GPG annual profit drops 61% as 2013 asset sales wash through, rebrands to Coats
Guinness Peat Group, which is rebranding to UK threadmaker Coats after exiting its other investments, reported a 61 percent drop in annual profit after asset sales bolstered its earnings the previous year.
Net profit fell to 9 million British pounds in calendar 2014 from 23 million pounds a year earlier, when it benefited from a 46 million pound gain on the sale of assets, it said in a statement. Its Coats unit, which this month sold its Europe, Middle East, and Asia crafts unit for US$10 million, reported a profit of US$30.8 million compared to US$37 million in 2013, after impairing the value of its EMEA crafts unit. Coats' revenue from continuing operations slipped 1 percent to US$1.69 billion.
GPG will rebrand as Coats with immediate effect, something the company has been putting off because of disputes over its pension schemes with the UK Pensions Regulator about how much support the parent needs to provide the superannuation programmes. The company said it is still engaged with the regulator and early this year put a proposal to settle the matter.
If a settlement can't be reached, GPG said a hearing is unlikely to happen before the second half of 2016.
"While the pensions schemes are under investigation by the UK Pensions Regulator, we cannot pass on the success of the strong and cash generative Coats business by way of returns to shareholders," the company said. "It is entirely appropriate that the company fulfils all obligations to its pension schemes, and the board and management continue to work to find a route forward balancing the interests of all GPG stakeholders."
As part of the rebranding, GPG announced the resignation of directors Rob Campbell, Scott Malcolm and Waldemar Szlezak from March 2. Coats chief executive Paul Forman, chief financial officer Richard Howes and industrial unit head Rajiv Sharma will join the board as executive directors and David Gosnell and Alan Rosling as independent directors.
Coats' industrial division increased revenue 3 percent to US$1.24 billion, while earnings gained 16 percent to US$128 million, while its crafts division reported a 10 percent drop in sales to US$442.8 million, for an 87 percent slump in earnings to US$2.8 million.
The company anticipates the sales of its EMEA crafts division will let it focus on more profitable business. The transaction is expected to be completed in the second quarter of this year.
GPG's triple-listed shares last traded at 45 cents on the NZX, and are unchanged this year.