TIDMCRU
RNS Number : 8530T
Coral Products PLC
29 November 2021
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 2021.
Financial headlines Six months
Six months to
to 31 October
31 October 2020
2021 restated % change
Group sales GBP7.1 million GBP4.5 million 57.8%
Gross profit GBP2.5 million GBP1.7 million 47.1%
Gross profit margin 35.7% 38.0% -6.1%
Underlying operating profit (excluding
finance expenses)* GBP759,000 GBP563,000 34.8%
Reported profit before taxation GBP510,000 GBP 286,000 78.3%
Underlying EBITDA* GBP1,014,000 GBP771,000 31.5%
Underlying basic earnings per
share* 0.81p 0.60p 35.0%
Interim dividend per share 0.50p 0.50p
*The financial headlines disclosed as underlying represent the
reported metrics excluding separately disclosed items (being share
based payment charges, amortisation of intangible assets and other
one-off costs in each period), see note 7.
Operational and financial highlights
- Strong net assets position has been maintained.
- Interim dividend of 0.5p declared.
- Cash and cash equivalents of GBP5.5m (2020: GBP1.3m). Cash and
cash equivalents are defined as cash of GBP4.8m (2020: GBP1.3m)
plus treasury shares of GBP0.7m (2020: GBPnil). The cash receipt
from the sale of the Haydock property of GBP3.5m will be recognised
in the second half of the financial year.
- The first half of the year has seen an increase in revenue and
profit, despite the on-going impact of Covid-19, Brexit, the
China-USA trading challenges, volatile currency fluctuations and
variable trading conditions.
- Ensuring that the business is Covid-19 secure for employees
and visitors is paramount. As a critical supplier the Group
continued to operate under strict Covid-19 Government
guidelines.
- The newly developed extruded fire retardant click & fix
product is expected to positively impact the business in the final
quarter of this year.
- The sale of the land and building at Haydock completed on 19
November 2021 with the gain of approximately GBP0.9m being
accounted for in the annual results to 30 April 2022.
Commenting on today's results, Joe Grimmond, Coral's Chairman,
said:
" I am delighted with the performance of the business in the
first half of the financial year. I am pleased to report that the
results to date are well ahead of the same period last year, in
spite of the prevailing uncertainties of Brexit and the Covid-19
pandemic. With our enhanced cash position arising from the sale of
the Haydock property which completed on 19 November 2021 for
GBP3.5m, we remain confident of the Group's future prospects ".
Enquiries
Coral Products plc Tel: 07703 518
Joe Grimmond, Executive Chairman 148
Nominated Adviser & Broker
WH Ireland Advisers LLP Tel: 020 7220
Adrian Hadden, Darshan Patel, Megan Liddell 1751
Capital Markets Consultants Limited Tel: 07515 587
Richard Pearson 184
Chairman's Statement
Results and Financial Position
Trading in the first half of the current year shows revenue
substantially ahead of the same period for last year, with gross
profit % decreasing slightly as a consequence of higher than usual
transport and raw material costs. Reported revenue was GBP7,103,000
(six months to 31 October 2020: GBP4,531,000), gross margins were
35.7% (2020: 38.0%) resulting in a gross profit of GBP2,534,000
(2020: GBP1,720,000) in the six months to 31 October 2021.
Underlying EBITDA was GBP1,014,000 (2020: GBP771,000). Underlying
operating profits increased to GBP759,000 (2020: GBP563,000).
Separately disclosed expenses of GBP188,000 (2020: GBP208,000)
comprised the amortisation of intangibles acquired on acquisition,
share based payment charges over employee options and redundancy
costs.
Finance costs dropped slightly to GBP61,000 (2020:
GBP69,000).
Profit before tax after including all the above items was
GBP510,000 (2020: GBP286,000).
The balance sheet net asset position remains strong at
GBP12,376,000, net of GBP693,000 treasury shares (2020:
GBP12,645,000). This represents a solid asset platform for
developing the business.
