Interim Results - Pre-tax Profit Up 13%

Coral Products PLC 6 December 1999 CORAL PRODUCTS PLC 1999 Interim Results Record Interim Pre-tax Profits of £1.41m; Dividend up 14.3%; Capex Programme continues; Confident about Prospects Coral Products PLC ('Coral'), a leading manufacturer of media packaging for video, CD and Digital Versatile Disc (DVD) cases, and houseware products, announces record interim results for the half year ended 31 October 1999. Highlights * Pre-tax profits up 13% to £1.41m (1998: £1.25m). * Diluted earnings per share, up 12.9% to 4.65p (1998: 4.12p). * Interim dividend up 14.3% to 1p net per share (1998: 0.875p). * Capital investment programme continues in media packaging, particularly in CD and DVD case manufacture. Commenting on the results, Chairman Sir David Rowe-Ham said: 'CD case sales remain buoyant. Further expansion of our CD and DVD production facilities takes place in Spring 2000. We expect the benefits of this increased capacity and new product line to flow through in the next financial year. Raw material prices have risen since June and have led to testing trading conditions. Increases, however, have in the main, been passed onto customers.' On prospects for the year as a whole, he added: 'Raw material price pressures continue to be felt but we continue to trade in line with expectations and, dependent upon industry conditions in the New Year, we remain confident of our trading prospects for the second half.' Enquiries: Coral Products PLC Tel: 01942 272882 Warren Ferster, Managing Director David Shalom, Finance Director Binns & Co Tel: 0171 786 9600 Peter Binns/Paul Vann Editors' Notes: 1. Coral is the only European manufacturer which can offer all three media packaging products on a 'just in time' basis at competitive prices to major international customers. 2. Coral supplies large blue chip customers in the UK and Europe and has around 25 per cent of the UK video box market and approximately 20 per cent of the European market. CHAIRMAN'S STATEMENT Trading in the first half of our financial year has been satisfactory and I am pleased to report a 13% increase in both pre-tax profits and earnings per share compared with the same period last year. Raw material prices have risen since June and have lead to testing trading conditions. Increases, however, have in the main been passed on to customers. Trading Turnover for the six months ended 31 October 1999 increased to £7.40 million (1998: £6.65 million) and pre-tax profits increased by 13% to £1,407,000 (1998: £1,245,000). Diluted earnings per share have increased by 12.9% to 4.65p (1998: 4.12p). Interim Dividend An interim dividend of 1p net per ordinary share (1998: 0.875p) has been declared representing an increase of 14.3% as compared with the same period last year. This dividend will be paid on 21 February 2000 to all shareholders on the register on 4 February 2000. Business In line with our long-term strategy we continue to invest heavily in expanding and updating our media packaging production facilities, particularly in relation to CD and DVD case manufacture. CD case sales remain buoyant and further orders have been placed for additional machinery for delivery in the second quarter of 2000. The re-introduction of a European Union tax on Far Eastern Imports in the New Year should also increase our competitiveness in the European marketplace. Initial production and sales of our ALPHApak DVD case commenced in the period and further expansion of our DVD production facilities will take place in Spring 2000. This exciting new market continues to expand at a rapid pace as with all digitally based media and we expect the benefits of this new product line to flow through in the next financial year. Prospects Raw material price pressures continue to be felt but we continue to trade in line with expectations and dependent upon industry conditions in the New Year we remain confident of our trading prospects for the second half. Sir David Rowe-Ham Chairman 6 December 1999 Profit and Loss Account Unaudited Unaudited Audited Half year to Half year to Year to 31 October 31 October 30 April 1999 1998 1999 Notes £'000 £'000 £'000 Continuing operations Turnover (1) 7,396 6,650 12,806 --------- --------- --------- Profit on ordinary activities before interest 1,466 1,292 2,385 Net interest payable 59 47 83 --------- --------- --------- Profit on ordinary activities before taxation 1,407 1,245 2,302 Tax on profit on ordinary activities (2) 436 386 739 --------- --------- --------- Profit on ordinary activities after taxation 971 859 1,563 Dividends 204 179 588 --------- --------- --------- Amount transferred to reserves 767 680 975 ====== ====== ====== Basic earnings per share (3) 4.75p 4.20p 7.65p ====== ====== ====== Diluted earnings per share (3) 4.65p 4.12p 7.49p ====== ====== ====== The Company has no recognised gains and losses other than the profits above and therefore no separate statement of total recognised gains and losses has been presented. There is no difference between the profit on ordinary activities before taxation and the retained profit for the year stated above, and their historical cost equivalents. Basis of preparation The interim results have been prepared on the basis of the accounting policies set out in the Company's accounts for the year ended 30 April 1999, and are neither audited nor reviewed. In the current financial period, the Company adopted Financial Reporting Standard 15 - 'Tangible Fixed Assets' issued by the Accounting Standards Board. Compliance with this standard has not required any changes to current or prior year figures. Balance