29th Aug 2007 07:01
Guinness Peat Group PLC29 August 2007 RESULTS OF GUINNESS PEAT GROUP PLC ("GPG") FOR THE SIX MONTHS ENDED 30 JUNE 2007 GPG results for announcement to the Market for the six months ended 30 June2007. Please note the following key information: * Revenue decreased by £23 million (3%) over the corresponding period in 2006; * Profit from ordinary activities after tax attributable to members increased by £61 million (185%) over the corresponding period in 2006; * Net profit for the period attributable to members increased by £61 million (185%) over the corresponding period in 2006; * No interim dividend has been declared for the period (nil for the corresponding period in 2006; 0.91p paid during the period in respect of the year ended 31 December 2006, as adjusted for the 2007 Capitalisation Issue). J R RussellCompany Secretary29 August 2007 Chairman's Statement A relatively uneventful 6 months for GPG on the surface but plenty of planningand analysis, directed, as always, to the continuing enhancement of net assetvalue. The main component of the £94 million profit for the period was the sale ofAustralian Wealth Management shares, albeit at a lesser value than their 31December level, but it was considered timely to exit, with GPG having completedits role in the creation of a credible independent funds management company. There were other useful contributions from Coats, Nationwide Accident RepairServices and Green's General Foods. Coats has achieved the progress which we hoped and anticipated at this stagewith the exception of the unwelcome downturn in key crafts markets. However,Coats' crafts division is a structurally mature, well established business andfuture expectations are firmly based on a return to better conditions. Overall,Coats should record further momentum for the full year and beyond, as itgradually moves from transition to an acceptable return on capital invested. A detailed analysis of Coats' half yearly results is available at www.coats.comor a printed copy can be obtained on request at any of GPG's offices. To the extent Coats has met expectations, Capral Aluminium has not. That isdoubly disappointing for GPG because we believe the company has done everythingright in terms of modernisation of manufacturing processes, upgraded customerservice and streamlined distribution channels. However, the full impact of ahigh aluminium price, Chinese imports and a depressed NSW housing market is apowerful combination to overcome. GPG is working with the company to devisepotential solutions until market conditions ultimately improve. The strength of the NZ$ has had some adverse effect on the half year accountsdue to the higher level of eventual Capital Note repayments. But that is not allbad because of the corresponding increase in the value of New Zealand assetswhich is not directly reflected in the published accounts. GPG's financial position continues to be very sound with strong liquidity asshown in the simplified balance sheet below: SIMPLIFIED BALANCE SHEET AT 30 JUNE 2007 £mCash at Bank 239Debtors 21Coats Group 252Canberra Investment Corp 19Turners & Growers 50Capral 60Tower Australia 77Tower NZ 34Rattoon 39Green's General Foods 16Share portfolio 443Total Assets 1,250Creditors (76)Note issues (215)Shareholders' Funds £ 959 An interesting second half is unfolding with increased market volatility and theprobability of a more severe correction to "blue sky" values in the foreseeablefuture. Nevertheless, the Board looks forward to presenting a positive resultfor the full year to 31 December 2007. Ron BrierleyCHAIRMAN29 August 2007 Consolidated Income Statement Unaudited Unaudited 6 months to Audited 6 months to 30 June Year to 30 June 2006 31 December 2007 Restated ** 2006 £m £m £m Continuing OperationsRevenue 657 680 1,356 Cost of sales (454) (467) (956) Gross profit 203 213 400 Profit on disposal of investments and other net investment 90 18 45income Distribution costs (79) (88) (177)Administrative expenses (116) (85) (196) Operating profit 98 58 72 Share of loss of joint ventures (1) - - Share of profit/(loss) of associated undertakings 7 2 (1) Profit on sale of businesses - continuing operations 25 - 5 Finance costs (19) (20) (40) Profit before taxation from continuing operations 110 40 36 Tax on profit from continuing operations (18) (10) (12) Profit for the period