.4 million.
In July 2023 the Group purchased 400,000 of its own shares into
treasury at an average cost of 16.5p. The issued share capital
following the sale is now 89,877,589 shares.
Trading
The year ended 30 April 2023 was an exceptionally productive
year for Coral Products plc as we continue to adapt and develop our
business to enable us to maximise the opportunities available.
The Company is focused on becoming a UK plastics business of
scale and using its established acquisition criteria the Group
bought four businesses during the first half of the financial
year:
-- Film & Foil Solutions Ltd acquired in May 2022, a market
leading converter and stockist of flexible packaging film, print
lamination film and speciality plastics.
-- Alma Products Ltd also acquired in May 2022, is a niche specialist and expert in extrusion, thermoforming and container printing serving the food industry, providing formable plastic sheet for Form-Fill-Seal applications, thermoformed and printed plastic food packaging.
-- Manplas Limited acquired in September 2022, is a provider of
customised product protection solutions solving logistical problems
across multiple sectors with premises that adjoin our largest
subsidiary Tatra Rotalac.
-- Ecodeck Grids Limited acquired in October 2022, e-commerce
led business selling plastic grids with potential to take the
manufacture of the grids in-house. In June 2023, the Group acquired
a small business which gives the Group a foothold in Spain for the
sale and distribution of Ecodeck Grids.
All four acquisitions are specialist design and product led
plastics businesses based in the North West of the UK and all are
now fully integrated into the Group and performing well.
It is important to highlight that the existing companies also
performed well in the period and it is the combination of both that
has delivered the positive trading performance for the year. In
particular, Tatra Rotalac Limited had a good year with increases in
both turnover and operating profit. The operational efficiencies
implemented during the previous year continue to pay off and this,
combined with the GBP2 million capital investment into new
machinery, will deliver during the next financial year.
Global One Pak Limited continues to focus on future growth and
researching new innovative products and markets. The machinery and
tooling to manufacture a range of caps and enclosures are on site
and production is expected to start during the second half of the
new financial year.
Customised Packaging Limited continues to perform well. The
focus is on improving efficiencies within the business and as such,
following the year end, Customised Packaging Limited was merged
into Manplas Limited, taking advantage of the Manplas premises
which are adjacent to Tatra Rotalac thereby centralising these
operations together. There are quick synergies to come from the
combination and through their shared expertise they will offer
customers enhanced solutions.
I am very proud to see how everyone within the business has
embraced our challenges, opportunities and ambitions. We are
reliant on the expertise, professionalism and commitment of our
people. I would like to thank them for this, and for the continued
commitment that they have shown over the past years whilst having
to deal with disruption to both their work and personal lives due
to the current economic climate.
Dividend
The Board remains committed to its long-term progressive
dividend policy, which takes account of the underlying growth,
whilst acknowledging the requirement for continuing investment and
short-term fluctuations in profit. Having made an interim dividend
payment of 0.5 pence per share for this financial period the Board
are proposing a final dividend of 0.6 pence per share (2022:
1.1p).
Outlook
We are mindful of the macroeconomic and geopolitical risks yet
remain confident about the current prospects for our business and
its ability to continue its successful evolution. Our continued
investment over many years in our people and our systems has
generated strong and resilient results in the past year and we
believe will continue to do so.
Our continuing priority is to do all we can to keep our
workplaces as safe as possible for staff. We have planned our
business to be flexible, in all areas, to meet fluctuating levels
of demand. We have robust financial controls that will ensure we
maintain our working capital requirements whilst meeting all our
agreed parameters with our financial partners and due to contracts
already negotiated all operations will remain relatively unaffected
by the current turmoil in energy prices.
The Group continues with its strategic progress of increasing
focus on value-added and innovative products. Our aim is to build a
significant specialist plastics business with a bias towards using
recycled materials.
We have enjoyed a strong start to our current financial year,
and we look forward to a satisfactory outturn for the year given
the prevailing conditions.
