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Coats revenue up 5% to $740 million in H1 2017
01
Aug '17
Leading industrial thread manufacturer Coats has announced that its revenue has gone up 5 per cent on a CER basis to $740 million (4 per cent reported) for the six months ended June 30, 2017. The company also reported a strong growth of 7 per cent in industrial division across both apparel and footwear (5 per cent), and performance materials (18 per cent).

The adjusted operating profit of the company increased 14 per cent on a CER basis (12 per cent reported) with Group revenue growth further underpinned by margin increase across both industrial (50bps) and crafts (260bps). Adjusted EPS went up 38 per cent to 3.06c (reported EPS of 2.89c) with higher operating profit, reduction in effective tax rate, and mark-to-market foreign exchange gains. Underlying EPS growth was 19 per cent.

Strong adjusted free cash flow for the last twelve months was $109 million (June 2016: $84 million).  As expected, second half capital expenditure will increase to $30-40 million ($50-60 million full year spend).

Return on capital employed by the country increased 400bps to 34 per cent (2016: 30 per cent) mainly as a result of higher profitability. The company also reported good operational progress on the identified focus areas of simplification, innovation and enhancing its digital capabilities.

Coats also concluded settlement with all three UK pensions schemes and Pension Regulator investigations now ceased, said the company in a press release. The board has also declared an interim dividend of 0.44 US cents per share payable in November 2017, representing 7 per cent growth (2016 pro-forma 0.41 US cents).

“Coats continued its strong start to the year, with CER sales growth of 5 per cent and adjusted operating profit growth of 14 per cent, of which the primary contributor was the industrial division.  We have continued to increase our market share in the apparel and footwear segment despite continued mixed demand from clothing retailers through maintaining our customer-led approach to innovation, digital solutions and corporate social responsibility,” said Rajiv Sharma, Group chief executive, Coats.

“We continue to leverage our global footprint and customer base in our performance materials business, develop new product solutions for our customers, and see a good contribution from our Gotex business which was acquired in 2016. In Crafts, the North American market remains weak despite recent stabilisation. Our strong cash generation allows us to service our various stakeholder capital demands, whilst allowing for increased investment in our existing asset base which, as previously indicated, is scheduled in the second half of the year,” added Sharma.

“We will look to build on the strong first half of the year, and expect to deliver performance in line with management’s expectations for the full year. This is expected to be achieved through our initiatives to deliver market share gains and productivity improvements, maintaining a tight control of our cost base, whilst investing in our growth opportunities,” he stated. (KD)

Fibre2Fashion News Desk – India


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