TIDMCRU
RNS Number : 2540R
Coral Products PLC
08 December 2016
8 December 2016
CORAL PRODUCTS PLC
("Coral" or the "Group")
HALF YEARLY REPORT
Coral Products plc, a specialist in the design, manufacture and
supply of injection moulded plastic products, is pleased to report
its half yearly report for the six months ended 31 October
2016.
Financial headlines Six months Six months
to to
31 October 31 October
2016 2015 % change
GBP10.75 GBP8.26
Group sales ** million million +30.1%
GBP2.85
Gross profit GBP3.51 million million +23.2%
Operating profit GBP842,000 GBP778,000 +8.2%
Underlying operating profit GBP1,030,000 GBP817,000 +26.1%
Underlying operating margin 33% 35%
Profit before taxation GBP718,000 GBP684,000 +5.0%
Underlying EBITDA GBP1,413,000 GBP1,130,000 +25.0%
Underlying basic earnings
per share 1.03 1.06p -2.8%
Proposed interim dividend
per share 0.33p 0.30p +10.0%
*The financial headlines disclosed as underlying represent the
reported metrics excluding separately disclosed items.
** Total sales (including inter-group sales) in 2016 were
GBP12.41m, of which inter-group sales were GBP1.66m (2015: total
sales of GBP10.02m of which inter-group sales were GBP1.76m).
Operational and financial highlights
- Half year performance in line with expectations, full year outlook unchanged.
- New long-term business gained for bakery trays.
- Underlying EBITDA increases by 25% to GBP1.41 million.
- Successful integration of Tatra business into 'TatraRotalac'
with much improved facilities in Wythenshawe.
- Margins have remained high and underlying operating profit has increased by 25%.
- Strong net assets position has been maintained.
- Gearing has risen from 24% to 37% as capital investment has
increased due to our continued programme of continuous operational
improvement and also covering the increased demand.
- Proposed Interim dividend increased from 0.30 pence to 0.33
pence per share. Last year's final dividend payment was increased
to 0.70p per share giving a full year payment of 1.0p.
- But for adverse currency movements pre-tax profits would have been 33% higher.
Commenting on today's results, Joe Grimmond, Coral's Chairman,
said:
"I am pleased to announce that trading in the first half of the
current year shows revenue and profits both substantially ahead of
the same period for last year.
Coral Products continues to make good progress in line with our
2015 strategic plan. We have strengthened our position in injection
moulding and extruded products whilst at the same time expanding
our range of capabilities enhancing our market offering.
Results to date in the current financial year have been in line
with the Board's expectations and, in spite of prevailing political
uncertainties, we remain confident about the Group's future
prospects."
Enquiries
Coral Products plc Tel: 01942 272882
Joe Grimmond, Chairman
Roberto Zandona
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
I am pleased to announce that trading in the first half of the
current year shows revenue and profits both substantially ahead of
the same period for last year. Reported revenue increased to
GBP10,752,000 (six months to 31 October 2015: GBP8,259,000). Group
revenue including inter-group sales were GBP12,410,000 (2015:
GBP10,021,000) with inter-group sales of GBP1,658,000 (2015:
GBP1,762,000). This incorporated a full period of contribution from
the Global One-Pak and Rotalac acquisitions.
Gross margins remained high at 32.7% (2015: 34.5%) resulting in
a gross profit of GBP3,506,000 (2015: GBP2,849,000) in the six
months to 31 October 2016.
There was an increase in operating costs from GBP2,032,000 to
GBP2,476,000 in the period principally due to the acquisitions
together with a GBP192,000 adverse currency effect resulting from
the weaker sterling in the immediate period following Brexit.
Underlying profits for operations increased to GBP1,030,000
(2015: GBP817,000), a significant improvement over the same period
last year.
Finance costs were up from GBP94,000 to GBP124,000 in this
period due to increased levels of borrowing.
Separately disclosed expenses of GBP188,000 (2015: GBP39,000)
comprised the amortisation of intangibles acquired on acquisition
of GBP174,000 (2015: GBP36,000) and a share based payment charge
over employee options of GBP14,000 (2015: GBP3,000). Profit after
tax after including these items was GBP663,000 compared with
GBP611,000 in the six month period to 31 October 2015.
