Interim Results

Coral Products PLC 5 December 2001 CORAL PRODUCTS PLC 2001 Interim Results Coral Products PLC, one of Europe's leading manufacturers and suppliers of media packaging for Digital Versatile Disc (DVD), Video and CD, announces interim results for the six months ended 31 October 2001. In his statement to shareholders, Chairman Sir David Rowe-Ham said: 'Trading in the first quarter of our financial year started slowly with below average demand in evidence across all our media packaging activities. More normal trading patterns were resumed in September with demand for media packaging products being in line with our expectations as the build up to the peak Christmas period commenced. However, the poor demand in the first quarter has inevitably impacted upon both our turnover and profitability within the first half year's trading period.' Summary Six months ended Six months ended 31 October 31 October 2001 2000 Turnover £8.4m £9.9m Pre-tax profits £0.59m £1.48m Earnings per share 1.93p 4.87p Maintained interim dividend 1.05p 1.05p * Volume sales of DVD boxes increased by 45% over same period last year - demand continues to grow * Video box capacity sold out since September with sales reaching record levels in October * CD case sales disappoint but both customer base and market share maintained * Sector reclassification to 'media & photography' sub sector 'publishing and packaging' from 1 January 2002 Regarding prospects for the current year, Sir David added: 'Industry demand for CD packaging, whilst much improved since the first quarter, remains below the levels seen last year and will continue to hold back our profits in the near term.' 'We continue to focus our overall investment on the DVD market, with orders for additional machinery already placed which will see capacity doubled in the summer of 2002.' 'Video demand remains strong and we believe volumes should continue to grow next year as we pick up market share from competitors who are increasingly pulling out of this area to focus on the competitive and rapidly growing DVD market.' Enquiries: Coral Products PLC Tel: 01942 272 882 Warren Ferster, Managing Director Mobile: 07785 223 039 David Shalom, Finance Director Mobile: 07786 226 656 Binns & Co Paul Vann/Carole Butcher Tel: 020 7786 9600 CHAIRMAN'S STATEMENT As stated at our Annual General Meeting in September trading in the first quarter of our financial year started slowly with below average demand in evidence across all our media packaging activities. More normal trading patterns were resumed in September with demand for media products being in line with our expectations as the build up to the peak Christmas period commenced. However the poor demand in the first quarter has inevitably impacted upon both our turnover and profitability within the first half year's trading period. Trading Turnover for the six months ended 31 October 2001 was £8.4million (2000: £9.9million) and pre-tax profits decreased to £585,000 (2000: £1,477,000). Diluted earnings per share were 1.93p (2000: 4.87p) Interim Dividend A maintained interim dividend of 1.05p net per ordinary share (2000: 1.05p) has been declared for the period. This dividend will be paid on 25 February 2002 to all shareholders on the register on 8 February 2002. Business During the period we made a capital investment of £1.4m, the majority of which was for added DVD case production capacity which came on stream in late summer. Volume sales of our DVD boxes have increased by 45% when compared to the same period last year and demand continues to grow. No further substantial capital investment is planned for the remainder of the current year although orders for some £1.7m worth of DVD production machinery have been placed for delivery in summer 2002. Video box demand has been completely sold out since September and has performed strongly following a quiet first quarter with sales reaching record levels in October. CD case sales continued to disappoint in the first half and despite a strengthening of demand in September volumes remain some 17% down compared to the levels seen in the same period last year. We continue to maintain both our customer base and our market share. Sector reclassification From 1 January 2002 the company will be re-classified