Coats Group Interim Results

Guinness Peat Group PLC
12 September 2005


                          Guinness Peat Group plc

The following unaudited consolidated results of Coats Group Limited ("the
Company") for the six months ended 30 June 2005 are released by Guinness Peat
Group plc ("GPG") for information only. The Company, which became a subsidiary
of GPG on 1 April 2004, is the holding company of Coats Group.

Richard Russell
Company Secretary
Guinness Peat Group plc

12 September 2005


Contacts:

Blake Nixon                        (UK) 00 44 20 7484 3370
Gary Weiss                         (Australia) 00 61 2 8298 4305
Tony Gibbs                         (New Zealand) 00 64 9 379 8888


                                                               12 September 2005

Coats Group Limited: unaudited results* for the six months ended 30 June 2005

Financial summary

                                                                             Like-for-like**
                                                                     2005               2004             2004
                                                                Half year          Half year        Half year
                                                                Unaudited          Unaudited        Unaudited
                                                                     US$m               US$m             US$m

Revenue                                                            830.4               812.9            779.0

Operating profit before reorganisation, impairment and              66.5                41.8             41.3
other exceptional items (see note 2)

Operating profit                                                    54.2                34.6             18.9

Pre-tax profit                                                      45.0                                  1.3

Net cash (outflow)/inflow generated by operations                   (5.8)                                69.4

Capital expenditure                                                 38.5                                 40.2

Net debt***                                                        483.9                                511.1

Net gearing***                                                       147%                                160%


* See note 1 for basis of preparation of this statement

** Excluding the impact of exchange translation and the acquisition and disposal
   of businesses

***Net debt at 30 June 2005 has been increased by $23.5 million from adopting
   IAS 32 and IAS 39 as at 1 January 2005 (as the preference share capital of a
   subsidiary undertaking is now classified as debt)


Chairman's statement

Overview

The Group performed well in the first six months of 2005, with profit before tax
of $45.0 million (2004 - $1.3 million) being ahead of management expectations
for the half year.

These interim results are reported under International Financial Reporting
Standards (IFRS), as set out in Note 1 on the basis of preparation.

Results

Operating results for the first six months of 2005, which are entirely generated
from our Thread operations, showed a significant improvement over 2004 as
follows:

Like-for-like* sales and operating profit


                                   2004        Exchange  Acquisitions/ 
                            comparative   retranslation      disposals 2004 adjusted 2005 reported   Increase
                                     $m              $m             $m            $m            $m          %

External sales                    779.0            24.5           9.4          812.9         830.4         2%
Operating profit pre
reorganisation,
impairment and other
exceptional items                  
(note 2)                           41.3             1.1          (0.6)          41.8          66.5        59%
Operating profit                   18.9            16.3          (0.6)          34.6          54.2        57%



* excluding the impact of exchange translation, acquisitions and disposals

An operating profit (before reorganisation, impairment and other exceptional
items) of $66.5 million (2004 - $41.3 million) was generated, on sales of $830.4
million (2004 - $779.0 million).  On a like-for-like basis, sales increased by
2%, due primarily to a strong performance from the Group's North American Crafts
business.  Operating profit (before reorganisation, impairment and other
exceptional items) increased by 59%, driven by North American Crafts and
benefits from reorganisation of the Group's industrial businesses in Western
Europe and North America.

This reorganisation programme has been accelerated in 2005 in order to hasten
the reduction of the Group's cost base in Western Europe and North America,
following the migration of industrial thread demand to lower cost regions.
Reorganisation costs of $28.0 million (2004 - $18.9 million) were incurred in
the period.

Profit before tax increased to $45.0 million (2004 - $1.3 million), including
$22.5 million (2004 - nil) exchange gains, of which $15.7 million was recognised
as an exceptional item in operating profit and $6.8 million was recognised in
finance costs.  These gains occurred as a result of translation of balance sheet
items which are required under current accounting standards to be reported
through the Profit and Loss Account.

Net earnings after tax and minorities increased by a similar amount to $33.3
million (2004 - loss of $12.5 million). The tax charge as a proportion of
pre-exceptional profit was significantly lower due to a reduction in unrelieved
operating losses.

