GPG Interim Report 2005 - Guinness Peat Group plc

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GPG Interim Report 2005 - Guinness Peat Group plc

GUINNESS PEAT GROUP PLC • INTERIM REPORT 3Coat’s performance is very encouragingnotwithstanding there is still a long way to go toreach our ultimate objectives for the company.All of the comments re Coats in the last AnnualReport remain valid and will be updated inmore detail at next balance date.The balance sheet is in excellent shape withstrong liquidity despite a reasonably activeinvestment program. The simplified parentcompany version is shown below which forinvestors is the most relevant measure of GPG.It should be noted that the share portfolio isnow shown at market value.Simplified Balance Sheet at 30 June 2005£(GBP)mCash at Bank 192Debtors 9Coats 189Nationwide 7Staveley (UK & USA) (14)Canberra Investment Corp 25Turners & Growers 43Capral 30Tower 59Australian Wealth Management 33Share portfolio 259Total Assets 832Creditors (58)Note Issues (178)SHAREHOLDERS’ FUNDS £596mEvery indication at this stage is for a very satisfactory full year result at 31 December 2005.Ron BrierleyCHAIRMAN12 September 2005


GUINNESS PEAT GROUP PLC • INTERIM REPORT 5Consolidated Balance SheetUnaudited Unaudited Unaudited30 June 30 June 31 December2005 2004 2004NON-CURRENT ASSETS £m £m £mIntangible assets 174 162 160Property, plant and equipment 341 341 343Investments in associates 85 48 47Investments in joint ventures 24 13 12Long term investments 284 161 159Deferred tax assets 7 4 17Trade and other receivables 26 17 27CURRENT ASSETS941 746 765Inventories 248 224 186Trade and other receivables 266 306 268Trading investments 13 51 20Cash and cash equivalents 246 213 283773 794 757Non-current assets classified as held for sale 105 56 60TOTAL ASSETS 1,819 1,596 1,582CURRENT LIABILITIESTrade and other creditors 220 278 273Current income tax liabilities 24 15 24Convertible subordinated loan notes – 6 6Other borrowings 101 80 45Provisions for liabilities and charges 98 103 102443 482 450NET CURRENT ASSETS 330 312 307NON-CURRENT LIABILITIESTrade and other creditors 8 37 4Deferred tax liabilities 10 18 15Capital notes 178 159 172Other borrowings 277 310 267Retirement benefit obligations:Funded schemes 86 36 91Unfunded schemes 56 59 61Provisions for liabilities and charges 29 12 22Liabilities directly associated with644 631 632non-current assets classified as held for sale 83 30 30TOTAL LIABILITIES 1,170 1,143 1,112NET ASSETS 649 453 470EQUITYShare capital 48 43 43Share premium account 12 6 11Translation reserve 15 (11) (8)Unrealised gains reserve 118 – –Other reserves 300 305 305Retained earnings 103 60 65EQUITY SHAREHOLDERS’ FUNDS 596 403 416Minority interests 53 50 54TOTAL EQUITY 649 453 470Net assets per share* – (pence) 61.74 42.78 43.52– (Australian cents) 145.18 111.37 106.58– (New Zealand cents) 159.05 122.17 115.68*The net assets per share for June 2004 and December 2004 have been adjusted for the 2005 Capitalisation Issue.Blake Nixon, DirectorApproved by the Board on 12 September 2005


