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Coral Products PLC (CRU)

  Print      Mail a friend       Annual reports

Thursday 11 July, 2013

Coral Products PLC

Final Results

RNS Number : 0653J
Coral Products PLC
11 July 2013
 

11 July 2013

 

 

CORAL PRODUCTS PLC

 

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 APRIL 2013

 

Coral Products PLC, (the "Company" or the "Group") a specialist in the design, manufacture and supply of injection moulded plastic products based in Haydock, Merseyside, announces its preliminary results for the year ended 30 April 2013.

 

 

KEY FINANCIALS

 


2013

   £

 

2012

   £

 

Change

Revenue

17.3m

17.3m

   -

Operating profit *

496,000

250,000

98%

Profit/(loss) for the year after tax

427,000

(369,000)

   -

EBITDA *

1,588,000

1,212,000

30%

Underlying earnings per share *

1.08p

0.58p

86%

Dividend per share

0.5p

0.5p

   -

 

* Operating profit, EBITDA and underlying EPS are reported before an exceptional operating charge in 2012 of £554,000 as the Directors are of the opinion that these give a more accurate picture of underlying performance.

 

HEADLINES

 

·      Return to profit following further progress of strategic plan and despite difficult trading conditions particularly in our media sales division.

 

·      Benefits from Interpack acquisition beginning to show through.

 

·      Operating profit of £496,000 from £250,000 resulting from growth in sales of food packaging containers and other higher added value products.

 

·      Underlying EBITDA up to £1.6m from £1.2m reflecting significant improvement in operating cash flow.

 

·      Investment of £1.9m in freehold property purchase leading to rental savings of £250,000 p.a. part funded by a 10 year loan increasing gearing to 45.8% from 23.3%.

 

·      Revenues from non-media products increased by £2.5m to £9.2m (53.3% of total) as targeted in the strategic plan.

 

·      Interpack recently added to its sales team to enable it to take advantage of opportunities and increase area coverage as it looks to further grow its income.

 

·      Proposed final dividend of 0.5p reflecting the Board's confidence in the future.

 

 

Commenting on the results, Joe Grimmond, Chairman, said:

 

"I am pleased to report that in the face of challenging market conditions the Group has made a return to an overall profit for the past financial year with EBITDA having shown significant growth. This was the middle year of our three year strategic plan of improvement and progress has continued to be made as the Group reduces its exposure to media packaging by developing other markets.

 

"This was the first full year of integration of the results of our reselling and distributing business Interpack Limited. The costs of converting our existing facilities and upgrading to BRC standards and accreditations have now been completed and we expect the benefits from this new range of products to increase over the coming years. Interpack has recently added to its experienced sales and marketing team as it looks to further increase in sales in the current period.

 

"The Group introduced a range of new packaging products and completed the purchase of the freehold of its production facility in Haydock which will save £250,000 per annum in rental costs. Whilst the Group experienced poor trading conditions, particularly in the second half of the year, the investments that have been made are starting to yield benefits and are expected to result in a further year of solid growth." 

 

 

For further information, please contact:

 

Coral Products plc

Joe Grimmond, Non-Executive Chairman

Warren Ferster, Chief Executive & Managing Director

 

 

Tel: 07703 518 148

Tel: 01942 272 882

Nominated Adviser

Cairn Financial Advisers LLP

Tony Rawlinson / Avi Robinson

 

 

Tel: 020 7148 7900

Broker

XCAP Securities plc

David Lawman / Adrian Kirk

 

 

Tel: 020 7101 7070

 

Bankside Consultants

Richard Pearson

Tel: 020 7367 8888

 

 

 

CHAIRMAN'S STATEMENT

 

I am pleased to report that in the face of challenging market conditions the Group has made a return to an overall profit for the past financial year with EBITDA having shown significant growth. This was the middle year of our three year strategic plan of improvement and progress has continued to be made as the Group reduces its exposure to media packaging by developing other markets.

 

This was the first full year of integration of the results of our reselling and distributing business, Interpack Limited. The costs of converting our existing facilities and upgrading to BRC standards and accreditations have now been completed and we expect the benefits from this new range of products to increase over the coming years. Interpack has recently added to its experienced sales and marketing team as it looks to further increase sales in the current period.

 

Sales volumes overall were maintained at the previous year's level belying the fact that the Group continued to diversify into more added value products resulting in improved gross margins (24.6% compared to 22.1% last year). This will continue to be our strategy and a number of new product areas are being assessed to this end.

 

Sales of media packaging products were adversely impacted by the difficult economic backdrop with consumer discretionary spending remaining subdued and by the discontinuance of a leading high street retailer. The distributor companies have only recently been able to recover and rebuild stocks. Further, the exceptionally poor weather particularly in the period through Easter pushed back food container orders, in particular for ice-cream and salads, and lowered our expectations for this period. However, the Group did benefit from the overall sales mix being focussed on sales of higher value products.

