Coats profits rise as Industrial unit proves strong
The world’s biggest industrial thread maker made significant profit gains last year, despite the overall sales picture being somewhat anaemic. But profits were boosted as Coats Group controlled costs, saw raw material price benefits and focused on growing its industrial segment.
The UK-listed firm said revenue rose 2% currency-neutral to $1,457m but fell 1% on a reported basis, although it was up 1% on an organic basis. Coats saw continued solid growth of 4% in its Industrial Division achieved through market share gains, helping to offset an 8% decline in Crafts Americas.
Operating profit was up 16% currency-neutral (up 13% reported) to $158m with adjusted EPS up 23% to 4.91 cents.
CEO Rajiv Sharma said the company delivered a strong performance in 2016, despite challenging market conditions that were characterised by “uncertainty, volatility and pricing pressures”.
He said the group organic sales growth of 1%, was delivered by share gains in the Industrial Division, which was supported by the introduction of new products and adoption of digital tools.
The division completed the acquisitions of Gotex and Fast React during the year, both of which have leading positions in their markets and “which are already delivering strong growth ahead of management expectations under Coats' ownership.”
The company said its Industrial sales growth of 4% was driven by share gains in apparel and footwear, product innovation, geographic expansion in performance materials, along with the impact of bolt-on acquisitions.
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