Join our community of smart investors

Coats looks to simplify its business

The industrial thread manufacturer is looking to artificial intelligence as a means of reducing input costs
March 1, 2019

The rewards of Coats Group’s (COA) ‘Connecting for Growth’ efficiency programme continue to rise, delivering $15m (£11.3m) in net savings over the full-year, well ahead of an initial $5m target that was raised to $10m by management in July 2018.

IC TIP: Hold at 83.8p

The industrial thread manufacturer has lifted its target again and aims for $23m in savings when the programme concludes in 2020, after reinvestments, according to chief executive Rajiv Sharma. The costs of the programme aren’t insignificant, however. It effectively amounted to a redundancy programme in 2018, with severance costs of $20.5m for laid-off staff making up the bulk of its total $22.8m expenditure, which has been treated as exceptional.

Analysts at Peel Hunt forecast 2019 full-year pre-tax profits and earnings per share of $190m and 8¢ respectively, against prior year figures of $181m and 7.7¢.

COATS GROUP (COA)  
ORD PRICE:83.8pMARKET VALUE:£ 1.2bn
TOUCH:83.8-84p12-MONTH HIGH:92pLOW: 69p
DIVIDEND YIELD:1.5%PE RATIO:29
NET ASSET VALUE:190¢*NET DEBT:75%
Year to 31 DecTurnover ($bn)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
20141.56973.00nil
20151.47801.80nil
20161.461234.601.25
2017**1.361305.101.44
20181.411233.851.66
% change+4-5-25+15
Ex-div:02 May   
Payment:28 May   
£1=$1.32 *Includes intangible assets of $284m or 20¢ per share **Turnover and EPS restated to include continuing results following NA Crafts disposal and to reflect the adoption of IFRS15