Coral Products Regulatory News (CRU)

1 May 2012

CORAL PRODUCTS PLC

("Coral" or the "Company")

Trading Update

Coral Products, which specialises in the design, manufacture and supply of injection-moulded plastic products, today announces the following trading update.

The results for the current financial year ending on 30 April 2012 are expected to be below market expectations with an expected shortfall in total sales of £1.1m and a resulting shortfall in contribution. This is largely attributable to a decline in sales and contribution of media products in the final quarter. However, taking into account the acquisition of Interpack Limited ("Interpack") for approximately 8 months of the current year since its acquisition in September 2011 and including acquisition and related costs of £450,000, the Company expects to report sales and ebitda substantially ahead of 2011 of £13.2 million and £602,000 respectively.

Coral recognised in 2010 that the media distribution market had been permanently changed by the increasing use of digital media and that it was essential to reduce the Company's dependence on the sale of media products. As the market for media products has declined, pricing has become increasingly competitive, which has had an adverse impact on sales and contribution, which have fallen sharply during March and April of the current financial year. The Company has implemented a cost reduction programme to reflect current market conditions whilst at the same time reducing overheads. Annualised savings are estimated to exceed £300,000.

The development of a range of products for domestic waste disposal, which was introduced in 2010, has proved successful. In addition, the acquisition of Interpack, a reseller and distributor of plastic container products, was the next major step in the diversification of the Company's product portfolio. Since its acquisition, Interpack has delivered sales and contribution ahead of the board's expectations and has continued to grow. The full impact of the Interpack acquisition will be seen in the forthcoming financial year.

The Company has invested heavily in new manufacturing plant and facilities (circa £1.8m) to increase the Company's capacity for manufacturing food packaging products whilst at the same time diverting capacity from production of media products and the board is confident that the Company will see the benefit of this investment in the new financial year.

The board anticipates that the preliminary results of the Company will be published on or around 23 July 2012.

Joe Grimmond, Non-Executive Chairman of Coral, commented: "As previously announced, we have been anticipating this decline in demand for media products for some time and have taken steps to mitigate the impact of this decline on the Company. The acquisition of Interpack was a key step in reducing the Company's exposure to media products. We have been delighted with the contribution that Interpack has had on the overall group to date and look forward to developing this part of the business going forward."

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