LSE:COA

Stock Analysis Report

Executive Summary

Coats Group plc manufactures and supplies industrial threads worldwide.

Snowflake

Fundamentals

Proven track record with mediocre balance sheet.

Share Price & News

How has Coats Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: COA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.4%

COA

1.4%

GB Luxury

-0.06%

GB Market


1 Year Return

-4.2%

COA

5.2%

GB Luxury

4.6%

GB Market

Return vs Industry: COA underperformed the UK Luxury industry which returned 5.2% over the past year.

Return vs Market: COA underperformed the UK Market which returned 4.6% over the past year.


Shareholder returns

COAIndustryMarket
7 Day-2.4%1.4%-0.06%
30 Day4.4%8.4%1.8%
90 Day1.9%-3.4%4.5%
1 Year-2.6%-4.2%7.8%5.2%10.1%4.6%
3 Year98.9%90.1%30.4%21.9%22.4%6.9%
5 Year192.8%179.8%32.1%17.8%33.3%3.1%

Price Volatility Vs. Market

How volatile is Coats Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Coats Group undervalued compared to its fair value and its price relative to the market?

20.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: COA (£0.74) is trading below our estimate of fair value (£0.93)

Significantly Below Fair Value: COA is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: COA is poor value based on its PE Ratio (19.4x) compared to the Luxury industry average (18.1x).

PE vs Market: COA is poor value based on its PE Ratio (19.4x) compared to the UK market (17.1x).


Price to Earnings Growth Ratio

PEG Ratio: COA is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: COA is overvalued based on its PB Ratio (4.6x) compared to the GB Luxury industry average (2.2x).


Next Steps

Future Growth

How is Coats Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: COA's forecast earnings growth (10.3% per year) is above the savings rate (1.2%).

Earnings vs Market: COA's earnings (10.3% per year) are forecast to grow slower than the UK market (12.5% per year).

High Growth Earnings: COA's earnings are forecast to grow, but not significantly.

Revenue vs Market: COA's revenue (2.6% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: COA's revenue (2.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: COA's Return on Equity is forecast to be high in 3 years time (26.6%)


Next Steps

Past Performance

How has Coats Group performed over the past 5 years?

25.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: COA has high quality earnings.

Growing Profit Margin: COA's current net profit margins (5.1%) are higher than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: COA has become profitable over the past 5 years, growing earnings by 25.9% per year.

Accelerating Growth: COA's earnings growth over the past year (11.4%) is below its 5-year average (25.9% per year).

Earnings vs Industry: COA earnings growth over the past year (11.4%) exceeded the Luxury industry -1.3%.


Return on Equity

High ROE: Whilst COA's Return on Equity (27.41%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Coats Group's financial position?


Financial Position Analysis

Short Term Liabilities: COA's short term assets ($614.0M) exceeds its short term liabilities ($378.2M)

Long Term Liabilities: COA's short term assets ($614.0M) do not cover its long term liabilities (618.9M)


Debt to Equity History and Analysis

Debt Level: COA's debt to equity ratio (101.4%) is considered high.

Reducing Debt: COA's debt to equity ratio has increased from 67.9% to 101.4% over the past 5 years.

Debt Coverage: COA's debt is well covered by operating cash flow (39.5%).

Interest Coverage: COA's interest payments on its debt are well covered by EBIT (12.9x coverage).


Balance Sheet

Inventory Level: COA has a high level of physical assets or inventory.

Debt Coverage by Assets: COA's debt is covered by short term assets (assets are 1.8x debt).


Next Steps

Dividend

What is Coats Group's current dividend yield, its reliability and sustainability?

1.73%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%2.0%markettop25%5.3%industryaverage2.2%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: COA's dividend (1.73%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.97%).

High Dividend: COA's dividend (1.73%) is low compared to the top 25% of dividend payers in the UK market (5.35%).


Stability and Growth of Payments

Stable Dividend: COA's dividend payments have been volatile in the past 10 years.

Growing Dividend: COA's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.4%), COA's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: COA's dividends in 3 years are forecast to be well covered by earnings (25.4% payout ratio).


