Fashion is key driver of Coats Group sales and profits rise
Fashion retail may be seeing both ups and down at the moment but the world’s biggest industrial threads maker, Coats Group, seems to be prospering and fashion is a big contributor to this.
The London-listed business reported its 2017 results on Tuesday with revenue up 4% both in total and at constant exchange rates to $1,510 million (it reports in US dollars). And it saw a 3% organic revenue rise.
Adjusted operating profit rose 10% to $174 million and reported operating profit was up an almost-as-good 9% to $167 million.
So what was behind the improvement? Well, Coats said that its revenue growth was driven by Apparel and Footwear (up 5%) as well as by Performance Materials (up 12%), with its growth drive held back a little due to a weak performance in North America Crafts.
Group CEO Rajiv Sharma was understandably upbeat: “Coats delivered a strong performance in 2017. Momentum in Industrial continued throughout the year in key Apparel and Footwear markets, where we continued to take share, and we saw double-digit growth in hi-tech end-uses in Performance Materials.
“In an environment of rising input costs, we were able to grow our operating margins, through realising price increases, productivity and procurement gains, as well as tight control of our cost base.”
But he added that “the markets in which we operate are constantly changing. Our customers require an increased emphasis on speed, quality, value, innovation and corporate responsibility.” To answer these needs it has launched a Connecting for Growth transformation programme that should deliver increased productivity, with targeted net annualised operating cost savings of $15 million by 2020.
The CEO added that the group enters 2018 “in a strong position, with continued momentum in our Apparel and Footwear and hi-tech Performance Materials businesses.” And 2018 adjusted operating profits are expected to be slightly ahead of previous management expectations.
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