Final Results

Coral Products PLC 30 June 2005 CORAL PRODUCTS PLC 2005 Preliminary Results Coral Products PLC, one of Europe's leading manufacturers and suppliers of media packaging for DVD, Video and CD, announces its preliminary results for year ended 30 April 2005. Commenting upon the Company's trading Sir David Rowe-Ham, Chairman of Coral, said: 'Trading, especially in the second half of the year, was difficult due to the decline in operating margins resulting from higher raw material prices following oil price increases.' Summary Results (unaudited) Year ended Year ended 30 April 2005 30 April 2004 - Turnover £18.7m £20.1m - Operating profit before exceptionals £0.75m £1.75m - Operating profit £0.24m £1.75m - Pre-tax profits after exceptionals £0.04m £1.58m - Earnings per share - pre exceptionals 2.14p 5.83p - Earnings per share - basic 0.33p 5.83p - Earnings per share - diluted 0.33p 5.81p - Total dividend 0.70p 3.35p - Growth in DVD case sales as the market expands and advances. - Licence obtained to manufacture new DVD security case. - Upgrade of DVD equipment. - Write-off of video plant. Regarding prospects for the current year, Sir David added: 'Trading in the opening months of the new financial year remains difficult. We have taken measures to improve our operating margins and will continue to update our DVD lines. We continue to increase our market share and remain confident that the measures put in place will bring positive results in the future.' Enquiries: Coral Products plc Tel: 01942 272 882 Warren Ferster, Managing Director Stephen Fletcher, Finance Director CHAIRMAN'S STATEMENT Turnover for the year ended 30 April 2005 amounted to £18.7 million compared to £20.1 million last year and operating profit before exceptional items for the same period was £0.75 million compared with £1.75 million. Operating profit for the year was £0.24m compared with £1.75m Earnings per share before exceptional items totalled 2.14p (2004: 5.83p). Exceptional items resulted from the contraction in video related business and comprised £398,000 of fixed asset write-downs and £120,000 of early retirement and redundancy costs. Profit before tax and after exceptional items was £0.04m (2004: £1.58m). Shareholders' funds at 30 April 2005 amounted to £11.2 million (2004: £11.2 million), namely 56p per share (2004: 56p). Dividend Your directors are not recommending a final dividend (2004: 2.3p). An interim dividend of 0.7p per ordinary share was paid in February 2005. The total dividend for the year is therefore 0.7p (2004: 3.35p). The share capital was increased to 20,135,609 shares (2004: 20,115,682 shares) during the year by the issue of 19,927 shares following the exercise of share options. Trading Trading, especially in the second half of the year, was difficult due to the decline in operating margins resulting from higher raw material prices following oil price increases. The demand for video boxes reduced significantly and, although DVD case sales growth is steadily replacing this, there was a period of lower activity as this change took place. The Easter period, in particular, was disappointing with retail sales not reaching the levels of previous years. During the year we took the opportunity to increase our DVD manufacturing capability by upgrading our DVD lines. This, together with video line conversion plans for later this year, will allow us to meet anticipated demand for this product. In order to improve margins we are currently making design changes to our moulds and we look to see the benefit of these changes in the second half of the current trading year. Exceptional Costs We have taken the decision to write-off the remaining value of our video manufacturing plant at the end of the year due to the industry world-wide fall in demand. Whilst there will be some further video sales over the next 12 months it is difficult to predict the extent of this and the directors therefore felt that it was a prudent measure to take at this time. Prospects Trading in the opening months of the new financial year remains difficult. We have taken measures to improve our operating margins and will continue to update our DVD lines. We continue to increase our market share and remain confident that the measures put in place will bring positive results in the future. Sir David Rowe-Ham Chairman 30 June 2005 MANAGING DIRECTOR'S REVIEW OF OPERATIONS The year to April 2005 proved to be difficult as trading was affected by the transition from video to DVD format coupled with a surge in raw material prices. The trading conditions were particularly difficult in