Coats Regulatory News (COA)

28 Feb 2008 07:01

Guinness Peat Group PLC28 February 2008 Guinness Peat Group plc ("GPG" or "the Company" or "the Group") PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007 CHAIRMAN'S STATEMENT The 2007 net profit of £129 million is easily a record, eclipsing the 1999result of £112 million which largely related to the sale of our Tyndallsubsidiary. The main components this time are the sales of shares in AustralianWealth Management (AWM) and Premier Investments (subsequent to Premier's ownsuccessful sale of its Coles Group holding). However, there are numerous otherplus and minus items which are important to the overall group result. Variousdeals involving Green's Foods and Nationwide Accident Repair Services madeuseful contributions and, of course, the Coats result was also important. The biggest negative was Capral Aluminium which has obviously been a bigdisappointment but, if we dare to say, there have been signs of real improvementin recent months. In the Interim Report, we expressed high hopes for the second half but, in theevent, it was not as good as anticipated. The EC decision in relation to Coatswas an unwelcome and unexpected blow. Although we were well aware of theuncertainties of the third and final unresolved EC issue, which we inherited asa 1990's legacy in the acquisition of Coats, the administrative "fine" of €110million is totally disproportionate and irreconcilable with the facts as knownto us. Perversely, that is also the good news. We believe that this amount willeventually be proved unsustainable, even to the extent of a complete reversal ofthe initial finding, when it is eventually subject to higher levels of ECscrutiny. A substantial provision continues to be held in Coats' accounts but not for thefull amount of €110 million, which reflects the considered view of the Board andits advisers regarding the ultimate outcome. Otherwise, Coats' trading continued the improvement noted in previous reports.The industrial thread business is now starting to show the benefit of themassively expensive restructuring exercise both before and after the GPGacquisition. Crafts was relatively weak in 2007 but this is a very well established operationand it is only a matter of time before profits return to more normal levels.Coats' detailed results for the year and Chairman's Review are available atwww.coats.com or a printed copy can be obtained from any GPG office. Coats' financial profile at 31 December 2007 is: £mFixed assets 272Intangibles 149Net current assets 144 ____ 565Net debt (183)Provisions (100)Minorities (9) ____ SHAREHOLDERS' FUNDS £273 ____ BALANCE SHEET GPG remains in a strong financial position as shown in the Simplified BalanceSheet below. As always, there is a high level of liquidity, which is particularly reassuringin the present climate of renewed emphasis on corporate stability. SIMPLIFIED BALANCE SHEET AS AT 31 DECEMBER 2007 £mCash at Bank 261Debtors 43Coats 273Canberra Investment Corp 21Turners & Growers 53Capral 56Tower Australia 88Tower NZ 34Rattoon 34Greens Foods 16Share portfolio 330 ____TOTAL ASSETS 1,209Creditors (42)Note issues (216) ____ SHAREHOLDERS' FUNDS £951 ____ The unrealised portfolio surplus was down quite sharply at 31 December, partlydue to the AWM and Premier sales and, also, the overall slide in share priceswhich began in late 2007 and has, so far, extended into the current term. GPG is not unreceptive to the changed environment because the vast majority ofour portfolio is in long term holdings where we are confident of the real valueregardless of market fluctuations. In fact, we are now seeing buyingopportunities which have not been available for some time past. The ultimateoutcome of the present market turmoil should be actively favourable for GPG. PORTFOLIO INVESTMENTS - Unrealised surplus before tax £mUnrealised surplus as at 31 December 2006 192Realised during 2007 (129) ____ 63Net increase during 2007 34 ____ Balance at 31 December 2007 £97 ____ The above table does not include investments in subsidiary and associatedcompanies (Canberra Investment Corp, Capral, Maryborough Sugar, Rattoon, TowerAustralia, Turners & Growers and Autologic) which are carried at book value andwould otherwise reduce the surplus by £3 million. CAPITAL AND DIVIDEND The Board has declared the standard 1p dividend and 1 for 10 bonus issue (the15th in succession, multiplying an original 1990 holding 4.2 times). The shareelection scheme is available and will operate in lieu of a cash dividend at therate of 1 new share for each 60 already held. OUTLOOK 2008 will be a significant year for GPG in developing the challenge ofincremental value realisation referred to in last year's Annual Report. Ron BrierleyCHAIRMAN 28 February 2008 Guinness Peat Group plcConsolidated Income Statement