Coral Products Regulatory News (CRU)

7 Dec 2007 11:16

Coral Products PLC07 December 2007 CORAL PRODUCTS PLC 2007 Interim Results Coral Products PLC announces interim results for the six months ended 31 October2007. In his statement to shareholders the Chairman, Geoffrey Piper, said: "The first half of our financial year continued in a similar vein to theprevious year with trade seriously affected by lower margins resulting fromhigher raw material prices. In particular, sales of CD cases have been affectedby reduced demand with regard to down-loading and market developments. DVD saleshave continued to grow although values were affected by the strength ofsterling. We have seen a gradual increase in sales of non-media products thatare trade moulded for customers and, if this continues, we should see improvedresults. As a result of the sale of the property we are now in a much betterfinancial position from which to source our working capital requirements andenable us to meet demands from our new business partners." Summary Six months ended Six months ended Year 31 October 31 October ended 2007 2006 30 April 20007 Turnover £ 7.1m £ 7.8m £ 14.3m Pre-tax loss before exceptional item £ 899,000 £ 833,000 £ 2.2m Pre-tax loss after exceptional item £ 180,000 £ 833,000 £ 2.2m EBITDA £1,073,000 £356,000 £104,000 Earnings/(loss) per share 0.55p (2.90)p (7.43)p Dividend NIL NIL NIL • DVD box sales have continued to increase but CD case sales have declined.• Margins continue to be affected by inability to pass on raw material price increases.• A number of new product lines have been introduced for our trade moulding customers.• Sale and leaseback of property completed in period. Regarding prospects for the current year, Geoffrey Piper added: "We are now seeing sales of new products emerge which offer improved prospectsfor 2008." Enquiries: Coral Products PLC Tel: 01942 272 882 Warren Ferster, Managing Director Stephen Fletcher, Finance Director/Company Secretary CHAIRMAN'S STATEMENT The first half of our financial year continued in a similar vein to theprevious year with trade seriously affected by lower margins resulting fromhigher raw material prices. In particular, sales of CD cases have been affectedby reduced demand with regard to down-loading and market developments. DVD sales have continued to grow although values were affected by the strengthof sterling. We have seen a gradual increase in sales of non-media products thatare trade moulded for customers and, if this continues, we should see improvedresults. As a result of the sale of the property we are now in a much betterfinancial position from which to source our working capital requirements andenable us to meet demands from our new business partners. The sale and leaseback of the property was completed on 24 September and thesales proceeds enabled the company's bank borrowings to be repaid. In addition,the Board decided that rather than remaining dependent on the continuingavailability of bank overdrafts that are repayable on demand, InvoiceDiscounting facilities would be acquired in order to finance the company'sworking capital requirements. Trading Turnover for the six months ended 31 October 2007 was £7.1 million (2006: £7.8million) and the pre-tax loss was £180,000 (2006: £855,000). Diluted earnings/(loss) per ordinary share was 0.55p (2006: loss of 2.90p). Interim Dividend No interim dividend has been declared (2006: nil) for the period to 31 October2007. Prospects We are now seeing sales of new products emerge and expect this to continuethrough 2008. Margins are still extremely tight but volumes have improved and weare in a better position now to benefit from improvements in market conditions.It continues to be a slow process to return to satisfactory levels ofprofitability but with the prospect of longer production periods for additionalproducts, we are hopeful that the required progress can be achieved. Geoffrey Piper Chairman 7 December 2007 Income Statement - (unaudited) for the half year to 31 October 2007 Half year to Half year to Year to 31 October 31 October 30 April 2007 2006 2007 Notes £'000 £'000 £'000Continuing operations ----------- ----------- ----------Revenue (2) 7,056 7,785 14,291Cost of sales (5,216) (5,846) (12,352) -------- -------- ---------Gross profit 1,840 1,939 1,939Operating expenses (2,667) (2,703) (4,029) -------- -------- --------Operating loss before exceptional item (827) (764) (2,090)Exceptional profit on sale of property 719 - - ------ ------ --------Operating loss before taxation and finance costs (108) (764) (2,090) Exchange (loss)/gain on finance leases (1) (10) 16 16 Interest payable (62) (85) (142) ------ ------- --------Loss before taxation (180) (833) (2,216)Taxation (3) 291 250 720 ------- ------- ------Profit/(loss) for the financial period 111 (583) (1,496) ------ ------- -------Earnings/(loss) per share (4) 0.55p (2.90)p (7.43)p --------- --------- --------Diluted earnings/(loss) per share (4) 0.55p (2.90)p (7.43)p --------- --------- -------- All activities derive from continuing operations. Statement of Changes in Shareholders' Equity -(unaudited) As at As at As at 31 October 31 October 30 April 2007 2006 2007 £'000 £'000 £'000 -------- -------- --------Equity at start of the period 8,924 10,435 10,435Profit/(loss) for the period 111 (583) (1,496)Share based payment charge - - (15) --------- --------- ---------Equity at end of the period 9,035 9,852 8,924 --------- --------- --------- Balance Sheet - (unaudited) as at 31 October 2007 As at As at As at 31 October 31 October 30 April 2007 2006 2007 £'000 £'000 £'000ASSETS ----------- ----------- -----------Non-current assets Intangible assets 304 359 339Property, plant and equipment 7,818 11,780 10,831 --------- ---------- ---------Total non-current assets 8,122 12,139 11,170 --------- ---------- ---------Current assets Inventories 1,267 1,372 1,407Trade and other receivables 4,520 5,091 3,303Cash and cash equivalents 487 - - Taxation - - 35 ----------- ----------- -----------Total current assets 6,274 6,463 4,745 ----------- ----------- ----------LIABILITIESCurrent liabilities Financial liabilities - borrowings 603 2,139 2,503Trade and other payables 3,745 4,057 2,918Current tax payable - - - --------- ---------- ----------Total current liabilities 4,348 6,196 5,421 --------- ---------- ----------Non current liabilitiesFinancial liabilities - borrowings 639 1,450 905Deferred tax liabilities 374 1,104 665 ---------- ---------- ----------Total non-current liabilities 1,013 2,554 1,570 ---------- ---------- ----------Net assets 9,035 9,852 8,924 ---------- ---------- -----------EquityShare capital 201 201 201Share premium 4,558 4,558 4,558Other reserves 12 27 12Retained earnings 4,264 5,066 4,153 ----------- ----------- -----------Total shareholders' equity 9,035 9,852 8,924 ----------- ----------- ----------- Cash Flow Statement - (unaudited) for the half year to 31 October 2007 Half year to Half year to Year to 31 October 31 October 30 April 2007 2006 2007 £'000 £'000 £'000 --------- -------- --------Cash (outflow)/inflow from operating activities (112) 86 390 (note 5) Interest paid (52) (49) (108)Interest on finance lease rentals (20) (20) (18)Income taxes received 35 107 103 ---------- --------- --------Net cash from operating activities (149) 124 367 ---------- --------- ---------Cash flows from investing activitiesProceeds from disposal of plant and equipment 2,802 - 43Purchases of property, plant and equipment - (316) (421) ---------- ---------- ---------Net cash generated by/(used in) investing activities 2,802 (316) (378) ---------- ---------- ---------Cash flows from financing activitiesNet proceeds from new bank loans - 113 113Proceeds of new asset finance 22 - -Repayment of bank loans (286) (212) (457)Finance lease principal payments (313) (444) (724) ---------- ---------- ---------Net cash used in from financing activities (577) (543) (1,068) ---------- ---------- ---------Net increase/(decrease) in cash and cash equivalents 2,076 (735) (1,079)Cash and cash equivalents at start of period (1,589) (510) (510) --------- ---------- ---------Cash and cash equivalents at end of period 487 (1,245) (1,589) --------- ---------- --------- Notes to the Interim Financial Statements 1. Basis of preparation This interim report, including comparative data, has been prepared in accordance with International Financial Reporting Standards (IFRS) in issue that are either adopted by the EU and effective at 31 October 2007. The Interim Financial Statements have been prepared in accordance with the listing rules of the Financial Services Authority and do not constitute financial statements as defined in section 240 of the Companies Act 1985. The results for the 6 months ending 31 October 2006 and 2007 are unaudited. The results for the year ended 30 April 2007 have been extracted from the Financial Statements for that period, which were filed with the Registrar of Companies and on which the auditors gave an unqualified report when did not contain a statement under sections 237(2) and (3) of the Companies Act 1985. The principal accounting policies applied in the preparation of this interim report are consistent with those set out in the 2007 Annual Report and Financial Statements. A summary of the company's principal accounting policies is set out below Segmental reporting The Directors consider the Company's operations as one business segment and that it operates in one geographical segment. Revenue recognition Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes. Sales of goods are recognised when goods are shipped and title has passed. Leasing Leases are classified as finance leases whenever the terms of the lease transfer substantially all of the risks and rewards of ownership to the lessee. Assets held under finance leases are capitalised as tangible fixed assets in the balance sheet and are depreciated over the useful economic life of the asset The interest element of the renatl obligations is charged to the Income Statement over the period of the lease. All other leases are classified as operating leases. Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Exceptional items These are material items which derive from events or transactions that fall within the ordinary activities of the company and which individually need to be disclosed if the financial statements are to give a true and fair view. Foreign currencies Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Gains and losses arising on translation are included in the profit and loss account for the period. Employee benefits The company contributes to defined contribution pension schemes and the pension charge represents the amount payable for that period. Taxation Current tax is provided at amounts expected to be paid (or recovered) using the tax rates that have been enacted at the balance sheet date. Deferred tax is provided in full, using the liability method, in temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements. Deferred tax is determined using tax rates that have been enacted by the balance sheet date and are expected to apply when the deferred tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment losses. Depreciation is charged so as to write off the cost of the assets over their estimated useful lives, using the straight-line method, on the following bases: Moulds - 10-25% Plant and machinery - 10% Fixtures and fittings - 10-33% Freehold land and buildings - 2% The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement. Intangible assets Intangible assets comprise licence fees paid in advance for the use of trade marks and technology. Such assets are defined as having finite useful lives and the costs are amortised on a straight-line basis over their estimated useful lives of 10 years. Intangible assets are reviewed for impairment whenever there is an indication that the carrying value may be impaired. Inventories Inventories are stated at the lower of cost and net realisable value. The cost of finished goods manufactured includes appropriate materials, labour and production overhead expenditure. Net realisable value is the estimated selling price less the costs of disposal. Provision is made to write down obsolete or slow-moving inventory to their net realisable value. Cash and cash equivalents Cash and cash equivalents comprise cash and bank balances together with bank overdrafts that are repayable on demand. Derivatives Financial instruments are used to hedge the company's exposure to foreign exchange and interest rate risk. The company uses forward currency contracts and interest rate swaps to reduce exposure and these are stated in the balance sheet at fair value. The fair value of interest rate swaps is the estimated amount that would be paid or received to terminate the derivative. The company does not enter into speculative financial instruments. Share related payments The fair value of equity settled share based payments to employees is determined at the date of grant and is expensed on a straight-line basis over the vesting period based on the Company's estimate of shares or options that will eventually vest. In the case of options granted, fair value is measured by a Black-Scholes pricing model. 2. Revenue All production is based in the United Kingdom. The geographical analysis of revenue is shown below: Half year to Half year to Year to 31 October 31 October 30 April 2007 2006 2007 £'000 £'000 £'000 ----------- ----------- -------- United Kingdom 4,584 6,163 11,073 Rest of Europe 2,472 1,622 3,218 ----------- ----------- ---------- 7,056 7,785 14,291 ----------- ----------- ----------- Turnover by business activity: Media packaging 7,056 7,785 14,291 ----------- ----------- ----------- 3 Taxation The charge or credit for taxation on the loss for the period is charged at 30% being the estimated effective rate for the full financial year. 4 Earnings /(loss) per share The calculation of basic earnings/(loss) per share is based on the earnings for the period available to shareholders of £111,000 (2006: loss of £583,000) and on 20,135,609 (2006: 20,135,609) ordinary shares, being the weighted average number of ordinary shares in issue and ranking for dividend during the period. Calculation of fully diluted earnings per share is based upon the same number of shares. The loss per share before taking account of exceptional items is 3.10p (2006:2.90p). 5 Cash flow from operating activities Half year to Half year to 31 Year to October 31 October 30 April 2007 2006 2007 £'000 £'000 £'000 Operating loss for the period (108) (764) (2,090) Profit on disposal of fixed assets (719) - (43) Depreciation of property, plant and equipment 942 1,096 2,144 Amortisation of intangible assets 23 24 50 Share based payments - - (15) Decrease in inventories 140 315 280 (Increase)/decrease in trade and other receivables (1,217) (1,783) 5 Increase in trade and other payables 827 1,198 59 --------- --------- --------- Cash (outflow)/inflow from operating activities (112) 86 390 --------- --------- -------- 6 Reconciliation of net cash flow to movement in net debt Half year to Half year to 31 Year to October 31 October 30 April 2007 2006 2007 £'000 £'000 £'000 Net increase/(decrease) in cash equivalents 2,076 (735) (1,079) Net proceeds from issue of new bank loans - (113) (113) Repayment of bank loans 286 212 457 Proceeds of new asset finance (22) - - Finance lease principal payments 313 444 724 --------- -------- ---------- Movement in net debt for the period 2,653 (192) (11) Net debt at beginning of period (3,408) (3,397) (3,397) --------- --------- -------- Net debt at end of period (755) (3,589) (3,408) --------- --------- -------- 7 Interim report The interim report will be posted to all shareholders on 12 December and will be made available on the company's website at www.coralproducts.com and at the company's registered office at North Florida Road, Haydock Industrial Estate, Haydock, Merseyside WA11 9TP. This information is provided by RNS The company news service from the London Stock Exchange