Coral Products Plc (LON:CRU) is the topic of conversation when Co Fund Manager Gervais Williams of Premier Miton Investors caught up with DirectorsTalk for an exclusive interview to discuss the UK listed market and some of his holdings in Miton UK MicroCap Trust plc.
DirectorsTalk asked: Coral Products is a UK plastics specialist. They have been scaling up in 2022 with four acquisitions which have provided tremendous lift to their recent results. How do you see their prospects?
Gervais Williams said:
“Yes, they have been investing progressively. Their plastic products are very large and it’s difficult to import those so they have a strong market position locally, and, as you say, they’ve been making acquisitions and investing in capex as well.
We like companies which are investing for surplus cash return and we think they will get good returns on this. I think that’s driving not just potential growth for the business but actually they’ve started paying dividends as well so it’s a combination of both which we think ultimately will drive share prices up. Coral Products is quite lowly rated at the moment but it has the potential to see a good share price recovery in due course.”
On 15 March 2023, Coral Products confirmed it had entered into a new improved banking facility with Virgin Money. The Facility gives the Group a banking facility of £10.35 million comprising £7.35 million for invoice financing and £3 million for trade financing.
In addition, the Group has re-mortgaged the freehold buildings acquired with Film & Foil Solutions Ltd and Alma Products Ltd for a combined £2.1 million which after repaying existing mortgages improves the Group’s working capital position by circa £1.4 million.
The Group has also been pre-approved for up to £1.5 million of asset finance to fund future capital projects.
Executive Chairman, Joe Grimmond, said:
“I am delighted that Virgin Money has chosen to partner with us in the further development of the Group. Virgin Money has shown great flexibility in providing the improved facilities acknowledging our ambitions for the future growth of our business. Overall, these actions combined will further enhance the financial strength of the Group”.