 

Trade moulding revenues showed a small increase and a number of products are being moulded for new customers. A recent order has been placed which is expected to produce significant additional revenue over the next 12 months.

 

Revenue from media products, having been on target until early in 2012, fell towards the latter stages of the financial year, as announced earlier this year. Overall however, our customers expect that volumes will be largely maintained and we remain committed to the sector.

 

Recycling product sales remained fairly constant over the year as a whole. The revenues were affected by local authorities' ability to determine their available spend and policy towards waste management. This area is significant to the Group and we continue to commit resources to developing products and partnerships with logistic distributors.

 

In addition to the introduction of a range of new packaging products in the year the Group also completed the purchase of the freehold of its production facility in Haydock. Whilst this has initially increased the debt levels and gearing of the Group there will be rental savings of £250,000 per annum in future financial years.

 

Revenue and Profits

 

Group revenue remained constant for the year at £17,279,000 (2012: £17,309,000). Improved margins on more added value products increased gross profit by 11% to £4,249,000 (2012: £3,826,000). EBITDA showed further strong growth to increase to £1,588,000 (2012: £1,212,000). Overheads in the group were maintained at 2012 levels with the increase representing the inclusion of Interpack for a full year.

 

Group underlying operating profit was £496,000 (2012: £250,000). Finance costs were £146,000 (2012: £65,000) and there was a credit for taxation of £77,000 (2012: £nil) resulting in a profit after tax of £427,000 (2012: loss of £369,000) to be added to reserves.

 

 

Cash and Finances

 

Cash flow generated from operating activities before taxation and working capital movements was £1,588,000 compared to £658,000 generated in the previous financial year. Net proceeds from the equity placing of £447,000 were used in conjunction with a new bank term loan of £1.4 million to fund the purchase of the freehold property at a cost of £1,949,000. Capital expenditure in the year on plant refurbishment and tooling for new recycling container products was £600,000.

 

Earnings per share

 

The underlying earnings per share, which, in the opinion of the Directors, best reflects the performance of the Group, has increased significantly to 1.08p (2012: 0.58p). Basic and diluted earnings per share rose to 1.08p (2012: loss of 1.16p).

 

Dividends

 

The Board proposes a final dividend of 0.5p per share to be paid on 17 October 2013 to shareholders on the register at the close of business on 27 July 2013.

 

Outlook

 

Whilst, as previously announced, the Group experienced poor trading conditions particularly in the second half of the year the investments that have been made are starting to yield benefits and are expected to result in a further year of solid growth.

 

We believe the opportunity exists for us to create a significant plastic moulding business and we remain confident in our ability to implement our strategic vision and improve business performance to increase our customer base and market share and drive financial results over the medium term.

 

 

 

 

Joe Grimmond

Chairman

 

11 July 2013

 

 

 

 

GROUP INCOME STATEMENT

FOR THE YEAR ENDED 30 APRIL 2013

 

 

 

 

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 APRIL 2013

 


Unaudited

2013


Audited

2012


£'000


£'000

Profit/(loss) for the financial year

350


(369)

Total comprehensive income for the year

attributable to the company's shareholders

350


(369)

 

 

 

 

GROUP STATEMENT OF FINANCIAL POSITION

AS AT 30 APRIL 2013

 



Unaudited

2013


Audited

2012



£'000


£'000

Non-current assets





Goodwill


3,868


3,868

Other intangible assets


144


200

Property, plant and equipment


6,286


4,658



10,298


8,726

Current assets





Inventories


1,377


1,986

Trade and other receivables


3,874


3,517

Corporation tax repayable


107


-

Cash


-


52



5,358


5,555

Total assets


15,656


14,281






Current liabilities





Trade and other payables


(3,047)


(4,291)

Corporation tax payable


                  -


(143)

Borrowings


(2,564)


(1,518)



(5,611)


(5,952)

Non-current liabilities





Borrowings


(1,386)


(385)

Deferred tax


(32)


-



(1,418)


(385)

Total liabilities


(7,029)


(6,337)






Net assets


8,627


7,944






Equity





Share capital


419


381

Share premium


409


6,977

Capital redemption reserve


-


7

Retained earnings


7,799


579

Equity attributable to shareholders


8,627


7,944

 

 

 

 

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 APRIL 2013

 

 

 

 

On 3 October 2012 the Company announced that it had received confirmation by the Court to its application to cancel its share premium account of £6,977,000 and capital redemption reserve of £7,000. This enabled it to credit the resulting sums to the Company's profit and loss account for the purpose of, inter alia, making distributions to its shareholders.