An operating cash outflow of $5.8 million (2004 - $69.4 million inflow) arose,
reflecting a $70.5 million increase (2004 - $14.3 million decrease) in net
working capital since the year end.  Given the excellent operating cash inflow
for the 2004 full year, it was expected that there would be some reversal at the
half year.

Compared to June 2004, net working capital has increased by $26.6 million. Sales
growth and the acquisition of Almedahls account for approximately $12.0 million,
with the balance due mainly to higher inventories in Europe and North America in
preparation for supply chain changes. However, over the last eighteen months,
underlying working capital performance has been significantly improved with the
ratio of average working capital / sales on an annualised basis showing a
reduction of six percentage points to 25% compared to the position at the
beginning of 2004. Further improvement is targeted as restructuring progresses.

Investment continued at a relatively high level with capital expenditure of
$38.5 million (2004 - $40.2 million) mainly directed at expansion of capacity in
Asia and cost saving projects in Europe and North America.  Disposals of assets
(mainly surplus property) and businesses (principally Dorma Bedwear) realised
$29.0 million (2004 - $21.4 million).

Outlook

The trading outlook is not without its challenges. Where possible, it is
intended that the remaining restructuring of capacity will be accelerated,
principally in Europe. Restructuring cost is therefore expected to continue at
relatively high levels until end 2006. However disposal of surplus property will
continue to provide a significant offset.

As a result of benefits from reorganisation, in the second half the Group
expects to make continued progress at the operating level on a like-for-like
basis. The Board remains confident that the current strategy will lead to
further benefits in future years.

Gary Weiss
Chairman
12 September 2005


Consolidated income statement (unaudited)


                                                                             2005          2004          2004
                                                                        Half year     Half year     Full year
                                                                        Unaudited     Unaudited     Unaudited
For the six months ended 30 June 2005                      Notes             US$m          US$m          US$m
Continuing operations
Revenue                                                                    830.4         779.0       1,578.2

Cost of sales                                                             (534.1)       (528.2)     (1,069.4)

Gross profit                                                               296.3         250.8         508.8

Distribution costs                                                        (152.6)       (149.1)       (298.1)

Administrative expenses                                                    (90.5)        (83.1)       (170.9)

Other operating income                                                       1.0           0.3           1.3

Operating profit                                             2              54.2          18.9          41.1

Share of profits of joint ventures                                           0.9           0.6           1.3

Share of profits of associated undertakings                                    -           0.1           0.2

Investment income                                                            2.0           2.8           7.9

Finance costs                                                              (12.1)        (21.1)        (38.5)

Profit before taxation                                                      45.0           1.3          12.0

Taxation                                                     3              (9.1)         (7.3)        (13.7)

Profit/(loss) from continuing operations                                    35.9          (6.0)         (1.7)

Discontinued operations
Loss from discontinued operations                                           (0.6)         (1.9)         (1.4)

Profit/(loss) for the period                                                35.3          (7.9)         (3.1)

Attributable to:
EQUITY SHAREHOLDERS OF THE COMPANY                                          33.3         (12.5)         (7.6)
Minority interests                                                           2.0           4.6           4.5
                                                                            35.3          (7.9)         (3.1)


Consolidated balance sheet (unaudited)


                                                                           2005          2004              2004
                                                                        30 June       30 June       31 December
                                                                      Unaudited     Unaudited         Unaudited
At 30 June 2005                                         Notes              US$m          US$m              US$m

Non-current assets
Intangible assets                                                        253.0         249.1             251.9
Property, plant and equipment                                            458.6         482.6             477.4
Investments in joint ventures                                             17.6          18.0              17.8
Long term investments                                                     10.0           4.3               4.0
Deferred tax assets                                                       12.0           5.8              13.6
Trade and other receivables                                               48.5          41.4              45.8
                                                                         799.7         801.2             810.5

