Coats Share Discussion Threads

[grabster] 31/7/2017 09:44

COATS GROUP INTERIMS WEAVE MOSTLY ENCOURAGING PICTURE

Oliver Haill Sharecast | 31 Jul, 2017 09:29 - Updated: 09:29

In its first set of results since weaving its way back the FTSE 350, industrial threads and yarns maker Coats Group reported 38% growth in earnings and hiked its dividend 7%.
Coats, which was founded in Paisley in the 18th century before becoming a founding member of the FT 30 index in 1935 and was once the third largest company in the world, posted interim results showing $740m of sales, up 4% year-on-year or 5% at constant exchange rates as solid growth from the industrial division more than offset a decline at the much smaller US-focused crafts business.
Growth remained strong in Europe and Asia, with a return to growth in the US consumer durables markets, the 7% growth in the industrial division same from 5% growth from market share gains at apparel and footwear, and 18% from performance materials' geographic expansion plus bolt-on acquisitions.
Crafts sales declined 8%, largely due to the disruption caused by the tornado strike at the main Crafts distribution centre in Georgia, USA in January.
Boosted by acquisitions, adjusted operating profit increased 14% to $89m, with industrial adjusted operating profit increasing 11% as margins widened by 50 basis points to 13.6% due to volume growth, productivity and procurement improvements, and continued cost control which more than offset continued pricing pressure and structural inflation in the markets in which we operate.
Adjusted earnings per share surged 38% to 3.06 cents, with an extra benefit from a reduction in the effective tax rate and mark-to-market foreign exchange gains. At the underlying level EPS grew 19%.
After generating $109m adjusted free cash flow in the last 12 months but with second half capital expenditure to increase to $30-40m to represent a full year spend of $50-60m, the board declared an interim dividend of 0.44 US cents per share, up 7%.
Coats, which as Coats Limited became a subsidiary of the Guinness Peat Group in 2004 and was taken private in 2005 before being re-floated in London as Coats Group in 2015, made onto the FTSE 250 index in June's index reshuffle.
Despite inconsistent levels of demand from clothing retailers and continued weakness of the North American market, chief executive Rajiv Sharma said the year was going well as the company continued to increase market share in the apparel and footwear segment, which he attributed to a "customer-led approach to innovation, digital solutions and corporate social responsibility".
"We continue to leverage our global footprint and customer base in our Performance Materials business, develop new product solutions for our customers, and see a good contribution from our Gotex business which was acquired in 2016."
He said strong cash generation was allowing it to pay a dividend and still increase investment in the existing asset base in the second half of the year.
"We will look to build on the strong first half of the year, and expect to deliver performance in line with management's expectations for the full year. This is expected to be achieved through our initiatives to deliver market share gains and productivity improvements, maintaining a tight control of our cost base, whilst investing in our growth opportunities."
Monday saw Coats shares, which have more than tripled since the start of last year, retreated a touch from recent highs, sitting down 1.5% at 77.8p.

[qs99] 31/7/2017 08:19

this market is saying that it is up with events now IMO. I genuinely thought such an early in year upgrade would be followed up by another one, looks like that was wrong so maybe trading has toughened up to stop that happening? Either way Mr Market now taking profits me thinks... GLA and DYOR

[glaws2] 31/7/2017 07:56

Well if you wanted to be picky revenue is below forecasts and much of the increase in EPS is from non trading items (FX, tax and reduction in pension finance charge).

Let's see what Mr Market makes of it.

[jambam] 31/7/2017 07:44

agree. over 80 today

[ayl30] 31/7/2017 07:18

Reads fine to me, all on track, all the pointers in the right direction, good management, divi up. What's not to like?

[qs99] 31/7/2017 07:07

decent update IMO....in line, was hoping for another "head of" personally given the earlier upgrade, let's see how market takes it....

[grabster] 28/7/2017 15:26

As per post 233, I have upped my stake on this one. Even if it slips back beneath 78p in the final hour today, I feel confident in it breaking out higher next week.

[qs99] 28/7/2017 14:47

Hi there miti, well done you mate! I sense another upgrade could be in the offing judging on early year upgrade....DYOR etc, but yes been a good earner and have a decent chunk still in here....GLA for Monday!

[miti 1000] 28/7/2017 14:45

Nice to see you are still long QS99 .This has been a beauty for you and me from 30p. I've sold out of most of mine from 65-75p .Still have a few hundred k left.

Results on Monday.

[qs99] 28/7/2017 14:41

and some more

[qs99] 28/7/2017 12:29

looking good to break 80p next week IMO

[qs99] 24/7/2017 14:51

wonder why the sell off today?

[grabster] 21/7/2017 10:12

I have a small holding in these - less than 2% of my portfolio. Might add today. Will definitely do so if it looks like closing in a breakout above 78p

[qs99] 19/7/2017 15:38

cant be long until the July Ints?

[qs99] 30/6/2017 13:05

topped up ahead of July next update judging from last year? DYOR

[blackholer48] 26/6/2017 08:22

This was anticipated and it was interesting to note directors buying the shares at around 57p earlier in the year which prompted me to buy. Also an article in Stockopedia highlighted the continuing attractions. Looking ahead the company will benefit from the lifting of uncertainty coupled with an increase in free cash flow which will enhance payment of dividends.

[ayl30] 26/6/2017 07:15

Good news re pension settlement. Should enable company reflect more stable base after removal of pension concern

[philanderer] 18/6/2017 20:28

SUNDAY TELEGRAPH

The long-running dispute regarding thread maker Coats and concerns over there not being enough money to fund three pension schemes has hung like a cloud over the firm, says James Ashton in this week's Questor column for the Sunday Telegraph.
After a £255m agreement last December, only one now remains to be settled and the company is now back in charge of its own destiny, according to Ashton.

Coats' shares have now advanced 33 per cent in the last year, it's about to enter the FTSE 250 and analysts at UBS forecast a compound annual growth rate of 2.5 per cent.

After the May trading update, house broker Peel Hunt upped its annual forecasts to $156m (£122m) this year and the shares trade at 12 times next year's forecast earnings.


Read more:

[qs99] 18/6/2017 10:20

not a premium person, anyone who is would be great to paste the full tip pretty please!
ta

[philanderer] 18/6/2017 08:41

Telegraph Questor tip

[qs99] 09/6/2017 16:18

wont COA benefit from weakening of £ against $?

[qs99] 25/5/2017 10:33

I think £1, this is up around 8% so far this week as continued buying....IMO as I have said before, reckon further upgrades are likely given the early stage upgrade in their financial year...DYOR and GLA

[spooky] 24/5/2017 12:35

On its way to 90p.

[qs99] 24/5/2017 12:28

looks like decent buying is continuing to push this to its next new high IMO