Adjusted operating profit was up 8 per cent with Connecting for Growth programme delivering a full period of benefits and focus on operational efficiencies, offsetting some gross margin decline, said Coats in a press release.
By geography, revenue in Asia grew by 3 per cent on a CER basis, which was underpinned by Apparel and Footwear growth, and despite a slowdown in the smaller Performance Materials segment in that territory. Revenue in EMEA rose encouragingly by 7 per cent and was driven by Performance Materials (Telecoms and Energy) as Gotex delivered a strong period of growth, alongside steady and consistent growth in Apparel and Footwear. In the Americas, revenue decreased 6 per cent, where US consumer durables market remained relatively soft alongside continued decline in Apparel and Footwear revenue in Latam which saw difficult trading conditions. This was offset to some extent by an encouraging performance in certain Latam Performance Materials markets and Patrick Yarns.
"I am pleased to report a robust performance in the first half despite mixed conditions in underlying retail and industrial markets. Our market-leading Apparel and Footwear thread business benefited from our continued focus on product innovation, digital solutions as well as our leading corporate responsibility and sustainability credentials. In our Performance Materials business, we saw strong growth in some emerging markets and key strategic focus areas, and acceleration in the performance of recent acquisitions, said Rajiv Sharma, group chief executive of Coats Group.
"Our improved operating margins, strong cash flow generation and underlying earnings growth reflect continued cost control and the benefits of Connecting for Growth. This programme is now mostly complete and will conclude this year. The savings achieved have funded reinvestments in the areas of innovation, digital and talent, which will benefit us in the future. We will also continue to invest capital in both value-adding organic and inorganic opportunities across our global network. As a reflection of our confidence in the future direction of the business we have announced a 10 per cent increase in the interim dividend.
In the second half of the year we will continue to drive performance through our focus on customer service and building on our innovation and digital capabilities, supported by our self-help initiatives. Our full year earnings per share will be impacted by the highlighted foreign exchange movements, IFRS16 changes and certain legacy interest charges. However, whilst we remain mindful of current macroeconomic uncertainties, we anticipate delivering 2019 full year adjusted operating profit in line with our expectations." (PC)
Fibre2Fashion News Desk – India
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