 

 

 

 

GROUP STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 APRIL 2013

 



Unaudited

2013


Audited

2012



£'000


£'000

Cash flows from operating activities





Loss for the year


350


(369)

 Adjustments for:





Depreciation of property, plant and equipment


1,019


904

Amortisation of intangible assets


                73


58

Interest expense


146


65

Operating cash flows before movements in working capital


1,588


658

Decrease/(increase) in inventories


609


(200)

(Increase)/decrease in trade and other receivables


(357)


53

(Decrease)/increase in trade and other payables


(1,244)


1,226

Cash generated by operations


596


1,737

UK corporation tax paid


(141)


(-)

Net cash generated from operating activities


455


1,737






Cash flows from investing activities





Purchase of subsidiaries net of cash acquired


-


(2,756)

Acquisition of property, plant and equipment


(2,647)


(1,568)

Acquisition of intangible assets


(17)


(41)

Dividend paid to equity holders


(191)


-

Net cash used in investing activities


(2,855)


(4,365)






Cash flows from financing activities





Proceeds of share issue


447


1,699

Proceeds of term loan


1,400


1,400

Proceeds of director's loan


150


-

 Proceeds of new asset finance


350


100

Rental deposit repayment


-


50

Interest paid


(146)


(65)

Term loan repayments


(1,170)


(380)

Finance lease principal payments


(179)


(39)

Net cash generated from financing activities


852


2,765






Net (decrease)/increase in cash and cash equivalents


(1,548)


137

Cash and cash equivalents at 1 May


(711)


(848)

Cash and cash equivalents at 30 April


(2,259)


(711)






Cash


-


52

Overdraft


(2,259)


(763)

Cash and cash equivalents at 30 April


(2,259)


(711)

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

 

 

1.   Basis of preparation

 

The financial information set out above does not constitute the Group's statutory accounts for the years ended 30 April 2013 or 2012 within the meaning of Section 434 of the Companies Act 2006, but is derived from those accounts. Statutory accounts for 2012 have been delivered to the Registrar of Companies and those for 2013 will be delivered following the company's Annual General Meeting. The auditors' report on the statutory accounts for the year ended 30 April 2012 was unqualified and does not contain statements under s498 (2) or (3) Companies Act 2006.

 

This financial information has been prepared in accordance with International Financial Reporting Standards ("IFRSs") and International Financial Reporting Interpretations Committee (IFRIC) interpretations as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

 

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.

 

 

2.  Earnings per share

 

The basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders for the financial period by the weighted average number of shares in issue during the financial period of 39,613,965 (2012: 31,840,527).

 

Diluted earnings per share include the effects of potentially dilutive share options granted.

 

Underlying earnings per share is also shown calculated by reference to earnings before exceptional items. The directors consider that this gives a useful indication of underlying performance,

 

Basic, diluted and underlying earnings per share:

 


Unaudited

2013

Audited

2012


£'000

EPS (p)

£'000

EPS (p)






Profit/(loss) for the financial period

427

1.08

(369)

(1.16)

Exceptional items

-

-

554

1.74

Underlying profit for the period

427

1.08

185

0.58

 

 

3.  Taxation

 

Analysis of the tax credit in the accounts comprises the following:

 



2013


2012



£'000


£'000

Current income tax credit


109


-

Deferred income tax


(32)


-



77


-

 

 

4.  Dividends

 

A final dividend of 0.5p per share was paid on 15 October 2012 to shareholders on the register on 27 July 2012. This dividend amounted to £191,000.

 

In respect of the current year the directors propose a final dividend of 0.5p per share to be paid on 17 October 2013 to shareholders on the register on 19 July 2013 subject to approval by the shareholders of the company at the Annual General Meeting. This dividend equates to £210,000 and has not been included as a liability at 30 April 2013.

 

5.  Group reconciliation of net cash flow to movement in net debt

 



2013


2012



£'000


£'000

(Decrease)/increase in cash and cash equivalents


(1,548)


137

Increase in bank loans


(230)


(1,020)

New director's loan


(150)


-

Increase in asset finance


(171)


(61)

Movement in net debt in the period


(2,099)


(944)

Net debt at start of the period


(1,851)


(907)

Net debt at end of the period


(3,950)


(1,851)

 

 

6.  Publication of Annual Report and Notice of Annual General Meeting

 

A copy of the 2013 Report & Accounts, together with a notice of the Annual General Meeting to be held at Haydock Thistle Hotel, Penny Lane, Haydock, Merseyside WA11 9SG on 28 August 2013 at 12:00 p.m., will be sent to all shareholders on or around 5 August 2013. Further copies will be available to the public at the company's registered address at North Florida Road, Haydock Industrial Estate, Haydock, Merseyside WA11 9TP and on the Company's website at www.coralproducts.com.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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