RNS Number:3601I
Stanley Gibbons Group Limited
06 March 2003
THE STANLEY GIBBONS GROUP LIMITED (formerly Communitie.com Limited)
Audited Results for the year ended 31 December 2002
The Stanley Gibbons Group Limited, incorporating Stanley Gibbons, Fraser's
Autographs, Collector Cafe and other collectible-related Internet sites, today
announced its audited results for the year ended 31 December 2002.
Highlights
* Earnings per share up 73% to 1.96p (2001: 1.13p).
* Profit before taxation and gain on property disposal #537k (2001: loss
#74k).
* #709k cash at year-end.
* Sales #8,121k (2001: #8,079k). Underlying turnover from continuing
activities up 4.3% on last year.
* Sales to the Rest of the World increased by 53% in 2002.
* Almost 9,500 new customers recruited in 2002, with sales of over #1
million.
* Tangible net asset value 26p (2001: 24p);
* 6 million hits per month to Internet sites (2001: 3 million).
* Re-launch of Stanley Gibbons Price Guide online with three subscription
levels.
* Compiled SG Stamp Index in 2002 listing 100 regularly traded stamps. Index
up 31% over last five years, with Great Britain section up 40% and Top Ten
up 71%.
* 2003 "Fraser's Autographs" Division 25th Anniversary.
Commenting on the results, Paul Fraser, Chairman said:
"I am pleased to announce a substantial increase in the Group's
profitability. Our strategic approach to reducing overheads and the
implementation of tight management controls, at the same time as
investing in new areas of opportunity in the most profitable elements of
the business, has proved to be successful.
We are now in a strong position going forward with lower fixed costs,
positive cash flows and growth potential through developing our online
stamp community and diversification into publishing in other collectible
areas."
For further information, contact:
The Stanley Gibbons Group Limited
Paul Fraser, Chairman 020 7836 8444
Michael Hall, Finance Director 01425 472363
Seymour Pierce Limited
Louise Carpenter ) 020 7648 8700
Jonathan Wright )
Chairman's Statement
I am pleased to report another substantial increase in the Group's
profitability. Turnover was slightly higher than last year at #8,121,000 (2001:
#8,079,000), producing a profit before tax of #537,000 (2001: #314,000). We have
continued to reduce loss making activity and increase turnover on the continuing
business. Earnings per Ordinary Share for the year ended 31 December 2002 were
1.96p compared to 1.13p for the previous year. Net assets per share have
increased to 26p compared to 24p at 31 December 2001.
The business is cash generative with average monthly bank balances now in excess
of #750,000. We are still unable to pay a dividend because of the tax structure
between the Channel Islands and UK. If the UK follows the US in not taxing
recipients of dividends, this may open the way for payment to shareholders. Once
the taxation issues are removed we intend to implement a progressive dividend
policy.
We had a great deal of publicity in 2002 concerning stamps as an alternative
investment and we have seen a resurgence in interest, especially from past
collectors. We successfully introduced the 'SG-100 Stamp Index; which now gives
a measure of market performance and is a useful benchmark for the trade and
collectors around the world. The SG-100 Stamp Index, which includes the most
commonly traded stamps, has increased over the past year by 10.6% comparing
favourably to stock market performance and bank term deposit interest rates.
Our organisational structure has been strengthened by several appointments. Mike
Hall, Group Finance Director, has also taken on the role of Deputy Chief
Executive from 1 January 2003, and is expected to assume the role of Chief
Executive by 1 July 2003. Richard Purkis, Company Secretary, has become
Operations Director with a seat on the Main Board.
At the operational level, a number of key people have been given titles that
reflect their increased management input. Dr Philip Kinns becomes 'Director of
Philately' and is the Grantee of the Royal Warrant of Appointment from Her
Majesty the Queen, which has just been renewed for a further five years. Trevor
Arthur, Director of Finance, who along with Russell Carleton, Director of IT and
Doug Roberts, Director of Web/E-Publishing become Directors of our main trading
subsidiary, Stanley Gibbons Limited.
Catalogue production continues to be simplified and made more cost effective.
Allworldstamps.com has been redesigned based on feedback from our users and a
greater need to integrate with our other internet sites. Allworldstamps was
relaunched at the beginning of February and has been received well, with a
further increase in visitor traffic. We are now experiencing close to 6 million
hits per month on our sites and internet sales continue to grow as a percentage
of total sales, particularly in respect of sales made to the Rest of the World.
The Queen's Golden Jubilee Year helped to progress the interest and sales in
stamp collecting. 2003 commemorates the Coronation and also the 21st birthday of
Prince William, which should keep new stamp issues in the spotlight.
