Final Results

Guinness Peat Group PLC 15 March 2002 For Immediate Release 15 March 2002 GUINNESS PEAT GROUP PLC ('GPG' or 'the Company or 'the Group') PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2001 CHAIRMAN'S STATEMENT 2001 was another successful year for GPG with a high level of productive activity and a substantial increase in realised profits. Major contributors to the net profit of £47.6 million were sales of shares in Inchcape, London Stock Exchange and Time Products. Our 16% of Inchcape was sold at an average of £4.74 per share which was very acceptable at the time but obviously compares somewhat unfavourably with the latest price on the LSE of £6.89. The shares were sold on a rising market over a 6 month period at levels consistent with our 'break up' valuation of around £5 per share, and the subsequent rerating of Inchcape on the strength of perceived growth prospects was not part of our original equation. Although GPG is no longer a shareholder, we wish the company well and will continue to follow its progress with interest. We are still a 10% shareholder in the listed Singapore subsidiary, Inchcape Motors Ltd. Most of the significant developments during 2001 were reported or foreshadowed in the Interim Report but some updates of note: • GPG has taken an active role in the direction of Capral Aluminium Ltd where our shareholding is now 30%. • Some well merited and, so far, modestly effective, corporate activism in the interests of minorities in poorly performing Australian Growth Properties Ltd and Trans Tasman Properties Ltd. • A 4.9% shareholding in Caltex Australia Ltd. The market has receded from A$4 (probably too high) in 1998 compared with the present level of a A$1.75, having been as low as A95c in 2001. • A 10% stake in Western Metals Ltd has proved to be a problem, but not without hope for the future as the world zinc price recovers from record lows. Our entry cost of £3.3 million has been written off as a prudent and conservative measure in the 2001 accounts. • All our Otter Gold shares have been sold as a consequence of a takeover offer by Normandy NFM Ltd. Notwithstanding some fanciful press speculation, we are quite satisfied the offer represented full value, or near enough thereto. Following the sale of Normandy shares, we have recovered £2.2 million, after writing off our investment (opening value £5.3 million) in the first half of 2001. • After years of pain, prior to GPG's successful takeover offer in 2000, Staveley Industries recorded an excellent result of £6.6 million. The USA operations, in particular, were strong performers. • Joe White Maltings Ltd continues its encouraging progress since our involvement began several years ago and is now a formal member of the GPG group, having become a 51% subsidiary during 2001. • GPG acquired a substantial shareholding (39%) in Aurora Gold Ltd on a favourable basis. Aurora had cash reserves in excess of its market capitalisation plus goldmining interests in PNG and Indonesia which we are evaluating for development or sale. • GPG's proposals for change at Enza Ltd were not supported by sufficient shareholders at the recent AGM but probably only delaying the inevitable, when there is a wider recognition that Enza needs stronger proprietorial drive and commitment to properly fulfil its role in the New Zealand pipfruit industry. • In contrast to the various Enza upheavals, GPG's investment in Turners & Growers Ltd has been consistently successful and satisfying. Turners is one of the few remaining old established 'traditional' public companies in New Zealand providing a genuine service to consumers and suppliers and making a real contribution to economic growth. • GPG's largest portfolio investment is now Coats plc (21.33% at cost, £69.12 million). We are represented on the Board of the company and although far removed from its former status as one of the UK's major industrial concerns, it is still the world leader in thread manufacture. We are a committed long term holder. • GPG's top five portfolio holdings after Coats are (book values at balance date) De Vere Group 8.29%, £27.13 million; Brickworks 10.14%, £21.21 million; Capral 30.04%, £15.82 million; Joe White Maltings 50.99%, £14.11 million and Dawson International 26.96%, £11.19 million. The 2001 result was adversely affected by exchange losses of £3.2 million which is the fall in value