Sir Ron Brierley's investment company Guinness Peat Group returned to a modest level of profit in the first half of 2010, at the same time as it pulls back from its activities in this country.In late June New Zealand-based Tony Gibbs was removed as an exe
Sir Ron Brierley's investment company Guinness Peat Group returned to a modest level of profit in the first half of 2010, at the same time as it pulls back from its activities in this country.
In late June New Zealand-based Tony Gibbs was removed as an executive director of GPG after publicly opposing plans to spin off the company's Australian assets.
Today, in comments accompanying the half year results, Sir Ron said that several years ago GPG announced it was working towards a release of value to shareholders.
But those plans had followed a rather erratic course, as the global credit crisis intervened and then the Australian demerger proposal failed to find favour with various institutional shareholders.
With the present corporate model no longer working for GPG, the company was now revisiting alternative capital restructuring proposals and would shortly be appointing three new directors to help in the task, Sir Ron said.
Following Mr Gibbs' departure from the GPG board, the company had closed its Auckland office and was selling off its New Zealand share portfolio other than the two major investments -- Turners&Growers (66 percent) and Tower (35 percent) which have been transferred to Australian portfolio management.
"When we established in New Zealand, in the early 1990s, there were no undue expectations but, largely due to Tony's efforts, it proved more active and rewarding than anticipated," Sir Ron said.
"More recently, however, there have been little or no opportunities and the New Zealand operation has necessarily become expendable for GPG."
In the six months to the end of June GPG had returned to a modest level of profit, mainly due to a vastly improved result from the investment in Coats, as investment returns still showed a deficit after interest and overheads.
A small profit at Capral -- a long time problem for GPG -- was an encouraging sign after the previous seven years of losses, Sir Ron said.
"Both Coats and Capral still have a long way to go but, hopefully, the actual and intangible resource which GPG has invested over the years is now finally starting to pay off."
Three other events which had little profile but had an impact for the future were:
* eServGlobal, in which GPG have a 19 percent interest, sold its USP business to Oracle for $A107 million ($NZ135.2m) and was now examining capital management options;
* former subsidiary, MMC Contrarian made a major acquisition of life insurance and wealth management businesses from BUPA and changed its name to ClearView Wealth. GPG now held 48 percent of the enlarged company;
* the acquisition of 20 percent of Ridley, Australia's leading producer of salt and animal stockfeeds. After an unsuccessful North American expansion, Ridley was restoring the value of its Australian operations and believed it had a promising future ahead.
GPG's accounts showed revenue from continuing operations of Stg643m ($NZ1.42 billion) in the latest half year, compared to a restated Stg577m a year earlier. Operating profit was Stg31m compared to a restated Stg28m a year earlier, with a bottom line profit of Stg12m in the latest six months, compared to a restated loss of Stg24m the previous year.
