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(Sharecast News) - Coral Products said in an update on Wednesday that trading in the first half of its financial year was materially ahead of last year, supported by recent acquisitions and new business wins, adding that it expected to deliver full-year results in line with management forecasts despite continued weakness in the UK manufacturing sector.
Ahead of its annual general meeting, the AIM-traded specialist plastics manufacturer said group sales revenue for the six months ended 31 October, including intercompany sales, was expected to be more than 30% higher than the same period in 2024.
It also anticipated a strong underlying operating profit for the period, reflecting operational efficiencies and improved margins across its three divisions.
Chairman Joe Grimmond said the company had maintained the pace established earlier in the year.
"The group has continued to build on the positive and progressive momentum referenced in our trading update of 7 July and again in the full year results announcement of 31 October," he said.
"The strong performance year to date has been delivered despite a challenging UK market and economy where underlying demand levels remain subdued across several of our market segments, while simultaneously managing a number of legacy issues across the group."
Growth in the first half was driven by the acquisition of Arrow Film & Foil Converters in April and new orders across the group's existing operations, which Coral said would support further revenue in the second half.
Profitability had improved through increased asset utilisation, enhanced margins and a more integrated product offering.
The Flexible division performed well during the period, with the Arrow business successfully incorporated into the wider unit. Coral said the focus at Arrow had been on establishing a sustainable profit base rather than short-term revenue growth.
A customer insolvency dented sales and margins during September and October, but the company said the impact was modest and the division remains positioned for further progress.
The Rigid division posted solid revenue growth and steady gross margin gains, supported by operational efficiencies and tighter cost controls.
Financial performance at Manplas, part of the division, had improved and was expected to continue strengthening in the second half.
The Distribution division also delivered a strong performance, benefiting from greater customer penetration and increased cross-selling across the group.
Looking ahead, the board said it was encouraged by Coral's integrated product range and strengthened order pipeline, but said it remained cautious about persistent macroeconomic headwinds.
Even so, it expected to meet full-year targets.
"The board remains mindful of the macroeconomic environment and continued headwinds faced by UK manufacturing businesses, it is confident that the business is focused on the right priorities and therefore expects to deliver a full-year result in line with management expectations," Grimmond said.
He added that Coral remained committed to "delivering above-market profitable growth and further strengthening Coral's role as a trusted, value-added UK packaging and engineered parts partner."
At 1123 GMT, shares in Coral Products were up 2.85% at 9p.
Reporting by Josh White for Sharecast.com.