Next Steps

Management

What is the CEO of Coats Group's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Rajiv Sharma (52yo)

2.8yrs

Tenure

US$3,293,100

Compensation

Mr. Rajiv Sharma is a Non Executive Director at Senior plc since January 1, 2019. Mr. Sharma has been the Group Chief Executive at Coats Group Plc and Coats Group Limited since January 1, 2017. Mr. Sharma  ...


CEO Compensation Analysis

Compensation vs Market: Rajiv's total compensation ($USD4.27M) is above average for companies of similar size in the UK market ($USD1.82M).

Compensation vs Earnings: Rajiv's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.8yrs

Average Tenure

57yo

Average Age

Experienced Management: COA's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

4.6yrs

Average Tenure

59yo

Average Age

Experienced Board: COA's board of directors are considered experienced (4.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Simon Boddie (59yo)

    CFO & Executive Director

    • Tenure: 3.3yrs
    • Compensation: US$2.02m
  • Michael Schofer (57yo)

    Chief Supply Chain Officer

    • Tenure: 2.3yrs
  • Rajiv Sharma (52yo)

    Group Chief Executive & Executive Director

    • Tenure: 2.8yrs
    • Compensation: US$3.29m
  • Stuart Morgan

    Chief Legal & Risk Officer and Group Company Secretary

    • Tenure: 0yrs
  • Yael Loewinger

    Managing Director of Coats Global Services and Group Director of Strategy & M&A

    • Tenure: 4.8yrs
  • Hizmy Hassen

    Chief Digital & Technology Officer

    • Tenure: 2.8yrs
  • Kristina Blissett

    Head of Communications

    • Tenure: 0yrs
  • Ronan Cox

    President of Performance Materials

    • Tenure: 2.8yrs
  • Monica McKee

    Chief Human Resource Officer

    • Tenure: 1.7yrs
  • Rob Mann

    Head of Investor Relations

    • Tenure: 0yrs

Board Members

  • Mike Clasper (66yo)

    Chairman of the Board

    • Tenure: 5.6yrs
    • Compensation: US$250.90k
  • Alan Rosling (56yo)

    Independent Non-Executive Director

    • Tenure: 4.7yrs
    • Compensation: US$70.00k
  • Simon Boddie (59yo)

    CFO & Executive Director

    • Tenure: 3.3yrs
    • Compensation: US$2.02m
  • David Gosnell (62yo)

    Independent Non-Executive Director

    • Tenure: 4.7yrs
    • Compensation: US$73.90k
  • Nicholas Bull

    Senior Independent Non-Executive Director

    • Tenure: 4.6yrs
    • Compensation: US$72.60k
  • Fran Philip (61yo)

    Independent Non-Executive Director

    • Tenure: 3.1yrs
    • Compensation: US$67.50k
  • Rajiv Sharma (52yo)

    Group Chief Executive & Executive Director

    • Tenure: 2.8yrs
    • Compensation: US$3.29m
  • Anne Fahy (58yo)

    Non-Executive Director

    • Tenure: 1.7yrs
    • Compensation: US$58.60k
  • Echo Lu

    Independent Non-Executive Director

    • Tenure: 1.9yrs
    • Compensation: US$61.50k

Company Information

Coats Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Coats Group plc
  • Ticker: COA
  • Exchange: LSE
  • Founded:
  • Industry: Textiles
  • Sector: Consumer Durables
  • Market Cap: UK£1.060b
  • Shares outstanding: 1.43b
  • Website: https://www.coats.com

Number of Employees


Location

  • Coats Group plc
  • 1 The Square
  • Stockley Park
  • Uxbridge
  • Middlesex
  • UB11 1TD
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
COALSE (London Stock Exchange)YesOrdinary SharesGBGBPDec 2002
COALBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPDec 2002
4TCDB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 2002
GPGR.FOTCPK (Pink Sheets LLC)CDI (1:1)USUSDMar 2015

Biography

Coats Group plc manufactures and supplies industrial threads worldwide. It provides sewing threads; engineered yarns; metal, plastic, and spiral zippers; and interlinings and reflective tapes for apparel,  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/18 20:35
End of Day Share Price2019/11/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.