7 September 2022                                       

CORAL PRODUCTS PLC

('Coral' or the 'Company' or the 'Group')

Final results for year ended 30 April 2022

Coral Products PLC, a specialist in the design, manufacture and supply of injection moulded plastic products based in Wythenshawe, Manchester, announces its audited final results for the year ended 30 April 2022.

KEY FINANCIALS

* Underlying results are reported before separately disclosed items, as shown in note 2. Such underlying results are not intended to be a substitute for, or superior to, IFRS measures of profit.

HEADLINES

·      Much improved performance in our continuing operations during the year.

·      Underlying operating profit increased to £1.6m (2021: £0.9m) and underlying EBITDA increased to £1.8m (2021: £1.3m).

·      Gross margin increased to 36.7% (2021: 35.5%).

·      The sale of the land and buildings at Haydock completed bringing in a further £3.5m of cash.

·      Cash reserves in the Group total £7.6m (2021: £3.8m).

·     An interim dividend of 0.5p per share was paid on 3 December 2021 with a further 0.4p per share paid on 1 June 2022. A final dividend of 0.2p is proposed to be paid on 30 November 2022, making a full year dividend of 1.1p (2021: 1.0p) per share.

POST YEAR END HEADLINES

·      Acquisition of Film and Foil on 4 May 2022 for a total consideration of £3,000,000.

·      Acquisition of Alma on 30 May 2022 for a total consideration of £1,500,000.

·      Review of all group energy contractual relationships to confirm all group energy needs are of a fixed and long-term nature agreed prior to the current energy crisis 

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

"2021/22 was an exceptionally productive year for Coral Products plc as we continue to adapt and develop our business to enable us to maximise the opportunities available."

"We enter the 2022/23 financial period with confidence for the outlook for our business and its ability to continue its successful evolution. The effects of the pandemic are ongoing and we remain mindful of macroeconomic and geopolitical risks. However, our continued investment over many years in our people and our systems has generated strong and resilient results in the past year and we believe will continue to do so. Our continuing priority is to do all we can to keep our workplaces as safe as possible for staff. We have planned our business to be flexible, in all areas, to meet fluctuating levels of demand. We have robust financial controls that will ensure we maintain our working capital requirements whilst meeting all our agreed parameters with our financial partners and due to contracts already negotiated all its operations will remain relatively unaffected by the current turmoil in energy prices."

"The Group continues with its strategic progress of increasing focus on value-added and innovative products. Our aim is to build a significant specialist plastic business with a bias towards using recycled materials."

"We have enjoyed a strong start to our current financial year and we look forward to a satisfactory outturn for the year given the prevailing conditions."

For further information, please contact:

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

CHAIRMAN'S STATEMENT

Chairman's Corporate Governance Statement

As Chairman of the Board, my role is to set the strategy for the company, monitor the ongoing performance of the companies within the Group to ensure that they are meeting our requirements and also identify potential acquisition targets.

In addition, my role also encompasses overseeing the functioning of the Board and its effectiveness and ensuring sound corporate governance practices are followed.

All the Directors of Coral believe strongly in the importance of good corporate governance for the creation of shareholder value over the medium to long-term and to engender trust and support amongst the Group's wider stakeholders.

In accordance with the changes to AIM Rule 26 the Company applies the revised QCA Corporate Governance Code published earlier in 2018. I work with key executives throughout the organisation to instil good corporate governance practices in accordance with the Code.

The Board monitors our corporate governance practices and will always implement improvements which further enhance performance and/or benefit stakeholders.

Trading

2021/22 was an exceptionally productive year for Coral Products plc as we continue to adapt and develop our business to enable us to maximise the opportunities available. An analysis of our performance and our outlook for the year ahead are covered in detail in the following pages, but, looking back on the year, among the highlights are:

·      The Board remains committed to its long-term progressive dividend policy, which takes account of the underlying growth, whilst acknowledging the requirement for continuing investment and short-term fluctuations in profit. Having made two interim dividend payments totalling 0.9p for this financial period the Board are proposing a final dividend of 0.2 pence per share.

·      The sale of the land and building in Haydock completed in November 2021, following the completion of the roof replacement works.