Current assets
Inventories                                                              331.1         288.0             303.1
Trade and other receivables                                              354.7         334.5             348.6
Trading investments                                                         -           39.0                -
Cash and cash equivalents                                 5               72.7          88.7             136.5
                                                                         758.5         750.2             788.2

Non-current assets classified as held for sale                            64.7         100.5             114.0

Total assets                                                           1,622.9       1,651.9           1,712.7

Current liabilities
Trade and other creditors                                               (311.0)       (274.3)           (348.0)
Bank overdrafts and other borrowings                                     (94.8)        (67.7)            (65.6)
Provisions for liabilities and charges                                  (172.7)       (185.1)           (191.1)
                                                                        (578.5)       (527.1)           (604.7)

Net current assets                                                       180.0         223.1             183.5

Non-current liabilities
Trade and other creditors                                                (10.2)           -               (2.5)
Deferred tax liabilities                                                 (16.0)        (36.1)            (25.9)
Other borrowings                                                        (461.8)       (532.1)           (474.7)
Retirement benefit obligations:
Funded schemes                                                           (65.0)        (51.7)            (71.9)
Unfunded schemes                                                         (99.7)       (107.6)           (117.7)
Provisions for liabilities and charges                                   (41.4)        (24.1)            (43.2)
                                                                        (694.1)       (751.6)           (735.9)

Liabilities directly associated with non-current
assets classified as held for sale                                       (22.1)        (53.8)            (58.5)

Total liabilities                                                     (1,294.7)     (1,332.5)         (1,399.1)

Net assets                                                               328.2         319.4             313.6

Equity
Share capital                                                              4.2           4.2               4.2
Share premium account                                                    412.1         412.1             412.1
Revaluation reserve                                                        1.2            -                 -
Hedging and translation reserves                                          16.5          (7.3)              8.5
Retained earnings                                                       (136.7)       (150.3)           (170.0)
Equity shareholders' funds                                               297.3         258.7             254.8
Minority interests                                                        30.9          60.7              58.8
Total equity                                                             328.2         319.4             313.6


Consolidated cash flow statement (unaudited)

                                                                              2005          2004         2004
                                                                         Half year     Half year    Full year
                                                                         Unaudited     Unaudited    Unaudited
For the six months ended 30 June 2005                        Notes            US$m          US$m         US$m
Cash inflow/(outflow) from operating activities
Net cash (outflow)/inflow generated by operations              4             (5.8)         69.4        196.5
Interest paid                                                               (19.0)        (14.6)       (34.0)
Taxation paid                                                               (18.8)        (15.3)       (33.4)
Net cash (absorbed by)/generated from operating activities                  (43.6)         39.5        129.1

Cash inflow/(outflow) from investing activities
Dividends received from associates and joint ventures                         0.9           0.5          1.7
Acquisition of property, plant and equipment and                            (38.5)        (40.2)       (91.1)
intangible assets
Disposal of property, plant and equipment and intangible                     16.6          23.5         57.3
assets
Acquisition of financial investments                                         (5.1)           -            -
Disposal of financial investments                                              -            3.4         45.0
Acquisition and disposal of businesses                                       12.4          (5.5)       (15.7)
Net cash absorbed in investing activities                                   (13.7)        (18.3)        (2.8)

Cash inflow/(outflow) from financing activitie
Issue of ordinary shares                                                        -         135.7        135.7
Dividends paid to minority interests                                         (2.3)         (6.7)        (9.0)
Decrease in debt and lease financing                                         (7.7)       (174.8)      (250.2)
Net cash absorbed in financing activities                                   (10.0)        (45.8)      (123.5)

Net (decrease)/increase in cash and cash equivalents                        (67.3)        (24.6)         2.8
Cash and cash equivalents at beginning of the period                        113.5          88.0         88.0
Exchange (losses)/gains on cash and cash equivalents                         (6.6)         (8.4)        22.7
Net cash and cash equivalents at end of the period             5             39.6          55.0        113.5

Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash and cash equivalents                            (67.3)        (24.6)         2.8
Cash outflow from change in debt and lease financing                          7.7         174.8        250.2
Change in net debt resulting from cash flows                                (59.6)        150.2        253.0
Loans and finance leases disposed with subsidiaries                            -            1.7          1.7
Transfer of preference shares from equity under IAS 32                      (28.0)           -            -
Other                                                                         1.0           3.6         (3.4)
Exchange                                                                      6.5          (7.5)         4.0
(Increase)/decrease in net debt                                             (80.1)        148.0        255.3
Net debt at start of period                                                (403.8)       (659.1)      (659.1)
Net debt at end of period                                      5           (483.9)       (511.1)      (403.8)


Consolidated statement of recognised income and expense (unaudited)

                                                                          2005            2004          2004
                                                                     Half year       Half year     Full year
                                                                     Unaudited       Unaudited     Unaudited
For the six months ended 30 June 2005                                     US$m            US$m          US$m

Gain on revaluation of investments                                         1.2               -             -
Gain on cash flow hedges                                                   0.4               -             -
Exchange differences on translation of foreign operations                  6.8            (7.9)          6.0
Actuarial gains in respect of retirement benefit schemes                    -             27.8           5.1
Net income recognised directly in equity                                   8.4            19.9          11.1

Profit/(loss) for the period                                              35.3            (7.9)         (3.1)

Transferred to profit or loss on cash flow hedges                          0.5              -             -

Total recognised income and expense for the period                        44.2            12.0           8.0

Attributable to:
EQUITY SHAREHOLDERS OF THE COMPANY                                        42.2             7.4           3.5
Minority interests                                                         2.0             4.6           4.5
                                                                          44.2            12.0           8.0

Reconciliation of shareholders' equity (unaudited)


                                                                          2005            2004          2004
                                                                     Half year       Half year     Full year
                                                                     Unaudited       Unaudited     Unaudited
For the six months ended 30 June 2005                                     US$m            US$m          US$m

Opening shareholders' equity                                             254.8           115.6         115.6
Restatement for the effects of IAS 32 and IAS 39                           0.3               -             -
Restated opening shareholders' equity                                    255.1           115.6         115.6
Profit/(loss) attributable to equity shareholders                         33.3           (12.5)         (7.6)
Gain on revaluation of investments                                         1.2              -             -
Gain on cash flow hedges                                                   0.4              -             -
Exchange differences on translation of foreign operations                  6.8            (7.9)          6.0
Actuarial gains in respect of retirement benefit obligations                -             27.8           5.1
Transferred to profit or loss on cash flow hedges                          0.5              -             -
Issue of ordinary shares                                                    -              1.3           1.3
Share premium on issue of ordinary shares                                   -            134.4         134.4
Closing shareholders' equity                                             297.3           258.7         254.8


Notes to the interim accounts for the six months ended 30 June 2005

1. Basis of preparation

Coats Group Limited is incorporated in the British Virgin Islands. It does not
prepare consolidated statutory accounts and therefore the financial information
contained in this announcement does not constitute full financial statements and
has not been, and will not be, audited.

The financial information in these accounts for the six months ended 30 June
2004 and 2005, and for the year ended 31 December 2004, has been prepared in
accordance with International Financial Reporting Standards (IFRS), and the
accounting policies adopted have been consistently applied to all periods
presented except for those relating to the classification and measurement of
financial instruments. The Group has made use of the exemption available under
IFRS 1 to only apply IAS 32 and IAS 39 from 1 January 2005. The IFRS and
International Financial Reporting Interpretations Committee (IFRIC)
interpretations adopted in this interim financial information are those issued
and effective as at the time of preparation.  The IFRS and IFRIC interpretations
that will be applicable at 31 December 2005 may introduce further changes.
Reconciliations and descriptions of the effect of the transition from UK GAAP to
IFRS on the Group's income statement for the year ended 31 December 2004 and
balance sheets as at 31 December 2004 and 1 January 2005 are provided in notes 7
and 8 at the end of this report.

As a subsidiary of Guinness Peat Group plc (GPG), Coats Group Limited follows
the accounting policies of GPG.

