GPG's Coats sells EMEA crafts unit for US$10 mln

Friday 20th February 2015

Guinness Peat Group's Coats unit, the UK threadmaker, has agreed to sell its Europe, Middle East, and Asia crafts unit for US$10 million, which has been a drag on earnings over the past year.

Coats will sell the unit to Aurelius Group, subject to a number of conditions, and is expected to complete the deal in the second quarter of this year, it said in a statement. The proceeds will go towards general corporate purposes.

"The agreement to sell EMEA crafts follows a comprehensive review of the business, including its strategic fit within Coats, and the formulation of a turnaround plan," chief executive Paul Forman said. "The decision to sell the EMEA crafts business better positions Coats for future profitable growth and allows us to focus management attention on our high performing global industrial and strong Americas crafts businesses."

Coats put the unit under review in August, and in October the threadmaker reported flat sales in the third quarter with gains in its industrial unit offset by declining sales in the crafts division.

GPG is in the process of rebranding as Coats after liquidating its broader portfolio, though that's been delayed by protracted negotiations to settle its group pension liability with the UK Pensions Regulator.

The triple-listed shares last traded at 45 cents on the NZX, and are unchanged this year. The stock is rated an average 'hold' based on four analyst recommendations compiled by Reuters, with a median price target of 54 cents.

BusinessDesk.co.nz

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