6 GUINNESS PEAT GROUP PLC • INTERIM REPORTConsolidated Statement of RecognisedIncome and ExpenseUnaudited Unaudited Unaudited6 months 6 months Yearto to to30 June 30 June 31 December2005 2004 2004£m £m £mGains on revaluation of long term investments 16 – –Exchange differences on translation of foreign operations 23 (11) (8)Actuarial losses on defined benefit pension schemes – – (19)Net income recognised directly in equity 39 (11) (27)TransfersTransferred to profit or loss on sale of long term investments (28) – –Profit for the period 51 9 32Total recognised income and expense for the period 62 (2) 5Attributable to:EQUITY SHAREHOLDERS OF THE COMPANY 61 (4) 3Minority interests 1 2 262 (2) 5Reconciliation of ConsolidatedMovements in Equity Shareholders’ FundsShareUnrealisedShare premium Translation gains Other Retainedcapital account reserve reserve reserves earnings Total£m £m £m £m £m £m £mBalance as at 31 December 2004 43 11 (8) – 305 65 416IAS 32 and 39 adjustments – – – 130 – (8) 122Balance as at 1 January 2005 43 11 (8) 130 305 57 538Exchange differences on translationof foreign operations – – 23 – – – 23Increases in fair value – – – 16 – – 16Transfers to profit or loss – – – (28) – – (28)Net income recogniseddirectly in equity – – 23 (12) – – 11Profit for the period – – – – – 50 50Total recognised income and expense – – 23 (12) – 50 61Dividends – – – – – (9) (9)Capitalisation issue of shares 5 – – – (5) – –Scrip dividend alternative – – – – – 5 5Share based payments – 1 – – – – 1BALANCE AS AT 30 JUNE 2005 48 12 15 118 300 103 596


8 GUINNESS PEAT GROUP PLC • INTERIM REPORTNotes to Financial Statements1. The interim financial information has been prepared in accordance with International Financial Reporting Standards(IFRSs), and the accounting policies adopted have been consistently applied to all periods presented except for thoserelating to the classification and measurement of financial instruments. The Group has made use of the exemptionavailable under IFRS 1 to only apply IAS 32 and IAS 39 from 1 January 2005. The IFRS standards and IFRIC interpretationsadopted in this interim financial information are those issued and effective as at the time of preparation of this report -the IFRS and IFRIC interpretations that will be applicable at 31 December 2005 may introduce further changes.As a UK company listed on the London Stock Exchange, GPG is obliged under European Union requirements to adoptInternational Financial Reporting Standards (IFRS) with effect from 1 January 2005. Previously GPG produced its accountsunder UK Generally Accepted Accounting Principles (“UK GAAP”).A number of differences arise from the adoption of IFRS, and UK listed entities are therefore also obliged to produce adocument re-presenting their results for the year ended 31 December 2004 in accordance with IFRS.GPG has therefore published a separate Announcement containing narrative explanation and reconciliations betweenIFRS and previously reported financial information under UK GAAP as at 1 January 2004, 30 June 2004 and 31 December2004. This separate Announcement also appears on GPG’s website.2. The figures for the year ended 31 December 2004 do not constitute statutory accounts for that year but have beenextracted from the statutory accounts, which have been filed with the Registrar of Companies, and adjusted asappropriate to reflect the restatement of those accounts from UK GAAP to IFRS. The auditors reported on the UK GAAPaccounts and that report was unmodified and did not contain a statement under Section 237(2) of the Companies Act1985. The accounts for the six months ended 30 June 2005 have not been audited, nor have the accounts for theequivalent period in 2004.3. Foreign exchange movements - during the six months to 30 June 2005, GPG recognised in operating profit £10 million offoreign exchange gains compared to £4 million of foreign exchange losses in the six months to 30 June 2004 (£7 millionlosses in the year to 31 December 2004).4. Tax on profit on ordinary activities30 June 30 June 31 December2005 2004 2004£m £m £mUK Corporation tax at 30% 1 1 3Overseas tax (10) (7) (21)(9) (6) (18)Deferred tax 4 2 18(5) (4) –5. The Group’s significant associate and joint venture entities are as follows:30 June 30 June 31 December2005 2004 2004Nationwide Accident Repair Services plc 50.0% 50.0% 50.0%Harcourt Hill Estate Ltd 50.0% 50.0% 50.0%Dawson International plc 24.8% 29.9% 29.9%Capral Aluminium Ltd 38.3% 36.6% 34.3%Green’s Foods Ltd 34.8% 29.0% 28.9%Australian Wealth Management Ltd 31.5% – –CPI Group Ltd 21.6% 19.9% 21.6%Australian Wealth Management Ltd (“AWM”) became an associated undertaking in March 2005, and contributed £1 millionto Group profit in the 6 months to 30 June 2005. The carrying value of AWM at 30 June 2005 amounted to £33 million.Other significant contributions to the profit for the period from associate and joint venture entities were:30 June 30 June 31 December2005 2004 2004£m £m £mNationwide Accident Repair Services plc 4 1 1Capral Aluminium Ltd (4) (2) (10)


