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(Alliance News) - Coats Group PLC on Thursday reported improving sales momentum in the later months of 2020 following the impact of the Covid-19 pandemic on sales earlier in the year.
The Uxbridge, England-based industrial thread manufacturer reported 2020 revenue of USD1.16 billion, which is down 16% from USD1.39 billion in 2019, while pretax profit fell to USD79.6 million from USD166.8 million. This was due to the launch of 22 new products during the year, which generated USD13 million in revenue that helped to offset hurt sales in early 2020 as a result of the pandemic.
Sales began to improve in the second half of the year, with adjusted operating profit recovering to be ahead of Coats' previous expectations and continued share gains from customers in Apparel & Footwear.
Coats reinstated a final dividend of 1.30 US cents for 2020 as a result of "the strength of the balance sheet, the encouraging recovery, and the board's confidence in the strategy and outlook for the group." It did not pay a dividend for 2019.
Shares in Coats were down 0.2% at 63.80 pence in London on Thursday.
"During a turbulent year, which saw the emergence of Covid globally, we focused on four key priorities: the health and safety of our employees and their families, cash management, supporting our customers and maintaining the critical elements of our supply chain. We have delivered a strong operational performance despite a very difficult global backdrop. Throughout 2020, the group moved quickly and prudently to put in place measures to underpin our future success and, through 2021, we will continue to invest in order to win the Covid recovery. We have a strong balance sheet, which provides strategic optionality and positions us well to navigate the ongoing challenging environment," said Chief Executive Rajiv Sharma.
Looking ahead, Coats said it remains cautious about its recovery and will be "vigilant" regarding inflationary pressures within its supply chain.
"Notwithstanding this uncertainty we are encouraged by our improved trading performance towards the end of last year as well as in the first two months of this year, and the board expects to see continued recovery through 2021," said Sharma.
By Zoe Wickens; zoewickens@alliancenews.com
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