Industrial thread maker Coats has delivered what it says was a strong performance last year as it moved to a profit thanks to a substantial decline in one-off charges and a restructuring of its craft and textiles business a year earlier.

Earnings amounted to US$71.2m in the 12 months to the end of December from a loss of $39.4m in 2015. Gross margins were up 130 basis points to 10.8% from 9.5% in the prior year.

Coats acquired Gotex and Fast React in June last year and the company says they are both performing well and ahead of management expectations, contributing $16m to sales and $3m to operating profit.

Revenue, however, dropped 1% on a reported basis to $1.46bn from $1.47bn a year earlier, but grew 2% in constant currencies. Growth of 4% in the group's industrial division was offset by an 8% decline in Crafts Americas.

Sales in the group's apparel and footwear division dropped slightly, to $975m from $979m in 2015. Coats said second-half sales growth reduced marginally to 2% following 3% growth in the first half.

"Coats delivered a strong performance in 2016, despite challenging market conditions," said group chief executive Rajiv Sharma. "Uncertainty, volatility and pricing pressures characterised 2016. We delivered productivity and procurement gains, and tightly managed our overheads which had a positive operational gearing effect in the industrial division."

The company said it was entering 2017 "on a solid footing", but said it remains cautious about market conditions.

"We expect to continue to deliver growth in line with management's expectations through our initiatives to deliver market share gains, productivity improvements and tight cost control. This growth is likely to be weighted to the second half of the year due to strong profit growth in H1 2016, and may also be subject to further foreign exchange headwinds on translation that have been seen in recent periods."