ADVFN Logo

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for charts Register for streaming realtime charts, analysis tools, and prices.

COA Coats Group Plc

81.10
-0.70 (-0.86%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Coats Group Plc LSE:COA London Ordinary Share GB00B4YZN328 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.70 -0.86% 81.10 81.60 81.90 82.30 79.90 79.90 1,989,436 16:35:16
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Textile Goods, Nec 1.42B 56.5M 0.0354 23.11 1.31B

Coats Group PLC Annual Financial Report (1346Z)

10/03/2017 9:32am

UK Regulatory


Coats (LSE:COA)
Historical Stock Chart


From Mar 2019 to Mar 2024

Click Here for more Coats Charts.

TIDMCOA

RNS Number : 1346Z

Coats Group PLC

10 March 2017

10 March 2017

COATS GROUP PLC

Annual Financial Report 2016

Coats Group plc ('Coats' or the 'Company') has today submitted to the Financial Conduct Authority's national storage mechanism its Annual Financial Report for the year ended 31 December 2016 ('Annual Report 2016'), as required by UK Listing Rule 9.6.1.

The Annual Report 2016 is available from the Company's website, www.coats.com/ara2016, and will also be available for viewing at the Financial Conduct Authority's national storage mechanism at www.morningstar.co.uk/uk/NSM.

This announcement also contains as appendices additional information for the purposes of compliance with the UK Disclosure Rules and Transparency Rules, including principal risk factors, a responsibility statement and details of related party transactions. This information is extracted, in full unedited text, from the Annual Report 2016. The Preliminary Announcement released on 24 February 2017 contained a condensed set of financial statements together with extracts of the Company's management report, and is also available to view on the Company's website www.coats.com/investors. These announcements should be read in conjunction with and are not a substitute for reading the full Annual Report 2016.

Stuart Morgan

Company Secretary

10 March 2017

Enquiry Details

   Rob Mann                               Coats Group plc                   020 8210 5175 

Appendix

Principal Risks overview

A description of the principal risks the company faces is extracted from pages 22 to 24 of the Annual Report 2016.

During the year the Board, supported by the Group Risk Management Committee, has continued to consider a broad range of risks and uncertainties and has carried out a robust assessment of the principal risks facing the Group along with the current levels of risk appetite for each of those risks.

In 2016, as a result of this ongoing review process, the Directors made the following changes to the risk register:

 
-          'Economic risk' moved up to become a principal risk - with a 
            particular focus on risks to free trade and the potential 
            consequences for economic growth given the Group's geographic 
            footprint and globally connected supply chain. 
    -------------------------------------------------------------------------- 
--         'M&A execution/integration risk' moved down and off the list 
            of principal risks - on the basis that M&A processes 
            are now embedded, learnings have been identified and applied 
            and the Group has stable internal and external resources. 
    -------------------------------------------------------------------------- 
--         'Joint Ventures and minority shareholder relationships' moved 
            down and off the list of principal risks - in light of the robust 
            controls and effective mitigating actions demonstrated by the 
            executive team in managing key JV relationships. 
    -------------------------------------------------------------------------- 
--         'Supply and supplier risk' moved down and off the list of principal 
            risks - again in light of the robust controls and effective 
            mitigating actions in place. 
    -------------------------------------------------------------------------- 
 

Currently, the Board has identified 10 principal risks, which fall into one of the following three categories:

1. High impact operational risks: risks inherent in our ongoing commercial operations and geographic footprint, which if not effectively managed, would be liable to cause significant commercial disruption.

2. Material legacy risks: risks relating to the Group's past operations and activities, including through historical mergers and acquisitions, which could create material financial exposure for the Group in its present form.

3. Risks to strategy delivery: risks that could adversely impact the Group's ability to achieve its defined strategic objectives.

These principal risks, along with a summary of the measures in place to manage and mitigate them, are set out in the table below.

The Board will continue to keep these principal risks, as well as the appropriateness of this list and the ever evolving broader risk environment, under ongoing review.

