Coats Group PLC (LSE:COA) expects its full-year performance to be "moderately ahead" of its previous expectations as the industrial thread manufacturer reported a spike in interim profits.
Adjusted operating profit jumped 28% on a reported basis to US$125mln for the 6 months ended 30 June compared to the same period the year before.
Revenue grew 14% to US$801mln on the back of favourable underlying market conditions and as early pricing actions helped offset inflationary pressures.
“We have made good progress in accelerating profitable sales growth and transforming the portfolio to improve margins,” said chief executive Rajiv Sharma.
"Despite inflationary pressures and supply chain challenges, Coats delivered timely pricing actions, productivity and self-help programmes to deliver significantly improved margins now well beyond pre-COVID levels.”
The FTSE-250 company expects to see more normalised growth in the second half as the stock replenishment of the first half gives way to more typical demand patterns and said it will continue to use timely pricing actions to outweigh inflationary pressure.
Coats said it was also delivering ahead of expectations on its strategic projects to transform the business.
Its focus on the premium and athleisure markets in its apparel & footwear division and its diversified end markets in performance materials has positioned the company well in the current macro-economic environment, according to the statement.
“As a result of these factors, we now anticipate the group's full-year 2022 performance to be moderately ahead of our previous expectations,” it said.