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1. Company Snapshot

1.a. Company Description

Coats Group plc, together with its subsidiaries, manufactures and supplies industrial threads worldwide.The company provides apparel and footwear, and accessories threads for sport/athleisure, denim, women wear, menswear, children's wear, leather wear, workwear, footwear, and intimates and underwear under Epic, Dual Duty, Seamsoft, Nylbond, Gral, Gramax, Astra, Sylko, Knit, EcoVerde, Eloflex, and Drybond brands; zips, trims, and crafting's for use in zips, interlinings, reflective tapes, and crafting products under Opti, Signal, and Connect brands; and software solutions that enables supply chain productivity gains and enhances supply and facilitating compliance under Coats Digital, FastReactPlan, VisionPLM, GSDCost, Intellocut, and Intellobuy.It also offers performance materials comprising fire retardant and cut resistant threads and yarns for personal protection sectors under Firefly, FlamePro, and Armoren brands; composites for telecommunications and energy, automotive, and footwear sectors under Gotex, Synergex, Lattice, Ultrabloc, Aptan XU, Gral Binder, and Protos Ripcord brands; and performance threads and yarns for the automotive, and household and recreation industries, as well as other technical industrial applications under Gral, Helios, Gral Quilt, Protos Fil, Epic, Gramax, Admiral, and Neophil brands.


The company was formerly known as Guinness Peat Group plc and changed its name to Coats Group plc in March 2015.Coats Group plc was incorporated in 1909 and is headquartered in Uxbridge, the United Kingdom.

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1.b. Last Insights on COA

Recent news suggests that Coats Group plc's performance may be negatively impacted by the challenging UK market environment, with the FTSE 100 and FTSE 250 indices experiencing downward pressure due to weak trade data from China and concerns about global economic recovery. Additionally, insider buying activity in the company's shares, although indicating confidence, may not be enough to offset the negative sentiment in the market.

1.c. Company Highlights

2. Coats' Resilient Performance and Ambitious Growth Plans

Coats delivered a resilient financial performance in 2025, with revenue of $1.46 billion, flat on an organic constant exchange rate basis, and an EBIT margin of 19.8%, an 80 basis point increase. The company's EPS was $0.01648, missing analyst estimates of $0.03511. The group's free cash flow was a record $160 million, driven by high margins and low capital intensity. The company's valuation metrics indicate a reasonable price for its earnings, with a P/E Ratio of 23.74 and an EV/EBITDA of 8.44.

Publication Date: Mar -08

📋 Highlights
  • Major M&A Transactions: Acquired OrthoLite ($770M) and divested U.S. Yarns, unlocking $20M cost synergies by 2028.
  • Free Cash Flow Record: Generated $160 million in free cash flow, driven by high margins and operational efficiency.
  • EBIT Margin Expansion: Group EBIT margin rose 80 bps to 19.8%, with Apparel division reaching 20.2% (60 bps improvement).
  • EcoVerde Growth: Recycled thread brand scaled to $550M in sales, achieving 52% penetration in group thread production.
  • Margin Target Upgrade: Raised EBIT margin guidance to 21-23% (200 bps increase) and $1B cumulative free cash flow over 5 years.

Divisional Performance

The Apparel division revenue was up 1% on a CER basis, with EBIT increasing by 4% and EBIT margin increasing by 60 basis points to 20.2%. The Footwear division revenue was 2% lower than 2025 on an organic CER basis, but outperformed the market with estimated organic market share growing to around 30%. The division successfully maintained pricing despite downward pressures and delivered a strong EBIT margin of 23.9%.

Strategic Update and Growth Initiatives

Coats made significant progress in 2025, reshaping its portfolio by divesting the U.S. Yarns business and acquiring OrthoLite for an enterprise value of $770 million. The company expects to deliver $20 million in joint cost synergies by 2028, with $5 million in 2026. The acquisition of OrthoLite has improved the group's quality, growth, and profitability potential, and is expected to contribute to the company's upgraded medium-term targets, including a revenue CAGR of above 5% through the cycle and a cumulative free cash flow target of $1 billion over the next 5 years.

Outlook and Valuation

Coats expects to deliver organic revenue growth in 2026, with easier comparatives, and further adjusted EBIT margin expansion driven by OrthoLite's contribution and modest organic margin improvement. Analysts estimate next year's revenue growth at 5.4%. The company's valuation metrics, including a P/S Ratio of 1.62 and a Free Cash Flow Yield of 8.12%, indicate a reasonable price for its growth prospects. The company's ROIC of 7.69% and ROE of 18.86% also suggest a strong return on investment.

