RNS Number:4566P
Stanley Gibbons Group Limited
29 July 2005
THE STANLEY GIBBONS GROUP LIMITED
INTERIM REPORT FOR SIX MONTHS ENDED 30 JUNE 2005
The Company today announces its Interim Results for the six months to 30 June
2005. Highlights include:
* Profit before tax up 23% at #710,000 (2004: #579,000)
* Earnings per share up 31% to 2.20p (2004: 1.68p). Excluding exceptional
operating costs, earnings per share were up 46% to 2.45p
* Sales up 15% to #5,278,000 (2004: #4,607,000)
* Cash balances of #1,517,000 (2004: #788,000)
* Interim dividend declared of 1p net per Ordinary Share (2004: 0.5p net
per Ordinary Share) payable on 12 September 2005 to all holders on the
register at the close of business on 12 August 2005. Ordinary Shares will go
ex-dividend on 10 August 2005.
* Hits to our Internet sites now approaching 30 million per month (2004:
10 million)
* Investment department has over #3 million of rare stamp portfolios under
management
* Figures for the six months ended 30 June 2004 have been restated for FRS 17
(Retirement Benefits), FRS 20 (Share-based Payment) and FRS 21 (Events after the
Balance Sheet date)
Commenting on current trading, Paul Fraser, Chairman said:
"Senior management is now focusing on the launch of the Stamp Investment Fund,
which we believe is an exciting opportunity to take The Stanley Gibbons Group
Limited to a new higher level of sales and profitability. The global stamp
market is very exciting at the moment, with renewed interest in stamp
collecting, especially at the top end of the market, where demand continues to
outstrip supply of rare stamps in top quality condition. This is reinforced by
the growth of traffic to our Internet sites, where the monthly hits are
approaching 30 million, which is three times greater than traffic levels one
year ago.
We are looking forward with confidence to achieving our objectives for the
second half and meeting the expectations of all stakeholders."
For further information, contact:
The Stanley Gibbons Group Limited
Paul Fraser, Chairman 020 7836 8444
Michael Hall, Chief Executive 01425 472363
Seymour Pierce Limited 020 7107 8000
Jonathan Wright
Chairman's Statement
Once again, I am able to report a very positive result for The Stanley Gibbons
Group Limited. Profit before tax was #710,000 (2004: #579,000) representing an
increase of 23% on the same period last year. Turnover increased by 15% to
#5,278,000 (2004: #4,607,000).
Earnings per Ordinary Share for the six months ended 30 June 2005 were 2.20p
compared with 1.68p for the same period to 30 June 2004. Excluding exceptional
operating costs, earnings per Ordinary Share were 2.45p, representing an
increase of 46%.
These results include the changes in accounting for pensions, share options and
dividends in both the prior and current periods as a result of the introduction
of new Accounting Standards as detailed in the Operating Review and note 1. In
summary, though, they are not material to our overall reported results.
As at 30 June 2005, the Company has cash balances of #1,517,000 (2004:
#788,000).
The Company paid a final dividend of 1.5p net per Ordinary Share, in respect of
the year ended 31 December 2004, on 19 April 2005. Your Board is pleased to
declare an interim dividend of 1p net per Ordinary Share (2004: 0.5p),
representing an increase of 100% payable on 12 September 2005 to holders of
Ordinary Shares on the register at close of business on the record date of 12
August 2005. The shares will go ex-dividend on 10 August 2005.
The Group's Internet sites are now receiving close to 30 million hits per month
(2004: 10 million), which has resulted in Internet sales up 16%. This has
resulted in a greater interest from non-philatelic advertisers and corporate
partners wishing to become associated with our brand. We believe this will still
be one of our key profit drivers for the future.
Stamps as an 'Alternative Investment' continue their rise and move into the
investment mainstream. Demand is still outstripping supply and the price of
investment grade material is now reaching levels more in tune with the current
market forces. We have become evermore aggressive in our buying in the market,
both at auction and purchasing privately from stamp collectors. However, we are
still falling short of the increasing needs of both our current and new clients.
