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Share Name Share Symbol Market Type Share ISIN Share Description
Coats Group Plc LSE:COA London Ordinary Share GB00B4YZN328 ORD 5P
  Price Change % Change Share Price Shares Traded Last Trade
  -0.60 -0.84% 70.50 2,122,392 16:35:08
Bid Price Offer Price High Price Low Price Open Price
70.60 70.90 73.00 70.10 73.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Industrials 1,112.02 120.53 4.51 13.9 1,126
Last Trade Time Trade Type Trade Size Trade Price Currency
17:55:23 O 3,424 70.559 GBX

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17:55:2370.563,4242,415.94O
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17:54:0370.502,7601,945.80O
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Coats (COA) Top Chat Posts

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Posted at 07/2/2023 08:20 by Coats Daily Update
Coats Group Plc is listed in the General Industrials sector of the London Stock Exchange with ticker COA. The last closing price for Coats was 71.10p.
Coats Group Plc has a 4 week average price of 63p and a 12 week average price of 63p.
The 1 year high share price is 82.40p while the 1 year low share price is currently 50.30p.
There are currently 1,597,810,385 shares in issue and the average daily traded volume is 2,188,789 shares. The market capitalisation of Coats Group Plc is £1,126,456,321.43.
Posted at 20/1/2023 08:28 by manurere
That's good, EI. Happy New Year.

Share markets can make idiots of us all. But, yesterday's only took about three hours to blast my confidence out of the water. Hope you and some of the others on this chat site took the chance to get back into Coats at a good price.

The only saving grace for me was that the British Pound moved upwards against my own country's currency. That mitigated the damage. I think better sit on my hands for now and avoid any posts on this site until we see the full year results.

Posted at 19/1/2023 06:59 by manurere
I am surprised that there has not been any comment on this chat site since Christmas.

Wednesday saw a very high volume of shares traded with quite large parcels changing hands at 70p.

Longterm contributor, EI, sold his last shares at 68.88 and is "waiting to get back in." And while I have misjudged the market often in the past, I have a sense that he might be waiting quite some time as I suspect that the share is most unlikely to move back into the 65p to 69p range.

Coats is not a flashy performer, but the company's fundamentals are very good.
And while a climb to 80p, 90p, and 100p will take time, it now looks like both the underlying drivers of the share price and the substantial support for the current price are pointing to a steady upward movement over the next two to three years.

Posted at 28/12/2022 18:58 by essentialinvestor
justice, might be missing your point, but COA has markedly outperformed the majority of MCX stocks YTD. It's around 5% lower over 12 months, in a bear market.

I sold the last of mine at 68.88 so waiting to get back in. Having made a number of acquisitions over the last year
the market may want confirmation performance is as expected. For those who are more risk adverse, perhaps consider waiting for the next update. Covid's rapid spread in China may impact some of COA's manufacturing capacity.

Posted at 12/11/2022 20:01 by simon gordon
Liontrust Growth Fund October update - 9/11/22:

Coats Group (+20%) moved higher as investors reacted positively to a Capital Markets Day focused on the company’s footwear division. Coats has expanded the scale of its footwear unit significantly recently with the acquisitions of US businesses Texon and Rhenoflex. It has now issued medium-term sales growth guidance of 7% to 8% per annum for footwear, with an operating profit margin target of over 20%. This higher forecast for the division has shifted up the overall group’s medium-term targets (inclusive of its apparel and performance materials divisions) from 5% to 6% sales growth per annum, with an operating margin target of 17%.

Coats also reiterated the message, already conveyed within interim results, that it has been able to offset cost inflation through price increases and internal efficiency measures.

Pricing power has long been one of the most valued characteristics we look for in the Economic Advantage investment process, stemming in our view from the barriers to competition provided by companies’ intangible and difficult-to-replicate assets.

Posted at 11/8/2022 17:55 by manurere
I believe it was 63.5p. As a non-UK investor, I wasn’t eligible. It was basically an insiders’ deal as far as retail investors were concerned. But I am not overly annoyed. It raised capital quickly and efficiently. The company is expanding I expect the benefits to show through in share price and dividends.
The share price is already above the issue price and will probably move back into the 70p zone fairly soon.
I think we retail investors just have to suck up this one. Yes, we got stiffed a bit. But we need to take a broader view.

Posted at 22/7/2022 18:24 by cravencottage
Here's what the I/C had to say in back in April..

Coats is back in fashion
The industrial thread company’s growth is sustainable in more ways than one
April 7, 2022
By Jemma Slingo


Those in search of threads, yarns and trims might visit a local haberdashery. The idea feels quaint in 2022, where sewing has largely been replaced by shopping. There is nothing quaint about thread manufacturing, however. The lucrative industry literally holds together swathes of the retail sector, and promises to be a reliable source of returns for investors.

