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LONDON - Coats Group (LON:COA) plc, the world’s leading industrial thread and footwear components manufacturer, reported a 2% increase in revenue on a constant exchange rate basis to $705 million for the first half of 2025, with adjusted EBIT rising 7% to $140 million.
The company achieved an adjusted EBIT margin of 19.8%, up 100 basis points from the prior year period, reaching its medium-term target range of 19-21%. This performance was driven by strong pricing, favorable product mix, and productivity improvements across its portfolio.
"We have outperformed our markets, achieving top-line growth in a period of significant external uncertainty due to tariffs, and delivered our medium-term margin target in advance of plan," said David Paja, Group Chief Executive.
The company reported adjusted earnings per share of 4.7 cents, up 4% from the same period last year. Free cash flow before dividends increased to $54 million from $39 million in the first half of 2024.
Coats also announced it has signed a definitive agreement to acquire OrthoLite Holdings LLC, a footwear insole manufacturer, for $770 million. The acquisition will be funded through a combination of new debt facilities and an equity placing of up to 19.99% of issued share capital, with completion expected in Q4 2025.
By division, Apparel revenue grew 3% on a CER basis to $381 million, while Footwear increased 1% to $199 million. The Performance Materials segment saw a 2% decline to $125 million but is expected to return to growth in the second half.
The company completed its exit from the low-margin US Yarns business in June 2025, which has improved the division’s margin by around 230 basis points and the Group’s margin by around 90 basis points.
The Board declared an interim dividend of 1.0 cent per share, an 8% increase from the prior year.
Looking ahead, Coats maintained its full-year outlook in line with market expectations, despite ongoing uncertainty related to US tariffs. The company expects balanced performance between the first and second halves of the year.
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