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COA Coats Group Plc

-0.60 (-0.89%)
28 Nov 2023 - Closed
Delayed by 15 minutes
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 -0.89% 66.90 2,702,264 16:35:04
Bid Price Offer Price High Price Low Price Open Price
66.50 66.90 67.30 65.70 66.40
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Textile Goods, Nec USD 1.61B USD -14.7M USD -0.0092 -72.28 1.06B
Last Trade Time Trade Type Trade Size Trade Price Currency
18:45:06 O 23,869 66.89 GBX

Coats (COA) Latest News (1)

Coats (COA) Discussions and Chat

Coats Forums and Chat

Date Time Title Posts
22/11/202314:11Coats Threads764
30/7/201818:29Coats (COA) One to Watch on Tuesday -
30/1/201713:02BAKE OFF / SEWING BEE / Kirstie homemade home2

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Coats (COA) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type

Coats (COA) Top Chat Posts

Top Posts
Posted at 28/11/2023 08:20 by Coats Daily Update
Coats Group Plc is listed in the Textile Goods, Nec sector of the London Stock Exchange with ticker COA. The last closing price for Coats was 67.50p.
Coats currently has 1,597,810,385 shares in issue. The market capitalisation of Coats is £1,062,543,906.
Coats has a price to earnings ratio (PE ratio) of -72.28.
This morning COA shares opened at 66.40p
Posted at 22/11/2023 08:47 by manurere
The trading statement was in line with my expectations. Although I had, of course, hoped for signs of some improvement.
Coats is, I fear, a price taker rather than a price setter. The observation that performance materials are languishing because clients are sourcing in-house is a tad ominous. The company has sunk a lot of research into this sector and should be reaping the rewards of its high quality products.
So yes, as T..O..W..S notes above: "it's not as bad as it was, but it's still bad!"
Posted at 29/8/2023 08:42 by manurere
Yes, Friday's trading did see a big dump. But three observations:
1. There has not yet been any notification of a change in major shareholders' holdings. This implies that those responsible for the dump are on the fringe.
2. There appears to have been no shortage of buyers in the low 70s; further, by the end of Friday's trading the share price was moving back up.
3. I know that it is early, but thus far Tuesday's trading suggests that buyers see the share as good value at around 74p.

As EI has often noted, this share does jump around a bit, but on Friday's and Tuesday's trading, there is little indication that the share price is going to sink back into the mid-60s.
Posted at 16/8/2023 05:22 by manurere
I was also surprised. Tuesday's trading was quite solid in terms of both volume and support for a 77p+ share price. Such trading suggests to me that some bigger players dive in when they perceive the share price to be too low. Brokers' forecasts keep suggesting a peak between 80p and 105p. That noted and even though I am bullish on the longer term trend, I am not confident that 77p will be sustained over the rest of this week. I am expecting the share price to drop back to low 70s by closing on Friday. My own horizon for some real movement beyond 100p now remains after the results for either FY2028 or FY2029.

But, as I have observed previously, when it comes to Coats I now have a long track record of getting my projections wrong.
Posted at 02/8/2023 02:33 by manurere
I am, as EI knows well, a long time, bullish Coats investor. My partner and I each have, for private investors, quite large holdings.

I was very pleased with the half year results, given the Q1 report. As EI has noted, costs continue to be trimmed, acquisition integration seems to be on track, and market share is growing.

My particular focus is on performance materials, rather than footwear and apparel. Over the past decade I have watched every video and studied every statement Coats has produced on performance materials, including industrial materials. This is cutting edge manufacturing with good margins. It also provides some insulation from the ups and downs of consumer spending. I believe that the medium term outlook for performance/industrial materials is very, very positive.

As for Tuesday's trading, on opening the share price dropped a couple of pence on small volumes, but then the smarter money arrived and the price went up. That buying might have over-reached a little, but I suspect that this time we have left 70p and below behind us. (Mind you, I've said that before and ended up with egg on my face!).

