Financial highlights
- Revenue growth of 2% on an organic CER basis in line with May trading update; 3% decline on a reported basis as a result of anticipated H1 weighted foreign
exchange translation headwinds. - Apparel and Footwear revenue growth of 1% (2% growth excluding portfolio rationalisation actions e.g. tail markets); Performance Materials revenue up 4% driven by strong growth in strategic focus areas of Telecoms and Energy and Personal Protection.
- Adjusted operating profit up 8% (up 3% on a reported basis) with Connecting for Growth programme delivering a full period of benefits and focus on operational efficiencies, offsetting some gross margin decline; adjusted operating margin up 80bps to 14.5%.
- Adjusted EPS down 4% to 3.4 cents; excluding temporary mark-to-market foreign exchange impacts, the initial impact of IFRS16 (leases), and legacy interest charges in the period EPS growth was 4%.
- Adjusted free cash flow for the period of $21 million up 24% supported by a strong Balance Sheet.
- Strong progression in reported operating profit to $101 million (up 27%) and basic EPS of 3.4 cents (up 47%), reflecting continued strategic progress and minimal net exceptional costs in the period compared to H1 2018.
Commenting on the Half Year Results Rajiv Sharma, Group Chief Executive, said:
‘I am pleased to report a robust performance in the first half despite mixed conditions in underlying retail and industrial markets. Our market-leading Apparel and Footwear thread business benefited from our continued focus on product innovation, digital solutions as well as our leading corporate responsibility and sustainability credentials. In our Performance Materials business, we saw strong growth in some emerging markets and key strategic focus areas, and an acceleration in the performance of recent acquisitions.
Our improved operating margins, strong cash flow generation and underlying earnings growth reflect continued cost control and the benefits of Connecting for Growth. This programme is now mostly complete and will conclude this year. The savings achieved have funded reinvestments in the areas of innovation, digital and talent, which will benefit us in the future. We will also continue to invest capital in both value-adding organic and inorganic opportunities across our global network. As a reflection of our confidence in the future direction of the business we have announced a 10% increase in the interim dividend.
In the second half of the year we will continue to drive performance through our focus on customer service and building on our innovation and digital capabilities, supported by our self-help initiatives. Our full year earnings per share will be impacted by the highlighted foreign exchange movements, IFRS16 changes and certain legacy interest charges. However, whilst we remain mindful of current macroeconomic uncertainties, we anticipate delivering 2019 full year adjusted operating profit in line with our expectations.’