All following references are at CER unless specified.

The Group traded as expected during the period, with good organic revenue growth of 7% against a weak prior year comparator.

The improving trend was driven by Apparel, where revenue was 14% higher as customer inventories and buying patterns returned to more normalised levels. As previously highlighted, destocking commenced later in Footwear, creating a lag effect in the recovery relative to Apparel. Notwithstanding this lag, Footwear also returned to growth in the period, with revenue 6% higher year-on-year, as demand from several major brand customers picked up as their inventories also normalised.

Performance Materials trading in the period was in line with our expectations. Whilst the business continues to be impacted by US customer phasing issues, the division is on an improving trend, with revenue down 5% year-on-year in the period (17% lower in FY 23).

Our global market leadership in 100% recycled thread products has continued to strengthen during the period with strong growth. In addition, we can confirm that the Science Based Targets initiative (SBTi) has validated Coats’ near and long-term science-based emissions reduction targets, including verification of the Group’s net-zero target for 2050.

Our strategic projects continue to deliver significant operational and financial benefits and we remain on track to achieve overall savings of $70 million by the end of 2024. These savings, along with our focus on controlling our costs, have resulted in Group adjusted EBIT margin being at least in line with our 2024 goal of c.17%.

Cash generation remained good through the period.

Outlook

The Group continues to make good progress and the Board’s full year expectations are unchanged. This is underpinned by evidence of the expected recovery in Apparel and Footwear, an improving recent trend in Performance Materials and the continued benefits from our strategic projects albeit a level of uncertainty in our markets remains.

Over the medium term, we remain confident in the Group’s ability to deliver strong profit growth and cash generation, owing to our scale, global footprint, innovation, strong digital platform and technical support capabilities, alongside continued investment in sustainability and innovation.

The Group will release its interim results on 1 August 2024.

1. Constant exchange rate (CER) figures are 2023 results restated at 2024 exchange rates.

ENDS