GPG
01/03/2010
FLLYR
REL: 0830 HRS Guinness Peat Group Plc
FLLYR: GPG: Preliminary Results for the Year Ended 31 December 2009
GUINNESS PEAT GROUP plc
("GPG" or "the Company" or "the Group")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009
CHAIRMAN'S STATEMENT
As foreshadowed in the August Market Update, 2009 was another poor year for
GPG with an accounting loss of GBP36 million.
That result was somewhat worse than anticipated, mainly as a consequence of
items largely beyond our control, such as forex fluctuations which moved from
a gain of GBP7 million in the Interim to a loss of GBP8 million for the full
year.
Other significant inputs were -
- A gain of GBP10 million on the sale of MYOB shares.
- MMC Contrarian became a 68% owned subsidiary and intends to expand
its financial services business which is an area where GPG has had success in
the past.
- A notable achievement was the capital reconstruction of Capral - the
culmination of GPG's very considerable "hands on" involvement in rescuing
this business in 2009. The reduction in our shareholding to 44%, combined
with earlier trading losses, crystallised a deficit of GBP15 million but,
hopefully, the last loss from this source. Now, for the first time in many
years, Capral has a sound financial and trading platform from which to
produce acceptable returns, notwithstanding the challenges still remaining.
- As expected, Coats was right in the firing line of the global
downturn, (particularly evident in the textile industries) but has emerged
very well in the circumstances. A net loss of GBP3 million was again due to a
mismatch of various country taxes of GBP21 million exceeding the original net
profit of GBP18 million. Continuing strong cash flow enabled Coats to reduce
its borrowings by GBP81 million during the year.
- A loss of GBP5 million in respect of CIC Australia Ltd (formerly
Canberra Investment Corporation). That essentially relates to the writedown
of a property joint venture and is a "one off" which does not diminish our
confidence in CIC's future prospects.
BALANCE SHEET
GPG remains in a strong financial position as shown in the Simplified Balance
Sheet below -
Simplified Balance Sheet as at 31 December 2009 GBP million
Cash at Bank 265
Debtors 13
Coats 295
CIC Australia 28
Capral 37
Turners & Growers 69
MMC Contrarian 37
Tower NZ 85
Trading subsidiaries 4
Share portfolio at market 298
1,131
Creditors & provisions (73)
Capital Notes (191)
SHAREHOLDERS' FUNDS GBP867
CAPITAL AND DIVIDEND
Having regard to GPG's 20 year record, rather than the disappointing results
of the last two years, the Board has maintained the standard 1p dividend and
1 for 10 bonus issue (the 17th in succession, multiplying an original 1990
holding 5.06 times). The share election scheme will operate in lieu of cash
dividend at the rate of 1 new share for each 35 shares already held.
OUTLOOK
In 2008, GPG committed to returning value to shareholders in 2010 but which
was subsequently qualified by global financial conditions in 2009. That
objective has now been restored as a top priority and the Board is actively
working on proposals for its early implementation.
There are still technical and other issues to resolve before a more specific
announcement can be made. However, it is planned to have a process in place
prior to the AGM to be held on
7 May.
Ron Brierley
CHAIRMAN
26 February 2010
Guinness Peat Group plc
Consolidated Income Statement
Unaudited Audited
Year ended 31 December 2009 2008
Restated*
GBPm GBPm
Continuing Operations
Revenue 1,176 1,139
Cost of sales (800) (770)
Gross profit 376 369
Profit on disposal of investments and other net investment income 27
60
Distribution costs (166) (171)
Administrative expenses (198) (190)
Operating profit 39 68
Share of (loss)/profit of joint ventures (6) 1
Share of profit/(loss) of associated undertakings 9 (9)
Finance costs (net) (31) (36)
Profit before taxation from continuing operations 11 24
Tax on profit from continuing operations (28) (48)
Loss for the year from continuing operations (17) (24)
Discontinued Operations
Loss from discontinued operations (21) (49)
Loss for the year (38) (73)
Attributable to:
EQUITY HOLDERS OF THE PARENT (36) (50)
Non-controlling interests (2) (23)
(38) (73)
Loss per Ordinary Share from continuing and discontinued operations:
Basic (2.25p) (3.24p)
Diluted (2.25p) (3.24p)
Loss per Ordinary Share from continuing operations:
Basic (1.21p) (1.76p)
Diluted (1.21p) (1.76p)
*Restated to reflect the results of Capral Ltd as a discontinued operation
(note 7).