Unaudited AuditedYear ended 31 December 2007 2006 £m £m______________________________________________________________________________________________________________________ Continuing OperationsRevenue 1,319 1,356 Cost of sales (911) (956) ________ ________ Gross profit 408 400 Profit on disposal of investments and other net investment income 145 45 Distribution costs (163) (177)Administrative expenses (235) (196) ________ ________ Operating profit 155 72 Share of loss of joint ventures (3) - Share of profit/(loss) of associated undertakings 11 (1) Profit on sale of business - continuing operations 25 5 Finance costs (net) (38) (40) ________ ________ Profit before taxation from continuing operations 150 36 Tax on profit from continuing operations (32) (12) ________ ________ Profit for the year from continuing operations 118 24 Discontinued Operations Gain on discontinued operations 8 10 ________ ________ Profit for the year 126 34 ======== ========Attributable to:______________________________________________________________________________________________________________________ EQUITY HOLDERS OF THE PARENT 129 36______________________________________________________________________________________________________________________ Minority interests (3) (2) ________ ________ 126 34 ======== ======== Earnings per Ordinary Share from continuing and discontinued operations:Basic 10.21p 2.89pDiluted 8.86p 2.54p Earnings per Ordinary Share from continuing operations:Basic 9.60p 2.08pDiluted 8.38p 1.84p Guinness Peat Group plcConsolidated Balance Sheet Unaudited Audited31 December 2007 2006 £m £mNON-CURRENT ASSETS_______________________________________________________________________________________________________________________ Intangible assets 204 198Property, plant and equipment 414 391Investments in associated undertakings 149 122Investments in joint ventures 45 17Fixed asset investments 328 417Derivative financial instruments 4 6Deferred tax assets 8 6Pension surpluses 34 32Trade and other receivables 18 18 ________ ________ 1,204 1,207 ________ ________ CURRENT ASSETS_______________________________________________________________________________________________________________________ Inventories 227 216Trade and other receivables 254 238Current asset investments 12 19Derivative financial instruments 5 3Cash and cash equivalents 318 254 ________ ________ 816 730 ________ ________ Non-current assets classified as held for sale 5 3 ________ ________ TOTAL ASSETS 2,025 1,940 ________ ________ CURRENT LIABILITIES_______________________________________________________________________________________________________________________ Trade and other payables 294 254Current income tax liabilities 10 9Capital notes 83 -Other borrowings 94 123Derivative financial instruments 4 -Provisions 84 87 ________ ________ 569 473 ________ ________ NET CURRENT ASSETS 247 257 ________ ________ NON-CURRENT LIABILITIES_______________________________________________________________________________________________________________________ Trade and other payables 15 21Deferred tax liabilities 17 18Capital notes 133 201Other borrowings 168 150Retirement benefit obligations: Funded schemes 1 14 Unfunded schemes 51 58Provisions 26 37 ________ ________ 411 499 ________ ________ TOTAL LIABILITIES 980 972 ________ ________ NET ASSETS 1,045 968 ======== ======== Guinness Peat Group plcConsolidated Balance Sheet (continued) Unaudited Audited31 December 2007 2006 £m £mEQUITY_______________________________________________________________________________________________________________________ Share capital 64 57Share premium account 61 61Translation reserve 13 (24)Unrealised gains reserve 94 188Other reserves 295 303Retained earnings 424 291_______________________________________________________________________________________________________________________ EQUITY SHAREHOLDERS' FUNDS 951 876_______________________________________________________________________________________________________________________ Minority interests 94 92 ________ ________ TOTAL EQUITY 1,045 968 ======== ======== Net asset backing per share * 74.63p 69.49p ======== ======== * The net asset backing per share at 31 December 2006 has been adjusted for the 2007 Capitalisation Issue. Guinness Peat Group plcConsolidated Statement of Recognised Income and Expense Unaudited AuditedYear ended 31 December 2007 2006 £m £m_______________________________________________________________________________________________________________________ Gains on revaluation of fixed asset investments 34 109 Losses on cash flow hedges (2) (2) Exchange gains/(losses) on translation of foreign operations 38 (36) Actuarial gains on retirement benefit schemes 7 9 ________ ________ Net income recognised directly in equity 77 80 Transfers