Last checked at 13 Sep 2010 12:16
13 September 2010
CORAL PRODUCTS PLC
INTERIM MANAGEMENT STATEMENT
Coral Products PLC (the Company) presents its Interim Management Statement as at 13 September 2010 as required by the UK Listing Authority's Disclosure and Transparency Rule 4.3.
The Company published its Annual Report for the year to 30 April 2010 on 27 July 2010. This Interim Management Statement summarises any further relevant information for the period since that announcement.
Highlights
·; The company successfully introduces new products for the recycling market.
·; Order book starting to improve for CD case supplies in the UK.
·; Lightweight DVD case, with its environmental benefits, is now available for the European market.
Material Events and Transactions
There are no material events or transactions to report for the period and performance has continued roughly in line with Directors' expectations. The Company has recently introduced its range of kitchen and kerbside food waste containers ('caddies') to the recycling market. These products are in addition to the crates already in production. We have already received a number of orders even though we must wait to obtain accreditations from purchasing organisations.
Trading Activity
Sales of media based products have reduced further since the start of the year and are expected to underperform the 2009 figures. CD sales have improved recently and will benefit from significant new orders for supplies within the UK. DVD case sales have slowed due to the longer than expected roll-out of a new lightweight box. Demand in Europe is increasing for this new case and now that we have had our product approved we are expecting substantial demand.
We have recently completed a large contract to supply food caddies to a UK council and further orders are now following. Whilst it has taken time for our range of crates and caddies to be recognised in the market, we are experiencing interest on a larger scale largely through our accreditation within ESPO and other purchasing organisations. As a result, the sales of these products will continue to develop and benefits will result as we obtain further accreditations and our marketing reaches prospective customers. Sales of our trade moulding service have again been strong and the order book continues to meet expectations.
Operating margins have reduced as a consequence of the significantly increased raw material prices, due to supply constraints and rises in oil prices, although this trend has recently stabilised. It is difficult to pass on these price increases in current market conditions. Overall, we are reporting continued trading losses, which reverse into a small positive EBITDA, due to the large depreciation expense. The outlook for non-media based products continues to improve and, whilst the media product market remains difficult, the rolling-out of our new lightweight DVD case with its environmental benefits will improve sales and enable us to look forward to a period of increasing sales and positive cash flow.
Financial Position
The financial position remains satisfactory with net assets over £6m. The Company continues to operate within its Invoice Discounting facility line. The majority of investment in new product lines has been completed and enough funds are available to meet expected working capital requirements.
Outlook
The company continues to make strong progress in growing and marketing its new product range to serve the recycling markets. Trading conditions have remained difficult but we should be in a position to take advantage of improvements in the economy and ultimately we believe that our strategy will deliver long term shareholder value.
For further information call:
Warren Ferster / Stephen Fletcher
Chief Executive / Company Secretary
Coral Products PLC
01942 272882
Enquiries can be directed to: mail@coralproducts.com
This Interim Management Statement contains certain forward-looking statements which have been made by the Directors in good faith using information available up until the date they approved the Statement. Forward-looking statements should be regarded with caution as by their nature such statements involve risk and uncertainties relating to events and circumstances that may occur in the future. Actual results may differ from those expressed in such statements, depending on the outcome of these uncertain future events