GPG made first-half loss, predicts full-year weakness on Coats

Friday 14th August 2009

Guinness Peat Group Plc., the investment company chaired by Ron Brierley, had a first-half loss and expects a “poor” fall-year result as it tries to restore profitability at its Coats threadmaker unit.

GPG didn’t give details of the loss in the six months ended June 30, with its results scheduled for August 26. Them company said it may not meet a 2010 deadline for a “substantial release of value” that Brierley flagged last year, which was to have coincided with his retirement. Since then he’s decided to stay on for longer.

Equity markets have “greatly improved” though GPG is anticipating “further repercussions” from the credit crunch. With some $767 million in cash on its books, GPG’s “balance sheet and liquidity continues to be a great strength,” it said.

“GPG is increasingly recovering a positive outlook on future prospects,” Brierley said in a statement. The company’s expected results “disguise the fact that things are happening which are not yet ready for formal reporting.”

GPG posted a full-year loss last financial year after it wrote down the value on its portfolio and its Coats unit in the U.K. was hit by the global economic slump.

The shares rose 1.3% to 81 cents on the NZX yesterday, and have declined 14% this year.

Brierley said its Australian trading subsidiaries Australian Country Spinners, Greens General Foods, Gosford Quarry and Touch Networks, worth some A$57 million, have all “had problems of one kind or another.” Still, Touch Networks was singled out as making good progress toward being “a very successful investment,” he said.

Businesswire.co.nz

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