the second half of the year when operating margins suffered from competitive selling prices and the strength of sterling. Overall turnover decreased by 7% to £18.7 million and operating profit declined to £0.75m before exceptional costs. The change in the market requirement from video to DVD led to a considerable alteration in our sales mix. We have recently acquired a 10-year licence to produce a security DVD case (known as 'Red Tag') and have seen demand for this box type increase significantly. Sales for this type of box have surpassed the standard DVD box and this trend will continue. CD case sales increased as the market showed improved conditions after a period of decline. There was, however, a decrease in margins attained due to the increases in raw material costs. The production of photo-finishing boxes slowed during the year in line with our expectations. We have devoted some spare capacity to other trade moulding and we acquired ISO9001 in May 2005. This will enable us to tender for a variety of technical moulded products. We have continued to place capital investment into our DVD production by upgrading a DVD line earlier this year. This will enable us to meet the industry forecasts for increases in the DVD format. The DVD lines are fully automated and this has enabled us to reduce our workforce. As a consequence, turnover per employee has risen substantially and this has enabled us to be more even more competitive. We are also taking measures to improve the efficiency of our mould designs and these will significantly improve our operating margins. These changes will be in place by the second half of the year to April 2006. Whilst the recent period has been difficult for trading, we have put in place measures that will benefit us in the future. We remain a market leader in Europe in the production of media packaging products and are now well placed to take advantage of the anticipated improvements to trading conditions. As such, I remain confident of our ability to succeed in the medium term. Once again I would like to express my gratitude to all members of staff and management for their efforts throughout the year. Warren Ferster Managing Director 30 June 2005 On 30 June 2005, the directors of Coral Products PLC approved the following statements of the unaudited preliminary results of the company for the financial year ended 30 April 2005. Profit and Loss Account For the year ended 30 April 2005 2005 2004 (unaudited) (audited) Continuing operations £'000 £'000 --------- ----------- Turnover 18,732 20,115 Cost of sales (13,856) (13,608) -------- -------- Gross profit 4,876 6,507 Operating costs (4,641) (4,756) ------------------------------ --------- --------- Operating profit before exceptional costs 753 1,751 ------------------------------ --------- --------- Exceptional costs- asset write-offs and redundancy/ (518) - early retirement costs ------------------------------ --------- --------- Operating profit 235 1,751 Interest receivable 12 9 Interest payable (206) (184) -------- -------- Profit on ordinary activities before taxation 41 1,576 Tax on profit on ordinary activities 26 (398) -------- -------- Profit on ordinary activities after taxation 67 1,178 Dividends (141) (674) -------- -------- (Accumulated loss)/ retained profit for the financial year (74) 504 -------- -------- Basic earnings per ordinary share 0.33p 5.83p ------- ------- 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 2005 2005 2004 (unaudited) (audited) £'000 £'000 -------- -------- Profit for the financial year 67 1,178 Dividends (141) (674) -------- -------- Net (reduction)/addition to equity shareholders' funds (74) 504 Proceeds of shares issued 7 17 Purchase of own shares - (124) -------- -------- (67) 397 -------- -------- Equity shareholders' funds at beginning of year 11,242 10,845 -------- -------- Equity shareholders' funds at end of the year 11,175 11,242 -------- -------- Balance Sheet At 30 April 2005 2005 2004 (unaudited) (audited) £'000 £'000 --------- --------- Fixed assets Intangible assets 418 - Tangible assets 12,743 13,968 ---------- ---------- 13,161 13,968 ---------- ---------- Current assets Stocks 2,856 3,119 Debtors 4,334 3,678 Cash at bank and in hand - 14 ---------- ---------- 7,190 6,811 Creditors: amount falling due within one year (7,177) (7,001) ---------- ---------- Net current assets/(liabilities) 13 (190) ---------- ---------- Total assets less current liabilities 13,174 13,778 Creditors: amounts falling due after more than one year (587) (988) Provisions for liabilities and charges (1,412) (1,548) ---------- ---------- Net