COA - Coats Group plc (formerly GPG - Guinness Peat Group Plc)

[777]

I have records that show I bought 25000 at 53 cents on 4/11/91. Not sure of date that it's present form was started.

[sharer]

I have records that show I bought 25000 at 53 cents on 4/11/91. Not sure of date that it's present form was started.

My cumulative table shows net cost of 26.39c per share, without having ever "traded" GPG, but it includes results of having sold off a few parcels at times when the market was particularly generous.
Otherwise the holding just includes the frequent "Bonus" or other adjustments that sporadically occur -
i don't think we ever bought any extra on market; nominally the total cost of investment is still about the same as originally yonks ago.

[malcolml10]

has anyone gone to the effort of shuting their NZ shares onto the UK registry to egt paid out in GBP? Is this easy to do and worthwhile if you plan to invest in the UK markets?

[Arbitrage]

Not yet. Will you be using the money to buy more GPG as a vote of confidnece in the new board?

[CAM]

Sell GPG and buy...........
http://www.theage.com.au/business/sir-ron-has-plans-for-life-after-gpg-20110719-1hn4h.html

Ticker INE on the Aussie

[macduffy]

Seems the old warhorse can't just get the message and retire quietly but needs to have one final (?) tilt at the windmill!

(Apologies for the mixed metaphors there but you probably get my drift.)

It looks like a cheap ride for a man of RB's wealth but I think I'll leave him to it.

;)

[Arbitrage]

I assume the money he used for the investment was from the GPG capital return. Why didn't he put it back into GPG?

[Balance]

Sounds like the equivalent of Jimmy Thunder trying to make a comeback in the boxing ring. Sad to see Sir Ron making a fool of himself.

[Hoop]

ACC topped up on the 68 major support on the 3 Aug now that was a cunning plan......oooops..bugger!! the support line broke.

[Arbitrage]

Yes, results look positive. However, they are selling assets into a difficult market.

[Arbitrage]

Yes and it will be interesting to look back as the sales proceed to see whether the so called "strategic holdings" we have been told GPG has held, are actually sold at a premium.

[Lizard]

I'm presuming that the capital notes they are talking about redeeming are the GFN020's?

I am surprised they have the option of repurchase, as I could not find such a clause in the prospectus for the GFN030's (which I have), but only read as though they could opt to redeem on election date. Might sound like nothing, but would have thought the GFN020 holders might not want to give up two more years of 9.0% interest rates, particularly while GPG looks like a good bet for repayment on next election.

[Xerof]

Liz,

Condition 4.6 would appear to be the relevant clause under which they have a call option to buy at any time after 30sept2007.

For the period from Nov 2010 to Nov 2012 the purchase price is 101.5% plus accrued interest

This would explain the rally in price today perhaps

I also have the 030's and am reading the short form Conditions for the Capital Notes relevant to that issue

Presumably the terms for the 020's are similar

[Lizard]

Thanks Xerof. I must have found the wrong document... have the 2003 prospectus for notes with first election date Dec 2008. Or perhaps there were new terms at election date.

I really wish there was a simple way to find terms on bonds & notes. Would be good if the NZX would keep the documents attached. They used to show the date first listed on the NZX site, which at least made it possible to go back via companies office and find the prospectus, but not on the latest web-site version. Makes it difficult to figure out bonds on the secondary market.

[Hoop]

Dredging through the todays world of information overload via Google up pops...

2008 Annual Report page 42 (http://www.gpgplc.com/accounts/accounts/GPG-AR-2008.pdf) Quote..."....In addition, the Issuer or GPG may purchase for cash some or all of the 2008 Notes at any time on giving not less than 180 days’ notice and paying the principal amount of the notes to be purchased plus any accrued interest and unpaid interest...."

Yeah Liz.... when the 020's were rolled over in 2008 I think they added that additional clause.

It seems the 2006 notes hasn't got this clause.

[Lizard]

Thanks Hoop! Looking at it now, I think the prospectus I have must be for the original 2003 notes that rolled over to become the 2008 notes (mature 2013). They must have added in the option at roll over. I actually own the GFN030's that I purchased a year or two back at a discount to face value, so looks like I should have been looking at the 2006 prospectus.

From that, it is difficult to see them opting for early repurchase, since they would have to pay an extra 1.5% and give 180 days notice, so I guess it is more a question of what % they might opt to repurchase at the next election date and what % would be let to roll over or convert. Can understand why they might not be keen to see them converted based on current share price, but repurchasing the whole $350m is a reasonable dollop of cash to allow for.

Interesting that in 2008, so few of the GFN020 notes were rolled over at 9.0% - looks like good terms now!

[Xerof]

To me it is clear they are going to repay the 020's roughly 77mill on issue. There is no penalty for them to do this and they'll give the appropriate notice of 180 days.

I hold the 030's which I only bought a month or so ago. I can't see them looking to use the call option either Liz, but I can see them repaying in full on maturity.

[artemis]

From Sharechat as of yesterday - Guinness Peat Group (GPG) has been upgraded to buy from hold by Deutsche Bank.

[Hoop]

The dividend scrip verses the dividend cash

At this exact moment of time.... taking the share instead of cash you effectively pay 64.15 nzcents (currency difference 1.15p = 2.122nzc)

The share price closed yesterday at 62.5c
Better news since then GPG opened at 64c. (+1.5c).

Taking this Bear Market into consideration, I will wait until the bitter end (the due date) before considering opting methinks.



GPG


13/09/2011 08:30


DIVIDEND





REL: 0830 HRS Guinness Peat Group Plc





DIVIDEND: GPG: Dividend Details





GUINNESS PEAT GROUP PLC


("GPG" or "the Company")





ANNOUNCEMENT





In the Announcement made by GPG on 26 August 2011 reference was made, amongst


other things, to the setting of the ratio for the Scrip Dividend Alternative


in lieu of the cash dividend of 1.15p per share which the directors intend to


pay on 25 October 2011.





The Board of GPG now confirms that eligible shareholders will have the


opportunity to elect to receive a scrip dividend of 1 new ordinary share for


every 29 ordinary shares they held on the dividend record date, being 9


September 2011.





A circular setting out further details of the Scrip Dividend Alternative,


together with the appropriate Forms of Election, will be posted by 23


September 2011.





Enquiry details are:





New Zealand and Australian media: Geoff Senescall on: +64 9 309


5659


UK media: Kevin Smith on: +44 20 7282 1054





Chris Healy


Company Secretary


Guinness Peat Group plc


Tel: +44 20 7484 3370

[Hoop]

GPG sells Turners Auction stake to Milford (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10753834)

[Snoopy]

GPG sells Turners Auction stake to Milford (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10753834)

And according to Stocknessmonster, the shares sold to Milford, (and others it would seem) went through at the heavily discounted price of $1.15, even though TUA was trading at $1.45 yesterday. That certainly makes a mockery of GPG net asset values. The receivers of GPG must be absolutely desperate. Pity the poor shareholders who are looking to be shafted by this quick fire sale process.

SNOOPY

[percy]

I look forward to reading tomorrow's NZ Herald."THE RAPE AND PILLAGE OF GPG CONTINUES" the inside story by Brian Gaynor.! Yeah right.!!!

[RRR]

TWR and TUR next targets:scared:

[gulf]

great to see another director being appointed to the board - this should shake things up and move things along !!

[Hoop]

Anyone out there know who the buyer was today ...about 12 million shares worth...

[janner]

ACC still topping up ??

[winner69]

ACC still topping up ??

If so is that good or bad?

[Arbitrage]

Hopefully it is good. It is our money they are investing.

[winner69]

Hopefully it is good. It is our money they are investing.

Must be hard to allocate how much to put into every stock on the NZX eh

[Silverlight]

Must be hard to allocate how much to put into every stock on the NZX eh

Their focus is global, check page 130 from their 2010 Annual Report (http://www.acc.co.nz/PRD_EXT_CSMP/idcplg?IdcService=GET_FILE&dID=53145&dDocName=WPC089389&allowInterrupt=1)

[Hoop]

Must be hard to allocate how much to put into every stock on the NZX eh

Yes it must be hard.... they get paid heaps to allocate..


Definition of 'Asset Allocation' An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon.

Hmmmm...

[Romulus]

Anyone have a rational reason why GPG has fallen 15c below it theoretical x distribution price of 70-72c after 8-9c (80c before)1st payout back in Jul11? Against a unexpected rally in sharemarkets and I'm not aware of any specific GPG news that seems to rationally explain the drop from 70-72c c to the current 53-55c range.

[winner69]

Their focus is global, check page 130 from their 2010 Annual Report (http://www.acc.co.nz/PRD_EXT_CSMP/idcplg?IdcService=GET_FILE&dID=53145&dDocName=WPC089389&allowInterrupt=1)

But they have a (reasonable) allocation to NZ equities (~$1.5 billion or so) .... and the NZX total market cap is only just over $50 billion so they have a decent chunk to play with and in the interest of being safe it spread fairly widely

[macduffy]

Anyone have a rational reason why GPG has fallen 15c below it theoretical x distribution price of 70-72c after 8-9c (80c before)1st payout back in Jul11? Against a unexpected rally in sharemarkets and I'm not aware of any specific GPG news that seems to rationally explain the drop from 70-72c c to the current 53-55c range.

