Guinness Peat Share Discussion Threads

[nod] 16/6/2010 01:57

GPG to split in two
By TIM HUNTER - BusinessDay.co.nz Last updated 12:01 16/06/2010

Investment company GPG has announced plans to cut itself in two as it strives to return value to shareholders.

In a statement this morning, GPG said it would spin-off its Australian assets and cash of $220 million into a new company called GPG Australia, to be listed on Australian and New Zealand stock exchanges.

GPG's other assets, principally thread maker Coats and NZ investments Tower and Turners & Growers, would remain in the original company listed on the New Zealand and London exchanges.

GPG's biggest asset, Coats, would be floated within two years, the company said.

Chairman Sir Ron Brierley said the scheme would create "an exciting and regioanlly focused activist investment company in Australia with the entrepreneurial flair to craete value for shareholdesr in the best traditions of GPG.''

The proposal follows speculation of a deep rift in GPG's board, with New Zealand director Tony Gibbs said to be unhappy with an Australian spin-off.

Some institutional investors are understood to be critical of GPG's investment performance, particularly its Australian assets.

Full details of the demerger plan are due for release in September, with a shareholder vote due in December.

[nod] 16/6/2010 01:50

GPG reveals plan to split in two
Duncan Bridgeman | Wednesday June 16, 2010 - 11:42am

UPDATED – Troubled investment company Guinness Peat Group has revealed plans to unlock shareholder value by spinning off its Australian business into a new listed entity followed by a planned float of thread maker Coats.

Shareholders in the company, founded by Sir Ron Brierely, will be asked to vote on the restructure in November once initial regulatory approvals are obtained.

The first step involves the demerger of GPG Australia, which holds a varied portfolio of investments with a net asset value of approximately $580 million, GPG said in a statement.

These assets would be bundled together and dual listed on the ASX and NZX.

All cash and liabilities would be allocated between GPG Australia and GPG Group before the demerger, with the latter initially retaining approximately 20% shareholding in GPG Australia.

GPG Group would retain its UK and New Zealand investment portfolios, which includes a 65% stake in Turners & Growers and a 35% stake in insurance company Tower.

After the demerger GPG Group would have a net asset value (NAV) of approximately $1.23 billion, including cash holdings of more than $220 million based on April 2010 valuations.

The proposal to spin off the Australian assets is understood to have been driven by director Gary Weiss, who is reportedly at odds with fellow directors Sir Ron, Tony Gibbs and Blake Nixon.

Plan for Coats

GPG said the restructure was an important prerequisite to an "efficient and value-enhancing" float of Coats, which GPG acquired in 2003.

Coats represents about a quarter of GPG's investment portfolio but has struggled against the economic downturn post the financial crisis in 2007/08. In December GPG valued Coats at $635 million.

Uncertainty over the return from Coats has contributed to GPG's sagging share price, which fell 20% last month. The shares have consistently traded at a discount of about 30% to NTA over the past three years.

GPG said today it anticipated a float of Coats within the next two years.

GPG said Coats had responded well to the financial crisis and had a much-improved performance in the 2010 year to date.

"Nevertheless it is considered that an immediate flotation of Coats is not in shareholders' best interests given the nascent stage of recovery in relation to Coats' markets and customers and the current uncertainty in relation to international financial markets.

"While Coats has taken longer than expected to turn around, its reorganisation is now largely complete. Under new chief executive, Paul Forman, Coats is pursuing a growth strategy."

"Exciting opportunity"

Sir Ron said the board had been evaluating with management a number of alternatives and was conscious that substantial changes could not be indefinitely postponed.

Immediate liquidation under the current structure would "destroy value for shareholders given that GPG plc's investments and actual and contingent liabilities (including in relation to pension funds) are at varying stages of maturity and liquidity.

"This proposal will create an exciting and regionally-focused activist investment company in Australia with the entrepreneurial flair to create value for shareholders in the best traditions of GPG," Sir Ron said.

GPG said that there was also potential for similar geographical separation of the New Zealand and UK interests.

GPG shares rose 1c to 67c on the NZX this morning.