Operations
Coral Products Mouldings Ltd, based at our Haydock manufacturing
site has added more new efficient equipment and introduced a
programme of training to improve the performance of our staff. Our
investments have provided tangible benefits, a 750 tonne moulding
machine has seen significant scrap reduction, faster cycle times
and was instrumental in helping us win a recent piece of business
making bakery trays. In the last month we have taken receipt of
three new tools which make product for our Interpack business and
this has seen output at least quadruple for this product. We take
receipt of further tooling for our blow moulded containers during
December which will again provide additional volumes where we
currently have limited capacity but increasing demand. We have also
made significant improvements to the facility with more to come in
the new year.
Our crates, caddies and larger container ranges have offered us
the greatest opportunity to progress the business with orders from
new customers for bakery trays now running alongside our crates for
on-line retail and waste recycling. Despite a lull in demand, the
expectation is for this to reverse in 2017 as we benefit from the
increased sales activity over the last 6 months where we have added
more opportunities into the pipeline. The benefits from economies
of scale on the larger contracts offered in trade moulding are
expected to result in improved efficiencies and performance in the
new year. The blow moulding business stabilised during this period.
There is planned and ordered investment in the second half in
machinery and tooling for production lines that are exposed to
higher growth and more predictable markets.
Interpack Ltd, our plastic packaging distribution business has
had a strong six months, an increase in the customer base driven by
the recruitment of further sales personnel adding to the previous
good performance. Supply issues are resolved with our new tooling
and we can service our customers from stock particularly from our
own in house manufacturing. This puts us in a strong position as
the seasonal demand picks up in the new year for our range of
products. In addition to the three new tools added in October and
November, we are currently looking to add more tooling in the
coming months which will broaden our range and increase the
percentage of product made by Coral Products Mouldings Ltd.
TatraRotalac Ltd is now formed due to the completed merger of
our separate businesses of Tatra Plastics Manufacturing Ltd of
Halifax and Rotalac Plastics Ltd of Wythenshawe. The newly merged
entity is based at our Wythenshawe facility. The last of the
production line moves was completed in September 2016. This gives
us 18 extrusion lines under one roof giving opportunities of
efficiency and capacity. During the transition there was minimal
disruption to customers and continuity of sales numbers. We are yet
to realise the full impact of the benefits of the move and look
forward to the second half of the year.
Global One-Pak Ltd have worked through a volatile period for
imports due to the currency effects post Brexit but have managed to
pass on any increases to the customers in the main. However, there
has been a time lag in being able to introduce these increases but
we should be over this constraint in the second half. We are now
looking to manufacture in house, some complimentary products for
the Global One-Pak range such as bottles which will provide our
customers with a one stop shop in this sector. There is a planned
visit to China in February in order to look at the potential for
purchasing assembly equipment and tooling which could produce our
current range of products, manufactured out of our UK
facilities.
We remain focused on our adherence to Health and Safety
standards and maintaining the highest level of accreditation to the
Quality standards appropriate to the products we supply. We have an
on-going agenda to train and develop our employees to the benefit
of all of our stakeholders.
Capital expenditure
Total capital expenditure in the first six months was
GBP1,143,000 (2015: GBP985,000) of which GBP293,000 was spent on
the integrated facilities at Wythenshawe and the balance expended
on the continued improvements to the capabilities at Haydock which
included a new 750 tonne injection moulding machine specifically
for making the larger crates, trays and totes. We expect to
continue investing in equipment which offers more automation,
increased outputs and scrap reduction, in order to keep pace with
our business winning and all of which improves shareholder
value.
Financial position
The balance sheet asset position has improved further with our
net assets standing at GBP13,787,000 (2015: GBP10,501,000). This
represents a solid asset platform for developing the business.
Reflecting higher cap ex and increased working capital requirements
(latter due to increased activity, net debt rose to GBP5.2m to give
a gearing ratio of 37% (24%).
Underlying EBITDA increased substantially to GBP1,413,000 (2015:
GBP1,130,000). This has given the Group an improved platform to
take the business forward with investment.
The Group had undrawn bank facilities of GBP1.0 million which,
together with its asset based finance lines at 31 October 2016,
enable it to invest internally or in further acquisitions and
businesses for growth which will then enable better returns for our
shareholders.