Probably a case of the bird in the hand - 55c - being preferable to many shareholders than the theoretical bird in the bush - 70c?

[Arbitrage]

Since when has rational thought been a strategy at GPG?
Price may also reflect the drag of an underperforming Coates. Who knows? Most investors are just hanging in there for the final divvy up.

[Toasty]

Probably a case of the bird in the hand - 55c - being preferable to many shareholders than the theoretical bird in the bush - 70c?

Thats me. Sold my miserable stash of just over 4000 shares. Some of these date back over 10 years. Now, where to reallocate this. Maybe just pay for the cars next WOF?

[Arbitrage]

Progress continues: http://www.sharechat.co.nz/article/8d189440/gpg-sells-australian-food-assets-to-mariner-for-a-3-2-mln.html

[777]

Remember that the FIF exemption for GPG expires 31/3/12.

[Hoop]

Remember that the FIF exemption for GPG expires 31/3/12.

...and no Tony Gibbs this time to help the NZ shareholders

[Arbitrage]

Ouch. Check out the results...

[Romulus]

Real shocker, Pension scheme providing a massive hit plus ongoing liabilities to such schemes plus Coat's fines. With such a massive hit, surely they were required under continous reporting to mention this earlier, or did they and I missed it.

[Casa del Energia]

Eye watering. This is massive - what ever happened to keeping market informed? This is not just fumbling the ball - it's a (black) comedy of errors.

[Romulus]

Please do submit a complaint, this equals or beats anything I have ever seen, and remember they are listed in OZ as well and I would think one could be lodged there also. The pension scheme was talked about and I knew about it, but the way they explained it, they have isolated/ring fenced mitigated it against any further falls. Makes Bridgecorp, Hanover, Lombard Fay Richwhite look like decent chaps when compared to this mob. Sir Ron and your group have been found very wanting and your mask/veil has been removed to find this lot has been no better that those we have come to seen as great wealth shifters of out times. Taking from the many and giving to the few. They didn't create wealth, just shifted it. One thing the western world has done so well is to institutionalise corruption/theft using the term Fees, commissions, CEO packages, bonus etc- I rather pay a border guard some money and know that I have. Guess simpe rule of engagement is if you aren't routing someone, then someone must be routing you. Do make a complaint someone please.

[Hoop]

http://i458.photobucket.com/albums/qq306/Hoop_1/vulture-in-tree-and-is-looking-down-on-a-couple-and-their-money-they-are-48165613.jpg

[winner69]

Not since the Chinaman in charge of Richina have i seen such eloquence in an announcement from the Chairman .... fancy starting this way

“Do not dwell in the past,
do not dream of the future,
concentrate the mind on the present moment.”
Buddha

So take notice of the Chairman Campbell ..... concentrate the mind on the present moment ...... and dont worry .... GPG still trading at a discount to the NTA .... yes

[Snoopy]

Real shocker, Pension scheme providing a massive hit plus ongoing liabilities to such schemes plus Coat's fines. With such a massive hit, surely they were required under continuous reporting to mention this earlier, or did they and I missed it.

Romulus, read the explanation for that UK pension hit

"As at 31 December 2011, the UK scheme showed a deficit of $251.0 million on an IAS 19 accounting basis, compared to a gross surplus of $18.6 million and a recoverable surplus of $1.5 million at the 2010 year end. The movement in the year reflects a $290.8 million actuarial loss, with the reduction in the differential at 31 December 2011 between the discount rate of 4.6% (2010 - 5.5%) and the inflation rate of 2.75% (2010 - 3.3%) being the key driver. The 2011 discount rate is determined by the yields on AA long-dated corporate bonds on 31 December 2011, which were at historically low levels on that date. Since 2000, the average has been 5.7% and rates have very rarely been below 5%. Company contributions remain at $13.4 million per annum (at 31 December 2011 exchange rates) in line with the ten year recovery plan agreed with the scheme's trustee as part of the April 2009 triennial valuation."

That $251m deficit is an accounting loss. What GPG are saying is that the ultimate expected liability from the pension scheme has not changed. The amount they are likely to earn on the investments in the pension scheme is less, relative to inflation. So given the time frame of the retirees has not changed, the cash in the investment scheme is going to have to work harder. Or put another way, they don't believe the rate of cash return will be as large as they believed last year, so they need more cash in the pension bin bucket.

This will not be unique to GPG. Any company with a large pension scheme is likely in the same boat.

SNOOPY

[Lizard]

One thing GPG holders need to keep an eye on is those GFN030's. While they are redeeming the $77m (£39m) of GFN020's next month, there remain the much larger $NZ350m (£176m) of GFN030's to contend with. These come up for election date at 15 November this year.

Three options exist at election date:

1. GPG redeems all or part of. At this stage, it seems unlikely. Given the cash being put aside for UK pension schemes, cash required for the GFN020's and clear indications of a shareholder return this year (and probably pressure to provide one), there seems little cash likely to be left over from the current £200m on hand. Even combined with cash from the T&G sale, it would need the sale of at least one other of the larger holdings to be implemented very soon for the cash to be available. At this stage, it seems more likely that the T&G cash will be used to bolster funds for a shareholder return. Therefore any redemption of the GFN030's seems likely to be quite limited.

2. Offer new terms - GPG can also offer new terms to roll over the notes. However, noteholders have the right to reject the rollover and therefore be issued either cash or GPG shares in repayment. Given the wind-down strategy, it is unlikely many noteholders would wish to continue holding notes while watching the assets of the company being distributed preferentially to shareholders. Any offer would need to be quite attractive (possibly higher interest and term of 2 years or less) to get any degree of support.

3. Issue of shares - to any noteholders who reject the rollover, GPG has to repay the notes in shares or cash. Given the lack of cash and the low likelihood of holders accepting a rollover, this could mean the majority of notes are redeemed in shares. Shares issued for such purpose are at a 3% discount to 5 day VWAP. The "worst" case scenario for GPG holders could be to see all GFN030's convert to shares. The % of GPG then owned by the current noteholders would be dependent on the market cap at conversion - which is likely to be reduced below Friday's $811m if another return of capital via buyback is undertaken as seems indicated.

What risk a conversionary death-spiral on the GPG share price come October/November?

[macduffy]

What a nasty (possible) picture you paint, Liz. But yes, a real possibility if fortune doesn't improve matters.

How about this as a possible, but unsatisfactory to shareholders, solution. Instead of using the T and G cash for a payout to shareholders, GPG gets rid of the Coats asset - and its attendant liabilities - by making a full specie distibution to shareholders, ie "x" Coats shares for every "y" GPG share. The T and G cash and other cashed up holdings - probably sold at a fire sale due to time constraints - is used to redeem notes and other borrowings. GPG becomes a virtual shell company and the shares have little or no value. GPG then proceeds to formal winding up.

I hope that that's a very low risk although the alternative of finding a buyer for Coats at a half-reasonable price seems equally remote at this stage.

[Snoopy]

1. GPG redeems all or part of. At this stage, it seems unlikely. Given the cash being put aside for UK pension schemes, cash required for the GFN020's and clear indications of a shareholder return this year (and probably pressure to provide one), there seems little cash likely to be left over from the current £200m on hand.


Cash required for UK pension schemes, as quoted in the result
"Company contributions remain at $13.4 (£6.7m) million per annum (at 31 December 2011 exchange rates) in line with the ten year recovery plan agreed with the scheme's trustee as part of the April 2009 triennial valuation."

"they are redeeming the $77m (£39m) of GFN020's next month"

"$NZ350m (£176m) of GFN030's to contend with. These come up for election date at 15 November"

That looks like £222 million pounds due to be paid out. Balance of £200m on hand already and 9 months to sell some more assets. Given the company is in wind down mode, this does look doable. Why is everyone suddenly so worried?

SNOOPY

[macduffy]

Why is everyone suddenly so worried?


Yes, it's doable but the ugly Coats pension liability suddenly looks uglier and unless markets start to recover it has the potential to become even uglier. Plus the fact that the other assets don't seem to be readily saleable at present at anything close to their book value. Or at least that's the impression given the lack of progress recently.

Certainly it's a glass half empty view but the market's finding it hard to see otherwise. Some may see it as a buying opportunity but I'm not one of them!

[Lizard]

That looks like £222 million pounds due to be paid out. Balance of £200m on hand already and 9 months to sell some more assets. Given the company is in wind down mode, this does look doable. Why is everyone suddenly so worried?

SNOOPY

If you look at the breakdown of the £200m cash, there is only £109m in NZD. The £73m kept in the UK seems to be retained to hedge the pension funds and because of the contingent liability the pensions represent (i.e. have to manage the situation carefully or trustee could force a "cash-up"):


In order to prevent an adverse outcome with respect to the GPG Pension Schemes, the support provided by GPG to back these schemes will need to be maintained. The current support provisions effectively provide the Trustees of the GPG Pension Schemes with a contingent claim over the assets of GPG of approximately £130 million (NZ$259 million). This will likely mean that £130 million (NZ$259 million) of asset realisation proceeds will be required to be retained by the GPG group and will not be available for distribution to shareholders in the medium term.