This is very positive for the market and the launch of our Stamp Investment Fund
will further strengthen the demand and reduce the supply of the top level
investment-grade material. We did expect the Fund to launch in the first half of
this financial year but, because to our knowledge this is the very first stamp
fund, everyone has had a steep learning curve. This, though, will increase the
barrier of entry to others and, with our brand name, the backing of a major
international bank and support of other financial institutions wishing to break
this new ground with us; we should be the prime vehicle for this section of the
investment market.
A certain level of demand has now built up from people wishing to take part in
the positive growth that rare stamps have shown over a number of years and some
who clearly prefer to invest in units in a fund rather than direct ownership of
a stamp portfolio. This extends both our client options and our ability to
service the complete market. Again, this will be a key driver for Stanley
Gibbons in the future and should be a major contributor in the second half.
Finally, I would like to thank all of my colleagues at Stanley Gibbons for once
again achieving our Group objectives and being part of the drive for growth and
profitability which has given an increasing return to all stakeholders.
Paul Fraser
Chairman
28 July 2005
Operating Review
6 months 6 months 6 months 6 months Year ended Year ended
to 30 to 30 to 30 to 30 31 31
June June June June December December
2005 2005 2004 2004 2004 2004
As As
restated restated
Sales Profit Sales Profit Sales Profit
#000 #000 #000 #000 #000 #000
Philatelic
trading and
retail
operations 3,709 885 3,122 787 6,718 1,719
Publishing and
philatelic
accessories 1,262 362 1,146 286 2,660 846
Dealing in
autographs,
records and 301 70 332 115 660 265
related
memorabilia
------ ------ ------ ------ ------ ------
5,272 1,317 4,600 1,188 10,038 2,830
Corporate
overheads (562) (554) (1,017)
New business
development 6 (8) 7 (96) 13 (214)
Interest and
similar
income/charges 53 41 105
------ ------ ------ ------ ------ ------
Before
exceptional
items 5,278 800 4,607 579 10,051 1,704
Profit on sale
of fixed asset
investment - - 1,985
Exceptional
operating
costs (90) - -
------ ------ ------ ------ ------ ------
Group sales
and profit
before tax 5,278 710 4,607 579 10,051 3,689
------ ------ ------ ------ ------ ------
Sales
Overall group turnover increased by #671,000 (15%) compared to the same period
last year. Sales growth continues to be driven by our increased trading in high
value stamps (retail value of #1,000 and more) where our investment in stock has
been concentrated and supported by an increasing demand from investment clients.
As a result of our increasing move to the top end of the philatelic market,
average order values have increased by 18% compared to the same period last
year. We continue to attract new customers through our website and visitors to
our 399 Strand retail outlet and have experienced a 23% increase in new
customers recruited compared to the same period last year.
Philatelic trading and retail sales increased by 19% against the same period
last year. Increased effort has been placed during the period on the development
of the investment department within philatelic dealing in all areas of buying,
sales and marketing. The historic evidence which is building up through our
stamp price indices and printed catalogues demonstrate consistent growth in
values of rare stamps and is improving the marketability of stamps as an
investment. Our ability to scale up to the new levels of demand being
experienced in terms of stock acquisition and to adapt to the current aggressive
pricing conditions in the market are paramount to our objectives for the second
half of the year.
Sales from our auction department were 15% above the same period last year
demonstrating that we are gradually regaining our credibility within auction
dealing. Our presentation and efficiency of service have improved which will
give us a better opportunity to attract higher value collections for sale
through our auctions in the future.
Publishing and philatelic accessory sales increased by 10% from the same period
last year. Sales benefit from catalogue titles in higher demand being released
this year together with the benefits from producing one of our main titles,
"Great Britain Concise", in colour this year for the first time. Stamp albums
and accessory sales were also 10% improved, achieved through a combination of
enhancements to our product range, more proactive management of trade and
wholesale customers together with the benefits from improved returns on
marketing activity.
Autographs and memorabilia sales were 9% below the same period last year. The
reduction in sales occurred mainly in auction sales both online and offline. A
clearer strategy is now in place to resurrect the department from the recent
downturn in trade with a return to common sense procedures and selling
techniques. We have recently transferred autograph auction activities to our
philatelic auction department which is already having a positive impact.
Gross Margins
The gross margin for the six months ended 30 June 2005 was 54% compared to 57%
for the same period last year. The reduction in the gross margin percentage was
in line with expectations and is attributable to reduced margins available on
the sale of high value specialist material. Return on capital is however highest
in the sale of high value stamps due to lower overheads associated in dealing
and processing a lower quantity of stock items at a higher realisable value.