3. NewsRoom

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Coats Releases 2025 Sustainability Report, Achieving Key 2026 Targets One Year Ahead of Schedule

Mar -12

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Coats Group PLC (CGGGF) Full Year 2025 Earnings Call Highlights: Record Cash Flow and Strategic ...

Mar -05

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FTSE 100 Live: Blue-chip shares flatten off as Iran nuclear offer played down

Mar -05

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Coats Group H2 Earnings Call Highlights

Mar -05

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UK Stock Market's February 2026 Value Picks For Savvy Investors

Feb -06

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UK Stocks That May Be Trading Below Their Estimated Value

Jan -08

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3 UK Stocks That May Be Undervalued By Up To 48.2%

Dec -10

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When Should You Buy Coats Group plc (LON:COA)?

Nov -27

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.66%)

6. Segments

Apparel

Expected Growth: 4.5%

Coats Group plc's Apparel segment growth of 4.5% is driven by increasing demand for high-quality threads and yarns from fashion brands, expansion into emerging markets, and strategic partnerships with leading manufacturers. Additionally, the company's focus on sustainability and innovation in textile production has contributed to its growth.

Footwear

Expected Growth: 4.2%

Coats Group plc's Footwear segment growth of 4.2% is driven by increasing demand for athletic and outdoor footwear, particularly in the Asia-Pacific region. Additionally, the company's focus on innovation, sustainability, and strategic partnerships with key brands have contributed to the growth. Furthermore, the rising trend of online shopping and the company's e-commerce expansion have also boosted sales.

Performance Materials

Expected Growth: 5.5%

Coats Group plc's Performance Materials segment growth of 5.5% is driven by increasing demand for high-performance fibers in automotive and industrial applications, as well as growing adoption of sustainable and eco-friendly textiles. Additionally, strategic investments in R&D and expansion into emerging markets have contributed to the segment's growth.

7. Detailed Products

Thread

Coats provides a wide range of threads for sewing, embroidery, and technical textiles. The threads are used in various industries such as apparel, footwear, and upholstery.

Zips

Coats offers a variety of zips for different applications, including clothing, bags, and accessories.

Interlinings

Coats provides interlinings for various applications, including garment manufacturing, upholstery, and technical textiles.

Tapes

Coats offers a range of tapes for various applications, including garment manufacturing, upholstery, and technical textiles.

Embellishments

Coats provides embellishments such as sequins, beads, and appliques for various applications, including garment manufacturing and accessories.

Crafts

Coats offers a range of craft products, including threads, yarns, and needles, for various craft applications.

8. Coats Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Coats Group plc is moderate due to the presence of alternative materials and products in the textile industry.

Bargaining Power Of Customers

The bargaining power of customers is low for Coats Group plc due to the company's strong brand reputation and diversified customer base.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Coats Group plc due to the presence of multiple suppliers in the textile industry.

Threat Of New Entrants

The threat of new entrants is low for Coats Group plc due to the high barriers to entry in the textile industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high for Coats Group plc due to the presence of several established competitors in the textile industry, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.95%
Debt Cost 9.20%
Equity Weight 48.05%
Equity Cost 10.86%
WACC 10.00%
Leverage 108.10%

11. Quality Control: Coats Group plc passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Van de Velde

A-Score: 6.9/10

Value: 5.6

Growth: 4.2

Quality: 7.9

Yield: 9.4

Momentum: 5.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Marimekko

A-Score: 6.1/10

Value: 2.7

Growth: 5.6

Quality: 8.1

Yield: 9.4

Momentum: 5.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
OVS

A-Score: 6.0/10

Value: 5.8

Growth: 5.4

Quality: 3.6

Yield: 5.0

Momentum: 8.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
G-III Apparel

A-Score: 4.5/10

Value: 6.6

Growth: 5.3

Quality: 5.4

Yield: 0.0

Momentum: 4.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Coats

A-Score: 4.2/10

Value: 3.5

Growth: 2.9

Quality: 5.4

Yield: 5.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Calida

A-Score: 3.5/10

Value: 8.9

Growth: 1.4

Quality: 3.1

Yield: 3.8

Momentum: 0.0

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.88$

Current Price

0.88$

Potential

-0.00%

Expected Cash-Flows