of A$ and NZ$ expressed in £ sterling in these Accounts. As stated on previous occasions, this has no impact on Australian and New Zealand investors as GPG's UK assets and income convert to a correspondingly higher amount in local currencies. E.g. the 2001 profit of £47.6 million converts to A$135.2 million and NZ$166.3 million at year end exchange rates whereas those amounts would have been A$127.9 million and NZ$160.6 million at 31/12/00 rates. GPG has a relatively simple corporate message in terms of profit, balance sheet and an asset portfolio profile. Shareholders may find it surprising therefore that it requires a 70 page Annual Report to convey this information. Unfortunately, that is a product of the unceasing demands of a proliferating range of 'corporate governance' academics and 'do gooders' which results in pages and pages of superfluous dross which is utterly meaningless but, nevertheless, expensive to compile. So called 'international accounting standards' is another obstacle to clear and concise reporting. As GPG has a number of subsidiary and associated companies which tend to obscure some essential features of the accounts, we present an informal simplified balance sheet which is a more accurate representation of the Board's own basis of accounting measurement: Simplified Balance Sheet at 31 December 2001 £m £m Creditors 19 Cash at bank 164 Note Issues 83 Debtors 10 Shareholders' funds 319 Coats 40 Staveley 8 Joe White Maltings 14 MEM* 6 Canberra Investment Corp 6 Turners & Growers 9 Share Portfolio 164 _______ _______ £421 £421 ====== ====== * 39% of Aurora Gold Ltd is held by MEM at a carrying value of £2.3 million Overall, the Company's financial health is excellent, with very strong liquidity after the successful Capital Notes issue in New Zealand in 2001. As stated on previous occasions, we believe the direct cost of this policy is more than offset by the advantages of speed and flexibility of action, when required. CAPITAL AND DIVIDEND The customary 1 for 10 bonus issue of shares is again recommended for approval at the AGM. Together with a 1p dividend, which will be paid as an interim for 2001, this maintains the pattern of a 10% effective increase each year as a consequence of the bonus increased capital. As dividends are not a tax efficient manner of distributing additional income, the Board has examined (and continues to examine) alternative methods of returning value to shareholders (including a possible second issue of 8% Notes, as in Year 2000). However, having regard to potential developments in prospect for GPG in the foreseeable future, it is considered appropriate to defer specific proposals until later this calendar year. It is unlikely the 2001 result will be repeated in 2002. Nevertheless, GPG is well placed with a strong balance sheet, a promising share portfolio and a positive outlook for superior performance in the foreseeable future. Ron Brierley 15 March 2002 CHAIRMAN - Ends - Enquiries: Guinness Peat Group plc 020 7236 0336 Blake Nixon, UK Executive Director Weber Shandwick Square Mile 020 7950 2800 Kevin Smith/Josh Royston GUINNESS PEAT GROUP PLC GUINNESS PEAT GROUP PLC Consolidated Profit and Loss Account Year ended Year ended 31 December 31 December 2001 2000 Unaudited Re-stated Notes £000's £000's Turnover: group and share of joint ventures 356,348 150,948 Less: share of joint ventures (5,524) (2,748) ________ ________ Group turnover - continuing operations 350,824 148,200 Cost of sales (268,951) (123,327) ________ ________ Gross profit 81,873 24,873 Profit on disposal of investments and other net investment income 60,706 29,365 Net operating expenses (82,642) (33,983) ________ ________ Group operating profit - continuing operations 59,937 20,255 Share of operating profit of joint ventures 1,901 447 Share of operating (loss)/profit of associated undertakings (630) 2,276 ________ ________ Profit on ordinary activities before interest 61,208 22,978 Interest payable and similar charges (5,301) (2,001) ________ ________ Profit on ordinary activities before taxation 55,907 20,977 Tax on profit on ordinary activities (6,673) (2,309) ________ ________ Profit on ordinary activities after taxation 49,234 18,668 Minority interests (1,667) 72 ________ ________ ________ ________ PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS £ 47,567 £ 18,740 ________ ________ Equity dividends 