The Group has cash and cash equivalents of GBP5,473,000 (2020:
GBP1,292,000) which includes cash of GBP4,780,000 (2020:
GBP1,292,000) and treasury shares of GBP693,000 (2020: GBPnil).
This figure does not include the benefit of the cash receipts from
the sale of the Haydock property in November 2021 of GBP3.5 million
as this will be accounted for in the annual accounts.
The Group's net funds has increased to GBP1,677,000 (2020:
GBP7,192,000 net debt).
Operations
Tatra-Rotalac Ltd
Tatra-Rotalac has exceeded the board's expectations during the
first half of the financial year with sales and profits well above
budget. The recent capital expenditure is expected to generate
additional improvements to performance in the following six
months.
Global One-Pak Ltd
This business has been hit especially hard during the six months
to 31 October 2021 due to logistical cost increases in Chinese
trading. This has been compounded by the continuing ill health of
the managing director. The global shortage of containers, increased
shipping times and delays at customs have all contributed to higher
than usual transport costs.
Performance in the second half of the financial year is expected
to improve given the business is now experiencing more enquiries as
customers' stock levels are returning to pre-pandemic levels.
Customised Packaging Ltd
This business is experiencing strong demand in UK manufacturing.
They currently have no supply issues and have assisted a major
customer in recycling its end of life plastic.
Capital Expenditure
Total capital expenditure in the first six months was GBP375,000
(2020: GBP314,000) of which GBP375,000 (2020: GBPnil) related to
Tatra-Rotalac.
Dividends
The board have declared an interim dividend of 0.50 pence per
share (2020: 0.50p). The ex-dividend date and the record date for
the interim dividend was 11 November 2021 and 12 November 2021
respectively. The interim dividend will be paid on 3 December 2021.
This continues to reflect our confidence in the positive
performance and profitable results of the Group.
Outlook
I am delighted with the performance of the business in the first
half of the financial year. I am pleased to report that the results
to date are well ahead of the same period last year, in spite of
the prevailing uncertainties of Brexit and the Covid-19 pandemic.
With our enhanced cash position arising from the sale of the
Haydock property which completed on 19 November 2021 for GBP3.5m,
we remain confident of the Group's future prospects.
Joe Grimmond Non-Executive Chairman 29 November 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months to 31 October 2021
Six months
to
Six months 31 October
to Year to
31 October 2020 30 April
Notes 2021 restated 2021
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Revenue 3 7,103 4,531 10,714
Cost of sales (4,569) (2,811) (6,913)
-------------- ---------------- --------------
Gross profit 2,534 1,720 3,801
Operating costs
Distribution expenses (334) (224) (761)
Administrative expenses
before separately disclosed
items (1,441) (933) (2,173)
-------------- ---------------- --------------
Underlying operating profit 759 563 867
Separately disclosed items:
--------------
Share based payment credit/(charge) (25) - (8)
Amortisation of intangible
assets (163) (138) (284)
Reorganisation costs - (70) (780)
(188) (208) (1,072)
Operating profit/(loss) 571 355 (205)
Finance expense (61) (69) (111)
-------------- ---------------- --------------
Profit/(loss) before taxation 510 286 (316)
Taxation 4 - - 76
-------------- ---------------- --------------
Total comprehensive income/(loss)
on continuing operations 510 286 (240)
-------------- ---------------- --------------
Profit on discontinued operations - 255 715
-------------- ---------------- --------------
Total comprehensive income/(loss) 510 541 475
-------------- ---------------- --------------
Earnings per ordinary share 5
Basic and diluted (pence) 0.59 0.35 (0.29)
Underlying basic (pence) 0.81 0.60 1.00
-------------- ---------------- --------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 October 2021
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Non-current assets
Goodwill 1,945 5,145 1,945
Other intangible assets 1,079 986 1,243
Property, plant and equipment 1,133 2,768 630
Right of use assets 1,117 4,058 1,496
Total non-current assets 5,274 12,957 5,314
------------- ------------- ------------
Current assets
Inventories 1,752 3,395 1,828
Trade and other receivables 3,371 4,575 4,453
Cash and cash equivalents 4,780 1,292 3,843
Total current assets 9,903 9,262 10,124
------------- ------------- ------------
Assets held for sale 2,500 2,520 2,500
