Coats Group trading patterns "back to normal" post-pandemic
Coats Group is pretty much back to normal on the performance front, the threads and global footwear components manufacturer said Wednesday, with its pandemic woes clearly behind it. That means trading patterns are now operating in line with full-year expectations.
For 1 July-31 October, Coats recorded strong organic revenue growth (+6% year-on-year) after the “very strong” first half. Year-to-date revenue growth was 14%, “a run-rate above the expected long-term trend”, it said.
Meanwhile, improved pricing and productivity continue to offset inflationary pressures.
But there was a “moderation” compared to H1 “due to an industry-wide softening in demand, mainly in Apparel, towards the end of the period”, it admitted.
Apparel and Footwear revenue increased 3% year-on-year in the period and 14% year-to-date. Apparel experienced some order cut-backs by customers, as a result of the macroeconomic environment.
Footwear continued to see positive end market sentiment across the US, Europe and Asia with its acquisitions of Texon and Rhenoflex “performing in line with our expectations”.
Revenue in Performance Materials increased 15% with all segments “continuing to perform well”.
“Our pricing actions and self-help efficiency programmes continue to offset the significant inflationary pressures in the supply chain. In addition, our strategic projects remain on track, and are delivering significant operational and financial benefits”, it said.
For its outlook, Coats said it’s “responding positively” to macroeconomic uncertainty “with a well-defined and tested playbook that focuses on cost and cash actions”, hence expectations for the full year 2022 are going to plan.
“The group continues to expect to make good progress during 2023 underpinned by the full-year contribution of acquisitions, associated synergies, and strategic projects”, it added.
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