21st May 2025 09:56
(Alliance News) - Coats Group PLC on Wednesday said it has made a good start to 2025 with continued momentum in Apparel and Footwear offsetting flat sales in Performance Materials.
Chief Executive David Paja said: "We have traded well in the first few months of 2025 and we expect to finish the first half with performance ahead of the prior year, reflecting both growth and further margin expansion."
The Bristol-based company provides products, including apparel, accessory and footwear threads, structural components for footwear and accessories, fabrics, yarns, and software applications.
In a trading statement, the firm said revenue was 2% higher in the four months to April 30 from a year prior, or up 4% at constant currency.
Shares were down 1.5% at 77.40 pence each in London on Wednesday morning.
Apparel sales rose 5% in the period, as did Footwear but Performance Materials revenue was flat, all at constant currency.
Coats noted "continued momentum" in Apparel and Footwear and said Performance Materials traded "in line" with expectations, with revenue excluding US Yarns at a similar level to the same period last year, as subdued conditions continue to affect a number of key end markets.
Underlying earnings before interest and taxes margins continued to improve, with further efficiency gains funding investment in our growth drivers, the firm added.
"Given the positive start to the year and our current order book visibility, we expect the first half performance to reflect an adjusted Ebit margin within our medium-term margin target range of 19% to 21%," Coats said.
On tariffs, Coats said it continues to monitor the "dynamic" situation closely but believes its global footprint, flexible cost base and proven pricing power positions it strongly to navigate any market volatility.
Full-year expectations remain unchanged, with a broadly equal profit weighting across the first and second halves.
"We expect another year of strong free cash flow generation, supporting the group's active and flexible capital allocation strategy. We continue to build a pipeline of attractive acquisition targets to further strengthen our portfolio, with the capacity to take advantage of any opportunities created by any disruption", the firm said.
By Jeremy Cutler, Alliance News reporter
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