Coats Group PLC (LON:COA) have seen their annual profits rise within a strong update from the firm.
The FTSE 250 listed firm recorded profit increases, despite lower growth and market fluidity.
The CEO commented: ‘I am pleased to report a year of continued growth in profits and cash, despite a market backdrop where we saw lower than normal growth in retail sales of Apparel and Footwear, and temporary softness in some of the industrial end-markets that we serve in Performance Materials. In Apparel and Footwear, this meant taking further market share by delivering high quality products with world class levels of speed, customer service and support. In Performance Materials, we delivered innovative thread and yarn-based solutions that solve our customers’ technical problems across a variety of industries. ‘
Coats Group, who make industrial thread said that pretax profit across 2019 was $166.8 million. Notably, this sees a 36% jump from $122.8 million in 2018.
Revenue fell despite the strong profit gains from $1.41 billion to $1.39 billion.
The firm said that profits rose due to a drop on exceptional and acquisition related items in the year.
These costs include the initial costs elating to a business transformation program. Interestingly, Coats also saw their exceptional charges fall to $4.4 million from $47.8 million – which represents a massive drop.
Looking at divisional performance, Coats noted that Apparel & Footwear recorded revenue growth of 1.0%, and Performance Materials revenue jumped 1.4%.
Additionally, Personal Protection saw 6% growth and Telecoms & Energy saw a 7% spike. Finally, revenue from Transportation division slipped 5%.
Coats proposed a final dividend of $1.30 per share, which gives an annual total of $1.85 – seeing a 11% rise from the 2018 which was $1.66.
‘During the year, we also made significant progress on our strategic priorities of M&A, Digital, Innovation and Sustainability. The acquisition of Pharr High Performance in North America makes Coats a market leader in Personal Protection yarns. ESG and Sustainability are key differentiators for Coats and a source of competitive advantage.
Rajiv Sharma, Group Chief Executive, said:
‘At an operational level we continue to grow margins through self-help programmes and cost management, whilst continuing to recover raw material cost increases. Cash delivery was once again strong which provides us with the funds to invest selectively in the most attractive organic and inorganic opportunities. Over the last two years the delivery of our Connecting for Growth transformation programme has resulted in less complexity, lower cost, more organisational agility and funds to invest in growth. The organisation is now fitter, faster, more agile and able to respond rapidly to fast-paced changes in the market.
‘We enter 2020 as a lean and agile organisation, having delivered significant positive strategic change through 2019. We are well placed to take advantage of the fast-paced and rapidly changing modern world, by capturing the many opportunities this presents to Coats as a truly global business.
‘Absent a material impact from Covid-19, Coats remains well placed to execute our strategy and deliver another year of growth in 2020.’
Shares in Coats Group PLC trade at 60p (+3.70%). 5/3/20 13:42BST.