Profitability
The profit before tax for the period of #710,000 compares to a profit for the
same period last year (as restated) of #579,000, representing an increase of
23%. The increase in profitability against the prior period was achieved through
growth in turnover, although at a lower gross margin percentage.
Overheads were 3% higher than in the same period last year although this
includes exceptional operating costs of #90,000 in respect of the closure and
relocation of activities from our premises in Nailsea to Ringwood, Hampshire.
Overheads were 1% lower than last year when excluding exceptional operating
costs with profit before tax up #221,000 (38%).
We have continued to manage overheads through close daily control at Director
level. We have increased our investment in new staff during the period resulting
in a 5% increase in salary overhead and an increase in the permanent staff with
a headcount at 30 June 2005 of 99 compared to 88 at 30 June 2004.
Establishment costs were increased by #54,000 compared to the prior year period
mainly as a result of the rent review of 399 Strand resulting in an increased
annual rent charge of #62,000. Rental income was consistent with the same period
last year. All empty property has now been sublet.
New Business Development
Direct sales generated through our web sites increased by 16%. Website
development work during 2005 is progressing well as we further improve our
online services towards meeting all the needs of all collectors worldwide.
New business development costs have been integrated into operating business
activities located in Ringwood, Hampshire which will result in cost savings in
the second half of the year from the consequent rationalisation together with
the benefits from future efficiencies in catalogue production.
Accounting Policies
We have reported the results and restated the prior period results in order to
comply with the provisions of FRS 17 (Retirement Benefits), FRS 20 (Share-based
Payment) and FRS 21 (Events after the Balance Sheet Date). As a result of the
implementation of new accounting standards the profit before tax for the six
months ended 30 June 2005 was reduced by #10,000 and net assets at 30 June 2005
were reduced by #171,000. Details of the restatement of prior period results is
given in note 1.
Consolidated Profit and Loss Account
6 months to 6 months to Year ended
30 June 30 June 31 December
2005 2004 2004
As restated As restated
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
---------- -------- --------
Turnover 5,278 4,607 10,051
Cost of sales (2,451) (1,966) (4,248)
---------- -------- --------
Gross Profit 2,827 2,641 5,803
Administration expenses (730) (736) (1,401)
Selling and distribution (1,351) (1,367) (2,803)
expenses ---------- -------- --------
Operating Profit before
exceptional 746 538 1,599
operating costs
Exceptional operating costs (90) - -
---------- -------- --------
Operating Profit after
exceptional 656 538 1,599
operating costs
Profit on sale of fixed asset
investments - - 1,985
Interest receivable and similar
income 53 42 109
Interest payable and similar
charges 1 (1) (4)
---------- -------- --------
Profit on ordinary activities
before taxation 710 579 3,689
Tax on profit on ordinary
activities 2 (166) (170) (493)
---------- -------- --------
Profit for the financial period 544 409 3,196
---------- -------- --------
Earnings per Ordinary Share 3 2.20p 1.68p 13.10p
Diluted earnings per Ordinary 3 2.17p 1.64p 12.82p
Share
Continuing operations: all items dealt with in arriving at the operating profit
above relate to continuing operations.
The 2005 results include the adoption of FRS 17 (Retirement Benefits), FRS 20
(Share-based Payment) and FRS 21 (Events after the Balance Sheet date) and the
2004 results have been restated accordingly. Details of these changes in
accounting policies are detailed in note 1.