[aspex] 10/5/2010 00:47

Ron Brierly waffled at the AGM
"I think the focal point of this year's Annual Report is the outlook section
which refers to the return of value to shareholders and the intention to
have a process in place by the time of today's AGM.
That part is literally true insofar as we do have a process in place and
which is no mere formality.
GPG shares are listed on 3 different stock exchanges, we have direct
investments and businesses (quite apart from Coats) in 4 countries, and
most of the shareholders are in New Zealand but there are, in addition,
significant institutional holders in the United Kingdom, Australia, Asia
and USA.
Also, GPG is incorporated in the United Kingdom, where corporate
bureaucracy is simply spiralling out of control.
That is a model which no longer works for GPG but formulating structural
changes where what shareholders already own is not eaten up in excessive
taxes and other charges is a very complex equation.
However, we are making progress and will continue to do so.
In terms of GPG's 20 year history, a few more weeks, or months, if
necessary, is not critical.
Much better to reach the right conclusion rather than anything more
precipitate but recognising that, inescapably, substantial changes cannot
be indefinitely postponed.
Shareholders will be kept informed, as and when decisions are made.
In the meantime, GPG in its present form, notwithstanding two bad years
behind us, remains in a healthy position with the current share price well
supported by net assets of 56p, which we believe to be conservatively
stated and prospective for added value."

[nod] 28/4/2010 23:16

Just a reminder:

Guinness Peat Group has announced a bonus issue, whereby shareholders will receive 1 bonus share in addition to every 10 shares held.

The ex-entitlement date is 7th June 2010. A pay date has not been announced. It should be announced after the AGM on 7 May.

[nod] 18/4/2010 03:00

From the Annual Report in March 2010. Return of equity to shareholders restored as a top priority. Plan promised at AGM on 7 May.

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

[nod] 18/4/2010 02:24

A new 17 month high reached this week.

[nod] 29/3/2010 22:18

GPG has gone sideways for six months.

Although I bought GPG in 2008 24% higher than today's price my portfolio shows the investment to be more than 20% in profit. This is due to the various issues and dividends that have occured. Given the stated goal to return cash to major shareholders, I expect this return of cash to accelerate over the next year or two.

Net assets are £867 million.
Cash is £265 million

As the World economies pick up, Coats should look an attractive target.

[aspex] 28/2/2010 22:13

+5% on NZ market open after the "poor" results released.
The usual 1 for 10 promised.

[aspex] 28/2/2010 22:13

+5% on NZ market open after the "poor" results released.
The usual 1 for 10 promised.

[nod] 09/2/2010 21:54

my timing with GPG was not great ... August 2008 ... just ahead of the crunch!

Fortunately, only a modest investment as I was somewhat nervous about the financial sector getting worse (I should have listened to my instinct and stayed out of the market).

I would have added to GPG in March 2009 but I piled in elsewhere.

As you will know, GPG is keen to liquidate assets in 2010/11. I'm hoping they will find a buyer for Coats this year. I would have thought Chinese investors would be v interested in Coats.

[aspex] 09/2/2010 21:20

In fact I just had a dabble on the NZ market opening (just by way of a CFD)
Watching and waiting.

[aspex] 09/2/2010 19:39

Yes, I am in NZ too.
Used to own them (1999)but got bored- too soon?
I may yet get involved again

[aspex] 09/2/2010 19:03

nod,
Talking to yourself?
I see Tower has done quite well.

[nod] 16/11/2009 03:59

cash of GBP 263m

Interim Management Statement
12 November 2009

Guinness Peat Group plc ("GPG") today publishes its interim management statement ("IMS") covering the period from 1 July 2009 to 12 November 2009.

Financial Position

As set out in the half-yearly financial report GPG's financial position
continues to be strong with significant liquid resources. Net asset backing per share has improved during the period, mainly as a result of the strengthening of Australian and New Zealand currencies against sterling - 52.59p per share at 30 September 2009 (49.96p per share at 30 June 2009). GPG Parent Group cash at 30 September 2009 was GBP263m (GBP259m at 30 June 2009).

Coats

Coats Crafts results have benefitted from the restructuring process in Europe
and strong performance in North America.

As a result of the global recession activity levels in the Industrial business
remain subdued and management has continued to take steps to reduce operating
costs.

Overall Coats has shown much resilience and has made further improvements in its working capital management and debt position.

