Brierley says GPG result satisfactory

Sir Ron Brierley

Guinness Peat Group plc said today its June half year net profit fell 36 per cent to £33 million ($99m).

GPG shares fell 8c to $2.50 in New Zealand soon after the result. Most of GPG's shareholding is in New Zealand and Australia.

Chairman, kiwi business mogul Sir Ron Brierley, said the company had made quite good progress but there was nothing spectacular to report nor any major transactions.

He said the net profit appeared better than it actually was because of a high component of currency gains including a £31m gain on capital notes offset by a £6m loss on cash balances.

The company's biggest asset, threads company Coats Group, reported its June half year net profit fell 37 per cent to US$23.1m ($36.4m).

The Coats contribution to GPG was £13m including a £11m sale of properties.

The company was hit by a 66 per cent reduction in crafts division's profit mainly due to de-stocking by North American retailers. Industrial thread sales increased 3 per cent and profit by 34 per cent.

Since 30 June, GPG's former joint venture company, Nationwide Accident Repair Services had listed on the London AIM market, reducing GPG's stake to 31.34 per cent and realising a profit of £5m.

The company said it was sitting on an unrealised surplus on the residual stake of £18m at current market value.

GPG had £203m cash on hand at balance date.

Earnings per ordinary share from continuing and discontinued operations fell to 2.95p from 4.93p.

Net asset backing per share was estimated to have risen to $2.22 from $1.49.

- NZPA