Guinness Peat posts loss

Friday 27th February 2009

Guinness Peat Group, the investment company chaired by Ron Brierley, posted a full-year loss as it wrote down the value of its portfolio and its Coats threadmaker unit was hit by the downturn.

The net loss was 73 million pounds, or 3.56 pence a share in 2008, from a profit of 126 million pounds, or 8.05 pence a year earlier, the company said in a statement. Sales rose to 1.38 billion pounds from 1.2 billion pounds.

"2008 was a very unsatisfactory year for GPG," Brierley said. "A number of portfolio writedowns have been necessary as a consequence of the global financial crisis although we believe many of these will ultimately recover as a more realistic reflection of intrinsic value."

The downturn may limit GPG's ability to make some sort of capital return to shareholders in 2010 that was to coincide with Brierley's retirement as chairman. Shares of GPG fell 10% to 62 cents on the NZX today and are down 35% this year.

"We are still focused on returning value to shareholders in 2010 but that must now be qualified by the unprecedented global financial stringency, the repercussions from which are likely to continue to emerge for some time to come," he said.

Coats, GPG's principal operating subsidiary, posted a loss of four million euros though this reflected tax treatment of earnings. The threadmaker will "continue to encounter difficult trading conditions during 2009."

GPG's net assets value was 729 million euros in January, down from 878 million euros as at December 31. The company retained its 1 pence a share dividend and 1-for-10 bonus issue.

By Jonathan Underhill

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