We are not alone in witnessing a greater focus by collectors worldwide in the '
classic' era of stamps where there is now a definite scarcity of supply. Prices
in the early issues of the key collecting countries continue to rise and it is
only those companies with a suitable holding of material that will benefit.
Countries where there is an uncontrolled release of new issues in prolific
quantities are seeing a decline in interest. We are focusing our buying on '
classic' issues and reducing our holdings of modern stamps.
Advertising sales have held up remarkably well in light of the general downturn
in the advertising market. We also believe that we have some exciting
propositions for 2003, both for Gibbons Stamp Monthly and our internet sites,
which should again improve contribution.
On our publishing side, we have matched supply and demand and this has allowed
us to reduce our stockholdings and increase our margin. This bodes well for 2003
as we tighten, yet again, our stock of back issues and we plan to finally retire
all old inventory on 30 June 2003 to the wholesalers and stamp trade customers.
This will further build demand for current publications and other planned
releases.
Communication with our customers is now much more cost effective and focused,
with improved marketing techniques being used to up-sell and cross-sell. Regular
e-mail campaigns are utilised for both the whole database and for specialist
sections, with response levels increasing with each mailing.
We have recruited almost 9,500 additional customers onto our database in 2002
bringing total sales from new customers of #1.25 million during the year.
Recruitment has been at very low cost with the majority of new customers being
directed either from our websites or from new visitors to the shop. The latter
have been converted to account customers through improved Customer Relationship
Management.
All employees embraced the challenges in 2002 and clearly understood the
objectives, and delivered a result in line with market expectations. 2003 is
another year on the 'road to recovery' and quest to build sustainable and
consistent profits back to the levels achieved five years ago. I believe our
preparation, research and development and upfront costs should show an
accelerating payback in 2003 and beyond.
Paul Fraser
Chairman
6 March 2003
Operating Review
Operating results for the year
Statutory Statutory Proforma
2002 2002 2001 2001 2000 2000
Sales Profit Sales Profit Sales Profit
#000 #000 #000 #000 #000 #000
Philatelic trading and retail 4,742 814 4,591 406 4,568 81
operations
Publishing and philatelic 2,605 679 2,641 598 2,598 331
accessories
Dealing in autographs, records and 765 189 824 230 778 250
related memorabilia
Exhibitions - - - - 68 (52)
8,112 1,682 8,056 1,234 8,012 610
Sale of property - 388 52
Corporate overheads (847) (934) (836)
New business development 9 (293) 23 (296) 5 (413)
Interest (5) (43) (27)
Before exceptional operating costs 8,121 537 8,079 349 8,017 (614)
and impairment of goodwill
Impairment of goodwill - - (200)
Exceptional operating costs - (35) (79)
8,121 537 8,079 314 8,017 (893)
Sales
Overall Group turnover produced a 0.5% improvement over the previous year.
Underlying turnover from continuing activities after adjusting for exceptional
income increased by #332,000, (4.3%) from last year as demonstrated in the table
below:
Year ended Year ended
31 December 2002 31 December 2001
#'000 #'000
Group turnover as reported 8,121 8,079
Discontinued activity - Public Auctions - (119)
Exceptional income - Sale of highest value stock items (71) (242)
Underlying turnover 8,050 7,718
The improvement in sales from philatelic trading and retail operations this year
was attributable mainly to sales of 'classic' British Commonwealth material
which were 25% ahead of 2001. The improved sales are due mainly to the quality
of our stockholding in this area which is still reaping the benefits from the
EHW & Co. acquisition in December 2000, together with new quality high margin
purchases made by our Director of Philately during the year. After a slow first
half of the year, sales of Great Britain material recovered in the second half
to deliver a result in line with the previous year.
Sales from publishing and philatelic accessories based in our premises in
Ringwood, Hampshire were 1% lower than the previous year. The overall sales
performance in this area was still encouraging, particularly in light of the
disruptions to business activities experienced during the move into one
operating unit which was completed during the year, reducing our ongoing fixed
costs. Sales of all products in our range performed well, and we have
successfully reduced our aged stock lines during the year.
Our direct marketing techniques have substantially improved following the full
integration of the Customer Relationship Management system with our stock buying
procedures. This has enabled us to focus buying towards the top selling stamp
collecting countries and to source registered customer 'wants' and interests
more accurately, providing a better service to our customers.
Gross Margins
We have continued to implement our strategy of eliminating loss making
activities and improving the gross margins achieved in the continuing core
business. The gross margin on sales for the year ended 31 December 2002 was
60.8% compared to 56.2% last year. Improved margins are being achieved through
emphasis on higher margin philatelic stock buying, stronger stock control
procedures, including higher focus on clearance of aged stocks, and cost
effective electronic catalogue production methods.
