Guinness Peat Group plc

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GUINNESS PEAT GROUP PLC • ANNUAL REPORT 9The anticipated proceeds from propertysales will, to a large extent, compensatefor the one-off costs of reorganisation.CraftsThe value and potential of the craftsdivision of Coats has exceededexpectations. Initially viewed as asomewhat secondary adjunct to threadmanufacture, that is not the reality. It isa growing and substantial business in itsown right, partly due to a revival intraditional crafts activities, particularlyin the USA.Crafts was seriously underrated as anasset of the listed Coats plc.ECThe least welcome aspect of the Coatsacquisition is the emergence of “the EClegacy” - three separate but relatedproceedings against the companyresulting from a European Commissioninvestigation into trading practices inthe European haberdashery and threadindustry in the early 1990’s.One has been determined at anadministrative level, resulting in a claimof e30 million and the other two haveyet to reach a conclusion.The e30 million claim relates to handsewing needles for which total sales inthe relevant period were e3 millionand therefore appears grosslydisproportionate, whatever thecircumstances at the time.It should be stressed that the presentBoard had no involvement in thesematters and is simply objectively dealingwith the facts as established.The next stage of these proceedings isa more formal tribunal hearing at whichthe company has much greater rights ofadvocacy which will be actively pursued.Full provision has already been madefor any anticipated eventual payment sono adverse impact on profit is foreseen.Unfortunately, it will be 2 to 3 years beforeany final resolution is obtained and in themeantime there are continuing costs anddiversion of effort.On a more positive note, that coincideswith the period when Coats’transformation will become fully effectiveand the EC matter is something whichmust and will be overcome togetherwith other difficult challenges which willno doubt arise from time to time.
10 GUINNESS PEAT GROUP PLC • ANNUAL REPORTFinancial Profile of OperationsConsolidated figuresConsolidated figuresyear ended 31 December 2004 at 31 December 2004GPG holding Net profit Shareholders’31 December before minority Group fundsOperating Subsidiaries2004 interests turnover Total assets (GPG share)% £m £m £m £mUNITED KINGDOMCoats Group Ltd 100.00% 2.3 653.3 780.8 222.4Thread manufactureStaveley Industries plc 100.00% 2.5* 253.3 94.9† 19.1Building services*Excludes interest received from GPG of £1.0 million†Includes net cash of £37.5 million which is generally available to GPG for investment purposesNEW ZEALANDTurners & Growers Ltd 78.46% 3.5 209.4 102.4 44.4Fresh produce wholesalerAUSTRALIACanberra Investment Corporation Ltd 66.34% 1.1 15.4 37.6 12.8Property developerTAFMO Ltd 56.21% (0.9) 0.8 12.8 6.0Electronic products and servicesUNITED STATES OF AMERICAStaveley Inc 100.00% 1.2* 25.4 23.4† 19.1Testing services*Includes £1.8 million in respect of gain on sale of subsidiary but excludes interest received from GPG of £2.2 million†Includes net cash of £9.9 millionThe net profit amounts shown above in respect of subsidiaries exclude the following amounts in respect of goodwill:Charge/(release)for year£mCoats Group Ltd 4.8Staveley Industries plc (0.1)Turners & Growers Ltd (0.8)TAFMO Ltd –GPGshare of income GPG Latest publishedGPG holding year ended book value at shareholders’ funds31 December 31 December 31 December 31 DecemberAssociates and Joint Ventures2004 2004 2004 2004% £m £m £mUNITED KINGDOMCoats Group Ltd – (3.1) – –(became a subsidiary during the year)Nationwide Accident Repair Services plc 50.00% 1.1 9.3 23.0Dawson International PLC 29.91% np – npnp: This information had not been published by the relevant company at 7 April 2005, the last practicable date beforeprinting this Annual Report.AUSTRALIACapral Aluminium Ltd 37.25% (9.8) 20.5 69.2Green’s Foods Ltd 31.91% 0.5 6.8 20.8CPI Group Ltd 21.58% 0.1 4.3 22.0For associates and joint ventures, goodwill has been reflected in the amounts shown above.
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