Coats Group (COA) H1 2025 earnings summary

Executive summary

• Achieved strong H1 results with 2% constant currency revenue growth to $705m/£705m, adjusted EBIT up 7% to $140m, and record 19.8% margin, meeting medium-term targets ahead of schedule despite market uncertainty and order deceleration due to U.S. tariffs and consumer confidence.

• Completed exit from North American/US Yarns business, improving group margin and focusing on higher-growth segments.

• Announced acquisition of OrthoLite Holdings LLC for $770m, expanding the Footwear division and creating a market-leading Super Tier 2 supplier in footwear components.

• Leadership in 100% recycled thread products, with revenue up 73% to $269m, and organic adjacency sales up 30% year-over-year.

Financial highlights

• Revenue up 2% at constant currency to $705m/£705m; Apparel +3% CER to $381m/£381m, Footwear +1% CER to $199m/£199m, Performance Materials -2% CER to $125m/£125m.

• Adjusted EBIT up 7% at constant currency to $140m; margin improved by 90–100bps to 19.8%; adjusted EPS up 4% to 4.7c.

• Free cash flow before dividends rose to $54m/£54m (prior year $39m/£39m); net debt at $430m, leverage at 1.4x.

• Interim dividend of 1.0c/£0.01 per share, up 7.5–8% year-over-year.

• ROCE at 38% (vs 35% prior year); operating cash conversion above 90%.

Outlook and guidance

• Full-year outlook unchanged and in line with market expectations; balanced H1/H2 weighting and further free cash flow growth expected.

• Q3 trading anticipated to be in line with Q2, with some recovery expected in Q4 based on historical demand patterns.

• Confident in delivering profit and cash despite ongoing market uncertainty and dynamic tariff environment.