The principal exchange rates (to the US dollar) used in preparing these accounts
are as follows:

                                             June                  June              December
                                             2005                  2004                  2004
Average         Sterling                     0.53                  0.55                  0.55
                Euro                         0.78                  0.81                  0.80
Period end      Sterling                     0.56                  0.55                  0.52
                Euro                         0.83                  0.82                  0.73


2. Operating profit is stated after charging/(crediting):

                                                                           2005             2004          2004
                                                                      Half year        Half year     Full year
                                                                      Unaudited        Unaudited     Unaudited
                                                                           US$m             US$m          US$m
Reorganisation costs and impairment of property, plant                    28.0              18.9          45.6
and equipment
Other exceptional items                                                  (15.7)              3.5           3.8
Total                                                                     12.3              22.4          49.4


For the six months ended 30 June 2005, the $15.7 million exceptional credit
represents exchange gains.  The other exceptional charges arising in 2004
largely represent Group refinancing costs.

3. Taxation

The taxation charge for the six months ended 30 June 2005 is based on the
estimated effective tax rate for the full year, including the effect of prior
period tax adjustments.


4. Reconciliation of operating profit to net cash (outflow)/inflow generated by
operations

                                                                                2005         2004       2004
                                                                           Half year    Half year  Full year
                                                                           Unaudited    Unaudited  Unaudited
                                                                                US$m         US$m       US$m

Operating profit                                                                54.2         18.9       41.1
Depreciation                                                                    23.4         27.0       50.7
Amortisation of intangible assets (computer software)                            4.5          2.7        5.5
Reorganisation costs                                                            28.0         18.9       43.2
Impairment of property, plant and equipment                                       -            -         2.4
Other exceptional items                                                        (15.7)         3.5        3.8
(Increase)/decrease in inventories                                             (33.2)        31.6       45.0
(Increase)/decrease in debtors                                                 (18.5)        (8.2)       7.7
(Decrease)/increase in creditors                                               (18.8)        (9.1)      38.0
Other non-cash movements                                                        (7.4)          -        (4.6)
Net cash inflow from normal operating activities                                16.5         85.3      232.8
Net cash outflow in respect of reorganisation costs and other                  (22.3)       (15.9)     (36.3)
exceptional items
Net cash (outflow)/inflow generated by operations                               (5.8)        69.4      196.5


5. Net debt
                                                                    2005              2004             2004
                                                               Half year         Half year        Full year
                                                               Unaudited         Unaudited        Unaudited
                                                                    US$m              US$m             US$m

Cash and cash equivalents                                           72.7              88.7            136.5
Bank overdrafts                                                    (33.1)            (33.7)           (23.0)
Net cash and cash equivalents                                       39.6              55.0            113.5
Other borrowings                                                  (523.5)           (566.1)          (517.3)
Total                                                             (483.9)           (511.1)          (403.8)


6. Balance sheet consolidated by Guinness Peat Group plc (unaudited)

The balance sheet consolidated by Guinness Peat Group plc (GPG) as at 30 June
2005 differs from that disclosed as follows:

                                                                                         Included in GPG's
                                           Coats Group Limited        GPG fair value          consolidated
                      Coats Group Limited    US$:GBP at 0.5578           adjustments         balance sheet
                                Unaudited            Unaudited             Unaudited             Unaudited
                                     US$m                   £m                    £m                    £m

Intangible assets                   253.0                  141                     23                  164
Other non-current                   546.7                  305                                         305
assets
Current assets                      823.2                  459                                         459
Total assets                      1,622.9                  905                     23                  928
Current liabilities                (600.6)                (335)                                       (335)
Non-current                        (694.1)                (387)                                       (387)
liabilities
Minority interests                  (30.9)                 (17)                                        (17)
Shareholders' funds                 297.3                  166                     23                  189

£7.8 million ($14.0 million) of the fair value adjustment to intangible assets
relates to a fair value provision being made at 31 December 2004 for the $14.0
million loss on sale of the Dorma Bedwear business in February 2005 referred to
in note 8.

