GPG oosts 'ordinary' result

By Phil Boeyen, ShareChat Business News Editor

Friday 23rd March 2001

Guiness Peat Group (NZSE: GPG) is picking the current year to be a critical one for the company after announcing a full-year profit of 18.7 million pounds.

The profit compares to last year's result of 19.13 million pounds.

The company admits that result appears relatively ordinary but claims the year 2000 was rather more successful than indicated in pure accounting terms.

"The year 2001 will be a critical one for GPG insofar as the company has never been better placed to achieve a strong combination of realised profits, higher asset backing and the momentum for continuing gains in the future," GPG says in a statement.

GPG says there was a quite high level of reinvestment from during the year from which there has not yet been any material return.

The company says its investment in Staveley Industries has been difficult and unrewarding and after the sale of the main subsidiary, British Salt, the residual group comprises some six engineering based manufacturing and contracting businesses in UK and USA.

"As the problems of the previous regime steadily diminish, GPG is probably not the most logical permanent owner of these businesses but, in the meantime, it has a valid role to support management in achieving consistent profitability and improved capital values," the company says.

It says its investment in New Zealand apple and pear company Enza has also been less than satisfactory but believes the company, which had sales of $800 million last year, can become successful.

GPG is happy with its investment in Wrightson (NZSE: WRI) which is says has improved 80% over the company's entry price, but says Otter Gold (NZSE: OTR) is another difficult situation.

Otter's recent cash issue has lifted GPG's stake to 44%.

GPG's is proposing a cash dividend of 1 pence per share, which can be paid out in either British, Australian or New Zealand currency. Alternately shareholders can claim one new share for every 35 shares held at record date.

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