CO. Coats

    23 January 2003
 
 
                                   Coats plc - Trading update, acquisition, disposal                                   
                                                                                                                       
Trading update
In the core Thread business, 2002 full year operating profit (pre-reorganisation cost) is expected to be broadly in
line with market expectations and modestly ahead of the previous year.

As forecast in the interim statement, Thread trading in the second half recovered strongly and sales for the six months
to December were 8% ahead of the previous year at constant exchange rates. This included an outstanding performance
from Asia where second half sales grew by 25% as local garment manufacturers continued to benefit from a growing share
of Western markets. Second half operating margins across the division are expected to be significantly higher than the
previous year as a result of cost reduction initiatives and improved capacity utilisation.

The Group's full year results will be published on 26th March.

Acquisition
In line with our strategy of increasing investment in strategically important Thread markets, Coats' subsidiary in
Brazil has signed an agreement to acquire the industrial thread business of Vicunha Textil, Brazil's largest textile
manufacturer, for US$10 million. Vicunha's thread sales amount to approximately US$11million and transfer of the
business will take place at the beginning of March.  Coats is being advised by HSBC Bank.

Disposal
Coats announces the sale of Jaeger and Viyella to Riverhawk Investments Limited, a company established by Richard
Thompson.  This disposal follows Coats' announcement of 12th September 2002, which stated that Coats was seeking to
divest its fashion retail division.  On behalf of Coats, HSBC Bank undertook an extensive disposal process including
discussions with a wide range of potential purchasers.  Under the terms of the agreement, the businesses have been sold
for a nominal consideration with Coats retaining certain assets, primarily including rights to the long-term lease on
Jaeger's flagship store on Regent Street and Jaeger's US business, which will continue to operate using the Jaeger name
under licence.

For the year to 31 December 2001, Coats' Fashion Retail Division (of which the businesses being sold comprise the
majority) reported sales of �156 million and an operating loss of �2 million. For 2002 on the same basis, management
accounts indicate an operating loss for the division of approximately �17 million on sales of �135 million.  Book value
of the net assets being sold amounts to �36 million.  Estimated operating losses attributable to the assets being sold
amounted to �2 million in 2001 and approximately �13 million in 2002.

Coats expects to record an exceptional charge on the disposal of approximately �38 million (including provision for
fees and other costs) in its 2003 accounts, substantially all of which relates to asset write-offs.  Book value of the
net assets currently being retained is approximately �11 million.  Based on external valuations, eventual realisation
of the retained assets is expected to lead to a net cash inflow of approximately �24 million.

Discussions with potential buyers of Bedwear continue and an announcement will be made in due course.

Martin Flower, Coats plc Chief Executive said:

"In the current economic climate, we are pleased to announce a strong second half performance from our core Thread
business. This has been largely due to our strong position in Asia which has been built up over many years and is of
ever-increasing importance in responding to the relocation of Western apparel and footwear manufacturing. We are also
glad to be able to announce a further increase in our presence in other key strategic markets through our latest
acquisition in Brazil.  The disposal of Jaeger and Viyella is a major step toward completing our strategy of focusing
entirely on Coats' global Thread business."

Enquiries:
Jonathan Lea            Finance Director, Coats plc          020 8210 5020                               
Patrick Handley         Brunswick Group                      020 7404 5959                               
Katya Reynier                                                                                            
About Coats

Coats plc, the world's largest manufacturer of industrial sewing thread and consumer needlecraft products is listed on
the London Stock Exchange under the symbol CO/. Additional information about Coats can be found at www.coats.com.

About Jaeger and Viyella

Jaeger is an international men's and women's retail brand focusing on elegant modern clothing in a classical style.
Viyella offers classic and versatile women's clothing with an emphasis on excellent quality and service. The assets
include a portfolio of UK high street stores and concessions with national coverage. The Jaeger businesses being sold
also include retail operations in Switzerland, Denmark, Belgium, the Channel Islands and Canada. Additional information
about Jaeger and Viyella can be found at www.jaeger.co.uk and www.viyella.co.uk.


                                                                
                                                                
                                                                

Coats (LSE:CO.)
Gráfica de Acción Histórica
De May 2024 a Jun 2024

Coats (LSE:CO.)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024