7. Effect of the transition to IFRS on the consolidated income statement for the
year ended 31 December 2004 (unaudited)                                                

                                                                                      Effect of   
                                                                                  transition to
                                                                       UK GAAP             IFRS          IFRS
                                                                     Unaudited        Unaudited     Unaudited
For the year ended 31 December 2004                                       US$m             US$m          US$m

Revenue                                                                1,711.9           (133.7)      1,578.2
Cost of sales                                                         (1,144.6)            75.2      (1,069.4)
Gross profit                                                             567.3            (58.5)        508.8
Distribution costs                                                      (346.3)            48.2        (298.1)
Administrative expenses                                                 (186.2)            15.3        (170.9)
Other operating income                                                     0.7              0.6           1.3
Operating profit                                                          35.5              5.6          41.1
Share of profits of joint ventures                                          -               1.3           1.3
Share of profits of associated undertakings                                1.5             (1.3)          0.2
Profit on sale of fixed assets                                             0.7             (0.7)           -
Investment income                                                          8.5             (0.6)          7.9
Finance costs                                                            (50.3)            11.8         (38.5)
(Loss)/profit before taxation                                             (4.1)            16.1          12.0
Taxation                                                                 (14.3)             0.6         (13.7)
(Loss)/profit from continuing operations                                 (18.4)            16.7          (1.7)

Discontinued operations
Loss from discontinued operations                                           -              (1.4)         (1.4)
(Loss)/profit for the period                                             (18.4)            15.3          (3.1)

Attributable to:
Equity shareholders of the Company                                       (24.0)            16.4          (7.6)
Minority interests                                                         5.6             (1.1)          4.5
                                                                         (18.4)            15.3          (3.1)

The key adjustments made are as follows:

Under IFRS 3 (Business Combinations), goodwill is no longer amortised, resulting
in a $18.2 million increase in operating profit.

Under IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations),
certain businesses (primarily Dorma Bedwear, which was sold on 14 February 2005)
represented discontinued operations, resulting in a $133.7 million reduction to
revenue and a $1.4 million increase in operating profit from continuing
operations.


Under IAS 31 (Interests in Joint Ventures), certain businesses are now accounted
for as joint ventures (instead of as subsidiary undertakings), resulting in a
reduction to operating profit of $3.0 million.

Under UK GAAP, Coats Group Limited accounted for pensions in accordance with
SSAP 24.  IAS 19 (Employee Benefits) has now been adopted resulting in
reductions to operating profit and finance costs of $13.6 million and $10.0
million respectively.


8. Effect of the transition to IFRS on the consolidated balance sheet as at 31
December 2004 and 1 January 2005 (unaudited)

                                                                                     IAS 32 and IAS 
                                                          Effect of                              39 
                                          UK GAAP at 31  transition       IFRS at 31   transitional    IFRS at 1
                                          December 2004     to IFRS    December 2004    adjustments January 2005
                                              Unaudited   Unaudited        Unaudited      Unaudited    Unaudited
At 31 December 2004 and 1 January 2005               $m          $m               $m             $m           $m
Non-current assets
Intangible assets                                 213.5        38.4            251.9                       251.9
Property, plant and equipment                     585.4      (108.0)           477.4                       477.4
Investments in joint ventures                        -         17.8             17.8                        17.8
Long term investments                               0.3         3.7              4.0                         4.0
Deferred tax assets                                  -         13.6             13.6                        13.6
Trade and other receivables                        94.7       (48.9)            45.8            2.0         47.8
                                                  893.9       (83.4)           810.5            2.0        812.5
Current assets
Inventories                                       337.7       (34.6)           303.1                       303.1
Trade and other receivables                       359.4       (10.8)           348.6            1.0        349.6
Trading investments                                 3.7        (3.7)              -                           -
Cash and cash equivalents                         141.4        (4.9)           136.5                       136.5
                                                  842.2       (54.0)           788.2            1.0        789.2
Non-current assets classified as held for            -         114.0           114.0                       114.0
sale
Total assets                                    1,736.1       (23.4)         1,712.7            3.0      1,715.7
Current liabilities
Trade and other creditors                        (361.2)       13.2           (348.0)                     (348.0)
Bank overdrafts and other borrowings              (68.3)        2.7            (65.6)                      (65.6)
Provisions for liabilities and charges               -       (191.1)          (191.1)          (0.8)      (191.9)
                                                 (429.5)     (175.2)          (604.7)          (0.8)      (605.5)
Net current assets                                412.7      (229.2)           183.5            0.2        183.7
Non-current liabilities
Trade and other creditors                          (3.2)        0.7             (2.5)                       (2.5)
Deferred tax liabilities                             -        (25.9)           (25.9)                      (25.9)
Other borrowings                                 (474.6)       (0.1)          (474.7)         (28.0)      (502.7)
Retirement benefit obligations:
Funded schemes                                     (1.1)      (70.8)           (71.9)                      (71.9)
Unfunded schemes                                 (123.9)        6.2           (117.7)                     (117.7)
Provisions for liabilities and charges           (238.0)      194.8            (43.2)                      (43.2)
                                                 (840.8)      104.9           (735.9)         (28.0)      (763.9)
Liabilities directly associated with                 -        (58.5)           (58.5)                      (58.5)
non-current assets classified as held for
sale
Total liabilities                              (1,270.3)     (128.8)        (1,399.1)         (28.8)    (1,427.9)
Net assets                                        465.8      (152.2)           313.6          (25.8)       287.8

