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GPG’s Coats lifts first quarter sales as industrial division bounces back from 2013

Guinness Peat Group's [NZX: GPG] Coats unit boosted first-quarter sales 2 percent in the first three months of the year, and expects to complete its migration to the UK threadmaker's offices next month.

GPG, which plans to take on the Coats name, said the gain in the threadmaker's group sales in the first quarter was driven by a 4 percent gain in its industrial division, offsetting a 3 percent fall in sales in its crafts division. On a common currency basis, group sales were up 5 percent, with an 8 percent gain in the industrial division and a 2 percent decline in the crafts division.

Coats' industrial unit benefited from demand in Asia for apparel and footwear, and growth in speciality and zips in Europe, Middle East and Africa. The crafts division was hindered by a shift in Scandinavia from retail sales to a distributor model.

"Coats anticipates that overall trading performance for the year to 31 December 2014 will be in line with market expectations," the company said in a statement.

GPG said it's continuing to reduce group costs, and the board expects to complete the downsizing and migration of support services to Coats on June 30, when it will close its London office and the remaining GPG employees will leave.

The investment firm generated about $1.4 billion from the asset sale programme it embarked on in 2011 after a shareholder revolt over plans to split up the company along regional lines saw a board shake-out. It had cash of some $773 million as at Dec. 31 from $490 million a year earlier, and shareholders' funds of $896 million, up from $876 million at the end of 2012.

GPG is still engaging with the UK Pensions Regulator over group pension obligations, which is holding up a capital return to shareholders.

The company will hold its annual meeting in London May 22, and announce first-half results on Aug. 13.

The shares slipped 0.7 percent to 67.5 cents yesterday, and have gained 14 percent this year.

(BusinessDesk)

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