As reported in the half-yearly financial report, a clear strategy has been implemented to migrate spare Parent Group cash funds into New Zealand dollars to match the capital notes liabilities and shareholder capital return obligations. At the year end the Parent Group cash was held in the following currencies:

£ million
GBP 73
AUD 17
NZD 109
Other 1
Total 200

The holding in GBP represents part of the Group’s hedging strategy against its UK pension scheme liabilities. The holding in NZD, which is expected to be supplemented by the proceeds from the sale of Turners & Growers, will be initially applied to the purchase of the 2008 capital notes on 15 March 2012.

Then there is the pressure from shareholders to be seen to be doing their job and returning value to holders:


We have had calls from shareholders to implement the share buy-back capability which we have as one means of reducing the share price to asset value gap. A buy-back has been given, and continues to be given, active consideration. While it has merit, we have had equal calls to maintain the dividend if possible as many shareholders look to this as a significant income stream. On top of this we have the obligations in respect of capital notes to meet and no absolute clarity as to the timing of future cash flow from realisations.

This seems to lead to an indication that capital is most likely to be returned via a buyback during the year:


The structure of GPG’s shareholder base is such that finding a route to suit all interested parties is complex and it may be that a pragmatic approach aimed at meeting this objective for the majority of shareholders, whilst minimising the costs of achieving the return, is the best approach. A share buy-back, at the appropriate time may meet this test. Subject to applicable laws, and it being in the best interests of the Company and shareholders at the time, shareholders should expect to see such action taken during the current year.

Reflecting on this, I am thinking that this time they are probably referring to an on-market buyback (as opposed to previous proportional buyback). I'm not going to look up all the restrictions around buybacks to work out what that means (though I think they are probably prevented from moving the market in a buyback), but would see it as having four advantages:

1. By operating an on-market buyback, they can be seen to be "doing something" to return cash to shareholders who want out.

2. By buying at a discount, they increase the NAV for those holders who stay in - so perhaps can report an improvement next year.

3. They support the share price, making it considerably less likely that a death spiral could develop.

4. It probably uses very little cash - buybacks seem to just stabilise prices and reduce speculative interest/liquidity. Therefore, can still have cash left towards partial re-purchase of notes.

Taking this into account, it seems possible they will offer a short term election date (say 2 years) at similar rates to current (8.3%). Probably get some take-up (25%?) and then reimburse the rest with 50:50 cash and shares. I think they probably only need to give 5 days notice as to what they are going to do, so, if there is sufficient assurance that a significant portion will not convert the share price may not fall too far going into conversion.

So I guess the "take" from all this is that there's unlikely to be much capital return beyond an on-market buyback this year and there is a reasonable possibility there is going to be some dilution from notes at year end...but how much remains wide open.

[Awamoa]

This company was given a 5 year exemption by the IRD from NZ FDR taxation and that runs out shortly.
It appears that the directors are overlooking this and many shareholders are going to be left with another problem later this year.

[777]

This company was given a 5 year exemption by the IRD from NZ FDR taxation and that runs out shortly.
It appears that the directors are overlooking this and many shareholders are going to be left with another problem later this year.

FIF from 1/4/12. Five weeks away.

[Arbitrage]

Is anyone else going to the AGM on 24th May? Will Sir Ron be there too? How much capital will be paid back to long suffering shareholders this year? These questions and more may be answered....

[Arbitrage]

Here is an answer to one question: http://www.3news.co.nz/GPG-exits-disastrous-stake-in-UK-firm/tabid/421/articleID/250691/Default.aspx

[Arbitrage]

Would have been a good question at the AGM but is in the past now. How many other skeletons are there lurking in the portfolio?

[Hoop]

It's a pity the loyal shareholders didn't hold more power.

Now I'm not kidding!!!.......

....With hindsight the todays share price would not be much worse off if they had've sack all of them Masters of the Universe back in 2006 ..burn't their pig troughs....replaced them with Monkeys + employed handler...bought a few cartons of darts (tools to make investment decisions) and their favourite food (Peanut prices as of 11 April 2012 $1040.81/ton)

[Arbitrage]

Looks like the knives are out: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10804879

It should be an interesting AGM

[Lizard]

Doing pretty well on the cash realisation so far this year. Getting close to having enough NZD put aside to cover capital notes on maturity if required in November. Gone quiet on possible share buyback, but perhaps waiting on the outcome of the EU court decision on 27 June. It doesn't appear to me that they have provisioned for the entire amount (interest & charges), but, as I understand it, Coats have obtained a bank facility that enables them to fund full cost if needed and should not require further parent company cash.

Overall, probably more chance of upside from the announcement than downside, since most valuations probably build in full cost of claims, so can only get better if cost is reduced. Plus will probably be followed soon after with indication of how next stage return to shareholders will be accomplished.

[Lizard]

A supprising bullish appraisal Liz. As the market follows you're every word I must says thanks and await the reversal of my current loses.

Haha. I could only wish my words had that power. :)

[sharer]

A while ago i got thoroughly sick of GPG, after holding on for ages hoping to be rewarded when Coats eventually came right.
I'm just rather ashamed it took so long for me to realize it was just a waste of valuable thinking time trying to follow them each day.
Meanwhile the money released has been very productively contributing to my modest balance sheet ever since.
And the GPG share price is still less than my quit price (having got out with a few thousand on the upside).
I'm so glad i dumped them, & can only wish i'd done it years earlier.
One longer term adjustment to my investing style, due to Ron & his bull****ting associates, is that if i suspect a Director's statement is obfuscating, evasive, or worse, i go straight to the computer from reading the morning paper, & dump the shares. There are better things deserving my attention.
Rather harsh possibly, but since this change from my usual gentlemanly attitude my gains/losses ratio has distinctly improved.

[macduffy]

From the chairman's address to today's AGM.

"Shareholders should note that the Group's liabilities will be substantially
reduced on repayment of the second capital notes tranche later this year."

That seems to have settled the market a bit with GPG's SP up a couple of cents. Oh, and Sir Ron was re-elected - by a small majority.

[Lizard]

I see they are planning to start an on-market buyback as a means to "return proceeds to shareholders".... which seems like a bit of a way of fobbing shareholders off until they actually have enough cash to return. At best, they can probably stop the shares falling further and may even be able to creep the price up should they choose to. However, they can't just buy back at NAV, so the main advantage accrues to shareholders who stay in and receive nothing.

I think they would have to repay the notes if at all possible, as under the trust deed, the trustee would probably have some claim that they were required to be repaid as the business is being liquidated.

Biggest risk remains the risk around pension liabilities, which could get worse before it gets better - Bank of England has been recently warning pension funds to this effect. Otherwise, would see it opportune to start accumulating with view to capital returns becoming more tangible in early 2013. (Although personally doubt I'll bother).

[Jessie]

Another quote from the chairman's address maybe sums up the state of the company:

"If one takes a group of individually mainly sound assets, some very good assets and a couple of big liabilities, and mixes them with poor structure and control the outcome is very difficult. This is known in corporate finance as the Pat Lam theorem"

[macduffy]

Yes, a bit of a cheap shot but I suppose it got a laugh and everyone could work out who GPG's "Pat Lam" is?

[Xerof]

I read it as a done deal that the 15/11/12 notes will be repaid. The Chair is a man of integrity

[Hoop]

GPG realised 54M Pounds Today they sold Young & Co Brewery shares (both A and nonvoting shares). (https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=3099597)

A book value loss of 10M (valued at 64M on 31 Dec 2011)
Could've been worse I suppose.:mellow:

Charts for both share types are similar..it seems there could be a trend break


http://i458.photobucket.com/albums/qq306/Hoop_1/ChartYoungcoBreweryGPG.png
EDIT : Does anyone know at what price GPG paid for these shares in the first place.

It seems they were a declining company and GPG bought in to turn it around...a classic GPG play.

[Lizard]

Looks like they bought a few of the "A" shares in 2009/2010, but prior to that had held 10.05% for many years - they are listed in the 2005 Annual Report, but haven't looked further back.

So yes, maybe some purchases were well timed, but some less well so.... maybe more another "turnaround" play that got bogged down, with GPG taking an ever increasing stake.

[winner69]

Must be getting close to all time low. A chart going back to 1993 had it about 50 cents then. All the bonus issues and all that sort of crap prob clouds the issue that nobody really knows whether they are worth more than in 1993 (and who really cares)

One thing the chart shows is the folly of market valuations v reality. Was GPG really worth 250 or whatever 5 to 6 years .... Of course not but that is the nature of the game eh

Where to from ..good guess. .... But I think they will continue to sell the bits off a piece at a time but I fear one day there won't be enough left in the kitty to make shareholders that happy

Does that mean the winners out of this have been who deserted the ship a few years ago with all or most of their capital intact

[winner69]

Shoeshine (NBR) reminds us that European Commission rules on the Coats case this week and sets the fine. If zilch it'll add 17 cents to GPG's NTA he reckons ....good stuff

On the other hand he points out that declining interest rates is adding zillions to the pension liabilities

When the Youngs cash comes through a share buy back is on the cards

[Xerof]

And the result is:

Appeal lost, further EUR93m to be expensed in Coats accounts

[Lizard]

And the result is:

Appeal lost, further EUR93m to be expensed in Coats accounts

"Coats refinanced its senior debt facilities in October 2011, making allowance for the possibility of an unfavourable judgment, as has now occurred. It therefore has more than adequate banking facilities to allow it to pay the fine."