Full Year Results

GPG is scheduled to release its 2009 full year results at the end of February
2010.

[nod] 11/9/2009 12:31

GPG has been busy in Australia the past couple of days. Perhaps keen to get in on what looks to be the fastest recovering economy.

Put in bids for MMC Contrarian Fund and Tandou

THE GPG bid for MMC Contrarian Fund is classic Gary Weiss - a bid at 48 cents a share for a company with a stated NTA of 56c, all of it being in cash.

GPG is sitting on 30 per cent of the stock and, having recently acquired another 3 per cent, can only buy more shares via a takeover offer.

As long as the market continues to undervalue the stock, Weiss is happy to spend 48c to buy 56c in cash.




SIR Ron Brierley's Guinness Peat Group has launched its second takeover bid in as many days, the latest an offer to take control of the Mildura-based agribusiness company Tandou.

On Tuesday, GPG said it would pay $47 million in cash to buy the 70.6 per cent of wealth and fund manager MMC Contrarian that it did not already own. That bid has already been complicated by the appearance of corporate gadfly Nicholas Bolton on the MMC register with a 5.6 per cent stake.

Last night, Tandou revealed that it had received an unsolicited approach from GPG, already a 19.9 per cent shareholder, offering all other investors 30c a share for half of their stakes.

[nod] 01/9/2009 10:57

Goldman Sachs JBWere broker Peter Sigley said a number of positives, including Monday's National Bank of New Zealand's monthly survey showing a surge in business confidence, helped the market limit its losses.

He said the session highlight was the strength shown by Ron Brierley's investment company Guinness Peat Group, which rose 5% to NZ$0.84 on solid volume after its result Friday showed its main asset, thread maker Coats Plc, "exceeded expectations by a country mile."

"It's a result that shows that these guys can manage businesses during absolutely dire business conditions," Sigley said. "It was a huge relief."

[nod] 01/9/2009 10:52

GPG results looked disapointing but were quite well received by analysts and commentators. Another case of expectations being so low that poor results beat them.

"It is unlikely there will be any significant improvement in the accounting result for the full year to 31 December," Brierley said.

"But GPG will be well placed to resume its traditional upward trend in 2010."

The company reported an operating profit of £19 million, up from £18 million in the same period a year earlier.

[nod] 16/8/2009 22:22

Rickey Ward of Tyndall Investments took an upbeat view of his commentary. Market commentator Arthur Lim was sceptical.

"They're basically indicating that things look too expensive still and they expect to see some further difficulty ahead which might present better opportunities," said Tyndall.

Lim said: "I still think a big part of their problem is still the whole Coats scenario, and it's not clear from the update how robustly it's tracking".

He was also sceptical, given its record, about the company's ability to identify suitable investment opportunities.

Although the company has a substantial amount of cash on hand - $767 million according to yesterday's update - Lim believed that could be required as a buffer for struggling investments, including Coats.

[nod] 14/8/2009 10:35

Share market conditions have greatly improved in recent months but we anticipate further repercussions from the "credit crisis" with opportunities to emerge which will be more favourable than over investing at the present time.

[nod] 09/6/2009 23:49

GPG share price has adjusted for the 10% bonus issue.

Good to see them buying shares in companies again.

[nod] 15/5/2009 13:14

Interesting that GPG feel they missed the boat and could have been more agressive in buying a few months ago. I'm not so sure. Maybe their comment stems from a feeling of urgency to make profits before their wind up next year. I reckon they will have another bite at the cherry soon - maybe not at quite the same desperate lows but not far off.

GPG has a big pile of cash and is well placed to buy cheap assets.

[nod] 15/5/2009 12:47

It's unfortunate that the global economic downturn appeared before GPG was able to sell Coates. I reckon close to 1 Billion could have been posible for Coates.

[swiftnick] 15/5/2009 08:17

Useful market update from the company this morning.

Net asset value 53.73p.

Share price 31.5p plus 1p dividend = 32.5p.

Current discount to net asset value = 39.5%

The net asset value includes Coats at book cost of £299m. Ron Brierley comments that: "The ultimate realisation value of Coats is considered to be significantly in excess of this figure."

AGM next Friday.

[catandcrow] 26/3/2009 20:17

what is the refi risk on Coats? anyone looked at it?