UK industrial thread giant Coats’ sales in the four months ending April went up seven per cent at constant exchange rates and four per cent on an organic basis. Reported sales were up two per cent in the apparel and footwear sub-division and 17 per cent in performance materials. But the crafts division saw sales falling three per cent.
Craft sales fell largely due to the business disruption caused by the tornado strike at the distribution centre in the US. However, the impact of lost profits and incremental costs of re-establishing operations there are expected to be covered in full by the group’s insurance cover.
Coats is an UK industrial threads giant. The four per cent growth in total group sales on a reported basis, which is lower than the five per cent constant exchange rate growth, reflects the stronger dollar, primarily against the Turkish lira, Mexican peso and Egyptian pound, compared to the same period in 2016.
The good results came despite continued mixed demand from clothing retailers and manufacturers. An improvement in the US consumer durables markets helped as also the contribution of Gotex, acquired in June 2016.
Coats has had a strong start to the year and now expects to deliver 2017 full-year results ahead of expectations.