TIDMCRU
RNS Number : 0790I
Coral Products PLC
25 August 2016
25 August 2016
CORAL PRODUCTS PLC
('Coral' or the 'Company' or the 'Group')
FINAL RESULTS
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 final results
for the year ended 30 April 2016.
KEY FINANCIALS
2016 2015 Change
GBP GBP
Group revenue 18,714,000 17,425,000 7.4%
Operating profit 938,000 375,000 150.1%
Underlying operating profit * 1,649,000 1,349,000 22.2%
Profit for the year before taxation 758,000 191,000 296.9%
Underlying profit before taxation* 1,469,000 1,165,000 26.1%
Underlying EBITDA* 2,342,000 1,912,000 22.5%
Underlying earnings per share
* 2.2p 2.1p
Dividend payable per share 1.0p 0.7p
* "Underlying" results are reported before separately disclosed
items, as shown in note 2, as the Directors are of the opinion that
these give a more accurate picture of underlying performance
HEADLINES
-- Group revenue increase of 7.4%.
-- Significant underlying operating profit rise to GBP1.65m (GBP1.35m in 2015).
-- Sales of packaging containers continue to offset fall in media sales.
-- Underlying EBITDA increased by 22.5% to GBP2.3m maintaining
an improvement in operating cash flow.
-- Successful integration of business and assets from Neiman Packaging Limited in June 2015.
-- Revenues from non-media products increased to GBP17.9m
(GBP14.5m in 2015) representing 95% of total revenues (2015:
83%).
-- Purchase of Rotalac assets in January 2016.
-- Acquisition of Global One-Pak Limited ("GOP") completed in February 2016.
-- Progressive dividend policy maintained with 43% increase in
total dividend for the year of 1.0p (2015: 0.7p).
-- Commenced strategic reorganisation and restructuring of Group
into more focussed units with benefits from economies of scale.
Commenting on the results, Joe Grimmond, Chairman, said:
"I am pleased to record a further year of progress for the Group
with revenue up by 7.4% to GBP18.7 million and underlying profit up
by 22.2% to GBP1.6 million.
The Group continues with its strategic progress of increasing
focus on value-added and innovative products, particularly in the
food container, telecommunications and rail industry markets. Our
aim continues to be to build a significant plastic moulding
business and we remain confident in our ability to make further
progress by improving business performance and increasing our
market share to drive forward financial results over the medium
term.
We look forward with confidence to further progress in the
coming year."
For further information, please contact:
Coral Products plc
Joe Grimmond, Chairman Tel: 07703 518
Roberto Zandona, Group Chief Executive 148
Tel: 01942 272
882
Nominated Adviser Tel: 020 7148
Cairn Financial Advisers LLP 7900
Tony Rawlinson, Liam Murray, Rebecca Anderson
Broker
Daniel Stewart & Co plc Tel: 020 7776
David Lawman 6550
Capital Markets Consultants Tel: 07515 587
Richard Pearson 184
Chairman's Statement
Trading
It is pleasing to record a further year of progress for the
Group with revenue up by 7% to GBP18.7m and underlying operating
profit up by 22% to GBP1.6m. I am pleased that we are both
delivering increased profits to our shareholders and putting in
place the levels of investment and planning needed to secure
Coral's long term future as a leading player in our chosen
markets.
Following the Five Year Plan that was adopted in 2015 the Group
made a number of acquisitions this year aimed at substantially
increasing Group revenue and profitability from our specialist
plastic products manufacturing and distribution activities. In June
2015, we took our first step along this plan when we acquired
certain plant and machinery from Neiman Packaging Limited
('Neiman'). This acquisition introduces two new manufacturing
processes, injection blow moulding and extrusion blow moulding,
enhancing our range of manufacturing capability. This was followed
in January 2016 with the purchase of the fixed assets, stock and
business of Rotalac Plastics Limited ('Rotalac') from its
administrators. Rotalac provides thermoplastic extrusion and
moulding solutions across a number of industries worldwide,
including aerospace, medical and automotive and is a leader in
shutter system design and manufacture. This addition further
enabled the broadening of the Group's product range. Finally, in
February 2016 the Group acquired Global One-Pak Holdings Limited
('GOP') which designs, manufactures and supplies lotion pumps and
trigger sprayers to a broad range of customers worldwide, including
a number of global brands, across a wide range of markets,
including household and garden, automotive, personal care and pet
grooming. This business expanded further the market coverage and
product range with the supply of a number of high added value
components. These businesses have all been successfully integrated
into the Group and enable us to promote a more diverse range of
products and manufacturing methods the benefits of which are
already being seen.