Current liabilities
Bank overdrafts and borrowings (1,832) (2,526) (1,353)
Trade and other payables (1,906) (3,212) (2,039)
Lease liabilities (405) (1,393) (459)
Corporation tax - - -
Total current liabilities (4,143) (7,131) (3,851)
------------- ------------- ------------
Liabilities on assets held - (1,706) -
for sale
Non-current liabilities
Borrowings - (1,000) -
Lease liabilities (866) (1,859) (1,035)
Deferred taxation (292) (398) (315)
------------- ------------- ------------
Total non-current liabilities (1,158) (3,257) (1,350)
------------- ------------- ------------
Total liabilities (5,301) (12,094) (5,201)
------------- ------------- ------------
Total net assets 12,376 12,645 12,737
------------- ------------- ------------
Equity
Share capital 859 826 859
Share premium 5,621 5,288 5,621
Treasury shares (693) - (218)
Other reserves 1,567 1,567 1,567
Retained earnings 5,022 4,964 4,908
------------- ------------- ------------
Total equity 12,376 12,645 12,737
------------- ------------- ------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the six months to 31 October 2021 (unaudited)
Share Share Treasury Other Retained Total
capital premium shares reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2021 859 5,621 (218) 1,567 4,908 12,737
Total comprehensive loss - - - - 510 510
Credit for share based
payment - - - - 25 25
Purchase of treasury
shares - - (475) - - (475)
Dividend paid - - - - (421) (421)
--------- --------- --------- ----------- ---------- -------------
At 31 October 2021 859 5,621 (693) 1,567 5,022 12,376
--------- --------- --------- ----------- ---------- -------------
For the six months to 31 October 2020 (unaudited)
Share Share Treasury Other Retained Total
capital premium shares reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2020 826 5,288 - 1,567 4,425 12,106
Total comprehensive
income - - - - 541 541
Charge for share based
payment - - - - (2) (2)
At 31 October 2020 826 5,288 - 1,567 4,964 12,645
--------- --------- --------- ---------- ---------- --------
For the year ended 30 April 2021 (audited)
Share Share Treasury Other Retained Total
capital premium shares reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2020 826 5,288 - 1,567 4,425 12,106
Total comprehensive profit - - - - 475 475
Credit for share based
payment - - - - 8 8
Issue of new shares 33 333 - - - 366
Purchase of treasury
shares - - (218) - - (218)
At 30 April 2021 859 5,621 (218) 1,567 4,908 12,737
--------- --------- --------- ----------- ---------- -------------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months to 31 October 2021
Six months Six months
to to Year to
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Cash flow from operating activities
Profit for the period after tax 510 541 475
Adjustments for:
Depreciation of property, plant
and equipment 122 321 487
Depreciation of right of use assets
under IFRS16 133 307 666
Amortisation of intangible assets 163 138 284
Share based payment (credit)/charge 25 (2) 8
Profit on disposal of subsidiary - - (1,133)
Interest payable 61 223 329
Taxation charge/(credit) - - (48)
(Increase)/decrease in inventories 76 (27) (382)
Decrease/(increase) in trade and
other receivables 505 386 433
(Decrease)/increase in trade and
other payables (133) (537) 422
UK corporation tax received - - 299
Net cash generated from operating
activities 1,462 1,350 1,840
------------- ------------- ------------
Cash flow from investing activities
Net cash on disposal of subsidiary - - 7,771
Acquisition of subsidiary - - (937)
Acquisition of property, plant and
equipment (375) (314) (454)
Net cash (used in)/generated from
investing activities (375) (314) 6,380
------------- ------------- ------------
Cash flow from financing activities
Interest paid on bank borrowings
and invoice discounting (61) (223) (119)
Interest paid on lease liabilities - - (210)
Repayments of bank borrowings - (60) (2,765)
Repayments of obligations under
lease liabilities (93) (462) (893)
Purchase of treasury shares (475) - (218)
New bank loans raised - 1,000 1,000
Movements on invoice discounting
facility 479 (452) (1,625)
Net cash used in financing activities (150) (197) (4,830)
------------- ------------- ------------
Net increase in cash and cash equivalents 937 839 3,390
Cash and cash equivalents at the
start of the period 3,843 453 453
------------- ------------- ------------
Cash and cash equivalents at the
end of the period 4,780 1,292 3,843
------------- ------------- ------------
1. Basis of preparation
The financial information set out in this Interim Report does
not constitute statutory accounts as defined in Section 435 of the
Companies Act 2006.