But it's not really like Coats balance sheet had much equity to spare...

[winner69]

Shoeshine (NBR) reminds us that European Commission rules on the Coats case this week and sets the fine. If zilch it'll add 17 cents to GPG's NTA he reckons ....good stuff



So we won't be seeing that 17 cents increase in NTA then

Jeez GPG seem to have lumberd themselves with some big problems eh ... this, pension laibilities .... genius at work

Love the statement ... the difference between what we owe will be treated as exeptional items in this years accounts (ie they won't affect profitability)

[Balance]

Brokers spy value hidden in Coats

11.01.05
by Ellen Read


Brokers who chose Guinness Peat Group as one of this year's top picks on the sharemarket have three main reasons for championing Sir Ron Brierley's investment company.

ASB Securities believes the market has yet to fully appreciate the company's asset base and the huge value potential in Coats, the zip-and-thread maker.

The English firm, boasting 30,000 employees, was taken over by GPG last April with a £200 million ($539 million) investment.

Another GPG champion, First NZ Capital, sees the successful restructuring of Coats - which accounts for 35 per cent of GPG net assets - as having the potential to add at least 45c a share to GPG's net asset value.

First NZ Capital research head Rob Bode said that Coats, headed locally by director Tony Gibbs, was also a potential beneficiary of the expected fall of the local dollar this year.

This was because companies that held most of their investments overseas, such as GPG, experienced a rise in the value of their assets when the New Zealand dollar fell.

The third GPG fan among the nine broking firms that took part in this year's Business Herald stock-picking competition is GoldmanSachs JB Were.

The firm's head of retail, John Cobb, said GPG was given the nod due to the signs of operational improvements at Coats and the potential for corporate activity surrounding Rubicon and Tower, both of which feature heavily in GPG's New Zealand investment portfolio.



GPG, which became the investment vehicle of Sir Ron after Brierley Investments floundered in the 1990s, has a market capitalisation of just over $1.9 billion.

The company's investment track record spans sectors including financial services, motor vehicle distribution, foodstuffs, building products and gas distribution.

In August, the company disclosed a "modest £5 million result in conventional accounting terms" for the six months to June 30, saying it had been another active and productive half-year.

"As we have stated before, many of GPG's major sources of profit do not fall neatly into six- or 12-month reporting periods and some volatility must be accepted," said director Blake Nixon.

"For the same reason, the half-year is not necessarily indicative of the full-year result, when various transactions now under discussion or negotiation are likely to come to fruition."

Three reasons to like GPG

* The potential of its British thread-making business, Coats.
* An expected dip in the dollar.
* The likely corporate activity around GPG's local investments.

Some perspective of Coats from the past.

Well, that senile old fool and his well-fed free-loading hyenas sure knew how to tell a story!

[Hoop]

Speaking about genius's at work ..Apparently this is not the first time Coats has been pinged for price fixing

[Lizard]

So presumably UK market was pricing further costs in, since the price there only fell 1.5p rather than the approx 4.5p per share this represents? Or perhaps the market just presumes this can be contained within Coats and not fully reflected in the value of Coats reflected in GPG?

I haven't followed Coats closely and presumably the bonds provided to the EC are only reflected through provisions on the balance sheet, so therefore this results in a $US115m subtraction from that $US248m of equity and an increase of $US115m of debt to the total $US238m of net debt? If so, I'd have thought Coats would need re-capitalising.

[Balance]

So presumably UK market was pricing further costs in, since the price there only fell 1.5p rather than the approx 4.5p per share this represents? Or perhaps the market just presumes this can be contained within Coats and not fully reflected in the value of Coats reflected in GPG?

I haven't followed Coats closely and presumably the bonds provided to the EC are only reflected through provisions on the balance sheet, so therefore this results in a $US115m subtraction from that $US248m of equity and an increase of $US115m of debt to the total $US238m of net debt? If so, I'd have thought Coats would need re-capitalising.

Real market reaction will be NZX or ASX. 962 shares traded in LSX on the news with bid/offer at 19p/22p.

Market is going to price in a recapitalization of Coats which means less scope for further share buyback or capital repayment for GPG shareholders?

Oops - there goes the 54m pounds from the sale of Young & Co Brewery shares.

Replay of nightmare of Mt Charlotte/Thistle for the senile old fool?

[Arbitrage]

At least there is certainty now and the company can hopefully go forward from here. The glass is half full (although it was fuller a few years ago!).

[sharer]

... The glass is half full (although it was fuller a few years ago!).
Sooo trooo !

[Arbitrage]

Either the share price has broken out of its downward trend or it is another false dawn. With most of the dirty washing now known, hopefully it will be an upward trend from here.

[Arbitrage]

The upward price trend seems to be continuing.

[winner69]

Soros / Quantum take a few more

Wonder who the mugs who sold are?

[Arbitrage]

Interesting results announcement. This company seems to lurch from one problem to another. The sooner they cash up and distribute the better.

[Arbitrage]

My comment was rather tongue in cheek Belg. I think a lot of small shareholders will be looking for a way out. No dividend and a NTA of 60c makes one wonder what the future upside is. The only glimmer of hope is that a few big investors seem to be positioning themselves on the share register. Maybe it is a "Hold"?

[macduffy]

So GPG plans to buy back NZ$19.9m worth of shares. At the time of the interim report announcement, Chairman Rob Campbell is reported as saying "market conditions were not conducive to natural share price appreciation...."
That obviously depends on the company involved. Most NZX indices continue to hit around 12 month highs.

[macduffy]

GPG has given formal notice of its intention to exercise the option to purchase the November 2012 Notes.

Purchase price will be the Principal Amount plus Accrued Interest - no surprises there!

I still hold a few of these but long gone out of the Ords.

[Silverlight]

Buyback increased from $10m to $70m, although no purchases made yet, given the price trades at a discount to NTA, this is good for holders who bought under 50 cents, when the discount was 40%+.

Long term wind up to become 100% Coats, which is quite a attractive staple consumer business, will be interesting which market(s) they stay listed on. Given Coats international revenues and UK head office, the listing does not make much sense being on NZX, I wonder if they delist and retain their primary UK listing, even though 70%+ of holders are NZ based.

[pierre]

This news has stimulated interest in TWR too - up another 5 cents today.

[Hoop]

Buyback increased from $10m to $70m, although no purchases made yet, given the price trades at a discount to NTA, this is good for holders who bought under 50 cents, when the discount was 40%+.

Long term wind up to become 100% Coats, which is quite a attractive staple consumer business, will be interesting which market(s) they stay listed on. Given Coats international revenues and UK head office, the listing does not make much sense being on NZX, I wonder if they delist and retain their primary UK listing, even though 70%+ of holders are NZ based.
Time for NZ Govt to revisit the current overseas investment (tax) legislation ???

[macduffy]

GPG duly redeemed the November 2012 Notes on the 15th as scheduled. That's the last of the 8.3% interest but I'm not sorry to put an end to what has been an "interesting" - and on balance, profitable investment in the company's shares and notes.

:mellow:

[Contrarian]

Gidday
In OZ they report correctly, real pdf & real announcements rather than crap from NZX.
Anyway I can report spent about 8 mill pounds & about 60 mill to go.

[Arbitrage]

Many thanks one-of-the-opposite-view. I wonder if they'll stop early as the price is getting up near the range of fair-value by my calcs.

Is that based on the market value of the remaining portfolio with a bit thrown on for Coates?

[Arbitrage]

As has been the case for many years, this company is still hard to value. The redeeming feature at the moment is that there were a few big investors that took positions in GPG over the past 12 months and the share price has been on a steady climb since. I am sure there will be a return of capital at some stage prior to it becoming Coates as these investors will want some realisation of value.

[POSSUM THE CAT]

Belgarion as it is an English company the NZX has no say in its Notification Requirements

[macduffy]

Reported from Australia:

Guinness Peat Group has sold its 47 per cent stake in listed manufacturer Capral.

A line of 183.7 million Capral shares traded after market closed on Wednesday, worth $40.4 million. The stock was traded at 22¢ a share through Bell Potter Securities.

[winner69]

don't tell belg .... he wouldn't want to know how much they lost on this investment over the years ..... even though current shareprice is the book value

[Hoop]

don't tell belg .... he wouldn't want to know how much they lost on this investment over the years ..... even though current shareprice is the book value
:D:D

Once again the sales of the small fry don't tell us whether the "masters of the universe" that made the investments actually came out ahead.

Why can't they clearly say: coy x sold for x - book value - y - gain or loss on sales z?

They know - WTF can't they just tell us rather than make up make educated guesses and/or trawl through the accounts?

NZX - pick your friggin' socks up and ensure the market is informed by clear english statements!

