Final Results

Coral Products PLC 4 July 2002 CORAL PRODUCTS PLC 2002 Preliminary Results Coral Products PLC, one of Europe's leading manufacturers and suppliers of media packaging for Digital Versatile Disc (DVD), Video and CD, announces its final results for year ended 30 April 2002. Commenting upon the Company's trading Sir David Rowe-Ham Chairman of Coral said: 'Reduced selling prices as a result of lower raw material prices earlier in the year together with poor demand for CD cases resulted in lower annual turnover and a reduction in profits. Continuing growth in DVD sales, together with strong Video sales have, however, helped to reduce the effects of a weak CD market.' Summary Results Year ended Year % change 30 April ended 2002 30 April 2001 Turnover £16.4m £18.4m -11 % Pre-tax profits £1.2m £2.0m -40 % Fully diluted earnings per share 4.03p 6.74p -40 % Total dividend 3.35p 3.35p same • Continued growth in DVD sales and strong Video sales helped reduce the effects of a weak CD market in the year. • Additional DVD lines to be installed and running in the next 3 months which will more than double DVD capacity. • New contract commenced with Kodak after the year end for a range of photographic packaging. • Cash flow generation and balance sheet remain strong enabling continuing investment in capacity whilst maintaining a worthwhile dividend to shareholders. Regarding prospects for the current year, Sir David added: 'The new financial year has started in line with our expectations with encouraging DVD and Video sales outweighing a continuation of weak demand for CD sales. I expect that the commencement of the Kodak contract, together with the growth we are experiencing in the DVD market, will help reduce our reliance on CD sales, and should impact favourably on trading within the second half of the present financial year.' Enquiries: Coral Products PLC Tel: 01942 272 882 Warren Ferster, Managing Director Mobile: 07785 223039 David Shalom, Finance Director Mobile: 07786 226656 Williams de Broe PLC Tel: 020 7588 7511 David Lawman Tel: 020 7898 2303 CHAIRMAN'S STATEMENT Turnover for the year ended 30 April 2002 amounted to £16.4 million compared with £18.4 million last year and profit before tax for the same period was £1.2 million compared with £2.0 million. Diluted earnings per share totalled 4.03p (2001: 6.74p ) with shareholders' funds at 30 April 2002 increasing to £10.3million (2001: £10.1million), namely 50p per share (2001: 49p). Dividend Your directors are recommending a maintained final dividend of 2.3p per ordinary share (2001: 2.3p) to be paid on 23 September 2002 to all shareholders on the register on 23 August 2002. This together with the interim dividend of 1.05p per ordinary share already paid, makes a total dividend for the year of 3.35p (2001: 3.35p). Trading Reduced selling prices as a result of lower raw material prices earlier in the year together with poor demand for CD cases resulted in lower annual turnover and a reduction in profits. Continuing growth in DVD sales, together with strong Video sales have, however, helped to reduce the effects of a weak CD market. Our most advanced DVD line to date successfully came into production during the year and additional lines will be installed in the next 3 months which will more than double our existing DVD capacity. DVD products are currently seeing strong demand and in addition, I am pleased to say that we have recently won a contract with Kodak to supply a range of photographic packaging. This will enable us to utilise surplus CD capacity and will not involve significant additional capital expenditure. Prospects The new financial year has started in line with our expectations with encouraging DVD and Video sales outweighing a continuation of weak demand for CD sales. I expect that the commencement of the Kodak contract, together with the growth we are experiencing in the DVD market, will help reduce our reliance on CD sales, and should impact favourably on trading within the second half of the present financial year. Our cash flow generation and balance sheet remain strong, and we continue to invest in our core media business whilst maintaining a worthwhile dividend income stream for our shareholders. Sir David Rowe-Ham Chairman 4 July 2002 MANAGING DIRECTOR'S REVIEW OF OPERATIONS Further investment of nearly £2m was made in the year on expanding DVD production and we successfully introduced our fastest DVD line to date with additional lines due for delivery in the next 3 months. CD sales remained weak throughout the period although this was offset to an extent by strong demand for both Video and DVD products. Media Packaging Turnover in the division fell by 9% during the year to £16.0m (2001: £17.5m). This was in part due to lower selling prices as compared to last year - but also as a result of another disappointing year for CD box sales. CD sales volumes fell by 12% in the year as a result of continuing weak demand in the industry and again fell short of our expectations. We continued to maintain market share but our customers had another quiet year with poor music releases in the UK in particular. Video box demand was strong throughout the period and production remained at full capacity as last year with sales volumes increasing by 3%. We continue to increase market share and demand in the video box market remains extremely robust despite the rapid take up of DVD. DVD case demand continued to grow at a rapid rate during the year and our sales volumes increased by 70% with DVD turnover now accounting for 12.3% of media packaging sales (2001: 8%). We have further improved the design of our box during the year and also recently introduced a double DVD box which we believe offers the cheapest solution on the market for use on automated packing lines. Since the year end, in addition to our core media products, we have recently commenced production of a range of boxes for Kodak. These boxes will be used for the presentation and storage of customers' developed photographs. The range will be gradually introduced and we expect it to have a positive impact on profitability in the second half of our financial year as volumes grow. Housewares Turnover in the housewares division continued to fall mainly due to the loss of our main customer Asda to Far East competition. Turnover in the year amounted to £0.3m (2001: £0.9m) but remains profitable as the majority of tooling is now fully written down and we continue to utilise any surplus production capacity available in the DVD and Video media business. Production of housewares products will continue as long as they are required by our customers but will no longer be reported on separately as this division now represents less than 2% of our total turnover. Outlook We continue to concentrate our efforts on the core media business as well as looking for new related products such as the Kodak range of boxes. The majority of capital investment remains focused on the expansion of DVD capacity and will be at similar levels to the last year. I am confident of further growth in DVD turnover in the coming year together with continued strong demand for video boxes. The commencement of the Kodak contract is particularly pleasing and is a major step forward in the diversification of our product lines at a time when I expect CD demand to remain at current levels for the foreseeable future. I must express my gratitude to all members of staff and management for their hard work during the year ensuring we continue to perform at optimum levels in what remains a highly competitive trading environment. Warren Ferster - Managing Director 4 July 2002 Profit and Loss Account For the year ended 30 April 2002 2002 2001 £'000 £'000 Continuing operations Turnover 16,371 18,424 Cost of sales (10,976) (12,736) -------- -------- Gross Profit 5,395 5,688 Distribution costs (628) (643) Administrative expenses (3,307) (2,801) -------- -------- Operating profit 1,460 2,244 Interest receivable 4 5 Interest payable (231) (246) -------- -------- Profit on ordinary activities before taxation 1,233 2,003 Tax on profit on ordinary activities (399) (614) -------- -------- Profit on ordinary activities after taxation 834 1,389 Dividends (690) (692) -------- -------- Retained profit for the financial year 144 697 -------- -------- Basic earnings per ordinary share 4.04p 6.77p Diluted earnings per share 4.03p 6.74p -------- -------- The Company has no recognised gains and losses other than the profits above and therefore no separate statement of total recognised gains and losses has been presented. Reconciliation of Movements in Equity Shareholders' Funds For the year ended 30 April 2002 2002 2001 £'000 £'000 -------- -------- Profit for the financial year 834 1,389 Dividends (690) (692) -------- -------- Net additions to equity shareholders' funds 144 697 Proceeds of shares issued - 56 Purchase of own shares (26) - -------- -------- 118 753 -------- -------- Equity shareholders' funds at beginning of year 10,136 9,383 -------- -------- Equity shareholders' funds at end of the year 10,254 10,136 -------- -------- Balance Sheet At 30 April 2002 2002 2001 £'000 £'000 --------- --------- Fixed assets Tangible assets 12,533 12,474 ---------- ---------- Current assets Stocks 2,048 1,893 Debtors 4,781 5,417 Cash at bank and in hand 84 395 ---------- ---------- 6,913 7,705 Creditors: amount falling due within one year (6,465) (6,928) ---------- ---------- Net