Coats Group to Exit US Yarns Business
Why we think this is neutral
The RNS announcement details Coats Group's strategic decision to exit its US Yarns business, which does not fit with the company's future strategy. While this may have some financial impact, the announcement does not provide specific financial figures or guidance, so the overall sentiment is neutral.
Key Points
- Coats Group to fully exit US Yarns business
- Strategic review concluded Americas Yarns does not fit with future strategy
- Exit expected to have positive impact on PM and Group adjusted EBIT margins
- Exit process to complete in Q2 2025 and generate modest cash inflow
Summary
Coats Group plc announced its intention to fully exit from the Performance Materials division's US Yarns business based in Kings Mountain, North Carolina. This follows a strategic review of the Americas Yarns business which started in Q4 2024 and has already resulted in the closure of the Toluca, Mexico facility in December 2024.
The strategic review has concluded that the Americas Yarns business does not fit with Coats' future strategy, and the exit from this non-core operation will result in a positive annualised impact to both the PM and Group adjusted EBIT margins. The exit process is expected to complete in Q2 2025 and is anticipated to generate a modest cash inflow, after closure costs.