Coats Group lifts dividend as FY profits grow

Industrial thread maker Coats Group posted a rise in full-year profits and revenue on Thursday and lifted its dividend as it hailed the benefits of recent acquisitions.

In the year to 31 December 2022, adjusted pre-tax profit increased to $206.8m from $181.6m a year earlier. Adjusted operating profit rose to $235m from $181m, in line with market expectations. Coats said this reflected "strong pricing and mix fully offsetting inflation, as well as part-year contribution from acquisitions and strategic projects".

Revenue grew 9% to $1.6bn and the company lifted its dividend by 15% to 2.43 cents per share.

Chief Rajiv Sharma said: "Coats produced a strong set of results in 2022, a year which was characterised by high inflation and supply chain disruption. Organic revenue growth was 10%, above our targeted medium-term growth of around 6%, and organic adjusted operating profit increased 22%.

"We made further excellent progress in transforming the group during the year, and this has made Coats a stronger, fitter and more focused group, enhancing our leading market positions in industrial thread and footwear component markets. The 2022 acquisitions of Texon and Rhenoflex have not only significantly strengthened our position in the attractive footwear market but also increased our medium-term organic growth and margin potential."

Coats said it continues to anticipate a full-year 2023 performance in line with its expectations, with a weighting to the second half.

"This performance will be underpinned by the contribution from acquisitions, in addition to associated synergies and efficiencies from strategic projects," it said.

At 0925 GMT, the shares were up 6% at 77.53p.