China smartphone shipments slumped in June on inventory overhang: Jefferies
Investing.com -- Coats Group (LON:COA) reported a solid start to 2025, with group revenues rising 4% at constant exchange rates over the first four months, driven by strong performances in Apparel and Footwear, both up 5%.
Reported growth for the period from January 1 to April 30 was slightly softer at 2%. Performance Materials remained flat, excluding the now-discontinued U.S. Yarns business, as demand in several end markets remained subdued.
The company highlighted margin expansion in line with its medium-term targets, supported by operational efficiencies. A key development was the planned exit from its low-margin U.S. Yarns business, sold for $16 million, with completion expected in June. The move is expected to boost portfolio quality and group margins.
Looking ahead, Coats reaffirmed its full-year outlook, with first-half EBIT margins expected to be within the 19–21% target range. The company acknowledged geopolitical uncertainty linked to new U.S.-led trade tariffs but said it remains well-positioned due to its global footprint, pricing power, and low capital intensity.
“We have traded well in the first few months of 2025 and expect to finish the first half with performance ahead of the prior year," said CEO David Paja. “Our client relationships, global footprint and high-quality product portfolio will underpin the delivery of market leading growth and profitability.”
Interim results are due on 31 July.
"We view this as a very respectable 4-month trading update from Coats given the circumstances," Jefferies analysts commented.
"While concerns over the FY outturn will not be fully put to bed given the lack of visibility beyond 1H, we believe the share price has been anticipating a much more adverse release," they added, reiterating their Buy rating on the stock.