Two of our subsidiaries at Interpack Limited ('Interpack') and
Tatra Plastics Manufacturing Limited ('Tatra') had further years of
improvement with continued improvements to profit and contribution.
Interpack's turnover stayed roughly constant but its margins were
improved from weaker overseas currencies whilst it also benefitted
from reduced overheads following the closure of its Dunstable site
with all operations moved to Haydock. Food container sales continue
to improve as the markets grow for foodstuffs to be contained
within hygienic, tamper-proof packaging and this looks set to
continue further. Tatra continued to report both significant
increases in both turnover and profit as demand from key suppliers
of infrastructure and communications increased. The Company
relocated from Halifax to Wythenshawe in July 2016 and, combined
with the existing Rotalac business already in situ there, is
confidently expected to maintain this progression and further
increase its contribution to Group performance. Tatra has been
renamed Tatra Rotalac Limited post year end, with the acquired
Rotalac trade hived into the now combined entity in
Wythenshawe.
At our freehold manufacturing site at Haydock within the
subsidiary Coral Products (Mouldings) Limited ('Mouldings') we have
made substantial investment in infrastructure, plant capacity and
management control. The improvement on operational efficiency,
whilst slower than anticipated, is nevertheless marked. We continue
to improve this facility and believe this will benefit our renewed
sales drive at Haydock.
Sales of on-line totes and recycling crates contributed GBP2.4m
from GBP1.2m in 2015 which helped to offset the further fall in
media sales to GBP0.9m in 2016 from GBP2.9m in 2015. We are
delighted to announce the receipt of a letter of intent from our
customer for a further supply of up to 300,000 totes for a new
on-line fulfilment centre with delivery late 2016 through 2018.
Trade moulding sales were below expectations with revenue falling
to GBP1.2m from GBP2.9m in 2015. There remained challenging market
conditions as local authorities continued not to commit resources
in the present atmosphere of austerity. Waste management will
continue to be a significant area of future spending and we are
determined to offer products and partnerships that will assist in
its management.
The significant fall in the relative value of sterling against
the dollar and the euro since the beginning of the year, together
with the prevailing uncertainty, could have a negative effect on
our business. We are taking steps across the Group to mitigate
these.
Performance of the Group is monitored principally through
adjusted profit measures which exclude GBP0.7m of underlying items.
Such items include the costs for the reorganisation involved in
merging the two businesses of Tatra and Rotalac during 2016,
together with the expenses in rationalising and improving the site
at Haydock. In addition, acquisition costs and amortisation of
intangibles arising on acquisition, written-off under accounting
practices, are also treated as underlying, as are share based
payment charges, compensation for loss of office of senior
management, and losses on sale of tangible assets.
The Group has reduced net debt by GBP0.7m in the year and
gearing has decreased to 23.9%. Given the continued pressure on raw
material prices and credit availability we continued to focus on
minimising our inventory and reducing our debtor days. Overall the
Group was able to report a net cash inflow of GBP1.3m.
Results
Group revenue improved for the year to GBP18.7m (2015:
GBP17.4m). Gross margin showed a significant increase to 33.1%
(2015: 29.6%) resulting from the continued addition of better added
value products along with decreases in the cost of raw materials.
