Coats announces 2016 half year results
28 July 2016
Coats, the world’s leading industrial thread manufacturer and a major player in the Americas textile crafts market, announces its unaudited results for the six months ended 30 June 2016.
- Revenue of $718 million maintained; lower sales growth in Q2 due to tougher market conditions
- Operating profit up 24% to $77 million on an adjusted basis (up 44% reported)
- Industrial profit growth of 27% delivered by market share gains and cost productivity
- Americas Crafts margin increased, despite tough market conditions, due to focus on costs
- Adjusted EPS up 24% to 2.08c with higher operating profit and reduction in tax rate offset mainly by unrealised losses on foreign exchange hedges; reported EPS of 1.90c (2015 continuing: 0.25c)
- Adjusted free cash flow for last twelve months of $82 million (June 2015: $75 million) primarily due to higher profitability
- Acquired Gotex and Fast React; last year’s acquisition GSD performing well
- Continuing settlement discussions with Trustees of the three UK pension schemes and engaging with UK Pensions Regulator to seek to achieve a resolution of investigations
Paul Forman, Group Chief Executive, Coats, said: ‘Coats continued to perform well in the first half of 2016 with operating profit growth of 24%. In challenging market conditions, which led to lower sales growth in Q2, we continued to take market share, introduce new and innovative products and drive customer adoption of our eCommerce platform.
‘We delivered productivity gains, tightly managed our overheads and greater sales volumes led to a positive operational gearing effect. We completed the acquisitions of Gotex and Fast React, both of which have leading positions in their markets and we are confident they will deliver strong growth under Coats’ ownership.
‘We will build on progress made during the first half and focus on maintaining our strong cash flows. However, the tougher market conditions that impacted Q2 sales performance are likely to persist, particularly given macroeconomic uncertainty. On balance we therefore maintain our previous 2016 guidance.’
1 All revenue and profit figures in highlights on an organic, constant exchange rate (restates H1 2015 figures at H1 2016 exchange rates) basis, unless otherwise stated.
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Notes to Editors
Coats is the world’s leading industrial thread manufacturer and a major player in the Americas textile crafts market. At home in more than 60 countries, Coats employs 19,000 people across six continents. Revenues in 2015 were US$1.5bn.
Coats’ pioneering history and innovative culture ensure the company leads the way around the world: providing complementary and value added products and services to the apparel and footwear industries; applying innovative techniques to develop high technology Speciality threads and yarns in areas such as automotive and fibre optics; and extending the crafts offer into new markets and online.
Headquartered in the UK, Coats has a premium listing on the London Stock Exchange.
- Each year we make enough thread to go into 8 billion pair of jeans - that’s one for every person on the planet
- Every month Coats produces enough thread to stretch all the way to the sun
- More than 450 million pairs of shoes are made every year using Coats’ thread
- More than 100 million car airbags are made using Coats’ Speciality thread every year
- In 1879 Thomas Edison used Coats’ thread in his experiments to invent the light bulb
- We’re experts in colour, last year we dyed thread and yarn in more than 150,000 different colours for our customers
- Our Red Heart knitting and crochet yarn brand has been named ‘America’s Most Recommended’ by the Women’s Choice Award
- Our flame retardant Speciality threads can withstand temperatures as high as 1,000 degrees Celsius
- Coats is the second largest supplier of zips to global brands