Belg
Google search Guinness Peat bought Capral (https://www.google.co.nz/search?q=guinuess+peat+bought+capral&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a#hl=en&client=firefox-a&hs=GsY&tbo=d&rls=org.mozilla:en-US:official&spell=1&q=guinness+peat+bought+capral&sa=X&ei=XM8SUeK9EofwkgWeooD4Bw&ved=0CC0QvwUoAA&bav=on.2,or.r_gc.r_pw.r_qf.&bvm=bv.41934586,d.dGI&fp=4f0a83ea6d2089ed&biw=1488&bih=903) to find GPG buy in dates
then chart Capral (http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=AU%3ACAA&insttype=Stock&freq=2&show=&time=11)
Have a nice day ;)

[winner69]

Methinks all up with their investment and subsequent rights offers probably spent about $300m

At least got $40m odd for what they owned

Maybe they get a good price for Tower ... yeah right

[Awamoa]

Just interested in what people think.
This is my worst NZ stock which I have owned for maybe 15 years.
Do I just quit and move to something else or just sit hoping that there will be a nice rise.

[Silverlight]

Just interested in what people think.
This is my worst NZ stock which I have owned for maybe 15 years.
Do I just quit and move to something else or just sit hoping that there will be a nice rise.

My current price target is high end value at roughly 82 cents, but I would start to reduce above 75 cents, excluding a bond market crash.

If the bond market bubble bursts and corporate yields rise then the pension funds liabilities fall significantly. When GPG the listed company becomes only Coats, this is a different story as Coats is quite strong business now in its own right, and it has market dominace in a pretty fractured market for thread. This is a NAV play currently but will turn into Coats shareholder only at some point, maybe 2015.

[jmsnz]

Just interested in what people think.
This is my worst NZ stock which I have owned for maybe 15 years.
Do I just quit and move to something else or just sit hoping that there will be a nice rise.

Not sure anyone can actually answer that for you, but I would argue that there are better risk/reward options than GPG available on the NZX. Silverlight also makes some interesting observations about the outcome in the mid-term which could see the value rise significantly, if they come to bear.

Personally I keep my (now) GPG small holding as a reminder of how dumb I was in the past and use it as motivation not to repeat those mistakes - not always 100% successfully :)

[Arbitrage]

Now that the buyback is over and various investments have been sold off, GPG shareholders can look forward to some sort of direct capital return. But wait. The proposed new "Coats" has pensioner liabilities. It will also need capital. Does anyone else sense that there will be nothing left for distribution to GPG shareholders?

[Hoop]

Now that the buyback is over and various investments have been sold off, GPG shareholders can look forward to some sort of direct capital return. But wait. The proposed new "Coats" has pensioner liabilities. It will also need capital. Does anyone else sense that there will be nothing left for distribution to GPG shareholders?

GPG still has a common thread in the business..:D
sorry couldn't resist..

[bonne vie]

Has anyone got any view on the recent large share movements with W/Pac and ACC reducing their shares (seems logical they would want to exit - assuming they have been longer term investors with responsibilities to exit to redirect investments to perceived better opportunities on the NZX) but what about Soros via Quantum increasing its shareholding to 9.01%

[Arbitrage]

The press seems to think Soros sees value in the Coats bit of the company. It could be interesting hanging on to his coat tails (excuse the pun) to see what happens.

[bonne vie]

The press seems to think Soros sees value in the Coats bit of the company. It could be interesting hanging on to his coat tails (excuse the pun) to see what happens. Yep that is what I thought - hopefully with a silver lining. $77m is not exactly chicken feed, even for Soros you would hope - on the other hand if his investment sparks a share price increase he could equal selly them for a reasonable profit - but to who. Let's hope others are interested and Soros investment is a strategic move made from perhaps rumours in Europe/China re a takeover.

Incidently when I first purchased a mix of shares in 04/2008 - it was at my Broker's suggestion to buy GPG - I did, sold out 2011 so would now like to think this may be pay back time. The same broker could not understand my interest in buying Xero at that stage 88c - certainly win some and lose some.

[bonne vie]

Just realised Soros entry is old news - he was reported to have 8% Aug 2012.

[janner]

Just realised Soros entry is old news - he was reported to have 8% Aug 2012.

That is really only two quarters away.. Soros is not a man given to sudden rushes .. IMHO..

[Arbitrage]

The company announcement today is making the return of capital to shareholders look a bit shaky.

[Hoop]

hmmm you are right belgarion alot of the management team have been buying shares, thats got to be a good sign.
Why is the share price on a decline after share cancelation is this due to investor disapointment that GPG did a share buyback rather than a direct cash handout to shareholders.
If multiple directors are buying share's normally a share price would react positively.
Looks like a good time to hit the buy button

Not a good time...Its never a clever plan to try to catch a falling dagger....

11 April 2013 GPG suddenly went TATits up and fell like a stone...why??? Arbiitrage sensed something back on the 20 March on this thread


Now that the buyback is over and various investments have been sold off, GPG shareholders can look forward to some sort of direct capital return. But wait. The proposed new "Coats" has pensioner liabilities. It will also need capital. Does anyone else sense that there will be nothing left for distribution to GPG shareholders?

Yes I sensed there will be nothing less to Distribute to Shareholders too and sold out after the 11th April announcement ... Mr Market also sensed the less amount to distribute....ATM It is still correcting as Mr Market hasn't yet worked out the distribution uncertainty risks and is still derisking.

This was the announcement



11/04/2013 09:29


GENERAL





REL: 0929 HRS Guinness Peat Group Plc





GENERAL: GPG: Update on Capital Management Initiatives





GUINNESS PEAT GROUP plc





("GPG" or the "Company")





UPDATE ON CAPITAL MANAGEMENT INITIATIVES





The Company's annual report published on 27 March 2013 stated that further


capital management initiatives would be outlined to shareholders at or prior


to the forthcoming annual general meeting on 23 May 2013. As previously


stated, any decision as to the quantum and timing of possible capital returns


to shareholders will be made as the asset realisation process progresses, and


having regard to the GPG group's actual and contingent liabilities.





As stated previously, the Company continues to actively consider the position


in respect of the GPG group's UK pension schemes, which comprise the Coats


Pension Plan, the Brunel Holdings Pension Scheme and the Staveley Industries


Retirement Benefits Scheme. By way of further update, the Company has


received correspondence from the UK Pensions Regulator ("TPR") in relation to


the Coats and Brunel schemes. The correspondence explains that TPR is


undertaking an investigation into whether financial support should be


provided to those schemes by the Company, or by one or more of the entities


connected or associated with the schemes' respective sponsoring employers,


under the provisions of the UK Pensions Act 2004. The receipt of this formal


correspondence has introduced a new element of uncertainty at this stage as


to when these investigations will conclude, whether any financial commitment


will result from such investigations or, should it do so, the quantum


involved. The relevant provisions of that Act are, however, subject to a


reasonableness test and accordingly the Board's advice continues to be that


its position on this matter is robust.





The Board is taking advice in respect of this correspondence and continues to


work with the parties relevant to the GPG group's UK pension schemes. This


will inform consideration of further capital management initiatives,


including their quantum and timing. An update will be provided to


shareholders in due course.





Chris Healy


Company Secretary


Guinness Peat Group plc


Tel: +44 20 7484 3370





10 April 2013

[Hoop]

thanks hoop that is very helpful but why are so many directors buying shares
I don't know

[bull....]

did a quick analysis a while back net assets equated to 50c gpg share value excluding coats so at 55c your paying 5c for coats as a stand alone business , pension liabilities are the unknown and the last announcement in regards to investigation into tyhese has probably sppoked the market hence the decline im interested to find out more as belgarion has mentioned about the pension money that has been allocated think its like 220 odd mil pounds and whether this can be clawed back if pension swings back to surplus my quick calc is about 29c its worth if clawed back then again if pension liabilities keep getting worse does this mean gpg could go broke? also do you think coats is worth more than 5c as a stand alone ?

[POSSUM THE CAT]

belgarion The primary listing is London to the best of this cats Knowledge.

[Arbitrage]

Did anyone go to the AGM? Chairman's report released this morning didn't look that good.

[Arbitrage]

I was waiting for your bight Belg. I couldn't go this year as I sold out awhile ago and backed Heartland instead. Far less stressful being on an upward trend, although I miss all the regular excuses by the GPG Board. I wonder whether Sir Ron made it again this year?

[whatsup]

I was waiting for your bight Belg. I couldn't go this year as I sold out awhile ago and backed Heartland instead. Far less stressful being on an upward trend, although I miss all the regular excuses by the GPG Board. I wonder whether Sir Ron made it again this year?

I went and yes R B was there perhaps his last one IMHO.
THe pension obligations IMHO are a head ache for GPG but Sorros has taken a 5% share holding with a interest rate arbitage in mind -- the old saying , "follow the money " comes into play here for me so all is not lost.
There most probably be a name change to Coats sometimes this year as they GPG are looking for a CEO to head up that company, its financials look O K, it is the biggest by far in its business but where will growth come from as any opposition that is left is about 1/5 of their size, and is the only thing that IMHO is a goer within GPG.. More of the same ---a long hard grind, GPG is winding down on all fronts, staff, offices overheads etc with a change to Coats and a new board sometime in the near term.

[macduffy]

Hi belg.

I assume that the big variables in your range of values is the extent of the Coats' pension fund liabilities; when will they crystallise; and what effect will interest rate movements have on them in the meantime?

All too hard for me which means that I'll continue to steer clear of GPG.

[whatsup]

Hi belg.

I assume that the big variables in your range of values is the extent of the Coats' pension fund liabilities; when will they crystallise; and what effect will interest rate movements have on them in the meantime?