Joe Grimmond
Chairman
4 September 2023
Group Income Statement
for the year ended 30 April 2023
2023 2022
GBP'000 GBP'000
----------------------------------------------- ----------------------- --------- ---------
Revenue 35,216 14,391
Cost of sales (24,740) (9,104)
--------- ---------
Gross profit 10,476 5,287
Operating costs
Distribution expenses (1,301) (787)
----------------------------------------------- ----------------------- --------- ---------
Administrative expenses before impairment and
other separately disclosed items (6,462) (2,926)
Other separately disclosed items (1,003) (162)
Administrative expenses (7,465) (3,088)
---------
Operating profit/(loss) 1,710 1,412
Finance costs (458) (82)
--------- ---------
Profit/(loss) for the financial
year before taxation 1,252 1,330
Taxation 6 (363)
--------- ---------
Profit/(loss) for the financial year attributable
to the equity holders of the parent 1,258 967
Basic earnings loss per ordinary share 1.44p 1.19p
Diluted earnings loss per ordinary share 1.44p 1.17p
Group Statement of Comprehensive Income
for the year ended 30 April 2023
2023 2022
GBP'000 GBP'000
------------------------------------------------ ---------- ----------
Profit/(loss) for the financial
year 1,258 967
---------- ----------
Total other comprehensive income - -
---------- ----------
Total comprehensive (loss)/income for the year
attributable to equity holders of the parent 1,258 967
---------- ----------
Balance Sheet
as at 30 April 2023
As at 30 As at 30 April
April 2022
2023 GBP'000
GBP'000
---------------------------------- --------- -----------------------------
ASSETS
Non-current assets
Goodwill 4,385 1,945
Other intangible assets 2,956 916
Property, plant and equipment 7,209 749
Right of use assets 2,870 1,393
Total non-current assets 17,420 5,003
--------- -----------------------------
Current assets
Inventories 4,320 1,781
Trade and other receivables 7,193 3,237
Cash and cash equivalents 4,774 7,589
Assets held for sale 200 -
Total current assets 16,487 12,607
--------- -----------------------------
LIABILITIES
Current liabilities
Other borrowings 6,063 1,389
Lease liabilities 970 416
Trade and other payables 7,218 2,800
--------- -----------------------------
Total current liabilities 14,251 4,605
--------- -----------------------------
Net current assets/(liabilities) 2,236 8,002
--------- -----------------------------
Non-current liabilities
Term loan 3,263 -
Lease liabilities 1,505 907
Deferred tax 1,040 391
--------- -----------------------------
Total non-current liabilities 5,808 1,298
--------- -----------------------------
NET ASSETS 13,848 11,707
--------- -----------------------------
SHAREHOLDERS' EQUITY
Share capital 903 859
Share premium - 5,621
Treasury shares - (1,008)
Other reserves - 1,061
Retained earnings 12,945 5,174
--------- -----------------------------
TOTAL SHAREHOLDERS' EQUITY 13,848 11,707
--------- -----------------------------
Statement of Changes in Shareholders' Equity
for the year ended 30 April 2023
Called Share
Up Premium Treasury Other Retained Total
Share Reserve Shares Reserves Earnings Equity
Capital GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
--------------------------- --- --------- --------- ----------- ----------- ----------- ----------
Group
At 1 May 2021 859 5,621 (218) 1,567 4,908 12,737
Profit for the year - - - - - 967 967
Contributions by and
distributions to owners
Equity settled share-based
payments - - - - 21 21
Purchase of treasury shares - - (790) - - (790)
Revaluation Reserve - - - (506) 506 -
Dividend paid - - - - (1,228) (1,228)
--------- --------- ----------- ----------- ----------- ----------
At 1 May 2022 859 5,621 (1,008) 1,061 5,174 11,707
Profit for the year - - - - 1,258 1,258
Contributions by and
distributions to owners
Equity settled share-based
payments - - - - 36 36
New shares 44 650 - - - 694
Cancellation of share
premium accounts - (6,271) (111) (1,061) 7,443 -
Sale of treasury shares - - 1,119 - - 1,119
Dividend paid - - - - (966) (966)
At 30 April 2023 903 - - - 12,945 13,848
--------- --------- ----------- ----------- ----------- ----------
Cash Flow Statement
for the year ended 30 April 2023
Group
2023 2022
GBP'000 GBP'000
----------------------------------------------- --------- ---------
Cash flows from operating activities
Profit for the year 1,258 967
Adjustments for:
Depreciation of property, plant and equipment 464 165
Depreciation of right of use assets under
IFRS16 705 296
Amortisation of intangible assets 513 327
Share based payment charge 36 21
Profit on disposal of subsidiary - -
Profit on disposal of building - (424)
Interest payable 458 82
Taxation charge/(credit) (6) 363
--------- ---------
Operating cash flows before movements
in working capital 3,428 1,797
(Increase)/decrease in inventories 1,219 47
Decrease/(increase) in trade and other
receivables 999 82
Increase/(decrease) in trade and other
payables (6,769) 761
--------- ---------
Cash generated by operations (1,123) 2,687
UK corporation tax received - -
--------- ---------
Net cash generated from/(used in) operating
activities (1,123) 2,687
--------- ---------
Cash flows from investing activities
Net cash on disposal of building - 3,500
Acquisition of subsidiary (4,313) -
Acquisition of property, plant and equipment (2,080) (206)
Net cash generated from/(used in)
investing activities (6,393) 3,294
--------- ---------
Cash flows from financing activities
New bank borrowings raised 3,496 -
Dividends paid (966) (1,228)
Interest paid on bank borrowings (19) -
Interest paid on invoice discounting (344) (22)
Interest paid on lease liabilities (95) (60)
Repayments of bank borrowings (814) -
Repayments of obligations under lease
liabilities (867) (171)
Purchase of treasury shares - (790)
Movement on invoice discounting facility 4,310 36
Net cash used in financing activities 4,701 (2,235)
--------- ---------
Net increase in cash and cash equivalents (2,815) 3,746
Cash and cash equivalents at 1 May 7,589 3,843
--------- ---------
Cash and cash equivalents at 30 April 4,774 7,589
--------- ---------
Notes
for the year ended 30 April 2023
1. Basis of preparation
The financial information set out above does not constitute the
Group's statutory accounts for the years ended 30 April 2023 or
2022 within the meaning of Section 434 of the Companies Act 2006
but is derived from those accounts. Statutory accounts for 2022
have been delivered to the Registrar of Companies and those for
2023 will be delivered following the company's Annual General
Meeting.
