Neville Bain, chief executive, said he was 'disappointed' by the results in Brazil, where Coats' turnover fell to pounds 50m compared with pounds 120m two years ago, although it believes it has maintained its market share.
Part of the pounds 15.7m loss, which compares with a pounds 1.5m profit in the previous year, was due to reorganisation costs, including reducing staff numbers by a third. Coats said it was unlikely the Brazilian operations would return to profits in the current year.
Despite the Brazilian losses, the threads business increased operating profits from pounds 67.9m to pounds 69.9m, helped by a full year's contribution from Tootal, which added pounds 11m to the division's operating profits.
Profits from British businesses rose 60 per cent to pounds 60m. Mr Bain said that pounds 6m was due to stemming losses at its fabric and branded-shirt businesses, while profits at Jaeger and Viyella rose more than threefold to pounds 8.5m.
He said that, while the economic outlook was more confident, it had not filtered into orders or deliveries. In Europe, however, the German downturn is spreading southwards and is particularly afflicting Italy.
Coats has adopted both FRS3 and the exposure draft on liabilities, which means its pounds 115.8m of redeemable preference shares are now treated as debt. That means borrowings are 53.5 per cent of shareholders' funds rather than 33.1 per cent.
Earnings per share rose from 10p to 10.2p and the final dividend was increased to 4.25p (4p) making 7.25p (7p) for the year. The shares gained 11p to 245p.Reuse content