All too hard for me which means that I'll continue to steer clear of GPG.

The thing not to lose sight of here is the Sorros shareholding ,with the expected world wide rise in interest rates over the next few years he's betting that there is real appreciating share holder value here, Im holding on that basis alone, Coats IMHO is just so-so.

[Arbitrage]

Belg,
Remember Buffett has said 'Never invest in a business you cannot understand.’
If you can't value GPG there is something wrong.
When you sell out of GPG and reinvest in a company that is profitable, pays dividends, its Directors are more interested in the company performance rather than the trough, and has a real future, then the sun starts to shine.

[whatsup]

DOWN and down she goes .47 getting past a joke !!

[whatsup]

45 cents is your support level. Nice little reverse cup is forming here, could be time for a dead cat bounce when it hits that target ;)


BIG % drop in this market from .60 down to .45 !!

[Arbitrage]

Any estimates about where the free fall will end? 40c? 35c?

[Hoop]

http://i458.photobucket.com/albums/qq306/Hoop_1/GPG20yrchart31052013.png (http://s458.photobucket.com/user/Hoop_1/media/GPG20yrchart31052013.png.html)

[Hoop]

uncharted territory, so psychological support at 40

It seems Findata disagrees with you Moosie ..Findata shows GPG is still in charted territory whether this 41/42/43 base support is still effective we will find out. The current depth suggests the chart base support is not effective atm...although the Friday intraday low of 42 did touch and bounce up off that charted base support.

GPG listed on 28th June 1991 The Findata chart (see the screenshot below) only has data going back as far as 1993 and it shows the share price was around the 30c mark then. The dotted red line is Findata's closing GPG price of 44c yesterday..it seems from Findata that 44 is just above base support. The depth (see below) is showing very weak (if any) base support around the 41/42 area...There is no psychological 40C yet but the current depth is a variable a snapshot taken at 5.00pm Friday..it doesn't mean that a 40c support or some other support point will not form in the near future...At the moment the depth is showing very little support anywhere which indicates this freefall has little resistance against it.

Come Monday morning who knows, some support may form somewhere....

I feel for the shareholders who have stayed loyal to this company they have been treated badly with this wind up ...

http://i458.photobucket.com/albums/qq306/Hoop_1/GPGscreenpage.png (http://s458.photobucket.com/user/Hoop_1/media/GPGscreenpage.png.html)
http://i458.photobucket.com/albums/qq306/Hoop_1/GPGdepth31052013.png (http://s458.photobucket.com/user/Hoop_1/media/GPGdepth31052013.png.html)

[Balance]

Hmmm ... With a bit of help from a retired accountant who spent most of his
life in the UK we've come to the conclusion that Mr Mkt may be over-reacting a bit.
While Coates is never going to be considered a growth stock and its not going out
of business anytime soon and won't deliver huge divies Mr Mkt is reading far, far too
much into its current woes. ...

Once current GPG mgt have wound up GPG and there's just Coates left methinks the
shareholders will be demanding big changes in Coates management ... All good.

One other point is that if one of Coates' major competitors gets into trouble Coates
may be off on a tear.

The big problem in the whole thread industry - and one I can't understand why former
GPG mgt didn't realise - is that barriers to competitors who specialise in one type of
thread is very low. i.e. Coates can be killed by a 1000 specialist tiny cuts. Previous GPG mgt
really are idiots - should have stuck to their knitting.

The issue with GPG is that the market thinks the pension liability is unfathomable - the day that the liability is crystallized is when the stock will move back towards NAB.

[Balance]

The issue with GPG is that the market thinks the pension liability is unfathomable - the day that the liability is crystallized is when the stock will move back towards NAB.

Sp tracking higher.

Watching out for settlement with regulators in time for Coats to be relisted in UK.

Watching out also for book build where shareholders can opt for cash from book build.

[whatsup]

The issue with GPG is that the market thinks the pension liability is unfathomable - the day that the liability is crystallized is when the stock will move back towards NAB.

At the GPG meeting I was talking to a sher holder who told me that there were two strings to the future GPG bow.

1 Was Coats- easy and simple.

2 The pension issues and the real play would come about with the long term ie 10 year U S treasury interest rates rising - which has happened over the last month hense the increase in GPG's s p , that is why Sorros is on board, smart fellow- always follow the money.
The GPG game has a long time to play out yet.

[Balance]

At the GPG meeting I was talking to a sher holder who told me that there were two strings to the future GPG bow.

1 Was Coats- easy and simple.

2 The pension issues and the real play would come about with the long term ie 10 year U S treasury interest rates rising - which has happened over the last month hense the increase in GPG's s p , that is why Sorros is on board, smart fellow- always follow the money.
The GPG game has a long time to play out yet.

Thanks, good one!

[bull....]

the chairman said at meeting value gpg



The value of a share in GPG should be considered as follows:


- the share which a holding represents of the cash held in GPG at the present


time less any requirements on that cash for the on-going operation of GPG,


less any contribution which may be required to support any of the pension


schemes, less any support which may be required for the Coats balance sheet;


- the value which is generated from the final realisation of our equity in


Tower; and


- the on-going value of Coats which remains in the ownership of GPG


shareholders so long as their shares are retained.

[Balance]

Share price nicely back on the uptrend.

Big volume going through with buyers now paying up for stock.

Wonder if announcement on Coats or settlement with regulator is around the corner.

[biker]

Share price nicely back on the uptrend.

Big volume going through with buyers now paying up for stock.

Wonder if announcement on Coats or settlement with regulator is around the corner.

The review must be close.

[bull....]

think chairman say he will update in august , they have hired two big firms to do analysis on the pensions for gpg so they may be close to advising gpg on what they think their situation is

[macduffy]

The sooner central banks worldwide start throwing money into the system and let I-rates return
to normal the sooner we'll see this pension thang evaporate ...

Presumably that "start" should read "stop"?

:huh:

[Balance]

Share price continuing to move higher - on volume.

Must be a research report out somewhere?

[bull....]

Share price continuing to move higher - on volume.

Must be a research report out somewhere?

If pension stuff is sorted should go back to 60c which was pre

[Balance]

9300000 shares crossed.

Someone wants volume and stock - and is prepared to pay up.

Looks to me like something is going to happen real soon.

[Balance]

Buyers paying up for stock.

Don't say this has not been brought to your notice!*

[Balance]

Buyers paying up for stock.

Don't say this has not been brought to your notice!*

Sellers thinning out in a big hurry.

60 cents is next stop.

[bull....]

Sellers thinning out in a big hurry.

60 cents is next stop.

big volume today

[False Profit]

GPG


29/07/2013 08:30


GENERAL





REL: 0830 HRS Guinness Peat Group Plc





GENERAL: GPG: Notification of Major Interests in Shares





GUINNESS PEAT GROUP PLC


("GPG" or the "Company")





NOTIFICATION OF MAJOR INTERESTS IN SHARES





GPG announces that it was informed on 26 July 2013 by MSDC Management, L.P.


on behalf of MSD European Opportunity Master Fund, L.P., the shareholder


("MSD") that on 25 July 2013 MSD's holding in GPG increased to 79,606,443


shares being 5.66% of the Company's total voting rights.





Chris Healy


Company Secretary


Guinness Peat Group plc


Tel: +44 20 7484 3370





26 July 2013

[Balance]

Huge buying depth - looks like the overseas funds have done their homework and are now buying up large.

Stock is getting tighter.

[Balance]

Up and up she goes.

[kiora]

Wow momentum buying last two days !

[kiora]

Some very large funds have decent sized shareholdings now
Belg what is your valuation for GPG if pension worries evaporate ?

[Balance]

https://www.nzx.com/companies/GPG/announcements/240638

Chairman of Coats buying up large - 870,000 shares at just under 57c.

[Dentie]

https://www.nzx.com/companies/GPG/announcements/240638

Chairman of Coats buying up large - 870,000 shares at just under 57c.

Yes Balance....I've also been watching the huge holdings being purchased by some very large overseas interests lately

[kiora]

Tick -uptick on volume =tick

[macduffy]

More UK pension issues for GPG.

http://www.stuff.co.nz/business/industries/9547437/GPG-gets-UK-pension-warning-notice

[alistair85]

Hi All. How do we see GPG going in 2014. Worth holding on to?

[bull....]

Hi All. How do we see GPG going in 2014. Worth holding on to?

Ive been holding for quite sometime, frustrating the delays but ill hold as i like coats , i see it is 60c will it hold? always seems to struggle up here but pound weakness must help i guess

[kiora]

2007 to now IMHO CBOE Interest Rate 10-Year
I think a lot of the green stuff they say is available actually disappeared into a black hole

[kiora]

It will be interesting when GPG share price reflects the value of Coats dominant market position.


Total sales revenue of $1,653m
Pre exceptional operating profit of $127m for 2014?
1400000000 shares on issue
Earnings 9 cps
PE 6.6 ?
Worth a punt ?

[kiora]

Last I,d heard of him he was selling ? Has he been buying recently ???