from the packaging sector to publishing and packaging, a new sub-sector of the FTSE media and photography sector.We believe that this will more accurately reflect our business which we see as being more closely aligned with that of the media sector. Prospects Industry demand for CD packaging, whilst much improved since the first quarter, remains below the levels seen for the comparative period last year and will continue to hold back our profits in the near term. CD packaging still contributes some 40% of our turnover and the current situation is unlikely to improve unless demand for CD boxes picks up markedly in the New Year. We continue to focus our overall investment on the DVD market, with orders for additional machinery already placed which will see capacity doubled in the summer of 2002. Video demand remains strong and we believe volumes should continue to grow next year as we pick up market share from competitors who are increasingly pulling out of this area to focus on the competitive and rapidly growing DVD market. Sir David Rowe-Ham 5 December 2001 Profit and Loss Account Unaudited Unaudited Audited Half year Half year Year to to to 31 October 31 October 30 April 2001 2000 2001 Notes £'000 £'000 £'000 ----------- ----------- ----------- Continuing operations Turnover (1) 8,356 9,902 18,424 ----------- ----------- ----------- Profit on ordinary activities before interest 702 1,595 2,244 Net interest payable (117) (118) (241) ----------- ----------- ----------- Profit on ordinary activities before taxation 585 1,477 2,003 Tax on profit on ordinary (2) (181) (458) (614) activities ----------- ----------- ----------- Profit on ordinary activities after taxation 404 1,019 1,389 Dividends (217) (215) (692) ----------- ----------- ----------- Amount transferred to reserves 187 804 697 ----------- ----------- ----------- Basic earnings per share (3) 1.96p 4.99p 6.77p ----------- ----------- ----------- Diluted earnings per share (3) 1.93p 4.87p 6.62p ----------- ----------- ----------- 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. Basis of preparation The interim results have been prepared on the basis of the accounting policies set out in the Company's accounts for the year ended 30 April 2001, and are neither audited nor reviewed. Balance Sheet Unaudited Unaudited Audited As at As at As at 31 October 31 October 30 April 2001 2000 2001 £'000 £'000 £'000 ----------- ----------- ----------- Tangible fixed assets 13,009 12,410 12,474 Current assets Stocks 1,166 1,555 1,893 Debtors 5,989 6,703 5,417 Cash at bank and in hand - 20 395 ----------- ----------- ----------- 7,155 8,278 7,705 Creditors: amounts falling due within one year (6,499) (7,085) (6,928) ----------- ----------- ----------- Net current assets 656 1,193 777 ----------- ----------- ----------- Total assets less current liabilities 13,665 13,603 13,251 Creditors: amounts falling due after more than one year (2,069) (2,192) (1,842) Provisions for liabilities and charges Deferred taxation (1,273) (1,224) (1,273) ----------- ----------- ----------- Total net assets 10,323 10,187 10,136 ----------- ----------- ----------- Capital and reserves Share capital 206 204 206 Share premium 4,497 4,443 4,497 Profit and loss account 5,620 5,540 5,433 ----------- ----------- ----------- Equity shareholders' funds 10,323 10,187 10,136 ----------- ----------- ----------- Movements in Shareholders' Funds Unaudited Unaudited Audited As at As at As at 31 October 31 October 30 April 2001 2000 2001 £'000 £'000 £'000 ----------- ----------- ----------- Profit for the period 404 1,019 1,389 Dividends (217) (215) (692) ----------- ----------- ----------- Net additions to equity shareholders' fund 187 804 697 Proceeds of share issued - - 56 ----------- ----------- ----------- 187 804 753 ----------- ----------- ----------- Equity shareholders' funds at the beginning of the period 10,136 9,383 9,383 ----------- ----------- ----------- Equity shareholders' funds at the end of the period 10,323 10,187 10,136 ----------- ----------- ----------- Cashflow Statement Unaudited Unaudited Audited Half year Half year Year to to to 31 October 31 October 30 April 2001 2000 2001 £'000 £'000 £'000 ----------- ----------- ----------- Net cash inflow from operating activities 864 878 3,589 ----------- ----------- ----------- Returns on investments and servicing of finance Net interest paid (117) (118) (228) ----------- ----------- ----------- Taxation (157) (132) (571) ----------- ----------- ----------- Capital expenditure and financial investment Purchase of tangible fixed assets (1,411) (2,385) (3,274) Sale of tangible fixed assets 3 - 7 ----------- ----------- ----------- (1,408) (2,385) (3,267) ----------- ----------- ----------- Equity dividends paid (475) (470) (687) ----------- ----------- ----------- Net cash outflow before financing (1,293) (2,227) (1,164) ----------- ----------- ----------- Financing Issue of share capital - - 56 Inception of new loans 286 500 500 Repayment of loans (175) (28) (193) Repayment of principal under finance (890) (578) (1,284) leases Proceeds of sale and leaseback 1,164 1,593 2,289 ----------- ----------- ----------- Net cash inflow from financing 385 1,487 1,368 ----------- ----------- ----------- Increase/(decrease) to cash (908) (740) 204 ----------- ----------- ----------- Reconciliation of Net Cashflow to Movement in Net Debt Unaudited Unaudited Audited Half year Half year Year to to to 31 October 31 October 30 April 2001 2000 2001 £'000 £'000 £'000 ----------- ----------- ----------- Increase/(decrease) in cash in the period (908) (740) 204 Net cash outflow from debt and lease financing (385) (1,487) (1,312) ----------- ----------- ----------- Change in net debt resulting from cashflows in the period (1,293) (2,227) (1,108) Net debt at beginning of period (3,035) (1,927) (1,927) ----------- ----------- ----------- Net debt at end of period (4,328) (4,154) (3,035) ----------- ----------- ----------- Reconcilitation of Operating Profit to Net Cash Inflow from Operating Activities Unaudited Unaudited Audited Half year Half year Year to to to 31 October 31 October 30 April 2001 2000 2001 £'000 £'000 £'000 ----------- ----------- ----------- Operating profit 702 1,595 2,244 Depreciation charges 876 716 1,536 Profit on sale of fixed assets (3) - (2) Release of grant income (1) (1) (1) Decrease in stocks 727 960 622 Increase in debtors (572) (1,789) (503) Decrease in creditors (865) (603) (307) ----------- ----------- ----------- Net cash inflow from operating activities 864 878 3,589 ----------- ----------- ----------- Notes to the Accounts 1. Turnover All production is based in the United Kingdom. The geographical analysis of turnover is shown below: Unaudited Unaudited Audited Half year to Half year to Year to 31 October 31 October 30 April 2001 2000 2001 £'000 £'000 £'000 ----------- ----------- ----------- United Kingdom 7,771 8,857 16,716 Rest of Europe 579 1,008 1,666 North America 6 37 42 ----------- ----------- ----------- 8,356 9,902 18,424 By Business Activity ----------- ----------- ----------- Media packaging 8,144 9,366 17,475 Housewares 212 536 949 ----------- ----------- ----------- 8,356 9,902 18,424 ----------- ----------- ----------- The classes of business activity do not differ substantially and therefore no separate analysis of operating profits and net assets is disclosed. 2 The charge for taxation on the profit for the period is based upon the estimated effective rate for the full year 3 The calculation of basic earnings per share is based on the profit on ordinary activities after taxation for the half year namely £404,000 (2000: £1,019,000) and on 20,637,781 (2000: 20,440,000) 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 a fully diluted weighted average number of ordinary shares of 20,918,073 (2000: 20,917,943) 4 The results for the year ended 30 April 2001 are in abbreviated form and have been extracted from the published accounts as filed with the Registrar of Companies. These were audited and reported upon without qualification by PricewaterhouseCoopers and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. 5 The interim report will be posted to all shareholders on 5 December 2001 and copies of this and the last published Annual Report and Accounts are available from the Secretary. Coral Products PLC, North Florida Road, Haydock Industrial Estate, Haydock, Merseyside WA11 9TP (Tel: 01942 272882). These reports may also be viewed on our web site at coralproducts.com.

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