Half Year Results to 30 June

Companies

Coats Group (COA)

UK 100

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Condensed Consolidated Income Statement
	Unaudited	Unaudited	Audited
	6 months to	6 months to	Year to
	30 June	30 June	31 December
	2010	2009	2009
		Restated *	Restated **
	£m	£m	£m
Continuing Operations
Revenue	643	577	1,172

Cost of sales	(417)	(395)	(799)

Gross profit	226	182	373

Profit on disposal of investments and other investment income	5	18	26

Distribution costs	(90)	(85)	(164)
Administrative expenses	(110)	(87)	(200)

Operating profit	31	28	35

Share of profit/(loss) of joint ventures	5	(9)	(6)

Share of profit of associated undertakings	7	3	9

Finance costs	(17)	(16)	(31)

Profit before taxation from continuing operations	26	6	7

Tax on profit from continuing operations	(15)	(18)	(28)

Profit/(loss) for the period from continuing operations	11	(12)	(21)

Discontinued Operations
Profit/(loss) on discontinued operations	1	(12)	(17)

Profit/(loss) for the period	12	(24)	(38)

Attributable to:
EQUITY SHAREHOLDERS OF THE COMPANY	10	(22)	(36)
Non-controlling interests	2	(2)	(2)
	12	(24)	(38)

Earnings/(loss) per Ordinary Share from continuing and discontinued operations:
Basic (pence)	0.54p	(1.23p) ***	(2.04p) ***
Diluted (pence)	0.54p	(1.23p) ***	(2.04p) ***

Earnings/(loss) per Ordinary Share from continuing operations:
Basic (pence)	0.47p	(0.57p) ***	(1.32p) ***
Diluted (pence)	0.47p	(0.57p) ***	(1.32p) ***

* Restated to reflect the results of Capral Ltd and Staveley Inc. as discontinued operations
** Restated to reflect the results of ClearView Wealth Ltd and Staveley Inc. as discontinued operations
*** Adjusted for the 2010 Capitalisation Issue

Condensed Consolidated Statement of Comprehensive Income

	Unaudited	Unaudited	Audited
	6 months to	6 months to	Year to
	30 June	30 June	31 December
	2010	2009	2009
	£m	£m	£m

Profit/(loss) for the period	12	(24)	(38)

(Losses)/gains on revaluation of fixed asset investments	(1)	8	41
Gains/(losses) on cash flow hedges	2	(1)	(4)
Exchange gains/(losses) on translation of foreign operations	21	(33)	15
Actuarial losses on retirement benefit schemes	(23)	(17)	(13)
Net (loss)/income recognised directly in equity	(1)	(43)	39

Transfers
Transferred to profit or loss on sale of fixed asset investments	(3)	(7)	(13)
Transferred to profit or loss on sale of businesses	(3)	(2)	(6)
Transferred to profit or loss on cash flow hedges	3	2	4
	(3)	(7)	(15)

Net comprehensive income/(expense) for the period	8	(74)	(14)

Attributable to:
EQUITY SHAREHOLDERS OF THE COMPANY	5	(72)	(12)
Non-controlling interests	3	(2)	(2)

	8	(74)	(14)

Condensed Consolidated Statement of Financial Position
	Unaudited	Unaudited	Audited
	30 June	30 June	31 December
	2010	2009	2009
	£m	£m	£m
NON-CURRENT ASSETS
Intangible assets	199	190	192
Property, plant and equipment	416	463	424
Investments in associated undertakings	230	123	157
Investments in joint ventures	47	43	47
Fixed asset investments	259	169	220
Deferred tax assets	15	13	20
Pension surpluses	28	25	27
Trade and other receivables	23	24	24
	1,217	1,050	1,111
CURRENT ASSETS
Inventories	257	236	179
Trade and other receivables	308	302	239
Current asset investments	13	8	15
Derivative financial instruments	2	4	3
Cash and cash equivalents	255	317	402
	835	867	838