Underlying earnings before interest, tax, depreciation and
amortisation for the Group remained strong at GBP2.3m (2015:
GBP1.9m). Administrative expenses in the Group increased to GBP4.4m
(2015: GBP4.1m) in line with the increase in Group activity. This
resulted in an underlying operating profit of GBP1.6m (2015:
GBP1.3m).
Separately disclosed underlying items totalled GBP0.7m (2015:
GBP1.0m) of which GBP0.4m resulted from the reorganisation costs of
Haydock and Wythenshawe to improve the facilities and rationalise
the businesses. Finance costs amounted to GBP0.2m (2015: GBP0.2m).
The underlying profit for the financial year before taxation was
GBP1.5m (2015: GBP1.2m). Earnings per share were 1.12 pence (2015:
0.35 pence), underlying earnings per share were 2.20 pence (2015:
2.12 pence).
Net debt at 30 April 2016 was GBP3.3m (2015: GBP4m) giving
reduced gearing of 23.9% (2015: 43.7 %). Interest cover before
underlying costs was 9.2 times (2015: 7.3 times). Net assets per
share were 16.6p (2015: 15.8p).
Dividends
The board remains committed to its long-term progressive
dividend policy, which takes account of the underlying growth in
earnings, whilst acknowledging the requirement for continuing
investment and short-term fluctuations in profit.
Having considered the results for the year, the outlook for the
new financial year and the ongoing requirements of the business,
the board has recommended the total dividend be increased to 1.0
pence per share. The final payment of 0.7 pence per share will have
an ex-dividend date of 8 September 2016 and record date of 9
September 2016. This final dividend will be paid on 14 October
2016.
Board Changes
In June 2016 Roberto (Rob) Zandona was appointed as Group Chief
Executive and at the same time Joe Grimmond became Non-executive
Chairman having previously acted as executive Chairman. Rob has
over 35 years of experience in the manufacturing and project
moulding sectors.
Strategy
Our board continuously reviews business performance alongside
market conditions to make sure that we take the correct strategic
decisions for each of our businesses. The board recognises fully
that it has been tasked with delivering enhanced shareholder value
in accordance with the strategy that we outlined in March 2015. The
challenges facing the board relate to managing the continued growth
of the Group whilst preserving the strengths of the business.
People
We are reliant on the expertise, professionalism and commitment
of our people and their contribution to the business during a
challenging year.
Outlook
The Group continues with its strategic progress of increasing
focus on value-added and innovative products, particularly in the
food container, telecommunications and rail industry markets. Our
aim continues to be to build a significant plastic moulding
business and we remain confident in our ability to make further
progress by improving business performance and increasing our
market share to drive forward financial results over the medium
term.
We look forward with confidence to further progress in the
coming year.
Joe Grimmond
Chairman
25 August 2016
Group Income Statement
for the year ended 30 April 2016
2016 2015
GBP'000 GBP'000
--------------------------------------------- ----------- -----------
Continuing operations
Revenue 18,714 17,425
Cost of sales (12,512) (12,268)
----------- -----------
Gross profit 6,202 5,157
Operating costs
Distribution expenses (863) (716)
------------------------------------------------ ----------- -----------
Administrative expenses before separately
disclosed items (3,690) (3,092)
Separately disclosed items (711) (974)
Administrative expenses (4,401) (4,066)
Operating profit 938 375
Finance costs (180) (184)
----------- -----------
Profit for the financial year before
taxation 758 191
Taxation (15) -
----------- -----------
Profit for the financial year attributable
to the equity holders 743 191
----------- -----------
Earnings per share
Basic (2015: basic and dilutive)
earnings per ordinary share 1.12p 0.35p
Dilutive earnings per ordinary share 1.12p 0.35p
Group Statement of Comprehensive Income
for the year ended 30 April 2016
2016 2015
GBP'000 GBP'000
------------------------------------------------------- ----------- -----------
Profit for the financial year 743 191
----------- -----------