Equity
Share capital                                       4.2          -               4.2                         4.2
Share premium account                             412.1          -             412.1                       412.1
Hedging and translation reserves                     -          8.5              8.5            0.3          8.8
Retained earnings                                 (28.2)     (141.8)          (170.0)                     (170.0)
Equity shareholders' funds                        388.1      (133.3)           254.8            0.3        255.1
Minority interests                                 77.7       (18.9)            58.8          (26.1)        32.7
Total equity                                      465.8      (152.2)           313.6          (25.8)       287.8


The key adjustments made to the balance sheet at 31 December 2004 are as
follows:

Intangible assets have increased primarily to include computer software of $17.4
million (previously recognised as part of property, plant and equipment) and to
write back $18.4 million of amortisation of goodwill, as under IFRS 3 (Business
Combinations) goodwill is no longer amortised.

The adjustments to property, plant and equipment, investments in joint ventures,
inventories and trade and other creditors largely arise due to the
reclassification under IFRS 5 (Non-Current Assets Held for Sale and Discontinued
Operations) of certain assets and liabilities as assets and liabilities held for
sale and due to certain businesses being deconsolidated as they represent joint
ventures under IAS 31 (Interests in Joint Ventures).

The adjustments to provisions largely reflect the fact that IFRS require
provisions to be allocated between short and long term provisions.  In addition,
under IFRS 5, certain provisions are reclassified to liabilities held for sale
and, also under IFRS 5, provision is made at 31 December 2004 for the $14.0
million loss on sale of the Dorma Bedwear business in February 2005.

The effect of the adoption of IAS 19 (Employee Benefits) is to increase
retirement benefit obligations by $121.9 million, with the main impact being on
the balance sheet categories for trade and other receivables and retirement
benefit obligations.

Net deferred tax liabilities have increased by $16.9 million, largely to reflect
deferred tax on the undistributed reserves of subsidiaries in accordance with
IAS 12 (Income Taxes).  (Under UK GAAP, a $4.6 million net deferred tax asset
was recognised in current assets).

The key adjustments to equity shareholders' funds are as follows:


                                                                                                            $m
Add back goodwill amortisation                                                                           18.4
Provision for the loss on the sale of Dorma Bedwear                                                     (14.0)
Additional provisions for retirement benefit obligations                                               (121.9)
Provision for additional net deferred tax                                                               (16.9)
Other                                                                                                     1.1
Total adjustment to equity shareholders' funds                                                         (133.3)


The adjustment to minority interests is largely due to the deconsolidation of
entities which represent joint ventures under IAS 31.

The key adjustment arising on the adoption of IAS 32 and IAS 39 as at 1 January
2005 is the reclassification of the preference share capital of a subsidiary as
debt.


                      This information is provided by RNS
            The company news service from the London Stock Exchange