Non-current assets classified as held for sale	4	-	3

TOTAL ASSETS	2,056	1,917	1,952

CURRENT LIABILITIES
Trade and other payables	278	262	256
Current tax liabilities	9	5	8
Other borrowings	130	126	80
Derivative financial instruments	17	20	16
Provisions	61	67	65
	495	480	425

NET CURRENT ASSETS	340	387	413

NON-CURRENT LIABILITIES
Trade and other payables	11	15	13
Deferred tax liabilities	28	20	22
Capital Notes	195	167	191
Other borrowings	257	248	235
Derivative financial instruments	4	3	3
Retirement benefit obligations:
Funded schemes	59	44	39
Unfunded schemes	53	58	56
Provisions	25	18	24
	632	573	583
TOTAL LIABILITIES	1,127	1,053	1,008
NET ASSETS	929	864	944

Condensed Consolidated Statement of Financial Position (continued)

			Unaudited	Unaudited	Audited
			30 June	30 June	31 December
			2010	2009	2009
			£m	£m	£m
EQUITY
Share capital			91	80	81
Share premium account			62	61	63
Translation reserve			140	83	123
Unrealised gains reserve			65	37	68
Other reserves			270	275	274
Retained earnings			239	267	258

EQUITY SHAREHOLDERS' FUNDS			867	803	867
Non-controlling interests			62	61	77

TOTAL EQUITY			929	864	944


Net asset backing per share*
Pence			47.69	45.42	48.64
Australian cents			84.48	92.53	87.34
New Zealand cents			103.76	115.47	107.95


*	The net asset backing per share for June 2009 and December 2009 has been adjusted for the 2010 Capitalisation Issue.


Blake Nixon, Director		Approved by the Board on 26 August 2010

Condensed Reconciliation of Consolidated Changes in Equity
6 months ended 30 June 2010

		Share		Unrealised				Non-
	Share	premium	Translation	gains	Other	Retained		controlling
	capital	account	reserve	reserve	reserves	earnings	Total	interests
	£m	£m	£m	£m	£m	£m	£m	£m

Balance as at 1 January 2009	71	61	118	36	281	311	878	71

Total comprehensive income and expense
for the period	-	-	(35)	1	-	(38)	(72)	(2)
Other currency translation differences	-	-	-	-	-	-	-	(3)
Dividends (note 11)	-	-	-	-	-	(14)	(14)	(3)
Scrip dividend alternative	2	(2)	-	-	-	8	8	-
Capitalisation issue of shares	7	-	-	-	(7)	-	-	-
Other share issues	-	2	-	-	-	-	2	-
Share based payments	-	-	-	-	1	-	1	-
Acquisition of subsidiaries	-	-	-	-	-	-	-	(2)

Balance as at 30 June 2009	80	61	83	37	275	267	803		61

Balance as at 1 January 2009	71	61	118	36	281	311	878	71

Total comprehensive income and expense
for the period	-	-	5	32	(1)	(48)	(12)	(2)
Other currency translation differences	-	-	-	-	-	-	-	5
Dividends (note 11)	-	-	-	-	-	(14)	(14)	(6)
Scrip dividend alternative	2	(2)	-	-	-	7	7	-
Capitalisation issue of shares	7	-	-	-	(7)	-	-	-
Other share issues	1	4	-	-	-	-	5	-
Share based payments	-	-	-	-	1	-	1	-
Acquisition of subsidiaries	-	-	-	-	-	-	-	18
Disposal of subsidiaries	-	-	-	-	-	-	-	(7)
Acquisition of non-controlling interests	-	-	-	-	-	2	2	(2)

Balance as at 31 December 2009	81	63	123	68	274	258	867		77

Total comprehensive income and expense
for the period	-	-	17	(3)	4	(13)	5	3
Other currency translation differences	-	-	-	-	-	-	-	3
Dividends (note 11)	-	-	-	-	-	(16)	(16)	(3)
Scrip dividend alternative	1	(1)	-	-	-	10	10	-
Capitalisation issue of shares	8	-	-	-	(8)	-	-	-
Other share issues	1	-	-	-	-	-	1	-
Additional investment in subsidiaries	-	-	-	-	-	-	-	16
Disposal of subsidiaries	-	-	-	-	-	-	-	(34)

