Channel Islands Based Collectibles Group Report Interim Results

Posted: 10/08/2012

Stanley Gibbons
The Company today announces its interim results for the six months ended 30 June 2012.

Key Financial Highlights

• Profit before tax of £1.8m (2011: £1.7m), up 8%
• Gross margin percentage of 44.5% (2011: 37.9%)
• Sales of £14.7m (2011: £15.0m), down 2%; Online sales up 90%
• Earnings per share of 6.53p (2011: 5.88p), up 11%
• Interim dividend declared of 2.75p per share (2011: 2.50p), up 10%, (payable on 1 October 2012 to all holders on the Register at the close of business on 24 August 2012)
• Stock levels at 30 June 2012 stated at historic cost of £24.5m (30 June 2011: £15.6m), in readiness for the launch of rare stamp fund in October

Key Operational Highlights

• Successful launch of smart phone applications in first half providing collectors worldwide with easier and greater access to our key services and inventory
• Opportunities taken to acquire top quality stamp collections and key philatelic rarities in the period at substantial discounts to market value
• New office in Hong Kong, opened in September last year, contributed sales of £1.3m and profits of £0.3m in the first half
• Prevailing strong demand for rare stamps from China with sales double that of the prior period at £1.4m
• Sales of rare coins and military medals doubled in the period to £0.8m, benefiting from our further development of in-house expertise in these areas
• The first of a two-part auction sale of the prestigious “Arnhold Collection” on the 17th of May left no item unsold, achieving a total realisation of £0.9m (129% of pre-sale estimate)
• Performance in the first half benefited from sales of commemorative collectibles issued for the Queen’s Diamond Jubilee

Outlook

• We are actively pursuing opportunities to accelerate returns from our online strategy
• New international office in Singapore scheduled for opening later this year and agent appointed in Rio de Janeiro to promote our services in Brazil
• Potential business partnerships in the US in respect of our online and auction developments under review
• The legal structure of the rare stamp fund is now complete with the necessary regulatory approval obtained. The investment roadshow is scheduled to take place in September with an aim to launch the fund in October
• Strong demand being experienced for commemorative issues around the London 2012 Olympics, with substantial interest most notably coming from China

Martin Bralsford, Chairman, commented:

“I am delighted to report, yet again, profit growth in line with our expectations. The strength and reputation of the “Stanley Gibbons” brand, together with the benefits from the sound execution of strategic initiatives, ensure that the business is not overly dependent on any one region or product category.

As a result of the success in sourcing of key philatelic rarities, the Group is in a strong position to deliver growth in the remainder of the current year, irrespective of economic conditions, which is expected to include the launch of a rare stamp fund in October. The Fund will be regulated and open to sophisticated investors and hold some of the most famous and best quality philatelic items at attractive values. It will combine prudence with good expected returns from future capital growth.

The enduring strength of the rare stamp market and lack of correlation with traditional asset classes is evident yet again based on the performance of the GB250 Stamp Price Index, as listed on Bloomberg Professional ®, where a gain of 11% was reported over the past 12 months.

The executive team is making good progress towards delivering on key aspects of the strategy driven by the growth of our online trading model and auction services. As a result, your Board is confident about the prospects of the Group for the second half of this year and beyond.”