LONDON (ShareCast) - (Sharecast News) - Industrial thread and shoe component maker Coats on Thursday upgraded medium-term targets as it reported a jump in annual earnings, driven by its apparel and footwear divisions.
Pre-tax profit jumped to $172.1m from $155.8m a year earlier. Operating profit increased to almost $200m from $184m on an 8% rise in revenue to $1.5bn.

Footwear and apparel revenues climbed 10% and 13% respectively as customer inventory and buying patterns returned to more normalised levels.

Coats said it was seeing "attractive opportunities arising with Chinese and Indian domestic brands" while the performance materials division "remains an attractive growth business with exposure to multiple industrial end markets which are showing improving trends and good prospects longer term".

However, results were affected by structural issues in the North American Yarns business and destocking at some US telecommunications customers, it added.

The company also updated medium-term targets, aiming for more than 5% average organic revenue growth and operating profit margins to grow to 19-21%. Coats expects to generate more than $750m in adjusted free cash flow after interest and tax and before dividend distribution over next five years which will support an "active" capital allocation policy, focused on accelerating compound earnings growth.

Reporting by Frank Prenesti for Sharecast.com

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