from continuing operations 92 30 24 Discontinued OperationsGain on discontinued operations - 1 10 Profit for the period 92 31 34 Attributable to:EQUITY SHAREHOLDERS OF THE COMPANY 94 33 36Minority interests (2) (2) (2) 92 31 34 Earnings per Ordinary Share from continuing and discontinued operations:Basic (pence) 7.46p 2.67p 2.89p Earnings per Ordinary Share from continuing operations:Basic (pence) 7.44p 2.62p 2.08p ** Restated to reflect a change in accounting policy - see note 1b. Consolidated Balance Sheet Unaudited Unaudited 30 June Audited 30 June 2006 31 December 2007 Restated ** 2006 £m £m £mNON-CURRENT ASSETSIntangible assets 199 204 198Property, plant and equipment 402 388 391Investments in associates 141 23 122Investments in joint ventures 34 24 17Fixed asset investments 431 410 423Deferred tax assets 7 5 6Pension surpluses 38 36 32Trade and other receivables 18 15 18 1,270 1,105 1,207 CURRENT ASSETSInventories 238 254 216Trade and other receivables 295 302 238Current asset investments 18 27 19Derivative financial instruments 7 3 3Cash and cash equivalents 280 244 254 838 830 730 Non-current assets classified as held for sale 2 3 3 TOTAL ASSETS 2,110 1,938 1,940 CURRENT LIABILITIESTrade and other payables 287 260 254Current tax liabilities 9 6 9Capital notes - 82 -Other borrowings 97 128 123Provisions 89 91 87 482 567 473 NET CURRENT ASSETS 356 263 257 NON-CURRENT LIABILITIESTrade and other payables 12 20 21Deferred tax liabilities 35 16 18Capital notes 215 70 201Other borrowings 212 198 150Retirement benefit obligations: Funded schemes 14 29 14 Unfunded schemes 55 65 58Provisions 32 41 37 575 439 499 TOTAL LIABILITIES 1,057 1,006 972 NET ASSETS 1,053 932 968 Consolidated Balance Sheet Unaudited Unaudited 30 June Audited 30 June 2006 31 December 2007 Restated ** 2006 £m £m £mEQUITYShare capital 63 57 57Share premium account 61 60 61Translation reserve (7) (16) (24)Unrealised gains reserve 162 154 188Other reserves 298 305 303Retained earnings 382 278 291EQUITY SHAREHOLDERS' FUNDS 959 838 876Minority interests 94 94 92TOTAL EQUITY 1,053 932 968 Net asset backing per share* Pence 75.31 66.58 69.49 Australian cents 178.10 165.76 172.55 New Zealand cents 195.59 201.84 192.88 * The net asset backing per share for June 2006 and December 2006 has been adjusted for the 2007 Capitalisation Issue.** Restated to reflect a change in accounting policy - see note 1b. Blake Nixon, Director Approved by the Board on 28 August 2007 Consolidated Statement of Recognised Income and Expense Unaudited Unaudited Audited 6 months to 6 months to Year to 30 June 30 June 31 December 2007 2006 2006 Restated ** £m £m £m Gains on revaluation of fixed asset investments 51 64 109Gains/(losses) on cash flow hedges 1 3 (2)Exchange differences on translation of foreign operations 17 (28) (36)Actuarial gains on defined benefit pension schemes - - 9Net income recognised directly in equity 69 39 80 TransfersTransferred to profit or loss on sale of fixed asset (78) 3 (7)investmentsTransferred to profit or loss on sale of businesses 1 - -Transferred to profit or loss on cash flow hedges (1) (1) 1Profit for the period 92 31 34 Total recognised income and expense for the period 83 72 108 Attributable to:EQUITY SHAREHOLDERS OF THE COMPANY 85 74 110Minority interests (2) (2) (2) 83 72 108 ** Restated to reflect a change in accounting policy - see note 1b. Reconciliation of Consolidated Movements in Equity Shareholders' Funds6 months ended 30 June 2007 Share Unrealised Share premium Translation gains Other Retained capital account reserve reserve reserves earnings Total £m £m £m £m £m £m £mBalance as at 1 January 2007 57 61 (24) 188 303 291 876 Total recognised income and expense for the period - - 17 (26) - 94 85Dividends (note 9) - - - - - (11) (11)Capitalisation issue of 6 - - - (6) - -sharesScrip dividend alternative - - - - - 8 8Share based payments - - - - 1 - 1 Balance as at 30 June 2007 63 61 (7) 162 298 382 959 Consolidated Cash Flow Statement Unaudited Unaudited Audited 6 months to 6 months to Year to 30 June 30 June 31 December 2007 2006 2006 £m £m £mCash inflow/(outflow) from operating activitiesNet cash inflow/(outflow) from operating activities 60 (4) 151Interest paid (24) (23) (42)Taxation paid (9) (9) (18)Net cash generated by/(absorbed in) operating activities 27 (36) 91 Cash outflow from investing activitiesDividends