Dividends
It is the board's intention to pay an increased interim dividend
of 0.33 pence per share (2015: 0.30p). The ex-dividend date and the
record date for the interim dividend will be 19 January 2017 and 20
January 2017 respectively. The interim dividend will be paid on 1
March 2017. This continues to reflect our confidence in the
recovery path and improvement this will bring to our results.
Outlook
Coral Products PLC continues to make good progress against our
2015 strategic plan. We have strengthened our position in injection
moulding and extruded products whilst at the same time expanding
our range of capabilities enhancing our market offering.
Results to date in the current financial year have been in line
with the Board's expectations and, in spite of prevailing political
uncertainties, we remain confident about the Group's future
prospects.
Joe Grimmond
Chairman
8 December 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months to 31 October 2016
Six months Six months
to to Year to
31 October 31 October 30 April
2016 2015 2016
Notes (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Revenue 3 10,752 8,259 18,714
Cost of sales (7,246) (5,410) (12,512)
------------------ ---------------- ------------------
Gross profit 3,506 2,849 6,202
Operating costs
Distribution expenses (427) (313) (863)
-------------------------------------- ------- ------------------ ---------------- ------------------
Administrative expenses before
separately disclosed items (2,049) (1,719) (3,690)
Underlying operating profit 1,030 817 1,649
Non-underlying items:
Share based payment charge (14) (3) (28)
Amortisation of intangible
assets (174) (36) (118)
Compensation for loss of office - - (30)
Acquisition costs - - (67)
Retirement costs of former
directors - - (418)
Impairment loss on trade receivables - - (50)
-------------------------------------- ------- ------------------ ---------------- ------------------
Administrative expenses (2,237) (1,758) (4,401)
Operating profit 842 778 938
Finance expense (124) (94) (180)
------------------ ---------------- ------------------
Profit before taxation 718 684 758
Taxation 4 (55) (73) (15)
------------------ ---------------- ------------------
Profit after taxation and
total comprehensive income
attributable to shareholders 663 611 743
------------------ ---------------- ------------------
Earnings per ordinary share 5
Basic and diluted (pence) 0.80 1.00 1.12
Underlying basic (pence) 1.03 1.06 2.20
------------------ ---------------- ------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 October 2016
31 October 31 October 30 April
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Non-current assets
Goodwill 5,495 4,768 5,495
Other intangible assets 2,214 203 2,390
Property, plant and equipment 7,293 6,010 6,517
Total non-current assets 15,002 10,981 14,402
-------------- ------------- ---------------
Current assets
Inventories 2,716 1,456 1,843
Trade and other receivables 5,283 3,922 5,279
Cash and cash equivalents 214 55 910
Total current assets 8,213 5,433 8,032
-------------- ------------- ---------------
Total assets 23,215 16,414 22,434
-------------- ------------- ---------------
Current liabilities
Bank overdrafts and borrowings (3,405) (1,517) (2,062)
Trade and other payables (3,360) (2,894) (3,914)
Corporation tax (233) (119) (140)
Total current liabilities (6,998) (4,530) (6,116)
-------------- ------------- ---------------
Non-current liabilities
Borrowings (1,960) (1,321) (2,122)
Deferred taxation liability (470) (62) (508)
-------------- ------------- ---------------
Total non-current liabilities (2,430) (1,383) (2,630)
-------------- ------------- ---------------
Total liabilities (9,428) (5,913) (8,746)
-------------- ------------- ---------------
Total net assets 13,787 10,501 13,688
-------------- ------------- ---------------
Equity
Share capital 826 656 826
Share premium 5,288 2,849 5,288
Other reserves 1,061 443 1,061
Retained earnings 6,612 6,553 6,513
-------------- ------------- ---------------
Total equity 13,787 10,501 13,688
-------------- ------------- ---------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
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 six months to 31 October 2015 (unaudited)
Share Share Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2015 579 1,862 443 6,237 9,121
Total comprehensive
income - - - 611 611
Issue of share capital 77 987 - - 1,064
Credit for share based
payment - - - 3 3
Dividend paid - - (298) (298)
--------- ---------- ------------- ------------- ----------------
At 31 October 2015 656 2,849 443 6,553 10,501
--------- ---------- ------------- ------------- ----------------
For the year ended 30 April 2016 (audited)
Share Share Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2015 579 1,862 443 6,237 9,121
Total comprehensive