Finally, while it is only 15%, the increase in the interim dividend tells us that a very conservative board--when it comes to rewarding shareholders--is confident that Coats is on track to be able to sustain regular, small increases in dividends. I am confident that we will hit US5 cents a share this decade, probably in FY2028 or FY2029, but maybe earlier.

If you own Coats shares, hang on to them. If you are thinking of buying, jump in.
Posted at 14/6/2023 09:08 by manurere
Given how often my bullish sentiment has turned out to be misplaced, I should stay off this chat for a few months. However, thus far this week's trading has been quite encouraging. It looks like we have some steady interest from buyers and no indication of any large sellers. Further, given previous suggestions of well-informed, possibly insider trading, one can only infer from the steadily rising share price that Coats's Q2 sales are tracking well. The litmus test will be the half year results. These are usually released in the first week of August.
Posted at 18/5/2023 07:49 by manurere
While the Q1 trading figures were disappointing, the market has overreacted, in my view.The Coats share price will flatten out quite quickly, probably a few pence above the 66p price at which a favoured few were able to buy shares when the company raised extra capital a few months back. I do not expect Coats to be subjected to a takeover offer. Sales and profits will grow year on year, not always evenly. Dividends will rise over time. And those of us who hang in there will be quietly pleased we did so.
The fundamentals are very sound. Fairly quickly, Q1 2023 will be seen as nothing but a blip.
Posted at 14/3/2023 01:17 by manurere
Coats share price proved to be very resilient yesterday, dropping only 0.64% compared to the FTSE (-2.58%) and the FTSE 250 (-2.75%). Furthermore, there were two significant moments when large trades took place at much higher prices than the closing price, especially around 10.30 am. Clearly, there is some smart money out there that believes Coats to be a good buy at 78+p.

It looks like European markets, including London, were oversold on Monday, 13 March.

As the day progressed, stock prices held up well in the USA. I'm typing this contribution just before 4.00pm. The Dow has dropped only -0.28%; the S&P 500 less (-0.15%); while the NASDAQ is up 0.45%. There has also been chatter in the USA that the Federal Reserve may pause on anticipated interest rate rises.

Early morning trading in Asia-Pacific also suggests that European markets were oversold. In New Zealand, the NZ50 has dropped -0.80%. Australia's S&P/ASX200 dropped sharply on opening, but at midday was clawing back some of that dip. In Japan the Nikkei 225 index has fallen by -2.25%, but now appears to have stabilised.

If Asian-Pacific stocks continue to claw back some of those early losses, we will probably see some clawback in Europe on Tuesday.

If that suspicion proves to be correct, Coats is likely to again break through 78p on Tuesday and, perhaps, even 79p.
Posted at 04/3/2023 07:32 by manurere
Thanks EI and j.f.t.m.
I was going to wait until after Monday and Tuesday’s trading.
The results were better than I had expected.
*The strategic expansion of the footwear investment is reaping quick rewards.
*I note the steady increase in both market share and margins as Coats exits hisorically high volume, low value production.
*I still believe that we will see some quite significant growth in performance materials over the medium- to longer-term.
*Really pleased that an end to the pension overhang is now in sight.
*Appreciate the dividend boost.
*Note that the CEO has increased his shareholding: an encouraging vote of confidence.
*Thought that some investors got a bit carried away on 2 March; the share price got ahead of itself.
*I still think share price will hover around 75p until mid-year results; they may see share price move closer to 80p.
*Will be surprised if share price goes over 100p before mid- or FY results 2025.

See no prospect of a takeover bid.
First, a very high percentage of shares are in institutional hands.
Second, most seem to be index linked investments with no incentive o make a quick buck, should it be offered.
Third, at what price would we sell, given some of us have hung in for a long time? I won’t voluntarily exit this side of 155pence as I see too much upside from just hanging in.

I’m looking forward to US 5 cents a share in annual dividends before my kids inherit the shares.
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.

Tip style
Risk rating
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.

Coats Group PLC

Today change
3.30%Price (GBP)
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 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.
Coats share price data is direct from the London Stock Exchange

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