current assets 448 777 ---------- ---------- Total assets less current liabilities 12,981 13,251 Creditors: amounts falling due after more than one year (1,345) (1,842) Provisions for liabilities and charges (1,382) (1,273) ---------- ---------- Net assets 10,254 10,136 ---------- ----------- Capital and reserves Called up share capital 205 206 Share premium account 4,497 4,497 Capital Redemption reserve 1 - Profit and loss account 5,551 5,433 ---------- ---------- Equity shareholders' funds 10,254 10,136 ---------- ---------- Cash Flow Statement For the year ended 30 April 2002 2002 2001 £'000 £'000 --------- --------- Net cash inflow from operating activities 2,915 3,589 --------- --------- Return on investments and servicing of finance Interest received 4 5 Interest paid (62) (73) Interest paid on finance leases (173) (160) -------- --------- (231) (228) -------- --------- Taxation (349) (571) -------- --------- Capital expenditure and financial investment Purchase of tangible fixed assets (1,918) (3,274) Sale of tangible assets 52 7 --------- --------- (1,866) (3,267) --------- ---------- Equity dividends paid (692) (687) --------- --------- Net cash outflow before financing (223) (1,164) --------- --------- Financing Issue of Share Capital - 56 Repurchase of Share Capital (26) - Repayments of principal under finance leases (1,758) (1,284) Proceeds of sale and leaseback 1,539 2,289 Repayment of loans (248) (193) Proceeds of new loans 286 500 --------- --------- (207) 1,368 --------- --------- (Decrease) / Increase in cash (430) 204 --------- --------- Other Financial Statements For the year ended 30 April 2002 Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities 2002 2001 £'000 £'000 --------- --------- Operating Profit 1,460 2,244 Depreciation on tangible fixed assets 1,793 1,536 Loss/(profit) on disposal of tangible fixed assets 14 (2) Release of grant income (1) (1) (Increase)/decrease in stocks (155) 622 Decrease/(increase) in trade debtors 493 (574) Decrease in other debtors, prepayments and accrued income 143 71 Decrease in trade creditors (1,032) (299) Increase in other taxation and social security creditors 87 126 Increase/(decrease) in accruals and deferred income 86 (48) Increase/(decrease) in other creditors 27 (86) -------- -------- Net cash inflow from operating activities 2,915 3,589 -------- -------- Reconciliation of Net Cash Flow to Movement in Net Debt 2002 2001 £'000 £'000 --------- --------- (Decrease)/increase in cash in the year (430) 204 Net cash outflow/ (inflow) from debt and lease financing 181 (1,312) --------- --------- Change in net debt resulting from cashflows (249) (1,108) Net debt at 1 May 2001 (3,035) (1,927) ---------- ---------- Net debt at 30 April 2002 (3,284) (3,035) --------- --------- Notes 1. Financial Statements The foregoing financial information is derived from the company's statutory accounts but does not constitute such statutory accounts for the financial years ended 30 April 2001 and 30 April 2002within the meaning of Section 240 of the Companies Act 1985 ('the Act') and has not been reported on, but has been agreed by the company's auditors. Statutory accounts for 2001 have been delivered to the Registrar of Companies, and those for the year ended 30 April 2002 will be delivered following the company's Annual General Meeting. The auditors have reported on the accounts for 2001; their report was unqualified and did not contain statements under Section 237(2) or (4) of the Companies Act 1985. 2. Dividends A final dividend of 2.3p net is recommended by the directors payable on 23 September 2002 to all shareholders on the register on 23 August 2002. 3. Earnings per Ordinary Share The calculation of earnings per share is based on the profit on ordinary activities after taxation namely £834,000 (2001: £1,389,000) and on 20,625,000 (2001: 20,522,000) ordinary shares. Diluted earnings per share is based on the same earnings and on the weighted average number of ordinary shares of 20,680,000 (2001: 20,609,000). 4. Annual Report and Accounts The Annual Report and Accounts will be posted to shareholders on 29 July 2002. Copies will be available by writing to the Company Secretary, Coral Products PLC, North Florida Rd, Haydock Industrial Estate, Haydock, Merseyside WA11 9TP (e-mail mail@coralproducts.com). The reports may also be viewed on our web site at www.coralproducts.com after posting to shareholders. 5. Annual General Meeting The Annual General Meeting will be held at the Crowne Plaza Hotel, Manchester, on Friday 20 September 2002 at 12.00 noon. This information is provided by RNS The company news service from the London Stock Exchange

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