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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 |
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
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(END) Dow Jones Newswires
March 10, 2017 04:32 ET (09:32 GMT)
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