CRU Coral Products Plc

CORAL PRODUCTS PLC

("Coral" or the "Group")

Interim Results

Coral Products plc, a specialist in the design, manufacture and supply of plastic products, announces its results for the six months to 31 October 2024.

* 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

H1 Trading

Sustainability Objectives

·      The Group is proud of its continued focus on sustainability:

o  Adoption of bio-based materials.

o  Increasing move to re-cyclable materials.

o  Increasing use of recycled materials in the manufacturing processes.

o  Supply chain tracking and transparency.

Joe Grimmond, Non-Executive Chairman, commented:

"Acknowledging the disappointing first half result the board took swift and effective actions. Whilst the group is trading in line with expectations the actions resulted in exceptional costs circa £600,000. The cost savings, operational improvements and strengthened financial position provide the Group with the financial resilience needed to navigate the current difficult economic landscape. With much reduced borrowings and greatly strengthened liquidity a sharper focus on core capabilities and strategic investments, the Group is well positioned, notwithstanding the difficult macro-economic climate, to deliver a much improved performance."

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Regulatory Information

The information contained within this announcement is deemed to constitute inside information for the purposes of Article 7 of EU Regulation 596/2014 (Market Abuse Regulations) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon publication of this announcement, this inside information is now considered to be in the public domain.

Caution regarding 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 because of new information, future events or otherwise, save as required by law and regulations.

Chairman's Statement

The Group has taken decisive actions to address the challenging trading conditions experienced during the first half of the year. These measures include:

Operational Review:

Tatra-Rotalac:

H1 saw subdued demand in the telecoms sector, impacting sales. Technical and operational challenges with new machine investments are being resolved, showing early signs of improvement. The restructuring efforts will further enhance operational focus.

Global One-Pak:

This leading supplier of lotion pumps, triggers, and mist sprayers faced logistical cost pressures and operational delays in launching UK-produced caps and enclosures. These challenges are being addressed to support future growth.

Manplas:

Unforeseen challenges following the 2023 merger led to operational losses. However, restructuring since October has yielded improvements, positioning the business for profitability and growth within a single-site model.

Film & Foil Solutions:

Capital investments aimed at expanding manufacturing capabilities have faced delays, with revenue generation expected to commence in February 2025. These investments represent a vital component of the company's strategic growth plan.

Alma Products:

While demand in the dairy sector has been disappointing, new projects are poised to drive growth from FY26 onwards. Synergies with Film & Foil offer opportunities for portfolio selling, and commercial strategies are evolving well.

Ecodeck and Ecodeck Spain:

Strong growth in B2B sales complements established B2C channels. Operational challenges with new machinery investments are being resolved, with full production capacity expected by February  2025.

Dividends

A final dividend of 0.25p for the year ended April 2024 was paid on 17 January 2025 taking the total dividend for the year to 0.5p. The board have not declared an interim dividend for the current year, a final dividend will be reviewed and determined following the publication of the FY'25 results.

Outlook

Acknowledging the disappointing first half result the board took swift and effective actions. Whilst the group is trading in line with expectations the actions resulted in exceptional costs circa £600,000. The cost savings, operational improvements, and strengthened financial position (through the insurance settlement and property transactions) provide the resilience needed to navigate current challenges.  

With much reduced borrowings and greatly strengthened liquidity a sharper focus on core capabilities and strategic investments, the Group is well positioned, notwithstanding the difficult macro-economic climate, to deliver a much improved performance.

Joe Grimmond
Non-Executive Chairman

27 January 2025

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

 For the six months to 31 October 2023 (unaudited)

For the year ended 30 April 2024 (audited)

CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

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.  These interim financial statements are for the six months ended 31 October 2024. They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 April 2024. 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. IAS 34 'Interim financial reporting' is not applicable to these half year condensed consolidated financial statements and has therefore not been applied.

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 2024.

3.         Revenue

All production is based in the United Kingdom. The geographical analysis of revenue is shown below:

A breakdown of Group revenues by product group is shown below:

4.         Taxation

The taxation charge for the six months to 31 October 2024 is based on the effective taxation rate, which is estimated will apply to earnings for the year ending 30 April 2025. The rate used is below the applicable UK corporation tax rate of 25% 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 89,428,701 (31 October 2023: 89,556,580 and 30 April 2024: 89,554,180).

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:

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.

8.         Company Information

Company contacts

Directors                      Joe Grimmond  Non-Executive Chairman

                                    Sharon Tinsley  Group Finance Director

                                    Paul Freud        Corporate Development Director

                                    Ian Hillman        COO

                                    Steve Barber     Non-Executive Director

                                    David Low        Senior Non-Executive Director

Secretary                      Sharon Tinsley

Registered Office          Southmoor Road, Wythenshawe, Manchester, M23 9DS, UK

Registered Number      02429784

Website                        www.coralproducts.com

Trading subsidiaries