Coral Products subsidiary signs food container supply deal

(Sharecast News) - Coral Products announced on Thursday that its subsidiary Tatra Rotalac has signed an exclusive three-year supply agreement with a leading UK distributor of BRC packaging containers. The AIM-traded firm said the contract, covering the supply of ice cream and food containers, was expected to generate between £1.5m and £2m in annual sales.

It said its ability to fulfil the contract followed a £2.1m investment in new machinery and re-tooling, first announced in September 2023, which was now fully operational.

In addition to the expansion, Coral said it had successfully commissioned in-house manufacturing capabilities for its Ecodeck floor grids, further enhancing its production capacity.

The new facilities would enable the company to optimise the use of recycled materials and insource £3m worth of previously-outsourced production, improving cost efficiency and operational resilience.

Coral said it expected the enhancements to have a material positive impact on margins and cash flow, reinforcing its long-term growth strategy.

"Thanks to the efforts of Ian Hillman, our group COO and the team we should now enjoy, after a 12-month delay, the full benefits of our investments in new machinery and re-tooling with improvements to both margin and cash flow," said chairman Joe Grimmond.

At 1232 GMT, shares in Coral Products were up 22.43% at 7.04p.

Reporting by Josh White for Sharecast.com.