Shares fall after GPG says its structure isn't working

Guinness Peat Group fell yesterday after it told shareholders the company faces complex structural change.

Chairman Sir Ron Brierley told the annual meeting in London that the company had not completed a plan to return value to shareholders. The shares fell 3c to 85c on the NZX yesterday.

GPG was incorporated in Britain, where corporate bureaucracy was "simply spiralling out of control", Brierley said.

"That is a model which no longer works for GPG but formulating structural changes where what shareholders already own is not eaten up in excessive taxes and other charges is a very complex equation."

In the company's annual report, Brierley had said it was planned to have a process in place to return value to shareholders before the annual meeting. After the meeting, he said: "That part is literally true insofar as we do have a process in place and which is no mere formality."

Despite the difficulties, GPG was making progress, Brierley said.

"In terms of GPG's 20-year history, a few more weeks, or months, if necessary, is not critical. Much better to reach the right conclusion rather than anything more precipitate but recognising that, inescapably, substantial changes cannot be indefinitely postponed."

In the meantime, GPG remained in a healthy position with a share price well supported by net assets the company believed to be conservatively stated.

- BLOOMBERG, NZPA