 
Principal                      Risk nature/potential impact             Action/mitigation 
 risk 
1. High impact operational risks 
---------------------------------------------------------------------------------------------------------------- 
Product liability              Our expanding product range,             Products are tested and measured 
 Trend on year:                 in particular in our growing            against stringent quality standards. 
 Upwards -                      Performance Materials business,         Controls in the Performance Materials 
                                could potentially create more           area specifically have been strengthened 
                                product liability exposure              with enhanced batch by batch testing 
                                for the Group.                          of safety critical products. Coats' 
                                                                        global insurance programme includes 
                                                                        product liability cover. 
----------------------------  ---------------------------------------  ----------------------------------------- 
Environmental                  Potential non-compliance with            Coats' Environmental Policy applies 
 non-performance                environmental control procedures         across the Group and effluent 
 Trend on year:                 and/or local requirements could          discharge quality of all dyeing 
 No move                       lead to a discharge of pollution         operations is monitored against 
                                resulting in legal and regulatory        a pre-determined schedule. We 
                                action, financial penalties,             continue to monitor very closely 
                                damage to reputation and an              throughout the Group compliance 
                                adverse impact                           with local laws and regulations 
                                on ongoing operations.                   and with Coats' Environmental 
                                                                         Policy. 
----------------------------  ---------------------------------------  ----------------------------------------- 
Failure of                     Key information systems and              The Group's manufacturing and 
 critical infrastructure        data stores could malfunction;           supply chain function monitors 
 Trend on year:                 and/or key manufacturing and             and reviews internal supply chains, 
 No move                       distribution centres could               fire protection and other systems 
                                be adversely affected as a               and creates and tests disaster 
                                result of a number of different          recovery plans. Actions have been 
                                scenarios.                               taken to further strengthen our 
                                Disproportionate reliance on             Business Continuity Management 
                                such systems and plants could            systems. Rolling property risk 
                                have a significant impact on             surveys are conducted and acted 
                                profitability in the event               upon in respect of all Coats' 
                                of such disruption.                      critical supply chain nodes. Actions 
                                                                         in relation to information systems 
                                                                         and data stores are set out in 
                                                                         'Data controls and security'. 
                                                                         Coats' global insurance programme 
                                                                         includes property destruction 
                                                                         and business interruption cover. 
----------------------------  ---------------------------------------  ----------------------------------------- 
Data controls                 As owners of corporate data,              Coats coordinates the management 
 and security                  a data controller of personal             of its technology infrastructure 
 Trend on year:                data and a processor of third             on a global basis and has a number 
 Upwards -                     party data, failure by the                of cyber security controls in place. 
                               Group to comply with ever-                Internal data networks are monitored 
                               more stringent data protection            on a 24/7 basis by a central team. 
                               laws and security controls                External internet access is controlled 
                               in different countries could              by policy-based web filtering and 
                               lead to high profile incidents            access management tools. Other 
                               of data loss or theft and could           technologies, including data encryption, 
                               create significant financial              continue to be deployed to protect 
                               and other penalties as well               data assets hosted at its data 
                               as adverse relationships and              centres and on laptops and mobile 
                               reputational consequences.                devices. The Group continues to 
                               The Group also maintains other            build its capabilities and progressively 
                               business critical electronic              to add controls as part of an ongoing 
                               information, and inappropriate            cyber security risk management 
                               access to and use of such information,    process. 
                               including through cyber-attack,           Coats continues to refine measures 
                               could again create significant            to ensure that all internal users 
                               financial and commercial exposure.        have appropriate access rights 
                                                                         and permissions for their roles. 
                                                                         There is a global data protection 
                                                                         policy in place that is dedicated 
                                                                         to protecting the rights of the 
                                                                         Group's customers and investors. 
                                                                         Progress is underway to ensure 
                                                                         compliance with the EU General 
                                                                         Data Protection Regulation ahead 
                                                                         of it becoming effective in May 
                                                                         2018. 
--------------------------  -----------------------------------------  ------------------------------------------- 
Bribery and                   Non-compliance with applicable            The Group has clear and well publicised 
 anti- competitive             bribery and corruption and/or            ethics policies including in relation 
 behaviour                     competition/anti-trust laws,             to partners, contractors and suppliers 
 Trend on year:                regulations and standards by             which are reinforced through a 
 No move                      the Group or one of its partners         comprehensive Supplier Code. These 
                               could result in material civil           policies are reviewed annually. 
                               or criminal penalties, exclusion         There is extensive online and face-to-face 
                               from future contract bidding             training and regular communications 
                               processes and reputational               through a range of channels. 
                               damage.                                  A sub-committee of the Group Risk 
                                                                        Management Committee comprising 
                                                                        key business and functional leaders 
                                                                        meets quarterly to consider specific 
                                                                        ethics risks, legislative and regulatory 
                                                                        developments and mitigation plans. 
                                                                        The Group actively maintains a 
                                                                        whistle blower system, enabling 
                                                                        employees and others who are aware 
                                                                        of or suspect unethical behaviour 
                                                                        to report it confidentially. 
--------------------------  -----------------------------------------  ------------------------------------------- 
2. Material legacy risks 
-------------------------------------------------------------------------------------------------------------------- 