GUINNESS PEAT GROUP PLC • INTERIM REPORT 96. Earnings per share - The calculation of earnings per Ordinary share is based on profit after taxation attributable toshareholders and the weighted average number of 959,300,613 Ordinary shares in issue during the six months. Thecomparatives for the six months to 30 June 2004 and the year to 31 December 2004 have been adjusted for theCapitalisation Issue which took place in May 2005.7. The net tangible assets per share at 30 June 2005 were 49.29p (30 June 2004: 30.92p, 31 December 2004: 32.41p)8. Changes in the issued share capital during the six months to 30 June 2005 comprise the following:£000At 1 January 2005 43,451Employee options exercised 109Scrip dividend alternative shares issued (13 May 2005) 288Capitalisation issue (23 May 2005) 4,384At 30 June 2005 48,2329. Dividends – The directors have not recommended the payment of an interim dividend (6 months to 30 June 2004 Nil).A final dividend of 0.91p per share, adjusted for the 2005 Capitalisation Issue, was paid during the period in respect ofthe year ended 31 December 2004.10. On 5 July 2005, those holders of GPG (UK) Holdings plc Convertible Loan Notes (“CLNs”) who elected to convert theirElection Amounts were issued with 11.7 million Ordinary shares of 5p each (“Conversion Shares”) and the remainingCLN holders were repaid Redemption Amounts of £0.9 million in cash. As no Interim Dividend has been declared, theConversion Shares will, with immediate effect, rank equally with the other shares of the Company.11. Directors – The following persons were directors of GPG during the whole of the half-year and up to the date of thisreport: Sir Ron Brierley, G J Cureton, A I Gibbs, B A Nixon, Dr G H Weiss.12. Directors’ Report – The Chairman’s Statement appearing in the Interim Results and signed by Sir Ron Brierley provides areview of the operations of the Company for the six months ended 30 June 2005.13. Directors’ Declaration – In accordance with a resolution of the directors of Guinness Peat Group plc I state thatin the opinion of the Directors:a) the Interim Results of the consolidated entity:(i)(ii)give a true and fair view of the financial position as at 30 June 2005 and the performance of the consolidatedentity for the half-year ended on that date; andcomply with applicable International Financial Reporting Standards and the UK Companies Act 1985; andb) there are reasonable grounds to believe the Company will be able to pay its debts as and when they become dueand payable.14. Publication - This statement is being sent to shareholders and copies will be available at the registered office of theCompany, First Floor, Times Place, 45 Pall Mall, London SW1Y 5GP. A copy will also be displayed on the Company’swebsite on www.gpgplc.com.On behalf of the BoardB A NixonDirector12 September 2005


