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Record Coats contribution lifts GPG 1H profit

Record Coats contribution lifts GPG 1H profit

By Paul McBeth

Aug. 26 (BusinessDesk) – Guinness Peat Group, the investment company founded by Ron Brierley, lifted first-half earnings after its troubled Coats Plc. unit made its biggest contribution ever and the firm booked gains from asset sales.

Profit attributable to shareholders rose to 17 million pounds, or 0.72 pence per share, in the six months ended June 30, from 12 million pounds, or 0.47 pence, a year earlier, the London-listed company said in a statement. Global thread-maker Coats, whose poor performance has often been blamed for GPG’s state, contributed 23 million pounds to the group, and asset sales added a net 36 million pounds.

Net profit, which includes unrealised changes in the value of currency hedging, was 12 million pounds, up from 8 million pounds in 2010.

GPG is in the process of winding itself down after several of years of underperformance, and shareholders voted for the firm to return capital at their annual meeting in June, the first and likely only one to be held in New Zealand.

The investment company generated 98 million pounds from asset sales in the six month period, the biggest of which was its 15 million pound exit from U.K. media firm Chrysalis Group, followed by 13 million pounds in fellow investment group Pertama Holdings, and 10 million pounds for Australia’s Alinta Energy Ltd.

Chairman Rob Campbell said a strategic review of New Zealand fruit marketer Turners & Growers Ltd. was completed, and the NZX-listed firm is “engaged through its advisers with a number of parties.”

“In regard to each substantive investment a plan has been developed for the orderly realisation of shareholder value,” Campbell said.

“In some cases the plan seeks to have investee companies pursue the appropriate mix of capital management initiatives to enhance value for shareholders and, where appropriate, liquidity for GPG’s investment,” he said.

The board approved an interim dividend of 1.15 pence per share for the year ended Dec. 31. The shares were unchanged at 63 cents on the NZX yesterday, and have shed almost a quarter since investors agreed to the capital return in June.

The half-year report got a clear bill of health from auditor Deloitte, though it raised an emphasis of matter note over the potential liability Coats faces over the European Commission’s antitrust probe in the region’s haberdashery sector. GPG’s board said they believe any fine is adequately covered by existing provisions.


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