received from associates and joint ventures 5 4 5Capital expenditure and financial investment (63) (11) (82)Acquisitions and disposals (12) 2 (30)Net cash absorbed in investing activities (70) (5) (107) Cash inflow from financing activitiesIssue of ordinary shares 1 48 48Equity dividends paid to Company's shareholders (4) (4) (4)Dividends paid to minority interests (2) (2) (4)Increase in debt 35 23 9Net cash generated by financing activities 30 65 49 Net (decrease)/increase in cash and cash equivalents (13) 24 33Cash and cash equivalents at beginning of the period 241 238 238Exchange gains/(losses) on cash and cash equivalents 39 (29) (30)Cash and cash equivalents at end of the period 267 233 241 NOTES TO THE FINANCIAL INFORMATION 1a. The interim financial information has been prepared in accordance with the recognition and measurement principles of applicable International Financial Reporting Standards (IFRSs) as adopted by the Group, and comply with the disclosure requirements of the Listing Rules of the UK Financial Services Authority and the Listing Rules of the Australian Securities Exchange. The accounting policies adopted have been consistently applied to all periods presented, other than as set out in 1b. below. 1b. The income statement for the six months ended 30 June 2006 has been restated to reflect emerging best practice in respect of the treatment of deferred tax assets recognised following the recognition on implementation of IFRS of unrealised gains and losses on non-current investments. Deferred tax assets recognised were previously offset against deferred tax liabilities in the unrealised gains reserve, but are now separately recognised through the income statement. The impact of this restatement is an increase in retained earnings of £30 million at 30 June 2006 and a corresponding decrease in the unrealised gains reserve of £30 million at that date, but has no impact on either profit for the six months ended 30 June 2006 or shareholders' funds at that date. 2. The figures for the year ended 31 December 2006 do not constitute statutory accounts for that year but have been extracted from the statutory accounts, which have been filed with the Registrar of Companies. The auditors reported on those accounts and that report was unqualified and did not contain statements under Section 237(2) or (3) of the Companies Act 1985. The financial information for the six months ended 30 June 2007 has been reviewed - see attached Independent Review Report - but has not been audited. The financial information for the equivalent period in 2006 was similarly reviewed but not audited. 3. Group foreign exchange movements - during the six months to 30 June 2007, GPG recognised in operating profit £11 million of net foreign exchange losses compared to £20 million of net foreign exchange gains in the six months to 30 June 2006 (£3 million net gains in the year to 31 December 2006). 4. Tax on profit from continuing operations 30 June 30 June 31 December 2007 2006 2006 £m £m £m UK Corporation tax at 30% - (3) - Overseas tax (10) (6) (21) (10) (9) (21) Deferred tax (8) (1) 9 (18) (10) (12) 5. The Group's significant joint venture and associate entities were as follows: 30 June 30 June 31 December 2007 2006 2006 Green's General Foods Pty Ltd 72.5% na na Australian Country Spinners Ltd 50.0% 50.0% 50.0% Rattoon Holdings Ltd 44.4% 20.2% 44.8% The Maryborough Sugar Factory Ltd 27.3% 22.4% 24.3% Tower Australia Group Ltd 24.4% na 23.9% Autologic Holdings plc 21.9% na na Nationwide Accident Repair Services plc na 50.0% 31.3% Green's Foods Ltd na 37.4% 37.6% CPI Group Ltd na 22.9% na Significant contributions to profit for the period from joint venture and associate entities were: 30 June 30 June 31 December 2007 2006 2006 £m £m £m Rattoon Holdings Ltd 3 - - Tower Australia Group Ltd 3 - - Nationwide Accident Repair Services plc 1 2 2 Green's General Foods Pty Ltd (2) - - Australian Country Spinners Ltd - (2) (2) Green's Foods Ltd - - (5) NOTES TO THE FINANCIAL INFORMATION - continued 6. Earnings per share - The calculation of earnings per Ordinary share is based on profit after taxation attributable to shareholders and the weighted average number of 1,264,378,670 Ordinary shares in issue during the six months ended 30 June 2007. The comparatives for the six months to 30 June 2006 and the year to 31 December 2006 have been adjusted for the Capitalisation Issue which took place in June 2007. Calculations of earnings per share are based on results to the nearest £'000s. 7. The net tangible assets per share at 30 June 2007 were 67.04p (30 June 2006: 57.88p, 31 December 2006: 61.03p). 