10 GUINNESS PEAT GROUP PLC • INTERIM REPORTIndependent Review Report to theMembers of Guinness Peat Group plcIntroductionWe have been instructed by Guinness Peat Group plc (“the Company”) to review the consolidated financial information of theCompany and its subsidiaries (together,“the Group”) for the six months ended 30 June 2005 which comprises the consolidatedincome statement, the consolidated balance sheet, the consolidated statement of recognised income and expenses, theconsolidated cash flow statement and the related notes (hereinafter referred to as “the interim report”). We have read the otherinformation contained in the interim report and considered whether it contains any apparent misstatements or materialinconsistencies with the financial information.This report is made solely to the Company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our workhas been undertaken so that we might state to the Company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.Directors’ responsibilitiesThe interim report,including the financial information contained therein,is the responsibility of,and has been approved by,thedirectors.The directors are responsible for preparing the interim report in accordance with the Listing Rules of the FinancialServices Authority which require that the accounting policies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where any changes,and the reasons for them,are disclosed.International Financial Reporting StandardsAs disclosed in the Basis of preparation to the IFRS restatement,the next annual financial statements of the Group will be preparedin accordance with International Financial Reporting Standards (IFRS) as adopted for use in the EU.Accordingly,the interim reporthas been prepared in accordance with the recognition and measurement criteria of IFRS and the disclosure requirements of theListing Rules.The accounting policies are consistent with those that the Directors intend to use in the annual financial statements.There is,however,a possibility that the Directors may determine that some changes to these policies are necessary when preparingthe full annual financial statements for the first time in accordance with IFRS as adopted for use in the EU.Review work performedWe conducted our review in accordance with the guidance contained in Bulletin 1999/4 issued by the Auditing Practices Boardfor use in the United Kingdom. A review consists principally of making enquiries of Group management and applyinganalytical procedures to the financial information and underlying financial data and, based thereon, assessing whether theaccounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than anaudit performed in accordance with International Standards on Auditing (UK and Ireland) and therefore provides a lower levelof assurance than an audit. Accordingly, we do not express an audit opinion on the financial information.Review conclusionIn our opinion, we are not aware of any material modifications that should be made to the financial information as presentedfor the six months ended 30 June 2005.Deloitte & Touche LLPChartered AccountantsLondon12 September 2005This review report will be published on the Company’s website. A review does not provide assurance on the maintenance andintegrity of the website, including controls used to achieve this, and in particular on whether any changes may have occurred to thefinancial information since first published. These matters are the responsibility of the directors but no control procedures can provideabsolute assurance in this area.Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation inother jurisdictions.


GUINNESS PEAT GROUP PLC • INTERIM REPORT 11Company and Registrar AddressesUNITED KINGDOMFirst Floor, Times Place, 45 Pall Mall, London SW1Y 5GPTelephone: 020 7484 3370 Facsimile: 020 7925 0700AUSTRALIAc/o PKF Chartered Accountants and Business AdvisersLevel 10, 1 Margaret Street, Sydney NSW 2000Telephone: 02 9251 4100 Facsimile: 02 9240 9821NEW ZEALANDc/o Computershare Investor Services LimitedPrivate Bag 92119, Auckland 1020Telephone: 09 488 8700 Facsimile: 09 488 8787Registered in England No. 103548Website: www.gpgplc.comLOCATION OF SHARE REGISTERSThe Company’s register of members is maintained in the UK with branch registers in Australia and New Zealand.Register enquiries may be addressed direct to the Company’s share registrars named below:Register Telephone and postal enquiries Inspection of RegisterUK Main Register:Computershare Investor PO Box 82, The Pavilions, Bridgwater Road PO Box 82, The PavilionsServices PLC Bristol BS99 7NH Bridgwater RoadTel: 0870 702 0000 Facsimile: 0870 703 6143 Bristol BS99 7NHAustralian Branch Register:Registries Ltd PO Box R67 Level 2, 28 Margaret StreetRoyal Exchange, Sydney NSW 1224 Sydney NSW 2000Tel: 02 9290 9600 Facsimile: 02 9279 0664New Zealand Branch Register:Computershare Investor Private Bag 92119, Auckland 1020 Level 2, 159 Hurstmere RoadServices Limited Tel: 09 488 8777 Facsimile: 09 488 8787 TakapunaNorth Shore City


12 GUINNESS PEAT GROUP PLC • INTERIM REPORT

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