GPG announces ‘rather poor result’
UK-based investment company Guinness Peat Group (GPG) has announced a lacklustre result for the half-year to June 2008, with net profits decreasing by 145 per cent (or $292.5 million) over the same period in 2007.
In a statement released by GPG chairman Sir Ron Brierley, while the company produced a “rather poor result”, there were some redeeming features.
According to Brierley, revenue increased by $94.7 million or 7 per cent over the corresponding period in 2007.
“There was a profit of £15 million [AUD$32.3m] from normal trading sources and sales of shares before share portfolio write-downs of £35 million [AUD$75.3m]. Hence, an overall loss for the period of £20 million [AUSD $43m].”
“GPG’s portfolio has not been immune from the worldwide share market shakeout and to that extent, we believe most losses will be recovered and more. The majority of GPG’s investments are sound, strategic, long-term holdings where we are confident of intrinsic value regardless of share price fluctuations,” he said.
Brierley conceded that there were some instances of misplaced investment judgement where prospects of recovery are more remote and where costs have exceeded market value.
“In particular, we made large losses in recent years from Capral Aluminium, which has not been a success for GPG,” Brierley said.
GPG made the news earlier this month when it agreed to sell its 29.7 per cent stake in Tower Australia, to Japanese insurance giant Dai-Ichi Life, of which 14.9 per cent has been acquired unconditionally at a price of $3.75 per share, 5 per cent will be acquired subject to regulatory approval and 9.8 per cent is subject to both regulatory and Tower shareholder approval.
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