Transferred to profit or loss on sale of fixed asset investments (129) (7) Transferred to profit or loss on sale of businesses 1 - Transferred to profit or loss on cash flow hedges (2) 1 Profit for the year 126 34 ________ ________ Total recognised income and expense for the year 73 108 ======== ======== Attributable to: EQUITY HOLDERS OF THE PARENT 77 110 Minority interests (4) (2) ________ ________ 73 108 ======== ======== Guinness Peat Group plcReconciliation of Consolidated Movements in Equity Shareholders' FundsYear ended 31 December 2007 Share Share premium Translation Unrealised Other Retained capital account reserve gains reserves earnings Total reserve £m £m £m £m £m £m £m_______________________________________________________________________________________________________________________ Balance as at 1 January 2006 49 16 12 86 306 251 720 Total recognised income and expensefor the year - - (36) 102 - 44 110 Dividends (note 10) - - - - - (10) (10)Capitalisation issue of shares 5 - - - (5) - -Scrip dividend alternative - - - - - 6 6Other share issues 3 45 - - - - 48Share based payments - - - - 2 - 2 ______________________________________________________________________________ Balance as at 31 December 2006 57 61 (24) 188 303 291 876 Total recognised income and expensefor the year - - 37 (94) (3) 137 77Dividends (note 10) - - - - - (11) (11)Capitalisation issue of shares 7 - - - (7) - -Scrip dividend alternative - - - - - 7 7Share based payments - - - - 2 - 2 ______________________________________________________________________________ Balance as at 31 December 2007 64 61 13 94 295 424 951 ============================================================================== Guinness Peat Group plcConsolidated Cash Flow Statement Unaudited AuditedYear ended 31 December 2007 2006 £m £m_______________________________________________________________________________________________________________________ Cash inflow from operating activitiesNet cash inflow from operating activities 255 151Interest paid (49) (42)Taxation paid (21) (18) _______ _______ Net cash generated by operating activities 185 91 _______ _______ Cash outflow from investing activitiesDividends received from associated undertakings and joint ventures 10 5Capital expenditure and financial investment (67) (82)Acquisitions and disposals (41) (30) _______ _______ Net cash absorbed in investing activities (98) (107) _______ _______ Cash (outflow)/inflow from financing activitiesIssue of ordinary shares 1 48Equity dividends paid to the Company's shareholders (4) (4)Dividends paid to minority interests (4) (4)(Decrease)/increase in debt (14) 9 _______ _______ Net cash (absorbed in)/generated by financing activities (21) 49 _______ _______ Net increase in cash and cash equivalents 66 33Cash and cash equivalents at beginning of the year 241 238Exchange gains/(losses) on cash and cash equivalents 2 (30) _______ _______ Cash and cash equivalents at end of the year 309 241 ======= ======= Guinness Peat Group plcNOTES TO FINANCIAL INFORMATION 1. The preliminary financial information has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the Group, 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. The accounting policies adopted have been consistently applied to all periods presented. 2. The financial information set out in this announcement does not constitute the Group's statutory accounts for the years ended 31 December 2007 and 2006. The financial information for the year ended 31 December 2006 is derived from the statutory accounts for that year, which have been filed with the Registrar of Companies. The auditors reported on those accounts and that report was unmodified and did not contain statements under Section 237(2) or (3) of the Companies Act 1985. Whilst the financial information included in this announcement has been compiled in accordance with the recognition and measurement principles of applicable IFRS, this announcement 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 April 2008. The financial information in this report is unaudited. However, 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 11. 3. Group foreign exchange movements - during the year ended 31 December 2007, GPG recognised in operating profit £8 million of net foreign exchange losses which compares to £3 million of net foreign exchange gains in the year ended 31 December 2006. 