4 (5,393) (4,757) ________ ________ Retained profit for the year 42,174 13,983 ________ ________ Earnings per ordinary share - basic (pence) 3 8.92 3.46 Earnings per ordinary share - diluted (pence) 3 8.00 3.43 Dividends per ordinary share (pence) 4 1.00 0.91 There were no material acquisitions or disposals of subsidiary undertakings during the year. GUINNESS PEAT GROUP PLC Consolidated Balance Sheet 31 December 31 December 2001 2000 Unaudited Audited Notes £000's £000's Fixed assets Intangible assets - negative goodwill (3,123) (3,152) Tangible assets 47,164 50,552 Investments 202,082 199,615 ________ ________ 246,123 247,015 Current assets Stocks and development work in progress 22,596 21,682 Debtors 87,272 76,554 Investments 24,101 31,277 Cash at bank and in hand 169,985 58,924 ________ ________ 303,954 188,437 Creditors: amounts falling due within one year Trade and other creditors (107,666) (84,725) Convertible subordinated loan notes (3,863) (3,863) Other borrowings (5,035) (18,304) ________ ________ (116,564) (106,892) Net current assets 187,390 81,545 Total assets less current liabilities 433,513 328,560 Creditors: amounts falling due after one year Trade and other creditors (1,708) (758) Convertible subordinated loan notes (11,587) (15,450) Capital notes 6 (67,502) - Other borrowings (6,868) (11,456) ________ ________ (87,665) (27,664) Provisions for liabilities and charges (9,938) (10,740) ________ ________ NET ASSETS 335,910 290,156 Capital and reserves ======== ======== Share capital 5 53,926 47,567 Share premium account 12,857 17,432 Capital redemption reserve 3,863 3,863 Profit and loss account 248,168 203,341 ________ ________ EQUITY SHAREHOLDERS' FUNDS 318,814 272,203 Minority interests (equity) 17,096 17,953 ________ ________ CAPITAL EMPLOYED 335,910 290,156 ======== ======== Net asset backing per ordinary share (pence) 59.12 52.02 GUINNESS PEAT GROUP Consolidated Cash Flow Statement Year ended Year ended 31 December 31 December 2001 2000 Unaudited Audited £000's £000's Net cash inflow from operating activities 70,451 26,961 Dividends received from associates and joint ventures 2,014 13,476 Returns on investments and servicing of finance (5,516) (2,528) Taxation (2,277) (626) Capital expenditure and financial investment (5,716) (53,583) Acquisitions and disposals 6,332 (4,655) Equity dividends paid (1,041) (4,662) __________ __________ Cash inflow/(outflow) before management of liquid resources and financing 64,247 (25,617) Management of liquid resources (96,597) 25,063 Financing Issue of ordinary shares, net of buy back expenses 306 (74) Increase in debt 48,170 5,787 __________ __________ Increase in cash for the year 16,126 5,159 ========== ========== Non-cash transactions: On 2 June 2000, the Company repurchased 38.6 million ordinary shares for an aggregate consideration of £19,313,000 (excluding expenses), which was settled through the issue of convertible subordinated loan notes. On 6 July 2001, the Company redeemed the first 10p tranche of the convertible subordinated loan notes, of which £2,287,000 was paid in cash and the balance of £1,576,000 was satisfied by the issue of ordinary shares. In December 2001, the Group sold its investment in Otter Gold Limited, for an associated undertaking, for £2,190,000 and received in exchange shares in Normandy NFM Limited, which are included in current asset investments. Analysis of changes in cash at bank and in hand Opening balance 58,924 85,044 Net cash inflow 16,126 5,159 Increase/(decrease) in liquid resources 96,597 (25,063) (Decrease)/increase in bank overdraft (172) 172 Currency translation differences (1,490) (6,388) __________ __________ Closing balance 169,985 58,924 ========== ========== NOTES TO THE PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2001 1. PRESENTATIONAL CHANGE Following the disposal of Tyndall Australia in May 1999, the Group's comparative figures no longer include any insurance business. The profit and loss account format has been modified to reflect this, with the principal change being the presentation of 'cost of sales' and 'gross profit' on the face of the profit and loss account. Comparative figures have been re-stated to reflect this change in format. 