Fine brings interim loss for GPG

22:21, Aug 28 2012

British-based investment holding company Guinness Peat Group has reported a loss of $70 million for the six months to the end of June, after its main investment Coats copped a $174m fine.

That compared with a profit of $25m for the same period last year.

GPG, which is in the process of winding itself down to return value to shareholders, also confirmed a share buyback would be launched early next month - initially up to a value of $20m.

Shareholder funds fell $193m in the six month period to $982m, while the net asset backing per share fell to 60.5c, down from 72.4c.

The fine on threadmaker Coats, imposed by the European Court for colluding with seven other firms in the fastener market, was confirmed in June after a lengthy appeal process was dismissed.

GPG said once interest and provisions made for the fine were factored in, it booked a $148m charge on its income.

Chairman Rob Campbell said it had continued to work on its key objectives - strengthening Coats so it could be the core of the company once its other assets are disposed, realising assets that had no clear prospect of value increase in the short term, and addressing the future of its legacy pension schemes.

"Progress has been made although Coats' trading performance has fallen short of our aims and the asset disposal programme has not progressed at the pace I would have liked," he said.

Campbell said further divestment transactions representing nearly £20m (NZ$39.3m) were in advanced stages and expected to be completed during the current year. "A large amount of activity is also on-going with respect to our remaining investment portfolio."

Campbell said the share buyback, which it would give more detail on shortly, would be "one efficient means of returning surplus cash to shareholders".

"As the asset realisation process continues further surplus cash will be returned to shareholders in appropriate forms, taking into account the obligations in respect of the capital notes and support to the pension schemes."

GPG's shares on the NZX were unmoved this morning, at 52c.