Consolidated Balance Sheet
30 June 30 June 31 December
2005 2004 2004
As restated As restated
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
--------- -------- --------
Fixed Assets
Tangible assets 1,195 1,235 1,239
Investments - 223 -
--------- -------- --------
1,195 1,458 1,239
Current Assets
Stocks 5,588 5,262 5,588
Debtors: amounts falling due
within 2,312 1,241 1,620
one year
Cash at bank and in hand 1,517 788 1,930
--------- -------- --------
9,417 7,291 9,138
Creditors: amounts falling due
within one year (2,725) (1,873) (2,729)
--------- -------- --------
Net current assets 6,692 5,418 6,409
--------- -------- --------
Total assets less current
liabilities 7,887 6,876 7,648
Provision for liabilities and
charges (105) (120) (119)
--------- -------- --------
Net assets excluding pension
liabilities 7,782 6,756 7,529
Pension liabilities (net of
deferred taxation) (78) (198) (213)
--------- -------- --------
Net assets including pension
liabilities 7,704 6,558 7,316
--------- -------- --------
Capital and reserves
Called up share capital 247 244 244
Share premium account 5,038 5,000 5,000
Capital redemption reserve 38 38 38
Revaluation reserve 206 169 206
Profit and loss account 2,175 1,107 1,828
--------- -------- --------
Equity shareholders' funds 7,704 6,558 7,316
--------- -------- --------
Consolidated Cash Flow Statement
6 months to 6 months to Year ended
30 June 30 June 31 December
2005 2004 2004
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
-------- -------- ---------
Net cash (outflow)/inflow from
operating activities 4 (43) (179) 1,024
-------- -------- ---------
Returns on investments and
servicing of finance
Interest received 29 22 56
Interest paid 1 (1) (4)
-------- -------- ---------
30 21 52
Taxation
UK corporation tax paid (3) - (134)
Jersey tax paid - (10) (10)
-------- -------- ---------
(3) (10) (144)
Capital expenditure and
financial investments
Payments to acquire tangible
fixed assets (72) (46) (138)
Receipts from sale of fixed
asset investment - - 2,208
-------- -------- ---------
(72) (46) 2,070
Equity dividends paid (366) - (2,074)
-------- -------- ---------
Net cash (outflow)/inflow before
financing (454) (214) 928
-------- -------- ---------
Financing
Purchase of own ordinary shares - (1,060) (1,060)
Shares issued 41 224 224
Repayment of Loan notes - (47) (47)
-------- -------- ---------
Net cash inflow/(outflow) from
financing 41 (883) (883)
-------- -------- ---------
(Decrease)/increase in cash (413) (1,097) 45
-------- -------- ---------
Analysis of changes in cash during the period
6 months to 6 months to Year ended
30 June 30 June 31 December
2005 2004 2004
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Net cash at the beginning of the
period 1,930 1,885 1,885
Net cash (outflow)/inflow (413) (1,097) 45
-------- -------- ---------
Net cash at the end of the period 1,517 788 1,930
-------- -------- ---------
Statement of total recognised gains and losses
6 months to 6 months to Year ended
30 June 2005 30 June 2004 31 December 2004
As restated As restated
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Profit for the financial
period 544 409 3,196
Surplus on revaluation of
assets - - 37
Actuarial gains/(losses)
recognised in the pension
scheme 226 (178) (186)
Deferred tax attributable to
actuarial gains/(losses) (67) 53 55
Prior period adjustment 27 - -
-------- -------- ----------
Total gains and losses
recognised since last
financial statements 730 284 3,102
-------- -------- ----------
Reconciliation of movements in equity shareholders' funds
6 months to 6 months to Year ended
30 June 2005 30 June 2004 31 December 2004
As restated As restated
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Profit for the financial
period 544 409 3,196
Dividends (366) - (2,074)
-------- -------- ----------
Retained profit for the
financial period 178 409 1,122
Purchase of own shares - (1,060) (1,060)
Shares issued on exercise of
share options 41 224 224
Surplus on revaluation of
assets - - 37
Actuarial gains/(losses) in
pension scheme net of tax 159 (125) (131)
Adjustment to cost of share
options 10 9 23
-------- -------- ----------
Net increase/(decrease) in
shareholders' funds 388 (543) 215
Opening equity shareholders'
funds as previously stated 7,289 7,299 7,299
Prior period adjustment 27 (198) (198)
-------- -------- ----------
Opening equity shareholders'
funds as restated 7,316 7,101 7,101
-------- -------- ----------
Closing equity shareholders'
funds 7,704 6,558 7,316
-------- -------- ----------
The proposed dividend of 1p net per Ordinary Share will result in a distribution
from reserves of #247,000.
