Coats Group returns to organic growth, outlook ahead of expectations
Coats Group is back on its game. The UK-based industrial thread manufacturer on Wednesday reported a return to organic growth following a strong operational performance in the three months to 30 April.
More good news is that its pricing and productivity actions are being successfully implemented to offset inflationary pressures and that performance for the year is expected to be "slightly ahead of our previous expectations".
Given the “exceptional circumstances of 2020” the latest set of figures is certainly much improved. Organic group sales for the three-month period grew 26% year-on-year, versus just a 1% gain in 2019 (the most meaningful comparison period given 2020's pandemic).
In Apparel and Footwear “improving momentum and recovery” delivered a 30% jump in organic sales versus a flat 2019 period. It cited “robust volume growth resulted in increased factory activity".
Meanwhile, against 2019, the core thread business — which represents around 85% of Apparel and Footwear — grew “solidly”, up 2%. It noted key markets “performed well vs 2019, albeit zips are recovering at a slower pace”.
Performance Materials organic sales also rose 14% versus 2020 and by 4% versus 2019, "with all segments performing well and growing against 2019 and 2020”.
Chief executive Rajiv Sharma said: "We are pleased to have seen recovery and positive momentum during the period, which resulted in a strong operational performance and a return to growth vs 2019”.
“Whilst we remain vigilant around the ongoing Covid pandemic, given the improving end market sentiment, we anticipate that the recovery in our trading will continue and that our anticipated performance for the year will be slightly ahead of our previous expectations”.
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