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


GPG focuses on cost cutting as restructuring plan delayed

GPG focuses on cost cutting as restructuring plan delayed by UK pensions regulator

By Tina Morrison

Aug. 28 (BusinessDesk) - Guinness Peat Group is focussing on cutting costs as an investigation by the UK pensions regulator delays its plan to wind up most of its investments and focus on threadmaker Coats.

GPG will cut board fees starting on Oct. 1 to reflect that it is now a simpler company, holding board meetings by conference call to reduce travel and other costs, close its last Australian office by November and its principal London office by the end of the year and cut permanent staff to eight from 15 in the year to December, the London-based company said in a statement.

The diversified investment firm has been selling off its varied businesses to focus on Coats, its biggest holding. The plan to return capital to investors and rebrand itself as Coats has been stymied by the regulator’s concerns about whether the firm is retaining enough capital to cover its pension scheme liabilities.

“Further capital returns have been deferred for the present time,” chairman Rob Campbell said in the statement. “The board is very conscious of the need to manage costs during this interruption in the capital return process.”

Shares in GPG rose 0.9 percent to 54 cents.

GPG’s only remaining investment aside from Coats is Tower, which returned $119 million to investors in April following the sale of its health insurance and investments businesses.

In August, Tower completed the sale of the bulk of its life insurance business and the company’s board is now considering its capital management strategy and exploring disposal options for the balance of its life business, GPG said.

GPG said it values its investment in Tower at $1.95 a share even as Tower’s share price fell to $1.72 as at Aug. 23.

“GPG considers the ongoing Tower business has an intrinsic value in excess of the current share price,” Campbell said. “GPG’s strategic holding in the company will continue to be managed in this context.”

Meanwhile, Coats boosted sales 2 percent to US$840 million in the six months ended June 30. Sales rose 4 percent in constant currency terms, as both the industrial and crafts divisions built on an improved performance in the second half of 2012, GPG said. Operating profit before one-time items rose 12 percent to US$64 million.

The Coats profit attributable to GPG amounted to US$7 million, compared with a loss of US$126 million in the year earlier period. GPG has increased its carrying value of Coats in its balance sheet to US$78 million from US$185 million on an improved valuation of employee benefits.

The thread maker has scaled back one of its planned restructuring projects, which will reduce a one-time charge this financial year to about $20 million from $35 million. As a result, plans to sell some properties won’t take place meaning the reorganisation plan will no longer be self-funding and will result in a net cash outflow over 2013 and 2014 of about $20 million, the company said.

“Coats continues to make good progress and the business is well placed to sustain and grow both revenue and profit, although trading conditions remain mixed across different geographies,” chief executive Paul Forman said.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Stats NZ: Largest Drop In Terms Of Trade In A Decade As Dairy Export Prices Sour

Lower export prices for dairy, meat, and logs in the September 2020 quarter led to the biggest drop in terms of trade since June 2009, Stats NZ said today. Export prices fell in the September 2020 quarter, down 8.3 percent from its highest ever ... More>>


Stats NZ: Election Boosts October Job Numbers

Job numbers were boosted by general election staff in October 2020, along with rises in the manufacturing, retail, and hospitality industries, Stats NZ said today. Filled jobs rose by 27,667 to 2.2 million in October 2020 compared with September, after ... More>>

Government: New Year Border Exception For Seasonal Workers In The Horticulture And Wine Industries

2000 additional RSE workers to enter New Zealand early next year employers must pay these workers at least $22.10 an hour employers will cover costs of managed isolation for the RSE workers RSE workers will be paid the equivalent of 30 hours work a week ... More>>


Media: Discovery, Inc. Completes Acquisition Of New Zealand’s Mediaworks TV Ltd

Auckland, New Zealand, December 1, 2020 - Discovery, Inc. (“Discovery”), the global leader in real-life entertainment, has completed its acquisition of New Zealand’s leading independent free-to-air commercial broadcaster, MediaWorks TV Ltd, now operating ... More>>

Department Of Conservation: Big Year Underway At Albatross Colony

Familiar faces are returning for the new season of Royal Cam, with a big breeding year underway for the toroa/northern royal albatross colony on Otago’s windswept Pukekura/Taiaroa Head. More than 120 albatrosses, a taonga species, have returned ... More>>

Real Estate: ASB Survey Reveals Majority Of Kiwis Expect House Prices To Keep Climbing


House price expectations are soaring as New Zealand’s housing market shifts up a gear. But stretched affordability is putting a dent in perceptions of whether it’s a good time to buy. While Kiwis reveal they do expect interest rates to fall further. ... More>>

Stats NZ: Births And Deaths: Year Ended September 2020

Births and deaths releases provide statistics on the number of births and deaths registered in New Zealand, and selected fertility and mortality rates. Key facts For the year ended September 2020: 57,753 live births and 32,670 deaths ... More>>