Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

GPG posts surge in first-half Coats earnings

GPG still wrangling UK pension liability, Coats 1H earnings more than doubles

By Paul McBeth

Aug. 13 (BusinessDesk) - Guinness Peat Group is still grappling with its UK pension liability and has offered to bump up the level of support for the schemes, while announcing a near-trebling in first-half earnings for its Coats threadmaker unit.

GPG, which plans to rebrand as Coats once it settles the pension liability, is still in negotiations with the UK Pensions Regulator and the trustees of the two schemes, which have been holding up its return to shareholders.

The investment firm's board has proposed to retain 170 million pounds across the two schemes through cash invested directly in the schemes and cash invested into sponsoring employers of the schemes, it said in a statement. The board had previously agreed to retain 124 million pounds to support the two pension schemes.

As at June 30, the pension obligation was valued at 222 million pounds, up from 178 million pounds six months earlier.

GPG and the trustees of the schemes have until Sept. 30 to make a written submission to the regulator, and any formal hearing would be unlikely to happen before the first half of next year.

The investment firm spent 10 million pounds in advisory fees in 2013 with a further 8 million provided for to deal with anticipated costs in 2014.

GPG has generated about $1.4 billion from the asset sales programme it embarked on in 2011 after a shareholder revolt over plans to split up the company along regional lines saw a board shake-out. It had cash of $734 million as at June 30, and shareholder funds of $782 million.

The investment company's Coats unit, which is now GPG's sole investment, reported a profit of 11 million pounds in the six months ended June 30 from a profit of 4 million pounds a year earlier. Revenue edged down to US$837.1 million from US$839.7 million, due to the British pound strengthening against the greenback, with sales up 2 percent on a like-for-like basis. Operating profit climbed to US$63 million from $59.4 million, driven by gains in the industrial division.

Coats chief executive Paul Forman said the industrial division is expected to keep delivering gains through the rest of the year, and anticipates an improvement in the crafts division, although trading will remain challenging. The threadmaker is undertaking a strategic review of its European, Middle East and Africa crafts division which it expects to be completed in the fourth quarter of this year.

"At a group level it is expected that, while operating profit will continue to be impacted by crafts, attributable profit will be in line with market expectations," Forman said.

The shares fell 0.7 percent to 67 cents yesterday, and have gained 14 percent this year. The stock is rated an average 'hold' based on six analyst recommendations compiled by Reuters, with a median target price of 64 cents.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fund For PPP Plans: Govt Embraces Targeted Rates To Spur Urban Infrastructure

The government's latest response to the Auckland housing shortage will see central government and private sector firms invest in 'special purpose vehicles' to fund essential roading, water and drains that Auckland Council can't fund without threatening its credit rating. More>>

ALSO:

Superu Report: Land Regulation Drives Auckland House Prices

Land use regulation is responsible for up to 56 per cent of the cost of an average house in Auckland according to a new research report quantifying the impact of land use regulations, Finance Minister Steven Joyce says. More>>

ALSO:

Fletcher Whittled: Fletcher Dumps Adamson In Face Of Dissatisfaction

Fletcher Building has taken the unusual step of dumping its chief executive, Mark Adamson, as the company slashed its full-year earnings guidance and flagged an impairment against Australian assets. More>>

ALSO:

No More Dog Docking: New Animal Welfare Regulations Progressed

“These 46 regulations include stock transport, farm husbandry, companion and working animals, pigs, layer hens and the way animals are accounted for in research, testing and teaching.” More>>

ALSO:

Employment: Most Kiwifruit Contractors Breaking Law

A Labour Inspectorate operation targeting the kiwifruit industry in Bay of Plenty has found the majority of labour hire contractors are breaching their obligations as employers. More>>

ALSO: