Interim Results

Guinness Peat Group PLC 30 August 2000 GUINNESS PEAT GROUP plc ('GPG' or 'the Company') Interim results for the six months ended 30 June 2000 A very satisfactory half year, notwithstanding the realised profit of £10 million is not spectacular, particularly having regard to the corresponding figure of £106 million (including the sale of Tyndall shares) for the first half of 1999. As we have said before, the accounting result of any 6 month period is not an accurate guide to GPG's real progress and prospects, which must be measured over a much longer time. In this respect, GPG is travelling well, with consistent net asset growth since 1991. The only disappointing aspect is that in the last two years, the share price has not reflected GPG's true value. This is beyond the control of the Board other than the ultimate solution of realising assets and returning the proceeds to shareholders. This would be very premature at present because GPG has some excellent opportunities in its existing and planned portfolio but it will become a valid option to consider at some time in the future. So far as the foreseeable future is concerned, the mood at GPG is very positive and productive, reviving the spirit of the best of BIL/IEL in the 1970's and 80's. The next few years will see GPG's peak achievements, with, hopefully, a share price to match performance and value. Turning to specific events, the main contributors to the half year result were sales of shares in Tarmac, Seven Network and Hudson Conway and a special dividend from Dawson International. Since balance date, there has been a useful gain from the sale of shares in Montana Group. New activities of note are quite extensive. The acquisition of 18% of Enza (the former New Zealand Apple and Pear Board) provides GPG with an active role in reinforcing New Zealand's status as the world's supplier of choice for quality apples and pears. Joe White Maltings has become an 'associated' company with GPG holding 44% of the capital as a consequence of the contested takeover offer earlier this year. In a difficult industry, Joe White's record is poor but after extensive reorganisation and with improved trading conditions, we are hopeful of better results in the next few years. Wrightsons is also deemed to be an 'associate', now that we hold 21% of the capital. Wrightsons is a major supplier to New Zealand's rural sector which is quite buoyant at present and the company's trading position has improved considerably since our initial purchase of shares. The takeover offer for Brickworks may appear to be going nowhere but we are not discouraged by our strategy for eventual success. In real terms, we are the largest shareholder in the company with 10% of the nominal issued capital (which effectively represents 12.7% of Brickworks genuine assets and 5.4% of Washington H Soul Pattinson & Co.). Other new investments include Inchcape, London Stock Exchange, GUD Holdings, IAMA and TAB Queensland. The company's financial position remains very strong, even after the £19 million reduction of capital by way of the redeemable note issue. We continue to maintain a high (but revolving) level of liquidity which has a cost in the short term but, on a wider view, provides enormous strength and flexibility to investments decisions. The Board looks forward to reporting to shareholders on the result for the full year to 31 December 2000. Ron Brierley, London, 30 August 2000 Enquiries: Guinness Peat Group plc (020) 7236 0336 Blake Nixon, Executive Director Square Mile Communications (020) 7601 1000 Kevin Smith CONSOLIDATED PROFIT AND LOSS ACCOUNT for the six months ended 30 June 2000 6 months 6 months Year ended ended ended 30 June 30 June 31 December 2000 1999 1999 (Re-stated) (Re-stated) Unaudited Unaudited Audited £ 000 £ 000 £ 000 Group turnover Continuing operations 47,672 19,250 49,581 Discontinued operations - 49,163 54,193 ------------------------------------------- 47,672 68,413 103,774 =========================================== Group operating profit Operating profit - continuing operations 10,644 8,063 12,003 Operating profit - discontinued operations - 11,048 11,048 -------------------------------------------- 10,644 19,111 23,051 Share of operating profit of joint ventures and associates 519 735 2,550 -------------------------------------------- 11,163 19,846 25,601 Profit on disposal of businesses (see note 6) - 95,498 95,498 -------------------------------------------- Profit before interest payable 11,163 115,344 121,099 Interest payable (125) (218) (619) -------------------------------------------- Profit before taxation 11,038 115,126 120,480 Taxation (403) (5,822) (5,288) --------------------------------------------- Profit after taxation 10,635 109,304 115,192 Minority interests (45) (2,893) (3,246) --------------------------------------------- Profit attributable to Ordinary Shareholders 10,590 106,411 111,946 Dividends payable - - (4,695) --------------------------------------------- Profit retained for the period 10,590 106,411 107,251 ============================================= Earnings per Ordinary share - basic (pence) 2.08 20.91 21.81 Dividends per Ordinary share (pence) - - 0.91 CONSOLIDATED BALANCE SHEET As at 30 June 2000 30 June 30 June 31 December 2000 1999 1999 Unaudited Unaudited Audited £ 000 £ 000 £ 000 Fixed assets Tangible assets 1,945 3,222 1,665 Investments 189,097 101,434 181,408 ------------------------------------------- 191,042 104,656 183,073 ------------------------------------------- Current assets Debtors 18,387 9,631 11,501 Development work in progress 5,169 2,976 3,053 Investments 19,592 9,316 36,747 Cash at bank 90,006 184,476 85,044 ------------------------------------------- 133,154 206,399 136,345 ------------------------------------------- Creditors: amounts falling due within one year Trade and other creditors (20,643) (12,072) (26,292) Borrowings (4,193) (3,102) (2,632) Convertible subordinated loan notes (3,862) - - -------------------------------------------- (28,698) (15,174) (28,924) -------------------------------------------- Net current assets 104,456 191,225 107,421 -------------------------------------------- Total assets less current liabilities 295,498 295,881 290,494 Creditors: amounts falling due after one year Trade and other creditors (125) (51) (83) Borrowings - (1,284) (451) Convertible subordinated loan notes (15,449) - - ------------------------------------------- (15,574) (1,335) (534) Provisions for liabilities and charges (2,805) (2,803) (2,539) -------------------------------------------- Net assets 277,119 291,743 287,421 ============================================ Capital and reserves Share capital 47,568 46,953 46,953 Share premium 17,432 21,684 21,635 Capital redemption reserve 3,862 - - Profit and loss account 205,008 219,676 215,321 ----------------------------------------------- EQUITY SHAREHOLDERS' FUNDS 273,870 288,313 283,909 Minority interests (equity) 3,249 3,430 3,512 ----------------------------------------------- 277,119 291,743 287,421 =============================================== Net assets per -(pence)share 57.57 55.82 54.97 -(Australian cents) 145.17 132.94 135.40 -(New Zealand cents) 185.15 166.05 169.88 CONSOLIDATED CASH FLOW STATEMENT for the six months ended 30 June 2000 6 months 6 months Year ended 30 ended 30 ended 31 June June December 2000 1999 1999 Unaudited Unaudited Audited £ 000 £ 000 £ 000 Net cash inflow/(outflow) from operating activities 20,608 14,066 (2,603) Dividends received from associates 342 382 875 Returns on investments and servicing of finance (308) (2,145) (2,437) Taxation (444) (29) 88 Capital expenditure and financial investment (10,302) (28,757) (109,658) Acquisitions and disposals - 126,685 126,685 Equity dividends paid (4,662) (530) (530) ----------------------------------------------- Cash inflow before management of liquid resources and financing 5,234 109,672 12,420 Management of liquid resources (6,289) (132,867) (33,177) Financing Issue of ordinary shares 274 795 1,470 Increase/(decrease)in debt 1,182 (5,325) (6,510) ---------------------------------------------- Increase / (decrease) in cash in the period 401 (27,725) (25,797) ---------------------------------------------- Non-cash transaction On 2 June 2000, the Company purchased 38.6 million Ordinary shares for an aggregate consideration of £19,311,000 which was settled through the issue of convertible subordinated loan notes. Analysis of changes in cash and liquid resources during the period Opening balance 85,044 72,854 72,854 Net cash inflow/(outflow) 401 (27,725) (25,797) Increase in liquid resources 6,289 132,867 33,177 Disposal of subsidiary - (105) (105) Currency translation differences (1,728) 6,585 4,915 -------------------------------------------------- Closing balance 90,006 184,476 85,044 -------------------------------------------------- NOTES TO THE FINANCIAL STATEMENTS 1.Abridged accounts (Companies Act 1985) - The information for the year ended 31 December 1999 has been extracted from the latest published accounts which have been delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified. 2.Accounting policies - The financial information has been drawn up on the basis of accounting policies consistent with those applied for the year ended 31 December 1999, except for the implementation of Financial Reporting Standard 16 ('FRS 16'). In accordance with FRS 16, dividends from UK companies are no longer grossed up for the imputed tax credit. Dividends received from non-UK companies include any underlying withholding taxes, but exclude any underlying tax paid by the investee company on its own profit. Comparative figures have been re-stated to reflect this change of accounting policy, although there is no impact on the profit attributable to shareholders. 3.Associated undertakings - The group has not recognised its share of the results of Joe White Maltings and Wrightsons since financial data for the period to 30 June 2000 is not yet publicly available. 4.Earnings per share - The calculation of earnings per Ordinary share is based on profit after taxation attributable to shareholders and the weighted average number of 510,096,736 Ordinary shares in issue during the period. The comparatives for the periods to 30 June 1999 and 31 December 1999 have been adjusted for the Capitalisation Issue which took place in June 2000. 5.Dividends - The directors have not recommended the payment of an interim dividend. The dividend of 1.00p a share for the year ended 31 December 1999, which was declared and paid in March 2000, has been adjusted for the 2000 Capitalisation Issue. 6.Balance sheet format - Following the sale of Tyndall Australia in May 1999, the group does not operate any insurance business. The balance sheet format has been revised to reflect this. 7.Publication - This statement is being sent to shareholders and copies will be available at the registered office of the Company, 2nd Floor, 21-26 Garlick Hill, London EC4V 2AU.

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