Shares in Coats Group, formerly GPG, continue to climb on the back of a trading update and last December’s settlement with the UK Pensions Regulator.
The shares, which trade on the London Stock Exchange, have more than doubled in price over the past 12 months, representing a nice gain for New Zealand shareholders who elected to transfer their holdings to the UK register.
The industrial threads specialist had sales of nearly $1.5 billion in 2016 and yesterday said group sales for the first four months of 2017 rose by 5% with 3% organic growth, driven by stronger-than-anticipated performance in the industrial division – up 7%.
The core apparel & footwear business gained 4%, despite continued mixed demand from clothing retailers and manufacturers
The only downside was the Crafts business where sales declined 5%, largely due to the business disruption caused by the tornado strike at the main crafts distribution centre in Albany, Georgia in the US on January 22.
“The estimated adverse sales impact from the Albany tornado is $10 million. However, the impact of lost profits and incremental costs of re-establishing operations in Albany are expected to be covered in full by the group's insurance cover,” Coats’ board said in a statement.
“Following the softness seen in late 2015 and throughout the majority of 2016, the US handknitting market has started to improve, with a return to point of sale growth at key retail customers in recent months.”
Coats said it had a strong start to the year, and therefore now expected to deliver 2017 full year results ahead of management's previous expectations.
“This is expected to be achieved through our initiatives to deliver market share gains and productivity improvements while maintaining a focus on tight cost control.”
Coats is the last remnant of Sir Rob Brierley's second empire, originally known as Guinness Peat Group.
The company delisted from the NZX and ASX on June 24 following a 99% approval from shareholders at its annual meeting.
Coats shares recently traded at 67.99 pence, and have climbed 134% since July.
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