Plastics manufacturer Coral Products (CRU:AIM) is finally returning to revenue growth mode after expanding its product range and shifting away from the declining CD and DVD market. Its shares are up 50% since we last wrote on the stock (8 Oct 2015). We see further upside.

The £15 million cap’s core Interpack division, which makes plastic containers, has launched a new range of products. Coral has also started producing bespoke crates for a national online retailer, which should boost sales by at least £2 million in the second half.

Sales of recycling boxes and caddies are improving as local authorities resume renewing waste contracts. Neiman Packaging - the wet wipe tub manufacturer Coral acquired in June - should make a positive contribution to profit in the second half.

Media products now contribute just 15% of group revenue, down from 80% four years ago, and the revenue decline appears to have bottomed out.

Coral’s shift to higher margin lines drove a 135% rise in pre-tax profit to £684,000 in the six months to 31 October. Net debt fell from £4 million to £2.8 million, resulting in its gearing reducing to 26%.

House broker Daniel Stewart forecasts a 12.5% rise in revenue to £19.6 million in the year ending April 2016. Pre-tax profit is expected to grow by 37% to £1.6 million.

Coral’s high growth prospects and prospective dividend yield of 5% make a strong investment case at 24p. We remain positive.