·      Customised Packaging Limited is now fully integrated into the Group and performing well. An earnout was paid in February 2022 as per the sale and purchase agreement following better than expected results for the period January to December 2021.

·      Tatra Rotalac Limited saw a significant increase in turnover and net profit. Output has improved following operational efficiencies and investment in new machinery.

·      Global One Pak Limited has strengthened its management team following the departure of the original directors. The team is focusing on future growth and researching new innovative products and markets.

·      The Board is continuing to consider the most effective use of the very strong cash rich asset base. We recognise that in today's low interest rate climate cash is a poor substitute for profit earning assets.

I am very proud to see how everyone within the business has embraced our challenges, opportunities and ambitions. We are reliant on the expertise, professionalism and commitment of our people. I would like to thank them for this, and also for the continued commitment that they have shown over the past two years whilst having to deal with disruption to both their work and personal lives due to the pandemic.

Outlook

We enter the 2022/23 financial period with confidence for the outlook for our business and its ability to continue its successful evolution. The effects of the pandemic are ongoing and we remain mindful of macroeconomic and geopolitical risks. However, our continued investment over many years in our people and our systems has generated strong and resilient results in the past year and we believe will continue to do so. Our continuing priority is to do all we can to keep our workplaces as safe as possible for staff. We have planned our business to be flexible, in all areas, to meet fluctuating levels of demand. We have robust financial controls that will ensure we maintain our working capital requirements whilst meeting all our agreed parameters with our financial partners and due to contracts already negotiated all its operations will remain relatively unaffected by the current turmoil in energy prices.

The Group continues with its strategic progress of increasing focus on value-added and innovative products. Our aim is to build a significant specialist plastic business with a bias towards using recycled materials.

We have enjoyed a strong start to our current financial year and we look forward to a satisfactory outturn for the year given the prevailing conditions.

Joe Grimmond
Chairman
6 September 2022

Group Income Statement

for the year ended 30 April 2022

Group Statement of Comprehensive Income

for the year ended 30 April 2022

Balance Sheet

as at 30 April 2022

Statement of Changes in Shareholders' Equity

for the year ended 30 April 2022

Cash Flow Statement

for the year ended 30 April 2022

Notes

for the year ended 30 April 2022

1.   Basis of preparation

The financial information set out above does not constitute the Group's statutory accounts for the years ended 30 April 2022 or 2021 within the meaning of Section 434 of the Companies Act 2006 but is derived from those accounts. Statutory accounts for 2021 have been delivered to the Registrar of Companies and those for 2022 will be delivered following the company's Annual General Meeting.

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.

2.  Underlying operating profit and separately disclosed items

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.

3. Earnings per share

Basic and underlying earnings per share

5.  Dividends

An interim dividend for the year ended 30 April 2022 of 0.5p per share was paid 3 December 2021. A second dividend of 0.4p per share was paid 1 June 2022.

A final dividend payment for the year ended 30 April 2022 of 0.2p per share is recommended.

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

7. Post Balance Sheet Event

In May 2022 the group acquired 100% of the share capital of Film & Foil Solutions Ltd for a total consideration of £3.0 million satisfied by £2.25 million in cash and £0.75 million of shares of Coral Products at 15.5p. The purchase price allocation has not yet been performed on this acquisition. In the most recent reporting period of 31 December 2020, revenues were £10.4m and profit before taxation was £61,000.

In May 2022 the group acquired 100% of the share capital of Alma Products Ltd for £1.5 million satisfied by cash. In addition, an earn out agreement is payable for the year ended 30 April 2023 if the EBITDA is greater than £300,000. The purchase price allocation has not yet been performed on this acquisition. In the most recent reporting period of 31 December 2021, revenues were £12.3m and profit before taxation was £145,000.

8.  Publication of Annual Report

A copy of the 2022 Report & Accounts will be sent to all shareholders. Further copies will be available to the public at the company's registered address at Southmoor Road, Wythenshawe, Manchester, M23 9DS and on the Company's website at www.coralproducts.com.

9.  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 Corals 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.

The Directors of the Group take responsibility for this announcement.