Guinness Peat Group plc
Consolidated Statement of Comprehensive Income
Unaudited Audited
Year ended 31 December 2009 2008
GBPm GBPm
Loss for the year (38) (73)
Gains on revaluation of fixed asset investments 41 22
Losses on cash flow hedges (4) (11)
Exchange gains on translation of foreign operations 15 114
Actuarial losses on retirement benefit schemes (13) (58)
Net income recognised directly in equity 39 67
Transfers
Transferred to profit or loss on sale of fixed asset investments (13)
(80)
Transferred to profit or loss on sale of businesses (6) (9)
Transferred to profit or loss on cash flow hedges 4 1
(15) (88)
TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR (14) (94)
Attributable to:
EQUITY HOLDERS OF THE PARENT (12) (71)
Non-controlling interests (2) (23)
(14) (94)
Guinness Peat Group plc
Consolidated Statement of Financial Position
Unaudited Audited
31 December 2009 2008
GBPm GBPm
NON-CURRENT ASSETS
Intangible assets 192 218
Property, plant and equipment 424 508
Investments in associated undertakings 157 126
Investments in joint ventures 47 59
Fixed asset investments 220 177
Deferred tax assets 20 11
Pension surpluses 27 29
Trade and other receivables 24 25
1,111 1,153
CURRENT ASSETS
Inventories 179 261
Trade and other receivables 239 302
Current asset investments 15 7
Derivative financial instruments 3 7
Cash and cash equivalents 402 362
838 939
Non-current assets classified as held for sale 3 7
TOTAL ASSETS 1,952 2,099
CURRENT LIABILITIES
Trade and other payables 256 306
Current income tax liabilities 8 8
Other borrowings 80 109
Derivative financial instruments 16 20
Provisions 65 79
425 522
NET CURRENT ASSETS 413 417
NON-CURRENT LIABILITIES
Trade and other payables 13 18
Deferred tax liabilities 22 21
Capital notes 191 172
Other borrowings 235 295
Derivative financial instruments 3 7
Retirement benefit obligations:
Funded schemes 39 32
Unfunded schemes 56 64
Provisions 24 19
583 628
TOTAL LIABILITIES 1,008 1,150
NET ASSETS 944 949
Guinness Peat Group plc
Consolidated Statement of Financial Position (continued)
Unaudited Audited
31 December 2009 2008
GBPm GBPm
EQUITY
Share capital 81 71
Share premium account 63 61
Translation reserve 123 118
Unrealised gains reserve 68 36
Other reserves 274 281
Retained earnings 258 311
EQUITY SHAREHOLDERS' FUNDS 867 878
Non-controlling interests 77 71
TOTAL EQUITY 944 949
Net asset backing per share * 53.50p 56.23p
* The net asset backing per share at 31 December 2008 has been adjusted for
the 2009 Capitalisation Issue.
