Micro-cap plastic products maker Coral Products (CRU) has warned it will miss its FY26 targets due to delayed orders. The firm said the timing of existing contracts and new customer wins had been affected by the ongoing Middle East siutation.
Delayed revenue
Coral makes specialist plastics, primarily for the food packaging, personal care products and the construction and telecoms markets. The group has manufacturing and distribution facilities throughout the North West of England.
Trading during the final quarter of FY26, which ends this month, has been ‘adversely affected’ by the timing of revenues. The delays have affected existing contracts and new wins, with a proportion of H2 sales now deferred until FY27.
While the sales shortfall is timing-related, H2 profitability will be lower reflecting the margin contribution of the deferred revenues. The firm stressed these sales are ‘deferred, not lost’ and its customers are committed to taking delivery.
Until now, Coral had been strengthening its operations, improving manufacturing efficiency and increasing cross-selling. The firm said it still expected positive FY underlying operating profit despite the impact of revenue phasing this quarter.
Coral is the latest company to add its voice to the choir of canaries in the coalmine but it won’t be the last. Although markets keep climbing, every company is reassessing how the Middle East conflict – and the closure of the Strait of Hormuz – is impacting their business.
Coral’s customers have slowed production, meaning they need fewer parts which lead to today’s warning. Household cleaning product maker McBride (MCB) last month warned it faced increased cost pressures and supply chain problems.
Engineering group Goodwin (GDWN) has seen tenders canceled, while health and wellness brand Applied Nutrition (APN) has lost business, all linked to the Middle East.
Before both of those, travel firm On The Beach (OTB) suspended its profit guidance for the year. Also, legal services firm DSW Capital (DSW) warned of a hit to revenue due to a sharp drop in M&A activity.
Smaller companies always feel the pain before big companies, just as they always feel things improving before big companies. Investors need to prepare themselves for a more grief in small- and mid-cap land, regardless of where the indices are going.
Read the press release here: https://coralproducts.com/investors/
