In This Article:
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Revenue Growth: Reported revenues up 7%, with an 8% increase in constant currency terms.
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Apparel Division Revenue: 14% growth in constant currency.
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Footwear Division Revenue: 7% growth in constant currency.
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Recycled Products Revenue: 141% growth, reaching $159 million in the half.
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Adjusted EBIT Margin: 18%, up 250 basis points.
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Adjusted Free Cash Flow: $59 million.
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EPS Growth: 27% increase in earnings per share.
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Interim Dividend: Increased by 15% to $0.0093 per share.
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Net Debt: $381 million, with leverage at 1.4 times.
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Apparel Division EBIT Margin: 19.1%, up 310 basis points.
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Footwear Division EBIT Margin: 24.1%, up 340 basis points.
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Performance Materials Revenue: 3% decline in the half.
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Performance Materials EBIT Margin: 8.3%, with a pro forma margin of 10.5% excluding certain costs.
Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Coats Group PLC (CGGGF) reported a strong revenue growth of 7% in the first half, with an 8% increase in constant currency terms.
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The company achieved a significant milestone with a 141% growth in recycled products, contributing $159 million in revenue.
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Coats Group PLC (CGGGF) delivered an 18% adjusted EBIT margin, the best since rejoining the London Stock Exchange in 2015.
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The company generated a healthy $59 million adjusted free cash flow, supported by market recovery and improved operating results.
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The Board increased the interim dividend by 15%, reflecting confidence in the business strategy and strong cash generation capabilities.
Negative Points
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Performance materials division faced challenges due to customer phasing issues in some US end markets, impacting revenue.
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The company experienced a 3% revenue decline in the performance materials division in the first half.
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There are ongoing operational challenges in ramping up production at the new plant in Toluca, Mexico.
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The performance materials division's adjusted EBIT margin was lower due to under-recovered costs related to production transition.
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The US market remains cautious, with expected positive momentum only anticipated in the first quarter of next year.
Q & A Highlights
Q: Could we talk a little bit about the shape of sales growth in H2, considering the challenging comps? A: Rajiv Sharma, Group CEO, explained that they expect a slow, gradual recovery with each quarter slightly better than the previous one. While the comps get harder in the second half, the trend is consistent with their previous predictions of a gradual recovery.