Guinness Peat Group plc
Reconciliation of Consolidated Changes in Equity
Year ended 31 December 2009
Share
Share premium Translation Unrealised Other Retained
Capital Account Reserve gains reserve Reserves Earnings
Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance as at 1 January 2008 64 61 13 94 295 424
951
Total comprehensive income and
(expense) for the year
-
-
105
(58)
(10)
(108)
(71)
Dividends (note 12) - - - - - (13) (13)
Capitalisation issue of shares 6 - - - (6) -
-
Scrip dividend alternative 1 - - - - 8
9
Share based payments - - - - 2 - 2
Balance as at 31 December 2008 71 61 118 36 281 311
878
Total comprehensive income and (expense) for the year
-
-
5
32
(1)
(48)
(12)
Dividends (note 12) - - - - - (14) (14)
Capitalisation issue of shares (note 11) 7 - - -
(7) - -
Scrip dividend alternative (note 11) 2 (2) - - -
7 7
Other share issues (note 11) 1 4 - - - -
5
Share based payments - - - - 1 - 1
Acquisition of non-controlling interests - - - -
- 2 2
Balance as at 31 December 2009 81 63 123 68 274 258
867
Guinness Peat Group plc
Consolidated Statement of Cash Flows
Unaudited Audited
Year ended 31 December 2009 2008
GBPm GBPm
Cash inflow/(outflow) from operating activities
Net cash inflow from operating activities 121 161
Interest paid (46) (55)
Taxation paid (20) (25)
Net cash generated by operating activities 55 81
Cash inflow/(outflow) from investing activities
Dividends received from associated undertakings and joint ventures 10
7
Capital expenditure and financial investment (16) (32)
Acquisitions and disposals 27 (23)
Net cash generated by/(absorbed in) investing activities 21
(48)
Cash inflow/(outflow) from financing activities
Issue of ordinary shares 5 -
Equity dividends paid to the Company's shareholders (6) (4)
Dividends paid to non-controlling interests (6) (4)
Decrease in debt (30) (8)
Net cash absorbed in financing activities (37) (16)
Net increase in cash and cash equivalents 39 17
Cash and cash equivalents at beginning of the year 347 309
Exchange gains on cash and cash equivalents 2 21
Cash and cash equivalents at end of the year 388 347
Cash and cash equivalents per the Consolidated Statement of Financial
Position 402 362
Bank overdrafts (14) (15)
Cash and cash equivalents at end of the year 388 347
Guinness Peat Group plc
NOTES TO FINANCIAL INFORMATION
1. The preliminary financial information ("the financial information")
set out in this report is based on the Group's unaudited financial
statements, which are prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union, and complies
with the disclosure requirements of the Listing Rules of the UK Financial
Services Authority and the Listing Rules of the Australian Securities
Exchange. Other than the adoption of IAS 1 (2007) ("Presentation of
Financial Statements"), IFRS 8 ("Operating Segments") and IFRIC 14 ("IAS 19 -
The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their
Interaction"), the accounting policies adopted by the Group have been
consistently applied to all periods presented.
2. The financial information set out in this report does not constitute
the Group's statutory accounts for the years ended 31 December 2009 and 2008.
Other than the restatement of the Consolidated Income Statement to reflect
aluminium extrusion (Capral Ltd) as a discontinued operation - see note 7 -
the financial information for the year ended 31 December 2008 is derived from
the statutory accounts for that year, which have been filed with the
Registrar of Companies. The auditors' report on those accounts included a
modified opinion, containing an emphasis of matter paragraph to highlight the
significant uncertainty in relation to the European Commission competition
investigation into alleged market sharing agreements relating to the European
haberdashery market. Further details relating to this matter are set out in
note 13. The auditors' report did not contain statements under Section
498(2) or 498(3) of the Companies Act 2006.
Whilst the financial information included in this report has been compiled in
accordance with the recognition and measurement principles of applicable
IFRS, this report does not itself contain sufficient information to comply
with IFRS. GPG expects to publish full financial statements that comply with
IFRS and these will be available to shareholders in March 2010.
The financial information in this report is unaudited. However, as in the
prior year the auditors anticipate issuing a modified audit opinion which,
without qualifying their opinion, will contain an emphasis of matter
paragraph to highlight the significant uncertainty in relation to the
European Commission competition investigation into alleged market sharing
agreements relating to the European haberdashery market. Further details
relating to this matter are set out in note 13.
Giving due consideration to the nature of the Group's business and underlying
investments as a whole, including the financial resources available to the
Group, the directors consider that the Company and the Group are going
concerns and this financial information is prepared on that basis.
3. Group foreign exchange movements - during the year ended 31 December
2009, GPG recognised in operating profit GBP8 million of net foreign exchange
losses which compares with GBP4 million of net foreign exchange losses in the
year ended 31 December 2008. Further net foreign exchange gains of GBP15
million (2008: GBP114 million) were recognised in reserves.
Guinness Peat Group plc
4. Tax on profit from continuing operations
2009 2008
GBPm GBPm
UK Corporation tax at 28.0% (2008: 28.5%) - 2
Overseas tax (21) (18)
(21) (16)
Deferred tax (7) (32)
(28) (48)
The tax charge for 2009 includes non-cash tax of GBP9 million (2008:
GBP26 million) in respect of movements in deferred tax assets relating to tax
losses. This charge arose from a similar reduction in deferred tax
liabilities recognised through the unrealised gains reserve. The tax charges
for both years also reflect the impact of unrelieved losses in certain
subsidiary undertakings.
5. Associated undertakings and joint ventures
The Group's significant associated undertakings and joint ventures at 31
December were as follows:
2009 2008
Australian Country Spinners Ltd 50.0% 50.0%
Green's General Foods Pty Ltd 72.5% 72.5%
Autologic Holdings plc 26.2% 23.5%
Capral Ltd 44.4% na
MMC Contrarian Ltd na 26.4%
Peanut Company of Australia Ltd 24.8% 23.8%
Rattoon Holdings Ltd 44.4% 44.4%
The Maryborough Sugar Factory Ltd 22.9% 24.0%
Tower Ltd 35.0% 35.0%
Capral Ltd ("Capral"), a former subsidiary undertaking, which constituted the
Group's aluminium extrusion segment, became an associated undertaking on 16
October 2009, as a result of that company's recapitalisation programme (see
note 7). Capral, as an associated undertaking, contributed GBPNil to the
Group result for the year. The carrying value of Capral at 31 December 2009
amounted to GBP37 million.
MMC Contrarian Ltd ("MMC") ceased to be an associated undertaking when it
became a subsidiary undertaking in October 2009 (see note 6). Whilst an
associated undertaking, MMC's contribution to the result for the year was a
profit of GBP1 million (2008: GBP Nil).
Other significant contributions to the Group's result for the year from
Parent Group associated undertakings and joint ventures were:
Guinness Peat Group plc
2009 2008
GBPm GBPm
Green's General Foods Pty Ltd (1) (3)
Autologic Holdings plc 2 (8)
Rattoon Holdings Ltd - (12)
Tower Ltd 6 5
Other contributions to the Group's result for the year from associated
undertakings and joint ventures, held by operating subsidiaries, include a
CIC joint venture GBP7 million loss (2008: GBP 3 million profit). The CIC
joint venture loss for the year includes an impairment charge of GBP12
million (2008: GBP Nil).
6. Purchase of subsidiary undertaking
On 23 October 2009, GPG acquired a controlling interest (54%) in the voting
equity shares of MMC Contrarian Ltd ("MMC") in Australia. In November 2009,
GPG acquired a further 14% of those shares from non-controlling interests.
The net assets acquired, and the related goodwill arising on this
acquisition, using the purchase method of accounting, were as follows:
Provisional
Book fair value Provisional
value adjustments fair value
GBP m GBP m GBP m
ACQUISITION SUMMARY
Intangible assets 6 (2) 4
Deferred tax assets 7 - 7
Cash and cash equivalents 46 - 46
Trade and other payables (2) - (2)
Net assets at acquisition 57 (2) 55
Non-controlling interests (18)
Net assets attributable to the Group's interest
37
Total consideration 30
Impairment provisions whilst a fixed asset investment (7)
Profits previously recognised as an associated undertaking
10
(33)
Negative goodwill, released to the Consolidated Income Statement
4
Consideration reported above:
Cash paid in current year 17
Cash paid in prior years 13
Total consideration 30
MMC would have contributed GBP Nil to the Group's revenue and GBP Nil to its
result for the year in respect of the period up to the date of acquisition.
As a consequence of the negative goodwill arising on acquisition, MMC as a
subsidiary undertaking contributed a profit of GBP 4 million to the Group
result for the year.
MMC contributed an inflow of GBP Nil to the Group's net operating cash flows,
paid GBP Nil in respect of investment activities, and paid GBP Nil in respect
of financing activities.
Guinness Peat Group plc
7. Disposal of subsidiary undertaking
As stated in note 5, in October 2009 Capral became an associated undertaking.
Capral has been treated as a discontinued operation in both the 2009 and the
2008 Consolidated Income Statements. No opening balance sheet has been
presented for the prior year in these financial statements as it is unchanged
from that previously reported.