Notes to the unaudited interim report
1 Changes in accounting policies and presentation
The results for the six months ended 30 June 2005 and 30 June 2004 are unaudited
and have been prepared using accounting policies consistent with those set out
in the Annual Report and Accounts for the year ended 31 December 2004 except as
detailed below. The financial information in this report does not comprise full
financial statements. Full financial statements for the year ended 31 December
2004, on which the auditors gave an unqualified report, have been delivered to
the Jersey Registrar of Companies. These interim financial statements were
approved by the board of directors on 28 July 2005.
The prior period profit and loss account and balance sheet have been restated to
take account of a number of changes in accounting policies as a result of the
introduction of new Accounting Standards as follows: FRS 17 "Retirement
Benefits", FRS 20 "Share-based Payment" and FRS 21 "Events after the Balance
Sheet date".
The effects of these changes in the Group's previously reported results and net
assets are as follows:
6 months to Year ended
30 June 31 December
2004 2004
(unaudited) (audited)
#'000 #'000
Profit on ordinary activities before taxation
As previously reported 603 3,728
-------- ---------
Impact of FRS 17:
Operating profit (35) (69)
Interest receivable and similar income 20 53
Impact of FRS 20 (9) (23)
-------- ---------
Net movement (24) (39)
-------- ---------
As restated 579 3,689
-------- ---------
Net assets
As previously reported 6,891 7,289
-------- ---------
Impact of FRS 17:
Debtors: amounts falling due after more than one
year (192) (179)
Provisions for liabilities and charges: net pension
liability (283) (305)
Provisions for liabilities and charges: deferred
taxation 142 145
Impact of FRS 21 - 366
-------- ---------
Net movement (333) 27
-------- ---------
As restated 6,558 7,316
-------- ---------
2 Taxation
The tax charge is based on the expected full year tax rate together with the
movement in the provision for deferred taxation.
3 Earnings per ordinary share
The calculation of basic earnings per ordinary share is based on the weighted
average number of shares in issue during the period.
Adjusted earnings per share has been calculated to exclude the effect of the
profit on the sale of the investment in Provide Commerce, Inc. and exceptional
operating costs. The Directors believe this gives a more meaningful measure of
the underlying performance of the Group.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The Group has only one category of dilutive ordinary shares: those share
options granted to employees where the exercise price is less than the average
market price of the Company's ordinary shares during the period.
6 months to 6 months to Year ended
30 June 2005 30 June 2004 31 December 2004
As restated As restated
(unaudited) (unaudited) (audited)
Weighted average number of
ordinary shares in issue (No) 24,737,896 24,406,570 24,404,298
Dilutive potential ordinary
shares: Employee share
options 298,784 536,579 523,776
Profit after tax (#) 544,000 409,000 3,196,000
Add: exceptional operating
costs net of tax (#) 62,000 - -
Less: profit on sale of fixed
asset investment (#) - - (1,985,000)
--------- --------- ----------
Adjusted profit after tax (#) 606,000 409,000 1,211,000
--------- --------- ----------
Basic earnings per share -
pence per share (p) 2.20p 1.68p 13.10p
Add: exceptional operating
costs net of tax (p) 0.25p - -
Less: profit on sale of fixed
asset investment (p) - - (8.14p)
--------- --------- ----------
Adjusted earnings per share -
pence per share (p) 2.45p 1.68p 4.96p
--------- --------- ----------
Diluted earnings per share -
pence per share (p) 2.17p 1.64p 12.82p
--------- --------- ----------
4 Reconciliation of operating profit to net cash (outflow)/inflow from
operating activities
6 months to 6 months to Year ended
30 June 2005 30 June 2004 31 December 2004
As restated As restated
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Operating profit 656 538 1,599
Depreciation 116 118 243
Increase in provisions 56 58 105
Cost of share options 10 9 23
Increase in stocks - (384) (710)
Increase in debtors (692) (118) (497)
(Decrease)/increase in
creditors (189) (400) 261
--------- --------- ----------
Net cash (outflow)/inflow
from operating activities (43) (179) 1,024
--------- --------- ----------
5 Further copies of this statement
Copies of this statement are being sent to shareholders. Further copies are
available on request from: The Company Secretary, The Stanley Gibbons Group
Limited, 399 Strand, London, WC2R 0LX.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFIDDVITFIE
Stanley Gibbons (LSE:SGI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Stanley Gibbons (LSE:SGI)
Historical Stock Chart
From Jul 2023 to Jul 2024
