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

[gulf]

I guess the preliminary report will be out in early March.I would be surprised if there was a change in the dividend or the usual 1:10 bonus.It will be interesting to see the progress with Coates

[gulf]

GPG having a bad day in Aust.down .6c to 209 on 168480.TWR down .5

[Gryffyn]

Ouch!

[Gryffyn]

Volume wasn't that high yesterday and it seems to have been oversold with the same vol already today and some good recovery.

Disc: GPG

[James K]

Nice to see Gryffyn, GPG sp gave me a fright yesterday. UBS Warburg just out a note estimating its market NAV at 269 - a discount of 15% is pretty generous given GPG track record and the largely unhedged NZ$ implications. A lot will depend on Coats, and whether it is as good an investment as the analysts and GPG seem to believe. Suspect that will take a year or more likely two years to prove, though. Happy to hold.

[Gryffyn]

Ditto.

[Gryffyn]

GPG01/03/2005FLLYR REL: 0900 HRS Guinness Peat Group Plc FLLYR: GPG: Preliminary Results for Year Ended 31 December 2004 Guinness Peat Group plc ("GPG or "the Company" or "the Group") PRELIMINARY RESULTS FOR YEAR ENDED 31 DECEMBER 2004 CHAIRMAN'S STATEMENT A relatively modest year for GPG in accounting terms with profit down from?64.0 million to GBP25.3 million. A rather better result was the continuedoverall increase in value of the Company (expressed in terms of market valueof quoted investments and book value elsewhere) of some ?87 million which isprobably a more appropriate measure for a company such as GPG. The reasons for the lower profit are readily identifiable and are worthfurther explanation. 1. A fewer number of completed capital transactions.This is essentially a timing issue with various projected asset sales now inthe pipeline for 2005.2. Coats' net loss of GBP 5.6 million.In view of Coats' importance to GPG, a separate report on this investment isproduced on Pages 4 and 5.3. An "exchange translation" loss of ?7.0 million compared with a profit ofGBP15.9 million in 2003.Regardless of annual fluctuations, in the longer run, the basket ofcurrencies in which our portfolio is held, must largely equalise. Since 1991,the net aggregate outcome of currency changes to date is a deficit of ?1million.4. A GBP6 million write-off in the value of Intellect Holdings Ltd.As foreshadowed in the Interim Report, it has been necessary to make aprovision in respect of what has so far been an unsuccessful investment andit was decided to write off the book value entirely. We do not believe it tobe all bad, however, and since 30 June, we have contributed an additional?1.3 million (wisely or not, remains to be seen) in recapitalising thecompany. Our holding is now 18%. We have also invested GBP 6.6 million in anew entity called Tafmo Ltd, an unlisted public company in which we have adirect 56% interest and Intellect has a further 28%. Tafmo appears to havegood credentials in the development of electronic payments technology.5. An "equity accounted" loss of ?9.8 million ex Capral Aluminium Ltd.This is purely accounting fiction as GPG has no entitlement to ex CapralAluminium Ltd profits or losses other than dividends received (or, in thiscase, not received).Capral's poor result (which includes the write-off of a "future tax benefit"of A$27.2 million) is, however, of definite concern to GPG in respect of itssubstantial investment in the company. There are distinct parallels withCoats insofar as a major relocation of the main manufacturing operations hasadversely affected current profitability but must pay off in the longer term.The market price of the shares has held up well, reflecting the confidence ofGPG and other major shareholders in the company's future prospects. The sale of Charter shares was a major contributor to the 2004 result andthere were also useful profits from Solution 6, Reinsurance Australia andAustralian Pharmaceutical Industries. In 2003 we wrote off the value of our 30% holding in Dawson International butthe company has actually recovered reasonably well and recently repaid ?4.0million of its convertible notes. Also, it has now acquired Dorma Group from Coats. Dorma has been a problemarea in the past but in the Dawson environment it has every opportunity tosucceed, as indeed it should, with its strong brands in linen and bedwear andan extensive marketing network in the UK. The "spin off" by Tower of certain of its Australian operations into a newlisting of Australian Wealth Management Ltd is proceeding to plan. This isthe first significant move by Tower since GPG became involved several yearsago and it is very positive for all concerned. GPG will continue to be themajor shareholder in both companies - AWM, a formidable new entrant in astrongly growing area of financial services and for Tower, the next phase inthe development of a leaner, more streamlined organisation. Since balance date, we have sold most of our shareholding in De Vere Group ona satisfactory basis. After some years of mild confrontation, it was f

[Gryffyn]

Gotta like the regularity of their 'standard' div policy - 1p a year.

[Gryffyn]

SP has fluctuated a bit last few days but still tracking up. Will be interesting to see how the market receives this news - business as usual is my prediction. As the report says. GPG is an investment vehicle so value of holdings is the main measure.

[Gryffyn]

Looking at the depth queues the bidding seems to indicate a rise in GPG today :-)

Disc: GPG