Threads manufacturer Coats Group PLC (LON:COA) has today reported broadly flat full year revenues as a decline in sales at its struggling crafts business offset a slight increase in the industrial division.
Revenues dipped 1% to $1.45bn in 2016 on a reported basis, compared to $1.47bn the previous year.
Sales in the industrial division rose 1% to $1.22bn from $1.21bn, supported by the introduction of new products and an increase in market share.
The crafts business posted a 9% drop in sales to $236mln from $260mln, reflecting a sharp contraction in the US handknitting market due to a mild winter in North America.
Adjusted operating profit rose 13% to $157.9mln from $139.9mln, buoyed by tight cost control and market share gains.
Earnings per share increased to $4.60 from $1.81 as last year’s results were hit by higher exceptional costs following the 2015 sale of its crafts unit in the Europe, the Middle East and Africa region. Coats also closed its loss-making UK crafts operations in the second half of 2016.
The company recommended a final dividend of 84c per share, totalling a pro-forma full year dividend of $1.25. Coats did not pay a dividend in 2015.
“Uncertainty, volatility and pricing pressures characterised 2016,” said newly appointed chief executive Rajiv Sharma.
“In the Crafts division, challenging market conditions continued, especially within the handknittings segment, although showed an improving trend in the second half of the year, and cost actions were taken to manage margins.”
Following a restructuring, Coats believes it enters this year on a solid footing. However, it remains cautious about market conditions.
The group expects to deliver growth in line with management's expectations through initiatives to improve market share and productivity along with cost cuts.
“The growth is projected to be weighted to the second half of the year due to strong profit growth in H1 2016, and may also be subject to further foreign exchange headwinds on translation that have been seen in recent periods,” Coats said in a statement.
Shares fell 4.52% to 55.62p in afternoon trading.