Pension scheme                The UK pension schemes' triennial         The funded pension schemes are 
 deficit funding               valuations could lead to increased       overseen by their Trustees, who 
 and pensions                  and/or accelerated cash contributions.   are required to have the appropriate 
 investigation                 These could impact one or more           knowledge and understanding in 
 Trend on year:                of free cash flow and dividend           this area and who take professional 
 No move                      payments.                                and actuarial investment advice 
                               Additionally, the UK Pensions            as necessary. 
                               Regulator's investigation in             Where appropriate independent professional 
                               respect of the Staveley Scheme           trustees are appointed to schemes 
                               could lead to a Financial Support        to provide additional expertise. 
                               Direction being imposed on               The Group and the scheme trustees 
                               the Group.                               routinely review de- risking of 
                                                                        the schemes through liability management 
                                                                        and investment strategies. 
                                                                        The strategy relating to the ongoing 
                                                                        investigation in relation to the 
                                                                        Staveley Scheme and the schemes' 
                                                                        funding positions more generally, 
                                                                        are regularly reviewed by the Board 
                                                                        in light of recommendations from 
                                                                        the Pensions Committee. 
--------------------------  -----------------------------------------  ------------------------------------------- 
Legacy environmental          Under the laws of certain countries,      The Board continues to monitor 
 risks                         Coats' subsidiaries could potentially     the strategy and developments in 
 Trend on year:                be responsible for investigating          relation to the Lower Passaic River 
 No move                      and/or remediating conditions             proceedings, more detail of which 
                               alleged to be associated in               can be found in note 28. Beyond 
                               whole or in part with former              that the Group continues to refine 
                               operations.                               its policies and procedures for 
                                                                         managing and mitigating potential 
                                                                         legacy risks associated with former 
                                                                         operations. 
--------------------------  -----------------------------------------  -------------------------------------------  --- 
3. Risks to strategy delivery 
----------------------------------------------------------------------------------------------------------------------- 
Appropriate                  Failure to identify and retain              The Board and senior management remain 
 capability                   key staff and/or continue to                very focused on talent and capability 
 development                  develop key skill sets among                development, as well as retention 
 Change in                    them could result in an inability           and succession planning. 2016 capability 
 year: Downwards              to execute the Group's growth               development actions have included 
 --                           strategy.                                   new cohorts on a range of sales force, 
                                                                          management and senior management development 
                                                                          programmes and individual coaching 
                                                                          for selective senior managers. 
                                                                          In addition, our annual Talent Management 
                                                                          and Succession Planning process reviews 
                                                                          talent in the top 300 roles. 
------------------------  ---------------------------------------------  ---------------------------------------------- 
Emergence                    Planned or irrational strategies            We strongly believe in the importance 
 of disruptive                or behaviours by one or more                of healthy competition and the benefits 
 competitor                   industry competitors in relation            that brings to both our customers 
 behaviour                    to the Group's core markets                 and ourselves. We maintain a deep 
 in core markets              could adversely                             understanding of emerging industry 
 Change in                    impact its position, profitability          trends through our relationships and 
 year: No move                and strategic goals.                        contacts with customers and global 
                                                                         brands and through our R&D activities 
                                                                          with university and specialist led 
                                                                          research projects. Outputs and insights 
                                                                          from these allow us to undertake ongoing 
                                                                          'horizon scanning' and planning strategies. 
------------------------  ---------------------------------------------  ---------------------------------------------- 
Economic risk                Like any company with global                The Group conducted a thorough risk 
 Change in                    activities, the Group is exposed            assessment prior to the UK referendum 
 year: Upwards                to risks arising from uncertainty           and continues to monitor developments 
 -                            around future macroeconomic                 closely. In addition, the Group is 
                              conditions and, in particular,              well diversified in its operations 
                              the risks to free trade and                 across geographies and sectors, is 
                              the potential consequences for              cash generative and has committed 
                              economic growth. Following the              debt facilities with significant levels 
                              results of the British referendum           of headroom to support the business. 
                              on its membership of the European           The Group also has an established 
                              Union and the                               forecasting and planning process which 
                              US Presidential election, this              takes into account and responds to 
                              risk has increased.                         both macro and micro economic trends. 
                              As a global industrial manufacturing        It has a defined policy on hedging 
                              company with no UK manufacturing            its exposure to fluctuations in foreign 
                              facilities and minimal direct               exchange and a culture of cost control 
                              sales in the UK, Coats is of                to manage and preserve cash. 
                              the view that there would be 
                              limited direct adverse impacts 
                              on the Group from Brexit. Both 
                              the UK and the EU, however, 
                              are significant markets for 
                              both Apparel and Footwear and 
                              Performance Materials sales 
                              and therefore any impact on 
                              future growth expectations for 
                              these markets could have an 
                              indirect consequence on the 
                              business. 
                              Whilst the future relationship 
                              between the UK and EU remains 
                              uncertain, there have been indirect 
                              factors which have impacted 
                              the 2016 results, primarily 
                              the effect of lower discount 
                              rates on the accounting valuation 
                              of pension liabilities and the 
                              depreciation of sterling on 
                              our UK costs. 
                              In the near and longer term 
                              there may be other impacts, 
                              notably the risk of greater 
                              protectionism in the US and 
                              fluctuations in foreign exchange 
                              rates that create volatility 
                              in the Group's results. 
------------------------  ---------------------------------------------  ---------------------------------------------- 
 
