Guinness Peat Group has posted a Stg42 million ($NZ112.4 million) first half loss, with the result affected by share writedowns and international accounting rules.
The investment company's performance compares with a net profit of Stg94m in the corresponding period a year earlier.
Chairman Sir Ron Brierley today said that the company had a profit of Stg15m from normal trading sources and sales of shares, before share portfolio writedowns of Stg 35m. Hence the overall loss for the period was Stg20m.
There was also a deferred tax adjustment of Stg22m which was "purely IFRS (International Financial Reporting Standards) nonsense and can be safely disregarded as a legitimate inclusion in any proper analysis of the result", Sir Ron said.
"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," he said.
But there were some instances of "arguably misplaced investment judgment" where prospects of recovery were more remote and where cost exceed ed market value.
In particular, the company had absorbed large losses in recent years from Capral Aluminium which had not been a success for GPG, Sir Ron said.
"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."
The core manufacturing business of GPG's Coats unit held up well but losses in European crafts , costs of refinancing and higher forex charges, all affected the bottom line.
Coats reported a pre-exceptional operating profit -- before reorganisation, impairment and other exceptional items of $US67.5m ($NZ98.1m) compared to $US68.4m a year earlier.
Sales were 6 percent up on 2007 and gross profit margins increased to 36.2 percent from 35.3 percent.
Sir Ron said that GPG had a strong, conservatively presented balance sheet and good liquidity supported by substantial undrawn credit lines, so was well placed for selective buying opportunities.
In early trade today, GPG shares were down 5c to $1.43.