Total comprehensive income for the year attributable
to equity holders 743 191
----------- -----------
Balance Sheets
as at 30 April 2016
As at As at
30 April 30 April
2016 2015
GBP'000 GBP'000
-------------------------------- ----------- -----------
ASSETS
Non-current assets
Goodwill 5,495 4,768
Other intangible assets 2,390 246
Property, plant and equipment 6,517 5,556
Investments in subsidiaries - -
----------- -----------
Total non-current assets 14,402 10,570
----------- -----------
Current assets
Inventories 1,843 1,404
Trade and other receivables 5,279 3,854
Cash and cash equivalents 910 67
Total current assets 8,032 5,325
----------- -----------
LIABILITIES
Current liabilities
Borrowings 2,062 2,349
Trade and other payables 4,054 2,659
----------- -----------
Total current liabilities 6,116 5,008
----------- -----------
Net current assets 1,916 317
----------- -----------
Non-current liabilities
Borrowings 2,122 1,704
Deferred tax 508 62
----------- -----------
Total non-current liabilities 2,630 1,766
----------- -----------
NET ASSETS 13,688 9,121
----------- -----------
SHAREHOLDERS' EQUITY
Share capital 826 579
Share premium 5,288 1,862
Other reserves 1,061 443
Retained earnings 6,513 6,237
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 13,688 9,121
----------- -----------
Statement of Changes in Shareholders' Equity
for the year ended 30 April 2016
Called Share
Up Premium Other Retained Total
Share Reserve reserves Earnings Equity
Capital GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
------------------------ ---------- ---------- ------------ ------------ -----------
Group
At 1 May 2014 419 409 - 6,439 7,267
Profit for the
year - - - 191 191
---------- ---------- ------------ ------------ -----------
Total comprehensive
income - - - 191 191
---------- ---------- ------------ ------------ -----------
Transactions with
owners
Issue of share
capital 160 1,453 443 - 2,056
Credit to equity
for equity settled
share based payments - - - 12 12
Dividend paid - - - (405) (405)
---------- ---------- ------------ ------------ -----------
At 1 May 2015 579 1,862 443 6,237 9,121
Profit for the
year - - - 743 743
---------- ---------- ------------ ------------ -----------
Total comprehensive
income - - - 743 743
---------- ---------- ------------ ------------ -----------
Transactions with
owners
Issue of share
capital 247 3,426 618 - 4,291
Credit to equity for
equity settled share
based payments - - - 28 28
Dividend paid - - - (495) (495)
At 30 April 2016 826 5,288 1,061 6,513 13,688
---------- ---------- ------------ ------------ -----------
Cash Flow Statements
for the year ended 30 April 2016
Group
2016 2015
GBP'000 GBP'000
----------------------------------------------- ----------- -----------
Cash flows from operating activities
Profit/(loss) for the year 743 191
Adjustments for:
Depreciation of property, plant and
equipment 678 533
Loss/(profit) on disposal of tangible
assets 50 (33)
Amortisation of intangible assets 133 136
Share based payment charge 28 12
Interest payable 180 184
Taxation charge 15 -
----------- -----------
Operating cash flows before movements
in working capital 1,827 1,023
(Increase)/decrease in inventories (174) 801
(Increase)/decrease in trade and
other receivables (455) 1,108
Increase/(decrease) in trade and
other payables 658 (1,361)
----------- -----------
Cash generated by operations 1,856 1,571
UK corporation tax paid (40) -
----------- -----------
Net cash generated from operating activities 1,816 1,571
----------- -----------
Cash flows from investing activities
Acquisition of subsidiary, net
of cash acquired (2,402) (1,998)
Acquisition of property, plant
and equipment (1,668) (440)
Proceeds from disposal of fixed
assets - 42
Acquisition of intangible assets - (7)
----------- -----------
Net cash used in investing activities (4,070) (2,403)
----------- -----------
Cash flows from financing activities
Proceeds of issue of share capital 3,641 1,605
New bank loans raised 1,150 500
New director's loan raised - 200
Dividends paid (495) (405)
New asset finance raised 463 237
Interest paid on borrowings (180) (184)
Repayments of bank borrowings (666) (297)
Repayment of director's loan (200) (146)
Repayments of obligations under finance
lease (205) (226)
Net cash used in financing activities 3,508 1,284
