H1 2026 results: revenue up 21.5% and profit swings back to black
Coral Products has delivered a tidy first-half turnaround. Group sales excluding intercompany rose 21.5% to £19.2 million, with gross profit up 39.5% to £6.7 million as margins improved. Reported profit before tax nudged into positive territory at £0.1 million, while the underlying profit before tax swung to £0.4 million from a £0.5 million loss.
Importantly for shareholders, underlying basic earnings per share moved to 0.74p from a 0.48p loss. Management calls this a broad-based improvement across all divisions, with integration progress and operational efficiencies doing the heavy lifting.
| Key metric | H1 2026 | H1 2024 (restated) | Change |
|---|---|---|---|
| Revenue (excl. intercompany) | £19.2m | £15.8m | +21.5% |
| Gross profit | £6.7m | £4.8m | +39.5% |
| Operating profit | £0.7m | £(0.7)m | Improved |
| Underlying operating profit | £1.31m | £0.03m | +4,579% |
| Underlying EBITDA | £1.78m | £0.73m | +144.3% |
| Reported PBT | £0.1m | £(1.3)m | Improved |
| Underlying PBT | £0.4m | £(0.5)m | Improved |
| Underlying EPS | 0.74p | (0.48)p | +254% |
| Net debt | £13.8m | £10.3m | Higher |
What is “underlying” and why it matters
Underlying results strip out separately disclosed items such as amortisation of acquired intangibles, share based payments and one-off costs. In the period, these totalled £588,000, including £254,000 amortisation, £63,000 reorganisation costs and a £271,000 inventory impairment.
Using underlying measures helps show trading momentum. Here, it highlights a genuine swing back to profitability at the operating level, which is more informative than the slim reported PBT given the non-cash and exceptional items in the mix.
Divisional performance: Flexible leads, Rigid improves, Distribution steady
The divisional split shows where the growth is coming from, and how integration is playing through:
- Flexible: Net sales £10.3 million (H1 2024: £6.4 million). The Arrow Film & Foil acquisition completed on 1 April 2025 has been integrated, with management prioritising sustainable profitability over pure top-line. That platform is now in place for capacity optimisation and growth in H2.
- Rigid: Net sales £5.6 million (H1 2024: £6.0 million). Revenue is solid while gross margins are improving through efficiencies and tighter cost controls. Manplas is showing structural and performance improvements, with further gains expected in H2.
- Distribution: Net sales £3.3 million (H1 2024: £3.35 million). Good customer penetration and cross-selling across the Group. Early commercial orders for the single polymer lotion pump are encouraging. A “Heavy Duty Grid” for the Eco-deck brand is in development, with contributions more likely from FY27.
Intercompany sales rose 225% to £1.9 million, reflecting the Group’s vertical integration strategy. This is a positive sign that sites are supplying each other more effectively, which can reduce supplier margins, improve lead times and enhance control over quality and availability.
Margins and operational delivery are heading the right way
Gross profit increased by £1.87 million year on year, outpacing revenue growth, which speaks to improving gross margins. Management cites ongoing manufacturing optimisation, higher recycled content in targeted products, and better cost control.
There is also targeted capex to support growth and mix. The rPET extrusion line at Alma Products is slightly delayed but due to be commercial from January 2026, and a new bag machine at Film & Foil has been installed to widen the range and support new business in H2 and beyond.
Cash flow, working capital and net debt: short-term drag, funded by invoice discounting
Operating cash flow was a £492,000 outflow, mainly due to working capital absorbed following the Arrow acquisition. Trade receivables associated with Arrow increased by £2.8 million and inventories by around £1.1 million.
To fund this, Coral drew approximately £2.3 million on a new invoice discounting facility. Net debt rose to £13.8 million from £11.4 million at year end and £10.3 million a year ago. Finance costs increased to £604,000, reflecting higher borrowings and lease liabilities. Cash at period end was £543,000.
In short, the turnaround is coming with a working-capital bill. That is typical after acquisitions, but it does raise the bar for H2 cash generation.
Outlook: momentum continues, H2 expected to be marginally higher
Trading since the period end has been robust. Despite the usual seasonal lull in December and January, management expects second-half revenue to be marginally higher, driven by the phasing of new business wins. Manplas is expected to return to consistent profitability as restructuring benefits bed in.
The full-year outlook remains “positively unchanged”. With new business wins evolving, incremental margin gains and operational improvements, H2 is set up constructively, albeit with the usual execution watchouts.
Dividend and capital allocation: cash generation first
No interim dividend has been declared. The Board is prioritising investment, debt reduction and cash generation. Future dividends will be kept under review based on performance, cash generation, working capital and financing arrangements.
A note on restatements
Comparatives for H1 2024 have been restated. Adjustments relate to an earlier acquisition, insurance claims and contingent consideration, plus correcting the accounting for a sale-and-leaseback. This does not change today’s H1 2026 results, but it matters for trend analysis and underlines the Group’s move to tighten financial reporting.
Why this matters for investors
- Top-line and margin momentum: Revenue up 21.5% and gross profit up 39.5% show healthy mix and efficiency gains. That is the foundation for sustained profitability.
- Underlying profitability restored: Underlying operating profit of £1.31 million and EPS of 0.74p confirm the business is moving beyond break-even on a normalised basis.
- Integration working: Intercompany sales up 225% and Arrow performing in line with expectations point to synergies beginning to come through.
- Cash and debt are the swing factors: Working capital absorption and higher net debt are the near-term trade-offs. H2 cash conversion is the key test from here.
What I’m watching in H2 2026
- Gross margin progression: Management say there is “further improvement potential” into H2. Delivery here drives operating leverage.
- Manplas profitability: A consistent move into the black would validate the restructuring efforts.
- rPET line ramp-up and new bag machine utilisation: Evidence that these investments translate into revenue and margin in H2 and FY27.
- Working capital release: Receivables and inventory normalisation post-Arrow to help reduce reliance on invoice discounting.
- Finance costs: With net debt higher, interest remains a headwind. Any progress on debt reduction would be welcome.
Bottom line
This is a much-improved set of interim results. Coral has moved from repair to rebuild: revenue growth is solid, margins are better, and underlying profits are back. The price is a heavier balance sheet and higher finance costs, but that is manageable if H2 cash conversion improves as expected.
If management continues to execute on integration, margin improvement and targeted capex, the Group looks set for a steadier, more profitable profile into FY27.
