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[sharechat] GPG result

From: "nick" <>
Date: Sat, 16 Mar 2002 06:08:42 +1300

Guinness Peat Group - Final Results
Guinness Peat Group - Final Results
RNS Number:0322T
Guinness Peat Group PLC
15 March 2002

For Immediate Release 15 March 2002


('GPG' or 'the Company or 'the Group')



2001 was another successful year for GPG with a high level of productive
activity and a substantial increase in realised profits.

Major contributors to the net profit of £47.6 million were sales of shares in
Inchcape, London Stock Exchange and Time Products. Our 16% of Inchcape was sold
at an average of £4.74 per share which was very acceptable at the time but
obviously compares somewhat unfavourably with the latest price on the LSE of
£6.89. The shares were sold on a rising market over a 6 month period at levels
consistent with our 'break up' valuation of around £5 per share, and the
subsequent rerating of Inchcape on the strength of perceived growth prospects
was not part of our original equation. Although GPG is no longer a shareholder,
we wish the company well and will continue to follow its progress with interest.
We are still a 10% shareholder in the listed Singapore subsidiary, Inchcape
Motors Ltd.

Most of the significant developments during 2001 were reported or foreshadowed
in the Interim Report but some updates of note:

• GPG has taken an active role in the direction of Capral Aluminium Ltd
where our shareholding is now 30%.

• Some well merited and, so far, modestly effective, corporate activism
in the interests of minorities in poorly performing Australian Growth
Properties Ltd and Trans Tasman Properties Ltd.

• A 4.9% shareholding in Caltex Australia Ltd. The market has receded
from A$4 (probably too high) in 1998 compared with the present level of a
A$1.75, having been as low as A95c in 2001.

• A 10% stake in Western Metals Ltd has proved to be a problem, but not
without hope for the future as the world zinc price recovers from record
lows. Our entry cost of £3.3 million has been written off as a prudent and
conservative measure in the 2001 accounts.

• All our Otter Gold shares have been sold as a consequence of a
takeover offer by Normandy NFM Ltd. Notwithstanding some fanciful press
speculation, we are quite satisfied the offer represented full value, or near
enough thereto. Following the sale of Normandy shares, we have recovered
£2.2 million, after writing off our investment (opening value £5.3 million)
in the first half of 2001.

• After years of pain, prior to GPG's successful takeover offer in 2000,
Staveley Industries recorded an excellent result of £6.6 million. The USA
operations, in particular, were strong performers.

• Joe White Maltings Ltd continues its encouraging progress since our
involvement began several years ago and is now a formal member of the GPG
group, having become a 51% subsidiary during 2001.

• GPG acquired a substantial shareholding (39%) in Aurora Gold Ltd on a
favourable basis. Aurora had cash reserves in excess of its market
capitalisation plus goldmining interests in PNG and Indonesia which we are
evaluating for development or sale.

• GPG's proposals for change at Enza Ltd were not supported by
sufficient shareholders at the recent AGM but probably only delaying the
inevitable, when there is a wider recognition that Enza needs stronger
proprietorial drive and commitment to properly fulfil its role in the New
Zealand pipfruit industry.

• In contrast to the various Enza upheavals, GPG's investment in Turners
& Growers Ltd has been consistently successful and satisfying. Turners is
one of the few remaining old established 'traditional' public companies in
New Zealand providing a genuine service to consumers and suppliers and
making a real contribution to economic growth.

• GPG's largest portfolio investment is now Coats plc (21.33% at cost,
£69.12 million). We are represented on the Board of the company and although
far removed from its former status as one of the UK's major industrial
concerns, it is still the world leader in thread manufacture. We are a
committed long term holder.

• GPG's top five portfolio holdings after Coats are (book values at balance
date) De Vere Group 8.29%, £27.13 million; Brickworks 10.14%, £21.21
million; Capral 30.04%, £15.82 million; Joe White Maltings 50.99%, £14.11
million and Dawson International 26.96%, £11.19 million.

The 2001 result was adversely affected by exchange losses of £3.2 million which
is the fall in value of A$ and NZ$ expressed in £ sterling in these Accounts.
As stated on previous occasions, this has no impact on Australian and New
Zealand investors as GPG's UK assets and income convert to a correspondingly
higher amount in local currencies. E.g. the 2001 profit of £47.6 million
converts to A$135.2 million and NZ$166.3 million at year end exchange rates
whereas those amounts would have been A$127.9 million and NZ$160.6 million at
31/12/00 rates.

GPG has a relatively simple corporate message in terms of profit, balance sheet
and an asset portfolio profile. Shareholders may find it surprising therefore
that it requires a 70 page Annual Report to convey this information.
Unfortunately, that is a product of the unceasing demands of a proliferating
range of 'corporate governance' academics and 'do gooders' which results in
pages and pages of superfluous dross which is utterly meaningless but,
nevertheless, expensive to compile.

So called 'international accounting standards' is another obstacle to clear and
concise reporting. As GPG has a number of subsidiary and associated companies
which tend to obscure some essential features of the accounts, we present an
informal simplified balance sheet which is a more accurate representation of the
Board's own basis of accounting measurement:

Simplified Balance Sheet at 31 December 2001

£m £m

Creditors 19 Cash at bank 164
Note Issues 83 Debtors 10
Shareholders' funds 319 Coats 40
Staveley 8
Joe White Maltings 14
MEM* 6
Canberra Investment Corp 6
Turners & Growers 9
Share Portfolio 164
_______ _______
£421 £421
====== ======

* 39% of Aurora Gold Ltd is held by MEM at a carrying value of £2.3 million

Overall, the Company's financial health is excellent, with very strong liquidity
after the successful Capital Notes issue in New Zealand in 2001. As stated on
previous occasions, we believe the direct cost of this policy is more than
offset by the advantages of speed and flexibility of action, when required.


The customary 1 for 10 bonus issue of shares is again recommended for approval
at the AGM. Together with a 1p dividend, which will be paid as an interim for
2001, this maintains the pattern of a 10% effective increase each year as a
consequence of the bonus increased capital.

As dividends are not a tax efficient manner of distributing additional income,
the Board has examined (and continues to examine) alternative methods of
returning value to shareholders (including a possible second issue of 8% Notes,
as in Year 2000). However, having regard to potential developments in prospect
for GPG in the foreseeable future, it is considered appropriate to defer
specific proposals until later this calendar year.

It is unlikely the 2001 result will be repeated in 2002. Nevertheless, GPG is
well placed with a strong balance sheet, a promising share portfolio and a
positive outlook for superior performance in the foreseeable future.

Ron Brierley 15 March 2002

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