Coats Group shareholders can look forward to a positive AGM later today (22 May) with the industrial threads maker reporting a mostly positive performance across its divisions in the four months to 30 April.

In a trading update Wednesday morning, Coats said it has returned to revenue growth, in line with expectations.

Headline performance was “good” organic revenue growth of 7%, albeit against a weak prior year comparison.

The improving trend was driven by Apparel, where revenue drove 14% higher “as customer inventories and buying patterns returned to more normalised levels”.

It noted that destocking had begun later in the Footwear sector, “creating a lag effect in the recovery relative to Apparel”. So the recovery here trailed with revenue up 6% year on year, “as demand from several major brand customers picked up as their inventories also normalised”.

Performance Materials trading in the period was also in line with expectations. Here too the business is making slow progress as it continues to be “impacted by US customer phasing issues”. But the division is on an improving curve. Revenue was still down 5% in the period, but that was better than the 17% fall in FY23. 

In other positive news, Coats said its global market leadership in 100% recycled thread products “has continued to strengthen during the period with strong growth”. The Science Based Targets initiative (SBTi) has validated Coats’ near- and long-term science-based emissions reduction targets. And strategic projects continue to deliver “significant operational and financial benefits”. Meanwhile, it remains on track to achieve overall savings of $70 million by the end of 2024.

The latter means the group adjusted EBIT margin will be at least in line with its 2024 goal of around 17%.

And the outlook? We’re told “the group continues to make good progress and the board’s full year expectations are unchanged. This is underpinned by evidence of the expected recovery in Apparel and Footwear, an improving recent trend in Performance Materials and the continued benefits from our strategic projects albeit a level of uncertainty in our markets remains.”

It added: “Over the medium term, we remain confident in the group’s ability to deliver strong profit growth and cash generation, owing to our scale, global footprint, innovation, strong digital platform and technical support capabilities, alongside continued investment in sustainability and innovation.”

The company will release its interim results on 1 August.