REG - Coats Group PLC - Trading Statement

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RNS Number : 5754G  Coats Group PLC  07 November 2025

 

 

 

7 November 2025

Coats Group plc

Full year in line with expectations, resilient trading, good strategic
progress

Coats Group plc ('Coats' or the 'Group'), a world-leading Tier 2 supplier of
critical components to the apparel and footwear industries, today announces a
trading update for the four-month period 1 July to 31 October 2025 ('the
period').

 

All the following references are at Constant Exchange Rates (CER) unless
specified.

 

Group Performance

 

Market conditions in the period remained subdued, with continued caution in
customer ordering patterns as a result of sustained macroeconomic and tariff
uncertainty. Against this backdrop, the Group delivered a resilient
performance, in line with our expectations.

 

Group revenue in the period was down 1%. We saw encouraging growth in target
organic adjacencies as well as further outperformance in core markets. We have
also successfully managed pricing pressures and flexed our cost base in the
period. As a result operating profit was at a similar level to the same period
last year, with margins consistent with H1 2025 and improved from prior year,
in line with our Group medium term margin target of 19-21%.

 

Cash generation has remained strong. As anticipated, leverage increased due to
the completion of the OrthoLite acquisition at the end of October. We expect
year-end leverage to be c.2.2x, consistent with previous guidance, and
leverage to fall below 2x by the end of 2026 given the sustained improvement
in cash generation.

 

Divisional Performance

 

Apparel

 

Apparel delivered a robust performance in the period with revenue 2% below the
prior year period due to challenging end markets. A focus on excellent service
and operational agility enabled us to outperform and win share with major
brands alongside good growth in China domestic. The division maintained
operating margins at c.20% during the period reflecting pricing discipline and
favourable mix with customers valuing our premium and sustainable thread
offerings.

 

Footwear

 

Footwear revenue was 4% lower than the prior year period, stabilising at
similar run rates to Q2, a reflection of cautious customer ordering patterns
given the ongoing market uncertainty. As expected, operating margin increased
during the period, driven by operational initiatives implemented in the past
year and an effective pricing strategy. As a result operating profit was in
line with the same period last year.

 

OrthoLite, prior to completion, has continued to perform well, delivering
strong revenue growth and maintaining high operating margins. We remain
excited about the potential of this high-quality, margin accretive business,
which will enable us to expand into the growing open cell insole segment of
the footwear market.

 

Performance Materials

 

Performance Materials continued to deliver an improving performance. As
expected, there was a return to growth in the period with revenue increasing
4% compared to the prior year, driven by accelerated growth in two target
adjacencies, safety fabrics and energy tapes, alongside market share gains in
automotive thread which offset softness in Telecom end markets. Operating
margins for the period were significantly ahead of prior year reflecting the
benefit of operational improvements across the division.

 

Divisional Structure Change

 

On 30 October the Group announced that it has streamlined its organisation
structure into two divisions: Apparel and Footwear, to reflect the
transformation of the Group's profile following the exit from the North
America Yarns business and the acquisition of OrthoLite. This change reduces
internal complexity and aligns the divisions more closely with the underlying
textile engineering and polymer science technologies. Coats' external
reporting will align to this new structure with effect from the next financial
year, the year ending December 2026.

 

Outlook

 

Given the resilient performance year to date, the Group's full year outlook
remains unchanged, with trading performance in line with market expectations.

 

The acquisition of market-leading OrthoLite and the portfolio rationalisation
actions now taken have improved the quality of the Group. As a result we are
on track to continue our outperformance of underlying market growth supported
by expansion into target adjacencies and deliver strong cash generation and
further margin progression in the medium term. Our confidence is underpinned
by our unrivalled global footprint, proprietary technology and sustainability
led innovation.

 

The Group will release its Full Year 2025 results on 5 March 2026. An updated
financial framework will be provided at the March results.

 

Enquiries

 Coats Group plc (Investors)                                                                                            Tel: +44 (0) 797 497 4690

 Chris Dyett

 FTI
 (Communications)

 Nick Hasell

 Victoria Hayns

                                                                                                                        Tel: +44 (0) 20 3727 1340

About Coats Group plc

Coats is a world-leading Tier 2 manufacturer and trusted partner for the
apparel and footwear industries. We deliver essential materials, components,
and software solutions that help our customers grow, compete and win.

 

With over 250 years of industry expertise, we're shaping the future of the
apparel and footwear supply chain through insight-led innovation, impactful
sustainability practices, and digital technologies that unlock better product
quality, efficiency and performance.

 

Headquartered in the UK, Coats is a FTSE 250 company and a constituent of the
FTSE4Good Index. In 2024, we generated $1.5 billion in revenue and employed
16,000 people worldwide - all united by a spirit of innovation, quality and
service. Learn more at www.coats.com or follow us on LinkedIn.

 

Cautionary statement

Certain statements in this full year report are forward-looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, we can give no assurance that these expectations
will prove to have been correct. Because these statements contain risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements. We undertake no obligation to
update any forward-looking statements, whether as a result of new information,
future events or otherwise.

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