The financial statements have been prepared on a historical cost
basis (except for certain financial instruments, land and buildings
and share-based payments that have been measured at fair value),
and in accordance with the AIM Rules and UK adopted International
Accounting Standards.
2. Underlying operating profit and separately disclosed
items
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.
2023 2022
On continuing operations GBP'000 GBP'000
---------------------------------------------------- --------- ---------
Operating profit/(loss) 1,710 1,412
Separately disclosed items within administrative
expenses
---------------------------------------------------- --------- ---------
Share based payment charge 36 21
Amortisation of intangible assets (customer
relationships and brands) 513 327
Profit on sale of land and building - (383)
Reorganisation costs 123 158
Acquisition costs 331 -
Cost of living payment to all staff - 39
Total separately disclosed items 1,003 162
--------- ---------
Underlying operating profit 2,713 1,574
Depreciation 1,169 205
--------- ---------
Underlying EBITDA 3,882 1,779
Separately disclosed items (excluding amortisation
and impairment) (490) 165
--------- ---------
EBITDA 3,392 1,944
--------- ---------
Profit/(loss) before tax 1,252 1,330
Separately disclosed items 1,003 162
--------- ---------
Underlying profit/(loss) before tax 2,255 1,492
--------- ---------
3. Earnings per share
Basic and underlying earnings per share
Number of Shares 2023 2022
----------------------------------------------- ------------ ------------
Weighted average number of shares 88,222,891 85,942,534
Effect of weighted average number of treasury
shares (1,099,823) (4,828,836)
Weighted average number of shares for the
purposes of basic earnings per share 87,123,068 81,113,698
Effect of share options 102,564 1,369,230
Weighted average number of shares for the
purposes of diluted earnings per share 87,225,632 82,482,928
------------ ------------
2023 2022
Weighted Earnings Weighted (Loss)/
average per (Loss)/ average earnings
Earnings number share earnings number per share
Continuing Operations GBP'000 of shares (pence) GBP'000 of shares (pence)
---------------------------- ----------- ----------- --------- ----------- ----------- -----------
Profit/(loss) for the year 1,258 87,123,068 1.44 967 81,113,698 1.19
Separately disclosed items
(note 6) 1,003 - - 162 - -
----------- ----------- --------- ----------- ----------- -----------
Underlying profit/(loss)
for the period 2,261 87,123,068 2.60 1,129 81,113,698 1.39
----------- ----------- --------- ----------- ----------- -----------
5. Dividends
An interim dividend for the year ended 30 April 2023 of 0.5p per
share was paid 16 December 2022.
A final dividend payment for the year ended 30 April 2023 of
0.6p per share is recommended.
6. Group reconciliation of net cash flow to movement in net
debt
2023 2022
GBP'000 GBP'000
-------------------------------------------- --------- ---------
Net increase in cash and cash equivalents (2,815) 3,746
Decrease/(increase) on invoice discounting
facility (4,310) (36)
Decrease/(increase) in bank loans (3,627) -
and other loans
Decrease in lease liabilities (1,152) 171
--------- ---------
Movement in net debt for the period (11,904) 3,881
Net debt at beginning of period 4,877 996
--------- ---------
Net funds/(debt) at end of period (7,027) 4,877
--------- ---------
7. Post Balance Sheet Event
In May 2023 Customised Packaging Limited was merged into Manplas
Limited. This should allow synergies between the two companies to
be realised.
In June 2023 the Group acquired 100% of the share capital of
Ecotatou SL in Spain for a total consideration of EUR18,000
satisfied in cash. This acquisition gives the Group a foothold in
Spain for the sale and distribution of Ecodeck Grids.
In June 2023 the Group sold the land and building in Parr, St
Helens for GBP225,000. This unencumbered property was valued at
GBP200,000 on the balance sheet at year end.
In July 2023 the Group paid an earn-out of GBP1,275,000 to the
Vendors of Alma Products Limited. This earn-out completes the full
consideration for the acquisition of Alma Products Limited taking
the total consideration to GBP3,002,000.
In July 2023 the Group purchased 400,000 of its own shares into
treasury at an average cost of 16.5p. This puts the issued share
capital to 89,877,589 shares.
8. Publication of Annual Report
A copy of the 2023 Report & Accounts will be sent to all
shareholders. Further copies will be available to the public at the
company's registered address at Southmoor Road, Wythenshawe,
Manchester, M23 9DS and on the Company's website at
www.coralproducts.com.
9. 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.
The Directors of the Group take responsibility for this
announcement.
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