The Group's statutory financial statements for the year ended 30
April 2021, prepared under IFRS, have been filed with the Registrar
of Companies . The auditor's report on those statutory accounts was
qualified with respect to opening inventory as the audit evidence
available was limited because, given the global Covid-19 pandemic,
no inventory count was undertaken and the auditor did not observe
the physical inventory as at 30 April 2020.
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 2021 .
The Interim Report has not been reviewed by our auditor 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 2021.
The six months to 31 October 2020 have been restated to show the
results of continuing operations only.
3. Revenue
All production is based in the United Kingdom. The geographical
analysis of revenue is shown below:
Six months
to
Six months 31 October
to 2020 Year to
31 October 30 April
2021 restated 2021
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
United Kingdom 6,827 4,050 9,811
Rest of Europe 186 386 94
Rest of the World 90 95 809
7,103 4,531 10,714
-------------- -------------- -----------
Turnover by business activity
Sale and manufacture of plastic
products 7,103 4,531 10,714
-------------- -------------- -----------
4. Taxation
The taxation charge for the six months to 31 October 2021 is
based on the effective taxation rate, which is estimated will apply
to earnings for the year ending 30 April 2022. 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 85,942,534 (31 October 2020:
82,614,865 and 30 April 2021: 83,032,453).
Six months
to Year to
Six months 31 October
to 2020 30 April
31 October
2021 (unaudited) 2021
(unaudited) restated (audited)
GBP000 p GBP000 p GBP000 p
Basic and diluted earnings
per ordinary share
Profit/(loss) for the period
after tax 510 0.59 286 0.35 (240) (0.29)
-------- ----- -------- ----- ------- -------
Underlying earnings per ordinary
share
Underlying profit/(loss) for
the period after tax 698 0.81 494 0.60 832 1.00
-------- ----- -------- ----- ------- -------
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
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Net increase in cash and cash
equivalents 458 839 5,015
Decrease/(increase) in bank
and other loans - 510 1,765
(Decrease)/increase in lease
liabilities 223 (551) 2,206
Movement in net debt in the
financial period 681 798 8,986
Net funds/(debt) at beginning
of period 996 (7,990) (7,990)
--------------- ------------- -----------
Net funds/(debt) at end of
period 1,677 (7,192) 996
--------------- ------------- -----------
7. Underlying profit and separately disclosed items
Underlying profit before tax, underlying earnings per share,
underlying operating profit, underlying earnings before interest,
tax, depreciation and amortisation are defined as being before
share based payment charges, amortisation of intangibles recognised
on acquisition, acquisition costs, reorganisation costs,
compensation for loss of office, impairment of goodwill and
impairment loss on trade receivables. Collectively these are
referred to as separately disclosed items. In the opinion of the
directors the disclosure of these transactions should be reported
separately for a better understanding of the underlying trading
performance of the Group.
Six months Six months
to to Year to
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Operating profit/(loss) 571 355 (205)
Separately disclosed items within
administration expenses
-------------------------------------- -------------- ------------- -----------
Share based payment (credit)/charge 25 - 8
Amortisation of intangible assets 163 138 284
Reorganisation costs - 70 780
Total separately disclosed items 188 208 1,072
-------------- ------------- -----------
Underlying operating profit 759 563 867
Depreciation 255 208 417
Underlying EBITDA 1,014 771 1,284
8. 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 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 announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (MAR). The Directors of the
Group take responsibility for this announcement.
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