(Alliance News) - Coral Products PLC on Monday said it saw sales drop due in the first quarter due to bad trading conditions caused by Covid-19 but came out on top as a result of good cost-cutting measures.
The manufacturer & distributor of plastics said its underlying earnings before interest, tax, depreciation and amortisation for the three months ended July 31 was up at GBP564,800 from GBP537,200 the year prior.
Underlying operating profit also surged to GBP201,500 from GBP38,400 a year ago. Gross margin was 31%, up from 27%.
These results came despite sales being down 24% at GBP5.4 million from GBP7.1 million a year prior due to bad trading conditions amid the Covid-19. pandemic.
Coral Products said early actions taken by the board to cut costs and improve efficiencies are reflected in the results. These included taking out a GBP1.0 million coronavirus business interruption loan which the company said has significantly reduced creditor pressure while remaining within its agreed facilities and loan covenants.
Looking ahead, it said: "When sales return to historical levels, as and when Covid-19 begins to fade, then the contribution from the increased sales should further improve profitability."
It added it is confident that cash flow will improve over the rest of the financial year dependent on Covid-19.
Coral Products shares were up 13% at 5.40 pence each on Monday morning in London.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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Coral Products (CRU)