[kiora]

http://au.finance.yahoo.com/q/ta?s=GPG.L&t=1y&l=on&z=l&q=c&p=m10%2Cm50%2Cm200%2Cb&a=m26-12-9%2Cf14%2Cr14%2Cv&c=

[artemis]

Up 6% today, a few buyers but almost no sellers. Was there some news we missed? May see a couple of SSH notices come through as the 20m was off market

[kiora]

OR :scared:Reading sharetrader

[artemis]

From the NBR today (extract):

Shares of Guinness Peat Group [NXZ:GPG], the cash-rich owner of a thread-making business that's attracted investors including George Soros, jumped to a 2 ½-year high after someone scooped up 1 percent of the company. The shares climbed as high as 64 cents yesterday after an investor, likely to be an offshore fund, bought 19.7 million shares just before the close of trading. The stock traded at 63 cents today and has gained 7.6 percent so far this year. GPG has about 404 million pounds of cash after selling its investment portfolio. It aims to return capital to shareholders and rebrand as its sole remaining asset, UK-based threadmaker Coats, though any return is on hold until it resolves a dispute with the UK's pension regulator. Its pension liabilities will reduce as global interest rates begin to rise, closing the gap on rates used to benchmark those funds. "Someone paid a reasonable premium to get that stock," said James Lindsay, portfolio manager at Tyndall Investment Management. "The pension scheme did hurt them, but if you were to take a longer term view about UK interest rates normalising, it would help reduce those pension rates."

http://www.nbr.co.nz/article/late-raid-guinness-peat-shares-pushes-price-2-%C2%BD-year-high-ck-150759

[kiora]

Funds are mopping up :cool:

[bull....]

cash is uncertain isnt it as you dont know what they will have to pay pension schemes anyway im out thanks to that little burst in price, my money seeks faster returns

[kiora]

I'm surprised Moosie hasn't latched onto this trade !Or has he ? :)

[Glendoonie]

Looking good for another squirt upwards. Top up time?

Any thoughts on the timing and likelihood of this "squirt upards"? All I have see recently is a continuing drift downwards. Most inconvenient. :-(

[Balance]

Any thoughts on the timing and likelihood of this "squirt upards"? All I have see recently is a continuing drift downwards. Most inconvenient. :-(

Going back down to 60c is my guess.

[Billy Boy]

Going back down to 60c is my guess.
Month of MAY Looming... could go further Balance
BB

[Balance]

More announcements from AMP ...

http://www.anzsecurities.co.nz/directtrade/dynamic/announcement.aspx?id=3608817

Sale of 3,819,817 Shares between 28-Apr-2014 and 05-May-2014.

Sales of 3.8m isn't much of the trade between when 68c become the agreed price. Becoming clear that with price being stuck at 68c for quite some time that a standoff between buyers and sellers is occurring.

Which will break first? The sellers stop selling and the price starts to climb? Of the buyers who just walk away and the price starts to sag?

Methinks some of the overseas funds may be looking at the price of NZD and upcoming election and thinking it might be better to be in another currency.

All the local institutions have been selling - nothing new.

[Balance]

So who's buying?

Overseas funds have been very happy to take the stock off locals since 45c.

Who has got more fire power?

[bull....]

glad i sold out a while ago looks like tpr not going well as there monetary figure offered was turned down, so it will take much longer to resolve now tpr are digging in

[mikeybycrikey]

From the Half Year Report released today: "The taxation charge for the first half of 2014 was $24.5 million (H1 2013: $27.5 million) resulting in a reported tax rate of 49%"

I don't know much about their international tax arrangements but 49% seems exceptionally high to me (and it's a reduction from the previous year). What going on here? Their documents seem a little light on details. If Apple and Google can pay next to no tax, maybe GPG should be on top of it a little more than they are.

[mikeybycrikey]

Any thoughts on GPG given their significant price drop this week?

I read some of the half-year report yesterday but didn't really see much material change in outlook. Might have to read again today with more rigour to see if I missed anything.

[Okebw]

Any thoughts on GPG given their significant price drop this week?

I read some of the half-year report yesterday but didn't really see much material change in outlook. Might have to read again today with more rigour to see if I missed anything.

Just had a quick glance. Coates net profit was about 11 mil whilst their pension fund liability increased by 80 mil in the last 6 months. I'd say that would explain the drop

[bull....]

if gpg have to contribute 100s millions to pension schemes and they then swing back to surplus sometime in the future gpg cannot claim back money its gone.

[bull....]

they offered 124m as a settlement which was refused by tpr they now provision 170m as a revised settlement, so it all depends on what tpr want them to contribute which looks like more so this will reduce there surplus available to s/h each time the figure goes up in the mean time they have to keep paying big legal fees and boe carney say last night no interest going up so pension schemes wont be helped by that so as the deficits get bigger in the scheme tpr probably want more an more

[biker]

Oh dear ... If you're correct bull... then the pension funds will own the company. :)

And wouldn't that be ironic.

[Balance]

Moving back up - locals getting mopped up again by overseas big boys?

[Balance]

So it would appear.

https://www.nzx.com/companies/GPG/announcements/254631

Well, the 'old has-been useless twice in a row' loser is selling out so it's good news all round.

Looks like his shares were squeezed out at a good price for the buyers - augers well for GPG. Reminds me of how Georgie Porgie shares in HNZ were squeezed out.

Still find it hard to believe how Ron has allowed shareholders in BIL and then, GPG to be fleeced by the executives. He has to be senile.

[kiora]

https://www.nzx.com/companies/GPG/announcements/254631

Well, the 'old has-been useless twice in a row' loser is selling out so it's good news all round.

Looks like his shares were squeezed out at a good price for the buyers - augers well for GPG. Reminds me of how Georgie Porgie shares in HNZ were squeezed out.

Still find it hard to believe how Ron has allowed shareholders in BIL and then, GPG to be fleeced by the executives. He has to be senile.

Directors are buying
http://stocknessmonster.com/news-item?T=tI4nffIeGynYWNI9Oi_rCD&E=NZSE&S=GPG&N=254776

[bull....]

more delays, looks like it could easliy be still going in 2017 - glad got out near the highs

[bull....]

http://www.bbc.com/news/business-30574510

[macduffy]

It's those darned obstinate interest rates, refusing to move up and rescue the pension fund!

Disc: I sold out long ago but still take a morbid interest in GPG.

[whatsup]

Whatsup here with the refresh button.

[winner69]

I'd be a bit worried if I was one of those 17,000 already getting a pension or one of those 10,000 waiting for their pensions to start when they get old enough. Corporates do funny things when lumbered with a big problem like this

Paying 27,000 until they die with not enough cash in the bank isn't good - bit like NZ Super really eh

[bull....]

pension scheme killing this company

Net asset backing per share of 17.2p(a) (31 December 2013: 31.5p), decline reflects actuarial losses in respect of retirement benefit schemes

https://www.nzx.com/companies/GPG/announcements/261220

35c nz asset backing

[pennyacw]

Some thoughts on GPG. Would be interested in any critic of comments.

I am a fan of GPG as an asset play. Sure they have pension liability concerns and a stock price that keeps on declining, but the cash on the books more than compensates an investor when purchasing.

Currently there is +$900m (NZD) in cash on their books. Now let’s take a conservative estimate of the potential payment they might make due to their pension liabilities and say this is going to be $500m (NZD), thus leaving them with $400M (NZD) or $0.28 per share (NZD). If we subtract this from the current price of $0.45 (NZD) this means one gets to buy the underlying business, Coats, for only $0.17 (NZD) per share. Meaning one is buying a business at only 4x the cashflow generated from operations in the 14FY. Or another way of looking at it a business trading at a EV/EBIT of 5-6x.

To me this seems like a no brainer. The stock is currently depressed because of limited ability to estimate when this pension issue is going to be done and dusted. However, as a result investors are missing out on a bargain for a company that has been operating for many years and has customers such as Gap, Levi Strauss jeans, Adidas, Marks and Spencer, Nike and Abercrombie & Fitch. I do not have a great deal of confidence in the current board setup or executive team, but Coasts seems like a business an idiot could run.

[kiora]

Some thoughts on GPG. Would be interested in any critic of comments.

I am a fan of GPG as an asset play. Sure they have pension liability concerns and a stock price that keeps on declining, but the cash on the books more than compensates an investor when purchasing.

Currently there is +$900m (NZD) in cash on their books. Now let’s take a conservative estimate of the potential payment they might make due to their pension liabilities and say this is going to be $500m (NZD), thus leaving them with $400M (NZD) or $0.28 per share (NZD). If we subtract this from the current price of $0.45 (NZD) this means one gets to buy the underlying business, Coats, for only $0.17 (NZD) per share. Meaning one is buying a business at only 4x the cashflow generated from operations in the 14FY. Or another way of looking at it a business trading at a EV/EBIT of 5-6x.

To me this seems like a no brainer. The stock is currently depressed because of limited ability to estimate when this pension issue is going to be done and dusted. However, as a result investors are missing out on a bargain for a company that has been operating for many years and has customers such as Gap, Levi Strauss jeans, Adidas, Marks and Spencer, Nike and Abercrombie & Fitch. I do not have a great deal of confidence in the current board setup or executive team, but Coasts seems like a business an idiot could run.

Yes yes yes I concur BUT as I understand it,pension liabilities are inversely related to interest rates.As interest rates decrease pension liabilities go up is my understanding.Since interest rates aren't going up any time soon GPG share price won't either.