Balance as at 30 June 2010	91	62	140	65	270	239	867		62

Condensed Statement of Consolidated Cash Flows

	Unaudited	Unaudited	Audited
	6 months to	6 months to	Year to
	30 June	30 June	31 December
	2010	2009	2009
	£m	£m	£m
Cash (outflow)/inflow from operating activities
Net cash (outflow)/inflow from operating activities	(72)	-	121
Interest paid	(20)	(23)	(46)
Taxation paid	(15)	(11)	(20)
Net cash (absorbed in)/generated by operating activities	(107)	(34)	55

Cash (outflow)/inflow from investing activities
Dividends received from associated undertakings and joint ventures	8	6	10
Capital expenditure and financial investment	(10)	(9)	(16)
Acquisitions and disposals	(90)	-	27
Net cash (absorbed in)/generated by investing activities	(92)	(3)	21

Cash inflow/(outflow) from financing activities
Issue of ordinary shares	1	2	5
Equity dividends paid to Company's shareholders	(6)	(6)	(6)
Dividends paid to non-controlling interests	(4)	(5)	(6)
Increase/(decrease) in debt	42	7	(30)
Net cash generated by/(absorbed in) financing activities	33	(2)	(37)

Net (decrease)/increase in cash and cash equivalents	(166)	(39)	39
Cash and cash equivalents at beginning of the period	388	347	347
Exchange gains/(losses) on cash and cash equivalents	8	(1)	2
Cash and cash equivalents at end of the period	230	307	388

Cash and cash equivalents per the balance sheet	255	317	402
Bank overdrafts	(25)	(10)	(14)
Cash and cash equivalents at end of the period	230	307	388

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.	The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed consolidated financial statements included in this half-yearly financial report have been prepared in accordance with International Accounting Standard 34: Interim Financial Reporting, as adopted by the European Union, and comply with the disclosure requirements of the Listing Rules of the UK Financial Services Authority and the Listing Rules of the Australian Securities Exchange.
	After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these condensed consolidated financial statements.
	Other than the adoption of IFRS 3 (2008) ("Business Combinations") and IAS 27 (2008) ("Consolidated and Separate Financial Statements"), the same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements.

2.	The information for the year ended 31 December 2009 does not constitute statutory accounts (as defined in section 435 of the Companies Act 2006) but has been extracted from the statutory accounts for that year, which have been filed with the Registrar of Companies. The audit report on those accounts did not contain statements under Sections 498(2) or 498(3) of the Companies Act 2006. The audit opinion contained in that report was unqualified but contained an emphasis of matter paragraph drawing attention to the significant uncertainty surrounding the ultimate outcome of the appeal by Coats plc against the European Commission fine of €110.3 million (equivalent to £90.3 million at 30 June 2010 exchange rates). That uncertainty remains as at 30 June 2010 and the independent review report on these condensed consolidated financial statements contains a similar emphasis of matter paragraph. The directors remain of the view that any anticipated eventual payment of the fine is adequately covered by existing provisions.
	The condensed consolidated financial statements for the six months ended 30 June 2010 have been reviewed - see attached independent review report - but have not been audited. The condensed consolidated financial statements for the equivalent period in 2009 were also reviewed but not audited.

3.	Group foreign exchange movements - during the six months to 30 June 2010, GPG recognised in operating profit £2 million of net foreign exchange losses compared to £7 million of net foreign exchange gains in the six months to 30 June 2009 (£8 million net losses in the year to 31 December 2009).