4. Tax on profit from continuing operations 2007 2006 £m £m UK Corporation tax at 30% - - Overseas tax (26) (21) ___________________________ (26) (21) Deferred tax (6) 9 ___________________________ (32) (12) ___________________________ 5. Associate and joint venture entities The Group's significant associate and joint venture entities are as follows: 2007 2006 Green's General Foods Pty Ltd 72.5% na Australian Country Spinners Ltd 50.0% 50.0% Rattoon Holdings Ltd 44.4% 44.8% The Maryborough Sugar Factory Ltd 27.1% 24.3% Tower Australia Group Ltd 26.9% 23.9% Autologic Holdings plc 21.7% na Nationwide Accident Repair Services na 31.3% plc Green's Foods Ltd na 37.6% Autologic Holdings plc ("Autologic") became an associated undertaking in 2007, and contributed £1 million to Group profit in the year to 31 December 2007. The carrying value of Autologic at 31 December 2007 amounted to £13 million. Green's General Foods Ltd ("Green's") became a joint venture in 2007, and contributed £2 million to Group profit in the year to 31 December 2007. The carrying value of Green's at 31 December 2007 amounted to £16 million. Green's Foods Ltd and Nationwide Accident Repair Services plc both ceased to be associated undertakings during 2007. Their contributions to the profit for the year ended 31 December 2007 amounted to £1 million (2006: loss of £5 million) and £1 million (2006: £2 million) respectively. Other significant contributions to the profit for the year from associate and joint venture entities were: 2007 2006 £m £m Rattoon Holdings Ltd 5 - Tower Australia Group Ltd 5 - Australian Country Spinners Ltd (3) (2) Guinness Peat Group plc 6. 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. 7. Earnings per share - The calculation of basic earnings per Ordinary Share from continuing and discontinued operations is based on profit for the year attributable to equity shareholders of the parent and the weighted average number of 1,269,191,224 Ordinary shares in issue during the year. The calculation of basic earnings per Ordinary Share from continuing operations is based on profit for the year from continuing operations attributable to equity shareholders of the parent and the weighted average number of 1,269,191,224 Ordinary shares in issue during the year. The comparatives for the year to 31 December 2006 have been adjusted for the 2007 Capitalisation Issue. 8. The net tangible assets (net assets excluding intangible assets) per share at 31 December 2007 were 65.96p (2006: 61.03p). 9. Changes in the issued share capital during the year to 31 December 2007 comprise the following £000 At 1 January 2007 57,310 Employee options exercised 209 Scrip dividend alternative shares issued (18 May 2007) 441 Capitalisation issue (22 June 2007) 5,780 At 31 December 2007 63,740 10. Dividends - The directors have approved the payment of an interim dividend of 1.00 pence per share payable on 19 May 2008 and making a total of 1.00 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 60 existing shares held at the appropriate record date. A final cash dividend of 0.91 pence per share (adjusted to reflect the 2007 Capitalisation Issue) in respect of the year ended 31 December 2006 was paid on 21 May 2007 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 accompany the Company's Annual Report and Accounts (see note 12 below). Shareholders are recommended to obtain their own professional advice. 11. European Commission Investigation - 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 two fines against the Coats plc Group ("Coats") of €12.2 million and €110.3 million. Following legal advice, Coats has determined not to appeal the • 12.2 million fine, which was paid in December 2007. The €110.3 million fine is in respect of the Commission's allegation of a market sharing agreement in the European haberdashery market. Coats totally rejects this allegation, and is vigorously contesting the Commission's decision in an appeal which has been lodged with the Court of First Instance in Luxembourg. As stated in previous reports, the Group remains of the view that any anticipated eventual payment of the remaining fines is adequately covered by existing provisions. 12. The Annual General Meeting of the Company (the "2008 AGM") will be held on 13 May 2008 to consider, amongst other things, the 2008 Capitalisation Issue. Notice of the 2008 AGM will be incorporated in the Annual Report & Accounts to be posted to shareholders in April 2008. A circular which will be posted to accompany the Notice of the 2008 AGM will contain details of the Interim Dividend, the Scrip Dividend Alternative and the 2008 Capitalisation Issue. The shares representing the 2008 Capitalisation Issue cannot be allotted until shareholders have given their approval at the 2008 AGM. 