IC TIP:
Buy
Tip style
GROWTH
Risk rating
MEDIUM
Timescale
MEDIUM TERM
Bull points
Convincing growth opportunities
Large market share
$50mn cost-saving drive
More demand for sustainable thread
Bear points
Tight US labour market
Inflationary pressures
Uxbridge-headquartered Coats (COA) might not be a household name, but it is the world’s leading manufacturer of threads, yarns, zips and trims. In the world of apparel and footwear, it has a 23 per cent market share, and is estimated to be over twice the size of its nearest thread competitor.

Its smaller ‘performance materials’ arm – which produces thread for an eclectic range of purposes, including personal protection, telecoms, and transportation – also has a chunky market share of around 14 per cent.

COA:LSE
Coats Group PLC

1mth
Today change
3.30%Price (GBP)
72.10
Coats’ size and history is crucial to its investment case. The group has been around since 1755, boasts well-established manufacturing processes, and counts on long-standing customer relationships, meaning new entrants to the market are unlikely to prove a threat.

Its broad portfolio also shelters it from the volatility of fashion retail. Its apparel and footwear division targets a variety of markets including premium lifestyle, fast fashion, mid-market, and luxury attire. Because of this, fickle consumer taste – often the downfall of retail brands – has little impact on demand for its products.

But it hasn’t all been plain sailing. Coats had a difficult lockdown, when profits were hit by a drop in demand and additional coronavirus costs. However, the group bounced back well in 2021, when sales and cash exceeded pre-pandemic levels, and operating profit edged toward past highs. Momentum also seems to be building. The final two months of 2021 saw sales up 20 per cent versus 2019 in both divisions, compared with 1 per cent in the first half of the year.




Opportunities in Asia
Over the past decade, Coats’ customer base has shifted away from Europe and into Asia. Asian countries – particularly India and China – are now expected to drive sales. In its latest annual report, the group said that sewing thread markets are due to grow by low single-digit percentages globally in the medium term. However, growth in Asia is expected to be faster, as consumers become wealthier and urbanisation increases demand for products such as fibre optic cables, which Coats’ performance materials division also specialises in.

“Not only will Asian consumers demand more garments, but more affluent consumers will demand higher-end garments, so we expect regional sales from our factories in Asia to increase over time,” management said in 2020.


Vietnam is also an important player. The country is a key end market for Coats as many of its clients have factories there. A series of strict Covid lockdowns resulted in serious operational disruption, particularly in 2021, when Coats had to temporarily shut its Vietnam site. The situation seems to have improved since then, although other shut-downs in Asia cannot be ruled out.



Sustainable sewing
Geography is not the only thing working in Coats’ favour. The group is also tapping into sustainability trends. As flagged in our recent Alpha report on the company, the apparel and footwear industry is a major polluter and retailers are under pressure to go green. Historically, synthetic threads have been an oil byproduct, so eco alternatives are likely to have a competitive advantage.

At the moment, this side of Coats’ business is small. Its ‘EcoVerde̵7; range – which is made from recycled plastic bottles – contributed just 6 per cent to group revenue in 2021. However, it’s growing fast: sales are up 159 per cent compared with 2020, and management wants all of its premium polyester threads to be made exclusively from recycled material by 2024. This would equate to around a third of sales.

The group has also repurposed its Asian ‘innovation hub’ to focus on new biomaterials, and launched a new product in 2021 made from sustainably sourced wood pulp.

As well as ticking the ESG box, this is an exciting opportunity to grow margins and market share. Analysts at Jefferies say Coats’ focus on sustainability is “core to [its] positive thesis”, and believe it will help to raise higher absolute profit per unit.



Efficiency drive
It might sound unduly optimistic to discuss margin improvements against a backdrop of inflation, tight labour markets and supply chain chaos. Coats is far from immune from these pressures, as the decline in its PM division’s operating margins since 2019 shows. This is largely due to its US operations, which are dogged by worker shortages and rising wages.

Management seems to have a plan, however. In early March, Coats announced a cost-saving scheme which promises to deliver incremental adjusted operating profit of $50mn by 2024. How exactly it will achieve this is a little hazy – the group refers simply to “strategic projects” that will optimise the business’s portfolio and footprint. However, broker Peel Hunt suspects Coats will focus on performance materials and – in a move straight out of the modern manufacturer’s playbook – increase production from lower-cost locations, such as Mexico or further afield.

This does not come without its own risks. Part of the strength of Coats’ business model is its global footprint, and the flexibility of its supply chain. Many of the group’s performance materials customers are based in the US, which has so far prevented significant offshoring. It is hard to shake the sense, therefore, that management’s hand has been forced.