The impact of the deemed disposal of Capral was as follows:
GBP m
Intangible assets 2
Property, plant and equipment 64
Inventories 25
Trade and other receivables 41
Cash and cash equivalents 2
Trade and other payables (56)
Borrowings (53)
Net assets at disposal 25
Non-controlling interests (7)
Group share of net assets at disposal 18
Cumulative translation differences recycled from reserves (7)
11
Residual carrying value as an associated undertaking 11
Impact of disposal -
8. Other investments - Fixed asset investments within non-current assets
are classified under IFRS as available-for-sale investments, and current
asset investments within current assets are classified under IFRS as
held-for-trading investments.
9. Loss per share - The calculation of basic loss per Ordinary Share
from continuing and discontinued operations is based on loss for the year
attributable to equity shareholders of the parent and the weighted average
number of 1,595,344,762 Ordinary Shares in issue during the year.
The calculation of basic loss per Ordinary Share from continuing operations
is based on loss for the year from continuing operations attributable to
equity shareholders of the parent and the weighted average number of
1,595,344,762 Ordinary Shares in issue during the year.
The comparatives for the year ended 31 December 2008 have been adjusted for
the 2009 Capitalisation Issue. No opening balance sheet has been presented
for the prior year in these financial statements as it is unchanged from that
previously reported.
Calculations of loss per Ordinary Share are based on results to the nearest
GBP '000.
10. The net tangible assets (net assets excluding intangible assets) per
share at 31 December 2009 were 46.38p (2008: 46.78p as adjusted for the 2009
Capitalisation Issue).
Guinness Peat Group plc
11. Changes in the issued share capital during the year ended 31 December
2009 comprise the following:
GBP 000
At 1 January 2009 70,940
Employee options exercised 1,247
Scrip dividend alternative shares issued (15 May 2009) 1,586
Capitalisation Issue (5 June 2009) 7,272
At 31 December 2009 81,045
12. Dividends - The directors have approved the payment of an interim
dividend of 1 pence per share, payable on 17 May 2010, making a total of 1
pence per share for the year. This is subject to a right for shareholders to
elect, instead of the cash dividend, to receive one new Ordinary Share for
every 35 existing shares held at the appropriate record date. An interim
dividend of 0.91 pence per share (adjusted to reflect the 2009 Capitalisation
Issue) in respect of the year ended 31 December 2008 was paid on 15 May 2009
to GPG shareholders.
There are local regulatory differences in the countries in which the Group's
shares are listed, which can result in different taxation treatment and
timing. This may have a significant effect on the tax treatment of the
dividend for shareholders resident outside the UK. Shareholders are advised
to obtain their own professional advice.
The tax treatment of the cash dividend and the scrip dividend alternative,
including the availability of tax credits such as franking credits, will be
dealt with more fully in a Circular which will be published at the same time
as the Company's Annual Report (see note 14 below). Shareholders are
recommended to obtain their own professional advice.
13. European Commission Investigation - As noted in previous reports, in
September 2007 the European Commission concluded its investigation into
European fasteners - the last part outstanding of its general investigation
into thread and haberdashery markets which began in 2001. It imposed fines
against several producers, including a fine against the Coats plc Group of
EUR 110.3 million (equivalent to GBP 97.7 million at 31 December 2009
exchange rates). This fine is in respect of the Commission's allegation of a
market sharing agreement in the European haberdashery market. Coats totally
rejects this allegation. Coats is vigorously contesting the Commission's
decision in an appeal which has been lodged with the European General Court
(formerly known as the Court of First Instance) in Luxembourg.
Coats plc has provided the European Commission with payment bonds to cover
its exposure to the full extent of the fine. In respect of certain of these
obligations, the Company has provided to the bond issuers a counter indemnity
for Coats plc's performance.
As stated in previous reports, the Group remains of the view that any
anticipated eventual payment of this fine is adequately covered by existing
provisions.
14. The Annual General Meeting of the Company (the "2010 AGM") will be
held on 7 May 2010 to consider, amongst other things, the 2010 Capitalisation
Issue. Notice of the 2010 AGM will be incorporated in the Annual Report
which will be published on the Company's Website at www.gpgplc.com in March
2010. A circular accompanying the Notice of the 2010 AGM will contain
details of the Interim Dividend, the Scrip Dividend Alternative and the 2010
Capitalisation Issue. The shares representing the 2010 Capitalisation Issue
cannot be allotted until shareholders have given their approval at the 2010
AGM.