4.	Tax on profit from continuing operations
		30 June		30 June		31 December
		2010		2009		2009
		£m		£m		£m

	UK Corporation tax at 28.0% (2009: 28.0%)	-		-		-
	Overseas tax	(11)		(10)		(21)
		(11)		(10)		(21)
	Deferred tax	(4)		(8)		(7)
		(15)		(18)		(28)

5.	The Parent Group's significant joint ventures and associated undertakings are as follows:

		30 June		30 June		31 December
		2010		2009		2009

	Autologic Holdings plc	26.2%		26.2%		26.2%
	Australian Country Spinners Ltd	50.0%		50.0%		50.0%
	Capral Ltd	44.4%		na		44.4%
	ClearView Wealth Ltd (formerly MMC Contrarian Ltd)	47.9%		28.6%		na
	Green's General Foods Pty Ltd	72.5%		72.5%		72.5%
	The Maryborough Sugar Factory Ltd	24.3%		24.0%		22.9%
	Peanut Company of Australia Ltd	24.8%		24.8%		24.8%
	Rattoon Holdings Ltd	44.4%		44.4%		44.4%
	Tower Ltd	35.0%		35.0%		35.0%

5.	ClearView Wealth Ltd ("ClearView"), a former subsidiary undertaking which was part of the Group's investment segment, became an associated undertaking on 5 May 2010, as a result of a share placement by that company (see note 7). ClearView, as an associated undertaking, contributed £3 million to the Group result for the period. The carrying value of ClearView at 30 June 2010 amounted to £64 million.
	Other significant contributions to the profit/(loss) for the period from Parent Group joint ventures and associated undertakings were:

			30 June		30 June		31 December
			2010		2009		2009
			£m		£m		£m

	Autologic Holdings plc		-		1		2
	Green's General Foods Pty Ltd		-		-		(1)
	Peanut Company of Australia Ltd		(2)		1		-
	Tower Ltd		5		2		6

	Other contributions to the profit/(loss) for the period from joint ventures and associated undertakings, held by operating subsidiaries, include a CIC joint venture £5 million profit (6 months to 30 June 2009: £9 million loss; year to 31 December 2009: £7 million loss). The CIC joint venture profit for the period includes an impairment charge of £Nil (6 months to 30 June 2009: £12 million; year to 31 December 2009: £12 million).

6.	Segmental Analysis - Analysis by activity
								Non-
								operating
				Thread	Fruit/produce	Aluminium	Other	items
			Investment	manufacture	distribution	extrusion	activities	(see note)	Total
			£m	£m	£m	£m	£m	£m	£m

		6 months ended 30 June 2010:
		Revenue:
		External sales	-	497	134	-	12	-	643

		Profit/(loss) after tax:
		Continuing operations	(19)	25	1	-	4	-	11
		Discontinued operations	(1)	-	-	-	2	-	1

		Total assets 30 June 2010	470	890	199	-	97	400	2,056

		6 months ended 30 June 2009:
		Revenue:
		External sales	1	443	120	-	13	-	577

		(Loss)/profit after tax:
		Continuing operations	(1)	(4)	2	-	(9)	-	(12)
		Discontinued operations	-	-	-	(12)	-	-	(12)

		Total assets 30 June 2009	503	792	176	126	68	252	1,917

		Year ended 31 December 2009:
		Revenue:
		External sales	2	903	237	-	30	-	1,172

		(Loss)/profit after tax:
		Continuing operations	(23)	3	4	-	(5)	-	(21)
		Discontinued operations	4	(2)	-	(19)	-	-	(17)

		Total assets 31 December 2009	524	815	148	-	83	382	1,952

	Note:
	Non-operating items comprise cash and cash equivalents, derivatives and investments held by operating subsidiaries (which are not considered to be financial operations).

7.	Discontinued operations
	As stated in note 5, in May 2010 ClearView became an associated undertaking. ClearView has been treated as a discontinued operation in the 2010 and the 2009 comparative Condensed Consolidated Income Statements.
	The impact of the deemed disposal of ClearView was as follows:
		£m
	Intangible assets	4
	Deferred tax assets	8
	Trade and other receivables	2
	Cash and cash equivalents	94
	Trade and other payables	(3)
	Net assets at disposal	105
	Non-controlling interests	(34)
	Group share of net assets at disposal	71
	Cumulative translation differences recycled from reserves	(3)
		68
	Residual carrying value as an associated undertaking	67
	Loss on disposal	1

	Also during the 6 months to 30 June 2010, Staveley Inc. sold its two remaining trading businesses, resulting in a gain of £3 million. That gain, together with the results of those businesses for the period and for the 2009 comparatives, is included within the profit/(loss) on discontinued operations.