However, analysts are excited by the cost-saving possibilities. While the efficiency drive is expected to incur a one-off cash cost of $35mn, Jefferies expects it to boost consensus earnings before interest, tax, depreciation and amortisation by 9 per cent in 2023 and 2024, and result in margin accretion of two percentage points.



Decent valuation
For some investors, a question mark hangs over the profits that will flow to shareholders. The shares have jumped by around a third since the end of February, driven by a strong set of annual results. But the stock sits on less than 13 times forward consensus earnings, and sentiment still remains tainted by historic issues with its group pension arrangements.

While the words ‘defined benefit scheme’ often cause investors to break out in a cold sweat, in the case of Coats things aren’t too bad. The group moved from a deficit of $226mn to a surplus of $21mn in 2021, largely due to higher discount rates and employer contributions.

Future contributions will remain at the previously agreed level of £22mn a year, meaning that the deficit should be paid down by 2028.

These contributions will inevitably impact Coats’ cash position. However, the end is well in sight and the group generated an impressive amount of cash in 2021, despite having to catch up on some payments it deferred at the start of the pandemic. As such, it managed to reduce its net debt (excluding lease liabilities) by almost $35mn, and increase its dividend.

Coats seems to offer an attractive combination of value and growth, therefore – and its performance this year suggests that industrial thread is firmly back in fashion.

2021 1.50 160 6.81 1.44
f'cst 2022 1.56 186 7.70 1.64
f'cst 2023 1.63 210 8.81 1.84
chg (%) +4 +13 +14 +12

Posted at 22/7/2022 17:13 by manurere
Agree, EI.
Although much analyst and broker comment is behind paywalls, the general sentiment is very positive in the wake of the Texon acquisition.
Seller sentiment has also shifted. A couple of weeks ago, you noted the number of sellers prepared to accept below 70 pence.
That’s shifted.
Recent trading volumes suggest that potential sellers now want more than 70 pence; I wouldn’t be surprised if we see a sustained trading range of 75 to 80 pence by the end of the month. We may even go over 80p.
However looking ahead, I am still of the view that it will take positive financial reports over the course of 2023 to push the share price closer to 100p.
That said, one or two more smart, ‘bolt on’ acquisitions could trigger a quicker, positive share price movement.
I am also looking for some good news in 2023 with respect to industrial materials. I believe that is where we will eventually see significant growth in revenue, earnings, profits, and dividends.
Overall, if one is going to be invested in medium cap, global
manufacturing, Coats remains a very good option.

Posted at 01/6/2022 08:04 by manurere
Hi 'essential,'
To be honest, my biggest concern at the moment is exchange rate fluctuations rather than share price volatility. As noted some time ago, my partner and I each own, independent of the other, very substantial (for private investors) holdings in Coats. In each case, our Coats holdings are our largest equity investment. In my case. Coats share constitute over 50% of the value my total portfolio.
I am very bullish on Coats's longterm future and expect the dividend to rise steadily over the next few years. Thus it is unlikely that I will sell my shares within the next five to ten years.
As note previously, we live outside the UK. Our shares through a trustee which in turn is arranged by our broker in our home country. So along the way, the ticket is clipped by intermediaries. And at some point those holding costs may outweigh the benefits of owning the shares.
So we do end up selling, it is most likely that it will be holding costs that force the issue.
I hope not as I want ether myself or my kids to reap the rewards of what I believe to be a very sound, long-term investment.

Posted at 18/5/2022 10:00 by manurere
I am also surprised at how much the share price has jumped in morning trading. I suspect it is starting to get a little bit ahead of the good trading report. The turnover so far has been light and I think the share price will roll back a little as profit takers sell their shares. Unfortunately, I live in a different time zone and will not sit up through the night to watch the afternoon movement.
Looking ahead, the share price may break through the 100 pence mark later this year, but that too would surprise me. A more measured movement would be a consolidation around 90 pence if Coats produces a good set of mid-year figures.
I'd be very happy to be at 90 pence at the end of the year and to look forward to breaking 100 pence some time in 2023.
I remain confident that the share price will be around 145 pence by the end of 2025/early 2026. I also expect the annual dividend to be close to US5 cents by 2026.

Posted at 18/5/2022 07:30 by manurere
I am surprised how good the trading update is, given the issues essentialinvestor noted at the end of April. Looking some distance ahead, it is the steady growth in performance materials that bodes well for the future. Coats is a real manufacturing company: it makes useful things other people want to buy. At the moment, the share price is being suppressed by a more negative general environment. I expect that once the clouds blow away, Coats share price will soar.
Coats share price data is direct from the London Stock Exchange
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