assets 11,175 11,242 ---------- ----------- Capital and reserves Called up share capital 201 201 Share premium account 4,558 4,551 Capital redemption reserve 7 7 Profit and loss account 6,409 6,483 ---------- ---------- Equity shareholders' funds 11,175 11,242 ---------- ---------- Cash Flow Statement For the year ended 30 April 2005 2005 2004 (unaudited) (audited) £'000 £'000 --------- --------- Net cash inflow from operating activities 3,164 2,949 --------- --------- Return on investments and servicing of finance Interest paid on bank balances (194) (64) Interest paid on finance leases (22) (99) -------- --------- (216) (163) -------- --------- Taxation (94) (811) -------- --------- Capital expenditure and financial investment Purchase of tangible fixed assets (1,438) (2,166) Purchase of intangible fixed assets (420) - --------- --------- (1,858) (2,166) --------- ---------- Equity dividends paid (604) (678) --------- --------- Net cash inflow/(outflow) before financing 392 (869) --------- --------- Financing Share options exercise 7 17 Repurchase of share capital - (124) Repayments of principal under finance leases (1,180) (1,552) Proceeds of sale and leaseback 790 969 Repayment of loans (160) (163) --------- --------- (543) (853) --------- --------- Decrease in cash (151) (1,722) --------- --------- Other Financial Statements For the year ended 30 April 2005 Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities 2005 2004 (unaudited) (audited) £'000 £'000 --------- --------- Operating Profit 235 1,751 Depreciation on tangible fixed assets 2,265 2,149 Impairment of fixed assets 398 - Amortisation of intangible assets 2 - Decrease/(Increase) in stocks 263 (861) (Increase)/Decrease in trade debtors (457) 841 (Increase)/Decrease in prepayments and accrued income (199) 143 Increase/(Decrease) in trade creditors 1,255 (1,059) (Decrease)/Increase in other taxes and social security creditors (168) 30 Decrease in accruals and deferred income (169) (33) Decrease in other creditors (261) (12) -------- -------- Net cash inflow from operating activities 3,164 2,949 --------- -------- Reconciliation of Net Cash Flow to Movement in Net Debt 2005 2004 (unaudited) (audited) £'000 £'000 --------- --------- Decrease in cash in the year (151) (1,722) Net cash outflow from debt and lease 550 746 financing -------- -------- Change in net debt resulting from cashflows 399 (976) -------- -------- Net debt at 1 May 2004 (3,498) (2,522) ---------- ---------- Net debt at 30 April 2005 (3,099) (3,498) --------- --------- Notes 1. Financial Statements The preliminary results for the year ended 30 April 2005 are unaudited, with the audit report on the full accounts yet to be signed. The preliminary results for the year ended 30 April 2005 have been prepared on the basis of accounting policies set out in the Report and Accounts for the year ended 30 April 2004. The comparative figures for the year ended 30 April 2004 do not constitute statutory accounts. These figures have been extracted from the audited accounts for that year which have been delivered to the Registrar of Companies and on which the auditors issued an unqualified report which did not contain a statement under either Section 237(2) or (3) of the Companies Act 1985. The aforementioned financial information does not amount to full statutory accounts within the meaning of Section 240 of the Companies Act 1985 (as amended). 2. Earnings per Ordinary Share The calculation of basic earnings per share is based on profit on ordinary activities after tax of £67,000 (2004: £1,178,000) and on 20,127,000 (2004: 20,212,000) ordinary shares. Earnings per share before exceptional items is based on profit after tax but before exceptional items of £430,000 (2004:£1,178,000) and on 20,127,000 (2004: 20,212,000) ordinary shares. Diluted earnings per share is based on profit on ordinary activities after tax of £67,000 (2004:£1,178,000) and on the weighted average number of ordinary shares of 20,203,000 (2004: 20,292,000). 3. Annual Report and Accounts The Annual Report and Accounts will be posted to shareholders before 26 August 2005. 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). These Reports may also be downloaded or viewed through our web-site at www.coralproducts.com. 4. Annual General Meeting The Annual General Meeting will be held at the Midland Crowne Plaza Hotel, Peter Street, Manchester, M60 2DS on Friday 23 September 2005 at 12.00 noon. This information is provided by RNS The company news service from the London Stock Exchange

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