income - - - 743 743
Issue of share capital 247 3,426 618 - 4,291
Credit for share based
payment - - - 28 28
Dividend paid - - - (495) (495)
--------- --------- ------------- ---------- --------------
At 30 April 2016 826 5,288 1,061 6,513 13,688
--------- --------- ------------- ---------- --------------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months to 31 October 2016
Six months Six months
to to Year to
31 October 31 October 30 April
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Cash flow from operating activities
Profit for the period after tax 663 611 743
Adjustments for:
Depreciation 367 306 678
Loss on disposal of fixed assets - 25 50
Intangibles amortisation 176 43 133
Share based payment charge 14 3 28
Taxation charge 55 - 15
Interest payable 124 94 180
Increase in inventories (873) (52) (174)
(Increase)/decrease in trade and other
receivables (4) (68) (455)
(Decrease)/increase in trade and other
payables (554) 354 658
UK corporation tax paid - - (40)
Net cash generated from operating
activities (32) 1,316 1,816
-------------------- ---------------------- --------------
Cash flow from investing activities
Acquisition of subsidiary, net of
cash - - (2,402)
Acquisition of property, plant and
equipment (1,143) (785) (1,668)
Net cash used in investing activities (1,143) (785) (4,070)
-------------------- ---------------------- --------------
Cash flow from financing activities
Proceeds of issued share capital - 1,064 3,641
New loans raised - 200 1,150
Proceeds of new asset finance 482 33 463
Repayment of director's loan - (200) (200)
Dividend paid (578) (298) (495)
Interest paid (124) (94) (180)
Repayments of bank borrowings (204) (197) (666)
Finance lease principal payments (186) (137) (205)
Net cash used in financing activities (610) 371 3,508
-------------------- ---------------------- --------------
Net (decrease)/increase in cash and
cash equivalents (1,785) 902 1,254
Cash and cash equivalents at the start
of the period (493) (1,747) (1,747)
-------------------- ---------------------- --------------
Cash and cash equivalents at the end
of the period (2,278) (845) (493)
-------------------- ---------------------- --------------
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 2016, 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 2016.
The Interim Report has not been audited or reviewed 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 2016.
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
2016 2015 2015
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
United Kingdom 9,812 7,991 18,151
Rest of Europe 538 268 408
Rest of the World 402 - 155
10,752 8,259 18,714
-------------- ------------- -----------
Turnover by business activity
Sale and manufacture of plastic
products 10,752 8,259 18,714
-------------- ------------- -----------
4. Taxation
The taxation charge for the six months to 31 October 2016 is
based on the effective taxation rate, which is estimated will apply
to earnings for the year ending 30 April 2016.The rate used is
below the applicable UK corporation tax rate of 20% 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 2015:
62,118,164 and 30 April 2016: 66,238,090). The earnings used to
calculate basic and diluted earnings per share are GBP663,000 (31
October 2015: GBP611,000 and 30 April 2016: GBP743,000). The
earnings used to calculate underlying earnings per share are
GBP841,000 (31 October 2015: GBP650,000 and 30 April 2016:
GBP1,454,000).
Six months Six months
to to Year to
31 October 31 October 30 April
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP000 p GBP000 p GBP000 p
Basic and diluted earnings
per ordinary share
Profit for the period after
tax 663 0.80 611 1.00 743 1.12
-------- ----- -------- ----- ------- -----
Underlying earnings per ordinary
share
Underlying profit for the
period after tax 851 1.03 650 1.06 1,454 2.20
-------- ----- -------- ----- ------- -----
6. Reconciliation of net cash flow to 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
2016 2015 2015
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Net (decrease)/increase in
cash and cash equivalents (1,785) 902 1,254
Decrease/(increase) in bank
and other loans 204 197 (284)
(Increase)/decrease in finance
leases (296) 104 (258)
Decrease/(increase) in net
debt in the financial period (1,877) 1,203 712
Opening net debt (3,274) (3,986) (3,986)
------------------ ------------------ ------------
Closing net debt (5,151) (2,783) (3,274)
------------------ ------------------ ------------
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 statements 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 Coral's 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 information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRBDDBSGBGLR
(END) Dow Jones Newswires
December 08, 2016 02:00 ET (07:00 GMT)