[pennyacw]

Yes, I also agree on that.

But I am thinking more long-term. There is the possibility that this will be settled earlier than 2016, as the annual report suggest they are trying to negotiate an alternative sum (but I suppose they have to say that and have been for quite some time). However, I think for a long-term investor the th price one can buy Coats is pretty good.

Depends on your investment time horizon I suppose.

[pennyacw]

Yes, I also agree on that.

But I am thinking more long-term. There is the possibility that this will be settled earlier than 2016, as the annual report suggest they are trying to negotiate an alternative sum (but I suppose they have to say that and have been for quite some time). However, I think for a long-term investor the price one can buy Coats is pretty good.

Depends on your investment time horizon I suppose.

[kiora]

Yes, I also agree on that.

But I am thinking more long-term. There is the possibility that this will be settled earlier than 2016, as the annual report suggest they are trying to negotiate an alternative sum (but I suppose they have to say that and have been for quite some time). However, I think for a long-term investor the price one can buy Coats is pretty good.

Depends on your investment time horizon I suppose.

Well someone else likes GPG/Coates today penny !

[pennyacw]

Yes, I would like to say that this is obvious, but a little surprising. Looking at the order volume, it looks like someone is trying to establish a reasonably large position.

Institutional perhaps? Although would be a surprise as it is likely to be a performance drag in the short-term for reason you said.

[kiora]

Yes yes yes I concur BUT as I understand it,pension liabilities are inversely related to interest rates.As interest rates decrease pension liabilities go up is my understanding.Since interest rates aren't going up any time soon GPG share price won't either.

Maybe interest rates will go up sooner than later with US unemployment dropping ?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11413967

[mikeybycrikey]

Given that Coats is basically a large pension fund that also owns a cotton company, the value of Coats is largely determined by that size of the pension deficit. The value of the pension deficit is driven by the discount rate which is driven by long term interest rates.

My understanding is that as the discount rate drops, the value of the pension deficit increases. This is also driven by inflation, so as inflation drops, the value of the deficit decreases. I believe that it is long-term inflation estimates rather than headline inflation that drives the change here.

The assumptions of mine are being tested a little because currently the long-term interest rates are falling, which I expect should cause the deficit to increase, yet the share price is going up. I've even looked at the NZD but considering that has been rising, that should also depress the price.

Based on all this I see NAV of about 20c-25c at the moment, and falling. Anyone got any insight?

Note, I am ignoring the profitability and cashflow here since I see them as mostly irrelevant for a quick valuation apart from ensuring the company won't go bankrupt.

[pennyacw]

Could be wrong, but the price increase of late, at least originally, looked to be the result of a big investor taking a fairly large position. The stock has had single trade orders of 500k+ at a range of prices. I am not sure whether this has much to do with the pension liability.

Although there has been statements by Coats indicating they have proposed an alternative deal to put the pension issue to bed, whether this eventuates who knows.

[kiora]

30 m shares traded through LSE yesterday.Whats up ?

[pennyacw]

Hardly a surprise as there was huge demand for the stock up until a couple of days ago.

https://www.nzx.com/companies/COA/announcements/264986

[kiora]

Shareholders notice for 36% of the company in the last month or so.
Accumulating for when interest rates go up ?

[Glendoonie]

What is happening to COA sp apart from nothing much?

Ideas. Anyone?

[kiora]

What is happening to COA sp apart from nothing much?

Ideas. Anyone?

Just waiting for interest rates to go up so the cash they are holding can be paid out.So if interest rates rise then it would be great for Coates shareholders

[Glendoonie]

Thanks, kiora. So now we wait? I guess so :t_down:

[Glendoonie]

So what happeed to COA today?

Ahh, delisting.

https://www.nzx.com/companies/COA/announcements/273618

[Scooter]

YIP, if you hold, you end up with certificate, and will be difficult to sell unless held in safe custody. When GuocoLeisure left, certificate issued, and has to be sent to Singapore custodian $180, then when ok'd for sale which can take up to 6 weeks, you get a selling brokerage charge. My thoughts are to get out whilst on the NZ register

[winner69]

YIP, if you hold, you end up with certificate, and will be difficult to sell unless held in safe custody. When GuocoLeisure left, certificate issued, and has to be sent to Singapore custodian $180, then when ok'd for sale which can take up to 6 weeks, you get a selling brokerage charge. My thoughts are to get out whilst on the NZ register

Good advise for smallish shareholders and probably sooner the better I reckon

[Glendoonie]

Finally I am out. Thanks for your comments.

[minimoke]

Yes, ill be out as well. Good riddance

[macduffy]

Brian Gaynor's views on Coats' delisting.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11559804

I don't hold.

[artemis]

I have a few lurking in the bottom drawer. Thinking that I will take up the offer to sell on the LSE. Crystal ball, but I would expect lots of NZ shareholders will sell or do nothing and sellers will drive the SP down for a while. A decent FY result should give the SP a boost.

[macduffy]

A decent FY result should give the SP a boost.

Higher interest rates to fund those pension liabilities would give it a bigger boost!

[whatsup]

What is happening to COA sp apart from nothing much?

Ideas. Anyone?

Glend, kiss of death imho after the weekend write up , why anyone would hold now after all of the instos sold yonks ago beats me , high of the year is .65 low .38 and Im picking that it will test this before it delists here.
I wonder now if R B truly deserves that knighthood !

[artemis]

Hmmmm, there are only small lots up for sale under .60 now and quite a lot of bids. Somebody sees a buying opportunity.

Once the NZ shares drop away why wouldn't the UK price steady, and rise if good news? It's a long time until the NZX delist so might well be worth a punt.

[whatsup]

Does anyone follow Coats(formally GPG ) into the U K since the shift over there they have doubled and now circa .60 p, why they couldn't achieve that while here bears me , another Brierley stuff up .

[777]

Does anyone follow Coats(formally GPG ) into the U K since the shift over there they have doubled and now circa .60 p, why they couldn't achieve that while here bears me , another Brierley stuff up .


It is the market that decides the price not the company.

[mikeybycrikey]

Does anyone follow Coats(formally GPG ) into the U K since the shift over there they have doubled and now circa .60 p, why they couldn't achieve that while here bears me , another Brierley stuff up .

I haven't followed this for a while but it was basically a pension scheme deficit with a company attached to it. I'm guessing there was some change in their pension situation since the company itself was mostly profitable.

I held for a while waiting for a jump if interest rates were to ever rise from near 0%. I gave up waiting but am not surprised there has been a jump and I'm pretty sure it's unrelated to delisting here.

[GTM 3442]

Does anyone follow Coats(formally GPG ) into the U K since the shift over there they have doubled and now circa .60 p, why they couldn't achieve that while here bears me , another Brierley stuff up .

When was the "jump", and how might it relate to the Brexit-devalued pound?

[Scrunch]

When was the "jump", and how might it relate to the Brexit-devalued pound?
Several features including removal of the nz sell pre delist presure, profit upgrades and making progress on the pension liability issues. The highs expectations had a sell down when the profit result with a small div came out.

[PLYNCH]

Share price up to 85p.($1.56 NZ).Happy long suffering holder.

[share4eva]

Share price now 90p ($1.71 NZ) Happy long suffering holder

[Balance]

Share price now 90p ($1.71 NZ) Happy long suffering holder

Absolutely no thanks to that has-been big time double loser Ron Brierley.

[share4eva]

Absolutely no thanks to that has-been twice big time loser Ron Brierley.

Feel sorry for those that sold out when the shares transferred from NZX to London Stock Exchange. I think it was only trading at about 55 cents. If people had held on that would be 3 x by now.

[whatsup]

Feel sorry for those that sold out when the shares transferred from NZX to London Stock Exchange. I think it was only trading at about 55 cents. If people had held on that would be 3 x by now.

I sold out @ .55 and put the money left into ATM @ 1.51 N Z !!!

[Balance]

I sold out @ .55 and put the money left into ATM @ 1.51 N Z !!!

You, Sir, are a champion!

Meanwhile, Ron Brierley continues to play with his .....

[blackcap]

When was the "jump", and how might it relate to the Brexit-devalued pound?

Why does everyone think the pound has devalued because of Brexit? That is such a commonly held fallacy.

On the 23rd June when the Brexit vote was held 1 NZD was worth .487 pounds.

Currently it is worth about .5235. Yes it has devalued but not outside the margins of normal trading.

Versus the USD it was 1.38 and now 1.30. Again not that much of a movement when normal currency movements are concerned.

More interestingly if you look at a 10 year chart of GBP versus Euro, well colour me blind it is exactly the same price it was 10 years ago. Currencies will go where they go and Brexit did have the initial downward movement but since then it has been very stable if not strengthening.
So if Coats appreciated because of Brexit and the devaluation of the Pound, it should have happened in June 2016.

[Balance]

Seems the old warhorse can't just get the message and retire quietly but needs to have one final (?) tilt at the windmill!

(Apologies for the mixed metaphors there but you probably get my drift.)

It looks like a cheap ride for a man of RB's wealth but I think I'll leave him to it.

;)

Obviously been too preoccupied with other things in GPG’s dying days to keep an eye on how GPG was becoming a plaything and source of unlimited fees for his fat cats.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12294884

The final fall from grace for this once feared and respected corporate raider.