Guinness Peat Group plc
In order to accommodate the different market practices of the London Stock
Exchange "(LSE"), Australian Securities Exchange ("ASX") and New Zealand
Stock Market ("NZSX"), being those markets on which GPG's shares are quoted,
and subject to approval of the Capitalisation Issue by shareholders, the
Stock Events timetable will be as follows *:
Preliminary Announcement of Results, Interim Dividend and accompanying
Scrip Dividend Alternative and the proposed Capitalisation Issue
Friday 26/02/10
Shares marked ex-dividend (ASX) Friday 05/03/10
Shares marked ex-dividend (LSE) Wednesday 10/03/10
Record date for dividend Friday 12/03/10
Head securities quoted ex-dividend (NZSX) Monday 15/03/10
Last date for receipt of 2010 AGM proxies Wednesday 05/05/10
2010 AGM Friday 07/05/10
Final date for receipt of Scrip Dividend Alternative elections Monday
10/05/10
Allotment of Scrip Shares (5.00pm UK time) Friday 14/05/10
Dispatch of FASTER mailings notifying NZ holders of the change in holdings
following the Scrip Dividend allotment Monday 17/05/10
Dispatch of Scrip Dividend holding statements (AUS) Monday 17/05/10
Dealings commence in Scrip Dividend Shares Monday 17/05/10
Dispatch of Scrip Dividend Share Certificates (UK) Monday 17/05/10
Update of UK CREST accounts (5.00am UK time) Monday 17/05/10
Payment of Cash Dividend ** Monday 17/05/10
Shares marked Ex-Capitalisation on ASX and traded on deferred settlement
basis Monday 24/05/10
Record date for Capitalisation Issue Friday 28/05/10
Head securities quoted Ex-Capitalisation (NZSX) Monday 31/05/10
Allotment of Capitalisation Shares (5.00pm UK time) Friday 04/06/10
Update of UK CREST accounts (5.00am UK time) Monday 07/06/10
Post out Capitalisation Share Certificates (UK) Monday 07/06/10
Shares marked Ex-Capitalisation in UK (LSE) Monday 07/06/10
Dispatch of FASTER statements in NZ notifying NZ holders of change in
holdings following Capitalisation Issue Tuesday 08/06/10
Last day of deferred settlement trading on ASX Tuesday 08/06/10
Post out holding statements (AUS) Tuesday 08/06/10
Notes
* Actions take place on all three Exchanges on the date specified
unless otherwise indicated.
** The cash payments will be made to shareholders on the Australian and
New Zealand share registers in Australian and New Zealand dollars
respectively, calculated at the rates of exchange ruling at 4.30pm (UK time)
on 10 May 2010.
To ensure the integrity of the three registers over record dates and
'ex' dates, they may be closed for transmissions between them at certain
times.
15. Directors - The following persons were, except as noted, directors of
GPG during the whole of the year and up to the date of this report:
Sir Ron Brierley
A I Gibbs
R Langley (appointed 28 May 2009)
B A Nixon
Dr G H Weiss
Guinness Peat Group plc
16. Directors' Report - The Chairman's Statement appearing in the
Preliminary Results and signed by Sir Ron Brierley provides a review of the
operations of the Group for the year ended 31 December 2009.
17. Publication - This statement will be available at the registered
office of the Company, First Floor, Times Place, 45 Pall Mall, London SW1Y
5GP. A copy will also be displayed on the Company's website on
www.gpgplc.com.
On behalf of the Board
B A Nixon
Director
26 February 2010
UNITED KINGDOM
First Floor, Times Place, 45 Pall Mall, London SW1Y 5GP Tel: 020 7484 3370
Fax: 020 7925 0700
AUSTRALIA
c/o PKF Chartered Accountants and Business Advisers
Level 10, 1 Margaret Street, Sydney 2000, Australia Tel: 02 9251 4100
Fax: 02 9240 9821
NEW ZEALAND
c/o Computershare Investor Services Limited
Private Bag 92119, Auckland 1020, New Zealand Tel: 09 488 8700 Fax:
09 488 8787
Registered in England No. 103548
End CA:00191834 For:GPG Type:FLLYR Time:2010-03-01:08:30:14