HAYDOCK plastics firm Coral Products says first half results to October 31 should be significantly improved after a range of new contracts with local authorities in the past three months.

The AIM-listed company is diversifying from its traditional media products, such as CD and DVD cases, into the recycling and food industries.

In September it announced an acquisition deal for Luton-based Interpack, which makes plastic containers for the food and packaging industries, which could be worth a total of £4.1m.

In a trading update today, ahead of the announcement of interim results in early December, Coral said it has received firm orders in the past three months from five local authorities – Braintree, Powys, Rochdale, Isle of Wight and Forest of Dean – for its recycling containers, including kerbside boxes and kerbside and kitchen caddies.

It said the contracts are for delivery during the financial year and have a sales value of around £700,000.

However, it warned that it faces costs of around £450,000 to reconfigure manufacturing and for additional tooling at Interpack designed to increase production capacity.

Nethertheless, Coral said Interpack has been successfully integrated and is expected to make a “significant contribution” to the group’s results for the six months.

Media packaging sales are in line with management expectations with increases sales of DVD cases offsetting a reduction in demand for CD cases.

Today’s statement concluded: “Overall, management expects to report a significant improvement in first half financial performance for the group (before acquisition costs) compared to the same period in the previous year.”