8. Changes in the issued share capital during the six months to 30 June 2007 comprise the following: £000 At 1 January 2007 57,310 Employee options exercised 97 Scrip dividend alternative shares issued (18 May 2007) 441 Capitalisation Issue (22 June 2007) 5,780 At 30 June 2007 63,628 9. Dividends - The directors have not recommended the payment of an interim dividend (6 months to 30 June 2006 Nil). An interim dividend of 0.91p per share, adjusted for the 2007 Capitalisation Issue, was paid during the period in respect of the year ended 31 December 2006. A final dividend of 0.91p per share, adjusted for the 2006 Capitalisation Issue, was paid during the six months ended 30 June 2006 in respect of the year ended 31 December 2005. 10. Directors - The following persons were directors of GPG during the whole of the period and up to the date of this report: Sir Ron Brierley G J Cureton A I Gibbs B A Nixon Dr G H Weiss 11. Directors' Report - The Chairman's Statement appearing in the Interim Results and signed by Sir Ron Brierley provides a review of the operations of the Group for the six months ended 30 June 2007. 12. Director's Declaration - In accordance with a resolution of the directors of Guinness Peat Group plc I state that: in the opinion of the Directors: a. the Interim Results of the consolidated group: (i) give a true and fair view of the financial position as at 30 June 2007 and the performance of the consolidated group for the half-year ended on that date; and (ii) comply with the recognition and measurement principles of applicable International Financial Reporting Standards as adopted by the Group; and b. there are reasonable grounds to believe the Company will be able to pay its debts as and when they become due and payable. 13. Publication - This statement is being sent to shareholders and copies will be available at the registered office of the Company, First Floor, Times Place, 45 Pall Mall, London SW1Y 5GP. A copy will also be displayed on the Company's website at www.gpgplc.com. On behalf of the BoardB A NixonDirector29 August 2007 UNITED KINGDOMFirst Floor, Times Place, 45 Pall Mall, London SW1Y 5GP Tel: 020 7484 3370 Fax: 020 7925 0700 AUSTRALIAc/o Registries LtdPO Box R67, Royal Exchange, Sydney NSW 1224, Australia Tel: 02 9290 9600 Fax: 02 9279 0664 NEW ZEALANDc/o Computershare Investor Services LimitedPrivate Bag 92119, Auckland 1020, New Zealand Tel: 09 488 8700 Fax: 09 488 8787 Registered in England No. 103548 INDEPENDENT REVIEW REPORT TO GUINNESS PEAT GROUP PLC Introduction We have been instructed by Guinness Peat Group plc ("the Company") to review theconsolidated financial information of the Company and its subsidiaries(together, "the Group") for the six months ended 30 June 2007 which comprise theconsolidated income statement, the consolidated balance sheet, the consolidatedstatement of recognised income and expense, the reconciliation of consolidatedmovements in equity shareholders' funds and the consolidated cash flow statementand the related notes 1 to 13. We have read the other information contained inthe interim report and considered whether it contains any apparent misstatementsor material inconsistencies with the financial information. This report is made solely to the Company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the Company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe Company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. Deloitte & Touche LLPChartered AccountantsLondon29 August 2007 Neither an audit nor a review provides assurance on the maintenance andintegrity of the website, including controls used to achieve this, and inparticular whether any changes may have occurred to the financial informationsince first published. These matters are the responsibility of the directorsbut no control procedures can provide absolute assurance in this area. Legislation in the United Kingdom governing the preparation and dissemination offinancial information differs from legislation in other jurisdictions. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Coats