1% organic growth A reassuring update in challenging end markets. Coats has reported flat group revenue growth for the four months to 31 October (at constant currency) while year-to-date revenue grew 1% y-o-y. This slowing in activity levels is not surprising to us, given the macro headwinds, and is against tough comparatives. The lower growth is in line with our revised forecasts as discussed in our 11 October 2019 sector report (here). Minor guidance downgrade – our forecasts are unchanged Given the slower top line growth experienced in recent months, the Coats Board has issued revised guidance for FY19 adjusted operating profit. The new range is $196m to $201m (INVe $198m, company-compiled consensus $203m, Bloomberg $202m). If consensus were to move to the middle of this new range ($198.5m), it would reduce by 1.7%, a minor movement which we believe should be taken as reassuringly resilient given the macro headwinds. We leave our forecasts unchanged. Flat footed – Apparel & Footwear Underlying retail markets continue to be challenging and mixed on a geographical basis. The core threads business achieved 2% revenue growth in the four month period, with strong performances in the peak September and October months. Zips saw a mid-single digit revenue decline, partly due to portfolio rationalisation actions. Latin American Crafts started to see a sequential improvement, although revenue still declined y-o-y. Performance Materials - Slow telecoms Revenue in the period was flat y-o-y, down from the +4% seen in 1H19. The main areas of lower growth were Personal Protection and Telecom / Energy, which saw strong growth in 2H18 and 1H19. The company believes this is due to customer de-stocking and the phasing of customer programmes in Europe. Autos was weaker, as we expected, with y-o-y revenue declines after been stable during 1H19. We remain positive on the significant long-term growth opportunities within autos from lightweight composites development. We anticipate more positive newsflow on this in 2020. Encouragingly, the more traditional end markets, such as Household and Recreation, returned to growth, aided by self-help initiatives, delivering an improved performance from these end markets.