Sheet Unaudited Unaudited Audited As at As at As at 31 October 31 October 30 April 1999 1998 1999 £'000 £'000 £'000 Tangible fixed assets 10,223 8,111 8,752 Current assets Stocks 1,304 993 1,347 Debtors 4,169 3,602 3,221 Cash at bank and in hand 272 385 797 --------- --------- --------- 5,745 4,980 5,365 Creditors: amounts falling due within one year 4,617 3,663 4,337 --------- --------- --------- Net current assets 1,128 1,317 1,028 ====== ====== ====== Total assets less current liabilities 11,351 9,428 9,780 Creditors: amounts falling due after more than one year 1,491 1,069 687 Provisions for liabilities and charges Deferred taxation 876 437 876 --------- --------- --------- Total net assets 8,984 7,922 8,217 ====== ====== ====== Capital and reserves Share capital 204 204 204 Share premium 4,443 4,443 4,443 Profit and loss account 4,337 3,275 3,570 --------- --------- --------- Equity shareholders' funds 8,984 7,922 8,217 ====== ====== ====== Movements in Shareholders' Funds Unaudited Unaudited Audited As at As at As at 31 October 31 October 30 April 1999 1998 1999 £'000 £'000 £'000 Profit for the period 971 859 1,563 Dividends (204) (179) (588) --------- --------- --------- Net additions to equity shareholders' funds 767 680 975 Equity shareholders' funds at the beginning of the period 8,217 7,242 7,242 --------- --------- --------- Equity shareholders' funds at the end of the period 8,984 7,922 8,217 ====== ====== ====== Cashflow Statement Unaudited Unaudited Audited Half year to Half year to Year to 31 October 31 October 30 April 1999 1998 1999 £'000 £'000 £'000 Net cash inflow from operating activities 1,210 1,397 3,473 --------- --------- --------- Returns on investments and servicing of finance Net interest paid (59) (44) (78) --------- --------- --------- Taxation - (77) (65) --------- --------- --------- Capital expenditure and financial investment Purchase of tangible fixed assets (2,108) (1,178) (2,380) Sale of tangible fixed assets 20 - 1 --------- --------- --------- (2,088) (1,178) (2,379) --------- --------- --------- Equity dividends paid (409) (307) (485) --------- --------- --------- Net cash (outflow)/inflow before financing (1,346) (209) 466 ====== ====== ====== Financing Repayment of loans (20) (19) (92) Payment of principal under finance leases (495) (469) (1,013) Inception of new finance leases 1,336 165 519 --------- --------- --------- Net cash inflow/(outflow) from financing 821 (323) (586) --------- --------- --------- Decrease in cash (525) (532) (120) ====== ====== ====== Reconciliation of Net Cashflow to Movement in Net Debt Decrease in cash in the period (525) (532) (120) Cash outflow from debt and lease financing 515 488 1,105 --------- --------- --------- Change in net debt resulting from cashflows (10) (44) 985 New finance leases (1,336) (165) (519) --------- --------- --------- Movement in net debt in the period (1,346) (209) 466 Net debt at beginning of period (490) (956) (956) ---------- ---------- ----------- Net debt at end of period (1,836) (1,165) (490) ====== ====== ====== Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities Unaudited Unaudited Audited Half year to Half year to Year to 31 October 31 October 30 April 1999 1998 1999 £'000 £'000 £'000 Operating Profit 1,466 1,292 2,385 Depreciation charges 625 460 990 (Profit)/Loss on sale of fixed assets (8) - 30 Release of grant income (1) (1) (1) Decrease/(Increase) in stocks 43 (44) (397) Increase in debtors (948) (476) (95) Increase in creditors 33 166 561 --------- --------- --------- Net cash inflow from operating activities 1,210 1,397 3,473 ====== ====== ====== Notes to the Accounts 1. Turnover All production is based in the United Kingdom. The geographical analysis of turnover is shown below: Unaudited Unaudited Audited Half year to Half year to Year to 31 October 31 October 30 April 1999 1998 1999 £'000 £'000 £'000 United Kingdom 5,712 5,086 9,440 Rest of Europe 1,684 1,564 3,366 --------- --------- --------- 7,396 6,650 12,806 ====== ====== ====== By Business Activity Media packaging 6,738 5,891 11,356 Housewares 658 759 1,450 --------- --------- --------- 7,396 6,650 12,806 ====== ====== ====== The classes of business activity do not differ substantially and therefore no separate analysis of operating profits and net assets is disclosed. 2. The charge for taxation on the profit for the period is based upon the estimated effective rate for the full year. 3. The calculation of earnings per share is based on the profit on ordinary activities after taxation for the half year namely £971,000 (1998: £859,000) and on 20,440,000 (1998: 20,440,000) ordinary shares, being the weighted average number of ordinary shares in issue and ranking for dividend during the period. Calculation of fully diluted earnings per share is based upon a fully diluted weighted average number of ordinary shares of 20,877,757 (1998: 20,860,722). 4. The results for the year ended 30 April 1999 are in abbreviated form and have been extracted from the published accounts as filed with the Registrar of Companies. These were audited and reported upon without qualification by PricewaterhouseCoopers and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. 5. The interim report will be posted to all shareholders on 6 December 1999 and copies of this and the last published Annual Report and Accounts are available from the Secretary, Coral Products PLC, North Florida Road, Haydock Industrial Estate, Haydock, Merseyside WA11 9TP (Tel: 01942 272882). These reports may also be viewed on our web site at coralproducts.com.

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