----------- -----------
Net increase in cash and cash
equivalents 1,254 452
Cash and cash equivalents at 1
May 2015 (1,747) (2,199)
----------- -----------
Cash and cash equivalents at 30
April 2016 (493) (1,747)
----------- -----------
Cash 910 67
Invoice discounting facility (1,403) (1,814)
----------- -----------
Cash and cash equivalents at 30
April 2016 (493) (1,747)
----------- -----------
Notes to the Financial Statements
for the year ended 30 April 2016
1. Basis of preparation
The financial information set out above does not constitute the
Group's statutory accounts for the years ended 30 April 2016 or
2015 within the meaning of Section 434 of the Companies Act 2006,
but is derived from those accounts. Statutory accounts for 2015
have been delivered to the Registrar of Companies and those for
2016 will be delivered following the company's Annual General
Meeting. The auditors' report on the statutory accounts for the
year ended 30 April 2015 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. Underlying operating profit and separately disclosed
items
2016 2015
GBP'000 GBP'000
Underlying operating profit 1,649 1,349
Separately disclosed items in administrative
expenses:
Share based payment charge (28) (12)
Intangible amortisation (118) (106)
Costs of acquisition (67) (106)
Retirement costs of former directors (30) (414)
Reorganisation costs (418) -
Loss on disposal of tangible fixed assets (50) -
Impairment loss recognised on trade receivables - (336)
--------------------------- ----------------------
Operating profit 938 375
--------------------------- ----------------------
3. Earnings per share
Basic and underlying 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 66,238,090 (2015: 54,894,513).
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.
Unaudited Audited
2016 2015
GBP'000 EPS (p) GBP'000 EPS (p)
Profit for the financial
period 743 1.12 191 0.35
Separately disclosed
items 711 1.08 974 1.77
-------------------- ------------------- ------------------- ------------------
Underlying profit for
the period 1,454 2.20 1,165 2.12
-------------------- ------------------- ------------------- ------------------
Diluted earnings per share
The diluted earnings per share is based on the weighted average
number of ordinary shares in issue ranking for dividend during the
year, adjusted for the effect of all dilutive potential ordinary
shares. The number of shares used to calculate the earnings per
share were 66,548,090 (2015: 54,894,513). This resulted in diluted
earnings per share of 1.12p (2015: 0.35p).
4. Dividends
A final dividend for the year ended 30 April 2015 of 0.5p per
share was paid on 30 October 2015 to shareholders on the register
on 7 August 2015. This dividend amounted to GBP289,308.
In respect of the current year an interim dividend of 0.3p per
share was paid on 1 March 2016 to shareholders on the register on
21 January 2016. This dividend amounted to GBP196,844.
A final dividend of 0.7p per share is to be paid on 14 October
2016 to shareholders on the register on 9 September 2016. The
ex-dividend date will be 8 September 2016. The dividend is subject
to approval by the shareholders of the company at the Annual
General Meeting. This dividend equates to GBP578,304 and has not
been included as a liability at 30 April 2016.
5. Group reconciliation of net cash flow to movement in net
debt
2016 2015
GBP'000 GBP'000
Increase in cash and cash equivalents 1,254 452
Increase in bank loans and other
loans (284) (257)
Increase in asset finance (258) 213
--------------------------- ---------------------
Movement in net debt in the period 712 (18)
Net debt at start of the period (3,986) (3,968)
--------------------------- ---------------------
Net debt at end of the period (3,274) (3,986)
--------------------------- ---------------------
6. Publication of Annual Report and Notice of Annual General
Meeting
A copy of the 2016 Report & Accounts, together with a notice
of the Annual General Meeting to be held at Tatra Rotalac Limited,
Southmoor Road, Roundthorn Industrial Estate, Wythenshawe,
Manchester M23 9DU on 28 September 2016 at 12:00 p.m., will be sent
to all shareholders on 5 September 2016. 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
END
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