Coral Products looks ahead after tough half-year

Plastics specialist Coral Products reported a 7.2% decline in group sales in its half-year report on Monday, to £12.14m, as its gross profit fell 8.7% to £4.6m.

The AIM-traded company said its underlying operating margin was 1.6% lower year-on-year for the six months ended 31 October, at 37.9%, while its underlying operating profit excluding finance costs slid 51.9% to £0.49m.

Reported profit before tax plunged 95.7% year-on-year to £25,000.

The firm’s underlying EBITDA was 23.2% weaker at £1.34m, and its underlying basic earnings per share slid 70.1% to 0.26p.

Coral’s board proposed no dividend for the period, down from the 0.25p-per-share distribution it paid at the interim a year ago.

“In my chairman's statement that accompanied the release of the 2019 accounts I expressed concerns over the uncertainties associated with the ongoing Brexit situation,” said chairman Joe Grimmond.

“Despite these concerns I am encouraged with the level of sales and profitability achieved over the period.

“However, there was a softening of demand during November and December 2019, possibly related to general election uncertainties, whilst January 2020 shows a renewed strengthening of demand.”

Grimmond said that, while the second half was “encouraging” with the recycling business moving to a 24-hour, five day a week operation, new lightweight products introduced to the market and the new plastic sound barrier, the delay in the delivery of the MBRS tooling and the continued uncertainties meant that the company was likely to report “a small loss before taxation” overall for the full-year, and a small drop in EBITDA from the previous year.

“We are confident that we can build on this base and in our future performance.”

At 0802 GMT, shares in Coral Products were down 7.69% at 7.5p.