8.	Earnings/(loss) per share - The calculation of earnings/(loss) per Ordinary Share is based on profit/(loss) after taxation attributable to shareholders and the weighted average number of 1,794,939,109 Ordinary Shares in issue during the six months ended 30 June 2010.
	For the calculation of diluted earnings/(loss) per Ordinary Share, the weighted average number of Ordinary Shares in issue is adjusted, where appropriate, to assume conversion of all dilutive potential Ordinary Shares, being share options granted to employees and Capital Notes. All dilutive potential ordinary Shares were not dilutive during the period.
	The comparatives for the six months to 30 June 2009 and the year to 31 December 2009 have been adjusted for the Capitalisation Issue which took place in June 2010 - see Note 10.
	Calculations of earnings/(loss) per share are based on results to the nearest £000s.

9.	The net tangible assets per share figure at 30 June 2010 was 40.14p (30 June 2009: 38.14p, 31 December 2009: 42.16p). The comparatives for 30 June 2009 and 31 December 2009 have been adjusted for the 2010 Capitalisation Issue.

10.	Changes in the issued share capital during the six months to 30 June 2010 comprise the following:
		£000
	At 1 January 2010	81,046
	Employee options exercised	162
	Scrip dividend alternative shares issued (17 May 2010)	1,456
	Capitalisation Issue (4 June 2010)	8,266
	At 30 June 2010	90,930

11.	Dividends - The directors have not recommended the payment of an interim dividend (6 months to 30 June 2009: Nil). An interim dividend of 0.91p per share, adjusted for the 2010 Capitalisation Issue, was paid during the period in respect of the year ended 31 December 2009. An interim dividend of 0.91p per share, adjusted for the 2009 Capitalisation Issue, was paid during the six months ended 30 June 2009 in respect of the year ended 31 December 2008.

12.	Contingent liabilities - During the period a subsidiary was released from its previously reported A$12 million exposure to provide funding to, or acquire assets from, an entity in which it has an existing investment.


13.	There have been no changes to the principal risks and uncertainties compared to those outlined in note 40 to the Financial Statements in the 2009 Annual Report, comprising risks associated with currency, interest rate, market price, liquidity, credit and capital.

14.	Related party transactions - There have been no related party transactions or changes in related party transactions described in the latest annual report that could have a material effect on the financial position or performance of the Group in the first six months of the financial year.

15.	Directors - The following persons were, except where noted, directors of GPG during the whole of the period and up to the date of this report:

	Sir Ron Brierley
	A I Gibbs (to 28 June 2010)
	R Langley
	B A Nixon
	Dr G H Weiss

16.	Interim Management Report - The Chairman's Statement appearing in the half-yearly financial report and signed by Sir Ron Brierley provides a review of the operations of the Group for the six months ended 30 June 2010.

17.	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.


DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with a resolution of the directors of Guinness Peat Group plc I state that:
in the opinion of the Directors and to the best of their knowledge:

a.	the condensed set of unaudited financial statements:

	(i)	give a true and fair view of the financial position as at 30 June 2010 and the performance of the consolidated Group for the half-year ended on that date;

	(ii)	have been prepared in accordance with IAS 34 "Interim Financial Reporting";

	(iii)	comply with the recognition and measurement principles of applicable International Financial Reporting Standards as adopted by the Group; and

b.	the half-yearly financial report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8;

c.	there are reasonable grounds to believe the Company will be able to pay its debts as and when they become due and payable.






Signed on behalf of the Board
B A Nixon, Director
26 August 2010



UNITED KINGDOM
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