15 May 2013

Coats reports flat sales

1:01 pm on 15 May 2013

Guinness Peat Group subsidiary Coats reported flat sales for the March quarter.

However on a like-for-like basis, and eliminating adverse exchange rate movements, the thread manufacturer's sales were up 5%.

Sales on a like-for-like basis at Coats' industrial division rose 4% and increased 7% at its crafts division.

GPG says although market conditions remain mixed, the improved sales momentum experienced in the second half of 2012 has continued.

Coats' operating margins have shown some encouraging progress while a combination of pricing initiatives, reorganisation benefits and productivity improvements in manufacturing and purchasing has offset structural cost inflation.

GPG says although Coats' trading outlook continues to be mixed, the business is well placed to sustain and grow both revenue and profit.

Coats' pension liabilities rose by £38 million in the three months to £273 million, reflecting unrealised market changes.

GPG says it has started a recruitment process to replace Mike Allen as chairman of Coats.

The investment company is winding up its portfolio and says its 34% stake in Tower Ltd, worth about £72 million, is its last substantial asset other than Coats.

That's after Tower announced that it is selling most of its life insurance operations for $189 million.