Coats Group (LSE: COA) shares closed up 12.8% at 101.00 pence on Thursday, making it the day’s biggest gainer in London. The surge came after the company reported strong first-half results and an optimistic outlook for 2024.
Key points:
- Pretax profit: Up 31% to $102.9 million in the first half of 2024, from $78.6 million last year.
- Revenue: Grew 6.6% to $740.7 million from $695.0 million.
- Interim dividend: Raised by 15% to 93 cents from 81 cents per share.
Coats cited a recovery in both footwear and apparel sectors for its performance. The company noted that footwear recovery lagged slightly behind apparel due to later destocking, but is now growing up to 7%.
Looking ahead, Coats expects its 2024 performance to be modestly ahead of current market expectations. The market currently anticipates an adjusted operating profit of $261.1 million, with a range of $256.3 million to $266.5 million. The lower end of this range would be 9.8% higher than the $233.4 million reported for 2023.
The company’s ability to grow revenue while managing costs – with cost of sales increasing by just 0.6% – appears to have impressed investors. However, administrative costs rose by 13% to $91.2 million.
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