Highlights1
- Revenue of $718 million maintained; lower sales growth in Q2 due to tougher market conditions
- Operating profit up 24% to $77 million on an adjusted basis (up 44% reported)
- Industrial profit growth of 27% delivered by market share gains and cost productivity
- Americas Crafts margin increased, despite tough market conditions, due to focus on costs
- Adjusted EPS up 24% to 2.08c with higher operating profit and reduction in tax rate offset mainly by unrealised losses on foreign exchange hedges; reported EPS of 1.90c (2015 continuing: 0.25c)
- Adjusted free cash flow for last twelve months of $82 million (June 2015: $75 million) primarily due to higher profitability
- Acquired Gotex and Fast React; last year’s acquisition GSD performing well
- Continuing settlement discussions with Trustees of the three UK pension schemes and engaging with UK Pensions Regulator to seek to achieve a resolution of investigations
Commenting on Coats first half 2016 results Paul Forman, Group Chief Executive, said:
‘Coats continued to perform well in the first half of 2016 with operating profit growth of 24%. In challenging market conditions, which led to lower sales growth in Q2, we continued to take market share, introduce new and innovative products and drive customer adoption of our eCommerce platform.
We delivered productivity gains, tightly managed our overheads and greater sales volumes led to a positive operational gearing effect. We completed the acquisitions of Gotex and Fast React, both of which have leading positions in their markets and we are confident they will deliver strong growth under Coats’ ownership.
We will build on progress made during the first half and focus on maintaining our strong cash flows. However, the tougher market conditions that impacted Q2 sales performance are likely to persist, particularly given macroeconomic uncertainty. On balance we therefore maintain our previous 2016 guidance.’
- All revenue and profit figures in highlights on an organic, constant exchange rate (see footnote 2) basis, unless otherwise stated
- On a constant exchange rate (CER) basis restates H1 2015 figures at H1 2016 exchange rates.
ENDS