 

Responsibility statement

The following responsibility statement is repeated here solely for the purpose of complying with Disclosure and Transparency Rule 6.3.5. This statement relates to and is extracted from page 78 of the Annual Report 2016. Responsibility is for the full Annual Report 2016 and not the extracted information presented in this announcement or the Preliminary Announcement released on 24 February 2017.

 
        We confirm that to the best of our knowledge: 
 
          *    the financial statements, prepared in accordance with 
               the relevant financial reporting framework, give a 
               true and fair view of the assets, liabilities, 
               financial position and profit or loss of the Company 
               and the undertakings included in the consolidation 
               taken as a whole; 
 
 
          *    the strategic report includes a fair review of the 
               development and performance of the business and the 
               position of the Company and the undertakings included 
               in the consolidation taken as a whole, together with 
               a description of the principal risks and 
               uncertainties that they face; and 
 
 
          *    the Annual Report and financial statements, taken as 
               a whole, are fair, balanced and understandable and 
               provide the information necessary for shareholders to 
               assess the Company's performance, business model and 
               strategy. 
 
 
 
         This responsibility statement was approved by the Board of Directors. 
 

Related party transactions

A description of the related party transactions of the Company is extracted from page 133 of the Annual Report 2016:

Remuneration of key management personnel

The remuneration of the directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 - Related Party Disclosures. Further information regarding the remuneration of individual directors is provided on pages 52 to 71 in the audited part of the Directors' remuneration report.

 
                                 2016    2015 
                                  US$m    US$m 
------------------------------  ------  ------ 
 Year ended 31 December           5.1     5.1 
------------------------------  ------  ------ 
 Short-term employee benefits     1.3      - 
------------------------------  ------  ------ 
 Share based payments             6.4     5.1 
------------------------------  ------  ------ 
 

Trading transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and its joint ventures are disclosed below.

During the year, Group companies entered into the following transactions with related parties who are not members of the Group:

 
                    Sale of goods     Purchase of goods      Other income 
----------------  ----------------  --------------------  ----------------- 
                   2016     2015     2016       2015       2016       2015 
                    US$m     US$m     US$m       US$m       US$m       US$m 
----------------  -------  -------  ---------  ---------  ---------  ------ 
 Joint ventures    2.8      5.5      46.2       44.1              -   0.1 
----------------  -------  -------  ---------  ---------  ---------  ------ 
 

About Coats Group plc

Coats is the world's leading industrial thread manufacturer and a major player in the Americas textile crafts market. At home in some 60 countries, Coats employs 19,000 people across six continents. Coats' pioneering history and innovative culture ensure the company leads the way around the world: providing complementary and value added products and services to the apparel and footwear industries; applying innovative techniques to develop high technology Performance Materials threads and yarns in areas such as automotive and fibre optics; and extending the crafts offer into new markets and online. Headquartered in the UK, Coats has a premium listing on the London Stock Exchange. To find out more about Coats visit www.coats.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACSGGUBPWUPMUBU

(END) Dow Jones Newswires

March 10, 2017 04:32 ET (09:32 GMT)

1 Year Coats Chart

1 Year Coats Chart

1 Month Coats Chart

1 Month Coats Chart

Your Recent History

Delayed Upgrade Clock