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 Thursday 28.02.08 Shares marked ex-dividend (ASX) Monday 03.03.08 Shares marked ex-dividend (LSE) Wednesday 05.03.08 Record date for dividend Friday 07.03.08 Head securities quoted ex-dividend (NZSX) Monday 10.03.08 Last date to post out Circular with Forms of Election for the Scrip Dividend Alternative Monday 14.04.08 Last date for receipt of 2008 AGM proxies (11.00am UK time) Friday 09.05.08 Final date for receipt of Scrip Dividend Alternative elections Monday 12.05.08 2008 AGM (11.00am UK time) Tuesday 13.05.08 Allotment of Scrip Shares (5.00pm UK time) Friday 16.05.08 Dispatch of FASTER mailings notifying NZ holders of the change in holdings following the Scrip Dividend allotment Monday 19.05.08 Dispatch of Scrip Dividend holding statements (AUS) Monday 19.05.08 Dealings commence in Scrip Dividend Shares Monday 19.05.08 Dispatch of Scrip Dividend Share Certificates (UK) Monday 19.05.08 Update of UK CREST accounts (5.00am UK time) Monday 19.05.08 Payment of Cash Dividend** Monday 19.05.08 Shares marked Ex-Capitalisation on ASX and traded on deferred settlement basis Monday 19.05.08 Record date for Capitalisation Issue Friday 23.05.08 Head securities quoted Ex-Capitalisation (NZSX) Monday 26.05.08 Allotment of Capitalisation Shares (5.00pm UK time) Friday 30.05.08 Last day of deferred settlement trading on ASX Monday 02.06.08 Update of UK CREST accounts (5.00am UK time) Monday 02.06.08 Post out Capitalisation Share Certificates (UK) and holding statements (AUS) Monday 02.06.08 Shares marked Ex-Capitalisation in UK (LSE) Monday 02.06.08 Dispatch of FASTER statements in NZ notifying NZ holders of change in holdings Tuesday 03.06.08 following Capitalisation Issue Notes * Actions take place on all three Exchanges on the date specified unless otherwise indicated. ** The cash payment 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 12 May 2008. Shareholders on all three registers will have the opportunity to elect for one of the other two currencies, and a circular containing further information and a currency election form will be circulated at the same time as the Notice of AGM is posted. 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. Guinness Peat Group plc 13. Directors - The following persons were directors of GPG during the whole of the year and up to the date of this report: Sir Ron Brierley G J Cureton A I Gibbs B A Nixon Dr G H Weiss 14. 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 2007. 15. Director's Declaration - In accordance with a resolution of the directors of Guinness Peat Group plc I state that: In the opinion of the Directors: a) The Preliminary Results of the consolidated entity: (i) give a true and fair view of the financial position as at 31 December 2007 and the performance of the consolidated entity for the year ended on that date; and (ii) comply with the recognition and measurement principles of applicable International Financial Reporting Standards as adopted by the Group; and b) There are reasonable grounds to believe the Company will be able to pay its debts as and when they become due and payable. 16. 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 BoardB A NixonDirector28 February 2008 UNITED KINGDOM_______________________________________________________________________________________________________________________First Floor, Times Place, 45 Pall Mall, London SW1Y 5GP Tel: 020 7484 3370 Fax: 020 7925 0700 AUSTRALIA_______________________________________________________________________________________________________________________Registries Ltd Tel: 02 9290 9600 Fax: 02 9279 0664 PO Box R67, Royal Exchange, Sydney NSW 1224, Australia NEW ZEALAND_______________________________________________________________________________________________________________________ c/o Computershare Investor Services LimitedPrivate Bag 92119, Auckland 1020, New Zealand Tel: 09 488 8700 Fax: 09 488 8787 Registered in England No. 103548 PRELIMINARY REPORT OF GUINNESS PEAT GROUP PLC ("GPG") FOR THE YEAR ENDED 31 DECEMBER 2007 GPG results for announcement to the Market for the year ended 31 December 2007. Please note the following key information: * Revenue decreased by £37 million (2.7%) over the corresponding period in 2006; * Profit from ordinary activities after tax attributable to members £129 million - an increase of £93 million (258.3%) from the previous year; * Net profit for the year attributable to members £129 million - an increase of £93 million (258.3%) from the previous year; * Gains of £129 million realised on portfolio investments during the year; * 1.0p interim dividend has been declared for the year, payable on 19 May 2008 to shareholders on the register as at 7 March 2008 (0.91p paid during the year in respect of the year ended 31 December 2006, as adjusted for the 2007 capitalisation issue); * The record date for entitlement to dividend is 7 March 2008. See note 10 to the Notes to the Preliminary Results; and * These Preliminary Results are based on financial information for the year ended 31 December 2007 which is in the process of being audited. J R RussellGroup Company Secretary28 February 2008 This information is provided by RNS The company news service from the London Stock Exchange