2. ACQUISITIONS / DISPOSALS Two further associates were acquired during the year, Aurora Gold Ltd (39.10%) and Capral Aluminium Ltd (30.04%), both registered in Australia. During the year, the Group disposed of its interest in Wrightson and Otter Gold Mines. Profit on disposal of these associates amounted to £3.2 million, which is included within the profit on disposal of investments and other net investment income. 3. EARNINGS PER SHARE Earnings per share is calculated on a net basis using earnings of £47,566,000 (2000: £18,740,000) on the weighted average number of ordinary shares in issue during the year of 533,359,897 (2000: 540,890,899) and amounts to 8.92 pence (2000: 3.46 pence). Earnings per ordinary share for 2000 have been adjusted for the 2001 Capitalisation issue of shares. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares, arising from share options granted to employees, Convertible Loan Notes and Capital Notes. 4. DIVIDEND No final dividend is recommended for the year ended 31 December 2001. The Directors have declared an interim ordinary dividend of 1.00 pence per share (2000: nil) payable on 13 May 2002 and making a total of 1.00 pence per share for the year (2000: 0.91 pence adjusted for the 2001 Capitalisation issue). This is subject to a right for shareholders to elect, instead of the cash dividend, to receive one new ordinary share for every fifty (2000: one for thirty five) existing shares held at the appropriate record date. 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 following sets out the principal timetable features which vary across the Company's three registers due to local regulatory differences: Cash payment* 1.00 pence Record date: UK 2.04.2002 Australia 2.04.2002 New Zealand 2.04.2002 Ex-dividend: UK 27.03.2002 Australia 25.03.2002 New Zealand 3.04.2002 * Shareholders on the UK, Australian and New Zealand share registers who do not wish their cash dividend payments to be made in relevant local currency and prefer to receive it in one of the two other specified currencies are given the right to make such an election. Further information regarding this right, together with details of the payment timetable, the date the exchange rates willbe struck, and information on the Scrip Dividend Alternative will be contained in a circular to be distributed shortly to shareholders. 5. ISSUES OF SHARES During the year, the movements on the Company's share capital were as follows: Ordinary shares at 1 January 2001 475,674,874 Employee options exercised 819,931 Capitalisation issue of shares 48,646,468 Scrip dividend alternative 10,651,150 Conversion of Loan Notes 3,463,467 ____________ Ordinary shares at 31 December 2001 539,255,890 ____________ 6. SIMPLIFIED BALANCE SHEET The simplified Group balance sheet presented in the Chairman's Statement shows GPG's share of the net assets of, together with the goodwill attributable to, certain subsidiaries: Staveley (including Staveley Inc), MEM Group Ltd, Canberra Investment Corporation Ltd and Joe White Maltings Ltd rather than their respective assets and liabilities. The Group's remaining net assets are shown at their book value. The net assets attributed to Staveley exclude the cash it held but which is generally available to the Company for investment purposes; such cash is presented instead within the aggregate cash balance. The shareholders' funds are those reported in the published balance sheet. 7. CAPITAL NOTES On the maturity of the Capital Notes, being initially 15 November 2006, holders will be entitled to elect to convert their holdings into GPG shares at 97% of the then market price. Prior to that date, the holders will be entitled to elect instead to roll-over their Capital Notes on new terms or conditions as proposed by the Company. Both elections are subject to the Company's over-riding right to purchase some or all of the Capital Notes for cash. 8. NON-STATUTORY ACCOUNTS This announcement does not constitute full financial statements. The Company's full financial statements for the year ended 31 December 2001 have not yet been signed by the auditors. The financial information for 2000 has been extracted from the latest published accounts, as adjusted for the presentational change described in note 1. These accounts have been delivered to the Registrar of Companies. The report of the auditors on the 2000 accounts was unqualified and did not contain a statement under s237(2) or s237(3) of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange

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