Guinness Peat Group plc 'GPG'

COA
22/05/2015 08:30
GENERAL
PRICE SENSITIVE
REL: 0830 HRS Coats Group plc

GENERAL: COA: Trading update

21 May 2015

Coats Group plc

Trading update

Coats Group plc ('Coats' or the 'Company'), the world's leading industrial
thread and consumer textile crafts business, announces a trading update for
the period 1 January to 30 April 2015 ahead of its Annual General Meeting
later today.

Year-on-year sales performance (January to April)

[see attached table]

Group
Coats' trading since the start of the year has been in line with management
expectations as the positive sales momentum in the Industrial business has
continued into 2015.

Sales during the first four months increased by 3%3 year-on-year on a
like-for-like (constant currency) basis, despite an expected decline in
Crafts sales. The 3%3 decline in group sales on an actual currency basis
reflected the strengthening of the US dollar primarily against the Brazilian
Real and Euro.

Industrial
Industrial sales increased 6% on a like-for-like basis compared with the
first four months of 2014. Coats delivered strong sales growth in Asia,
driven by Apparel & Footwear demand, and in the Americas through Speciality
growth in North America. Sales in EMEA were relatively flat due mainly to
weaker demand for zips.

The Speciality business continued to deliver double digit sales growth, up
14%, driven by growth across all regions following strong performance in the
automotive, protective clothing and wire & cable markets. Apparel & Footwear
sales, which includes zips, trims and services, increased by 4% on a
like-for-like basis, primarily driven by volume growth and the strong
performance in Asia.

Crafts
Crafts saw a 6% like-for-like decline in sales. The Americas business
continued to deliver growth in its core handknitting product range, however
as expected total sales fell due to a decline in fashion handknitting sales
following a peak in demand in 2013 that continued into early 2014.

Sale of EMEA Crafts
As announced on 19 February 2015 Coats agreed to sell its EMEA Crafts
business to the Aurelius Group for a total consideration of US$10 million,
payable in cash on completion and subject to customary adjustments. The sale,
which is complex given the number of jurisdictions involved, is subject to a
limited number of conditions usual for this type of transaction, and is
expected to be completed during Q2 2015 or very soon thereafter.

Lower Passaic River
In April 2015 a Cooperating Parties Group, which includes Coats and Clark
Inc., a subsidiary of the Company, submitted a remedial investigation and
feasibility study ('RI/FS') to the US Environmental Protection Agency
proposing remedial action for the Lower Passaic River in New Jersey. The
Company is assessing the accounting implications, if any, of the RI/FS, and
will provide an update as part of the Company's H1 results.

UK Pensions Regulator's investigations
As previously announced, Coats Group received a Warning Notice ('WN') from
the UK Pensions Regulator ('tPR') in relation to the Coats UK Pension Plan in
December 2014. Written representations in response to the Coats WN will be
submitted by the end of July, within the required timeframe. tPR has
previously indicated that it believes it would be appropriate for the
Determinations Panel to hear the cases for the Brunel and Staveley pension
plans (for which WN's have been received and written representations made) at
the same time as the Coats Plan, which means that any hearing is unlikely
before the second half of 2016 at the earliest.

Acquisition of GSD
In early May, Coats acquired GSD Corporate Ltd, a UK based company which
supplies expert management solutions that analyse time, cost and production
capability in the sewn products sector with the focus on maximising
productivity and controlling costs. GSD becomes part of Coats Global Services
and will enhance its end to end Operational Excellence offering, which
provides practical, industry-specific technical services, training,
technology solutions, quality assurance and compliance. Revenues in 2014 were
approximately US$2 million.

Outlook
The continuing business of Coats has made a good start to the year and is on
track to at least deliver management expectations, which were outlined in the
Company's full year results announcement of 26 February 2015.

1 Like-for-like restates 2014 figures at 2015 exchange rates
2 EMEA Crafts business being sold
3 From continuing operations

Enquiry details
UK media Richard Mountain +44 20 3727 1374
New Zealand and Australian media Geoff Senescall +64 9 309 5659
Investors Jaideep Thatai +44 20 8210 5086
End CA:00264653 For:COA Type:GENERAL Time:2015-05-22 08:30:31

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