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City File: Coats Viyella

Sunday 24 January 1993 00:02 GMT
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TEXTILE companies have always been sensitive to currency movements. In the late 1980s, the strong pound was responsible for a virtual reverse in the strategy of Coats Viyella, which found that its hi-tech factories in Northern Ireland could not compete with cheap foreign imports.

But since the purchase of Tootal Group, with its large US and Far Eastern operations, Coats is less dependent on the UK and benefits from any dollar strength.

If the dollar rises as the Clinton administration settles in, Barclays de Zoete estimates that Coats' profits in 1993 will gain pounds 6-7m for every 10c movement and that Coats' shares are a buy if the dollar goes below dollars 1.50 to the pound.

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