Coats revenues slip as FX headwinds weigh on growth

Industrial thread company Coats Group saw reported sales slip in the first four months of the year as a result of currency translation headwinds.

While group sales grew 2% year-on-year on an organic basis, reported sales reduced 3% due to FX headwinds on the Indian Rupee, Turkish Lira and Brazilian Real.

However, Coats did note the impact of these translation headwinds was expected to be weighted to the first half of the year, following the tailwinds seen in the same period in 2018.

Coats' apparel and footwear business grew 2% year-on-year as underlying retail markets remained mixed but supportive. The group told investors that its growth was driven by "a robust performance in the core thread business", which grew 3%.

The FTSE 250 resident's performance materials unit grew 4% year-on-year, driven by double-digit growth in hi-tech end uses such as Wire and Cables, but noted some ongoing offset from traditional end-use segments in North America, as well as the phasing of certain customer programmes.

Whilst Coats said it remained cautious of current macroeconomic uncertainties, the group anticipates its 2019 full-year performance will be in line with the expectations of its board.

As of 0915 BST, Coats shares had fallen 3.87% to 79.40p.