The Australian Financial Review, safe from the butcher’s axe (AKA Brian McCarthy), yesterday missed a simple but good finance story.

The interim report from GPG (Guinness Peat Group), chaired by market legend, Sir Ron Brierley and run by Garry Wiess, a man many reporters have whispered to in numerous takeovers and deals, was issued at 8.30 am yesterday and by end of business last night, all the AFR could manage was a one par brief on the result, a subbed down version of a Bloomberg story buried on Page 16.

It would also seem that The Australian was in a similar position: no local story, although they ran an NZPA story on GPG and the buried news lead in the finance pages, so at least someone was awake. And, the Sydney Morning Herald didn’t run a story but mentioned the buried story in the CBD gossip column.

So what did they miss? Chairman, Sir Ron Brierley made this comment at the end of the chat about what was a poor set of results:

The Board is working towards a substantial release of value to shareholders in 2010 which will coincide with GPG’s 20th anniversary and my own retirement as Chairman of the company.

Sir Ron started in NZ in 1956 with a share tip sheet, then an investment fund in 1959, then a company in 1961, that had no capital. He taught a generation or two of imitators (good and bad) about finding value in the market, raiding companies, building strategic stakes, bringing on takeovers and selling at a profit (and the odd loss, but not many).

In his taciturn NZ way (black moustache, the signature of the Kiwi male), Brierley could be laconic, voluble (don’t get him started on cricket; he’s the original tragic) when he wanted to be, and he was a straight talker. Even in the GPG interim, which saw this canny stockmarket player and his team bitten by the credit crunch and volatile markets. GPG reported a first-half net loss of 42 million pounds ($90.4 million), compared with a net profit of 94 million pounds ($202.32 million) in the first half of 2007.

“GPG’s portfolio has not been immune from the worldwide sharemarket shakeout and to that extent, we believe most of those losses will be recovered and more.

“The majority of GPG’s investments are sound strategic long term holdings where we are confident of intrinsic value regardless of share price fluctuations,” he said.

Sir Ron said there were some instances of “arguably misplaced investment judgment’ where prospects of recovery were more remote and where cost exceeded market value.

Would so many other CEOs and chairman admit to “misplaced investment judgment”? I’m thinking of Mirvac, GPT, Allco, Macquarie Group, Babcock and Brown, and so on and so on.

Peter Fray

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