Guinness Peat Group plc
Guinness Peat Group plc today releases its unaudited condensed consolidated
results for the 6 months to 30 June 2008.
Richard Russell
Company Secretary
Guinness Peat Group plc
27 August 2008
Contacts:
Blake Nixon (UK) 00 44 20 7484 3370
Gary Weiss (Australia) 00 61 2 8298 4305
Tony Gibbs (New Zealand) 00 64 9 379 8888
Chairman''s Statement
Unfortunately, GPG has produced a rather poor result for the half year to 30
June 2008.
There are some redeeming features but first to address the worst. There was a
profit of GBP 15 million from normal trading sources and sales of shares
(including exchange gains of GBP 7 million, of which GBP 2.3 million is in
respect of the NZ$ Capital Notes) before share portfolio writedowns of GBP 35
million. Hence, an overall loss for the period of GBP 20 million. There is
also a "deferred tax adjustment" of GBP 22 million which is purely IFRS
nonsense and can be safely disregarded as a legitimate inclusion in any
proper analysis of the result.
GPG''s portfolio has not been immune from the worldwide sharemarket shakeout
and to that extent, we believe most of those losses will be recovered and
more. The majority of GPG''s
investments are sound strategic long term holdings where we are confident of
intrinsic value regardless of share price fluctuations.
Less favourably, there are some instances of arguably misplaced investment
judgment where prospects of recovery are more remote and where cost exceeds
market value. We will review those again on a full year basis at 31 December
next. As we have said before, a 6 month accounting period (2008 is our 37th
and the first where there has not been a successive increase in
net assets) is far too short to properly measure GPG''s overall performance.
In particular, we have absorbed large losses in recent years from Capral
Aluminium which has not been a success for GPG. However, we are now
supporting yet another equity issue in the
hope/expectation that the inevitable changes in the company''s trading
environment are looming ever closer and our faith will be finally rewarded.
Coats'' core manufacturing business held up well but losses in European crafts
(where vigorous remedial action is underway), costs of refinancing (an
important milestone for Coats) and higher forex charges, all impacted on the
bottom line.
A detailed analysis of Coats'' half yearly results is available at
www.coats.com or a printed copy can be obtained from any of GPG''s offices.
An important advantage which GPG retains in the present financial climate is
a strong, conservatively presented balance sheet and good liquidity (which
has been further augmented since balance date). That is supported by
substantial undrawn credit lines so GPG is well placed for selective buying
opportunities.
Nevertheless, we are far from complacent and proceed with
caution in the present climate.
End CA:00169166 For:GPG Type:HALFYR Time:2008-08-27:08:16:46