Profitability
The profit before tax for the year of #537,000 compares to a profit last year of
#314,000, which included a #388,000 profit on the sale and leaseback of our
property at 5 & 7 Parkside, Ringwood. Core business activity, excluding new
business development (mainly research and development), produced an operating
profit of #835,000 (2001: #300,000) for the year.
The key contributors to the increased profitability were improved gross margins
together with the benefits realised from reduced staffing levels. We have also
benefited from lower marketing costs in 2002 through lower cost direct marketing
techniques used to communicate regularly with existing customers, and tighter
controls in place over proposed new customer recruitment advertising campaigns.
Salary overhead reduced by #284,000 (11.5%) compared to last year. This was
facilitated by the lower Directors' salaries, outsourcing of certain activities
and a general reduction in staff numbers. The staff headcount at 31 December
2002 was 106 compared to 130 at 31 December 2001. The significant reduction in
our fixed cost base over the past two years has been achieved without
sacrificing customer service or key business processes, and puts the Group in a
very strong position going forward to achieve increased profitability through
development of new business opportunities and organic sales growth.
New Business Development
Direct sales generated through our web sites represented 5.5% of total sales for
the year compared to 3.3% last year. We have introduced over 50,000 new
philatelic stock items of lower value stamps on stanleygibbons.com during the
year which have attracted new non-specialised collectors to our business.
We successfully produced our major catalogue title, 'Stamps of the World',
electronically this year and will be releasing a new title in full colour in
March, 'Simplified Commonwealth Catalogue 2003', for which we already have
registered demand. By the end of 2003 all our catalogue data will be held
electronically and be capable of cost effective and controlled editorial
management. The full benefits of our investment in this area will be realised as
existing products will be produced more efficiently at a lower cost, and we will
have the ability and flexibility to release new products directed towards areas
of researched demand, to create quickly new revenue streams.
We continue to make progress towards building our integrated stamp community
online, which is gaining momentum with the relaunch of the redesigned
allworldstamps.com website. We will be making significant improvements to our
gibbonsstampmonthly.com website in 2003 with the implementation of a Content
Management System (CMS), which will allow us to produce an online version of our
already successful Gibbons Stamp Monthly magazine. The site improvements will
also allow users much more versatility and enhanced search functionality when
using the site.
Corporate Overheads
Corporate overheads of #847,000 have reduced by #87,000 from last year. The
reduction in overhead is due to lower Directors' salaries.
Consolidated Profit and Loss account
For the year ended 31 December 2002
Year ended Year ended
31 December 2002 31 December 2001
Notes #'000 #'000
Turnover 8,121 8,079
Cost of sales (3,184) (3,539)
Gross profit 4,937 4,540
Administration expenses (1,242) (1,224)
Selling and distribution expenses (3,153) (3,312)
Exceptional operating costs - (35)
Operating profit/(loss) 542 (31)
Operating profit before exceptional 542 4
operating costs
Exceptional operating costs - (35)
Profit on sale of property - 388
Interest receivable and similar income 5 8
Interest payable and similar charges (10) (51)
Profit on ordinary activities before 537 314
taxation
Tax on profit on ordinary activities (53) (23)
Profit for the financial year 484 291
Earnings per Ordinary share 2 1.96p 1.13p
Exceptional operating costs - 0.14p
Adjusted earnings per Ordinary share 1.96p 1.27p
Diluted earnings per Ordinary share 2 1.95p 1.13p
Continuing operations: all items dealt with in arriving at the operating profit/
(loss) for 2002 and 2001 relate to continuing operations.
There is no material difference between the profit on ordinary activities before
taxation and the retained profit for the year stated above and their historical
cost equivalents.
Statement of total recognised gains and losses for the year ended 31 December
2002
Year ended Year ended
31 December 31 December
2002 2001
#'000 #'000
Profit for the financial year 484 291
Surplus on revaluation of assets - 169
Total gains and losses recognised since last financial statements 484 460
Reconciliation of movements in equity shareholders' funds for the year ended 31
December 2002
Year ended Year ended
31 December 31 December
2002 2001
#'000 #'000
Profit for the financial year 484 291
Purchase of own shares (79) (404)
Other recognised gains - 169
Net increase in shareholders' funds 405 56
Opening equity shareholders' funds 6,013 5,957
Closing equity shareholders' funds 6,418 6,013
Balance sheets
at 31 December 2002
Group Group Company Company
31 December 31 December 31 December 31 December
2002 2001 2002 2001
#'000 #'000 #'000 #'000
Fixed Assets
Tangible assets 1,455 1,553 - -
Investments 223 223 5,811 5,811
1,678 1,776 5,811 5,811
Current assets
Stocks 4,547 4,633 - -
Debtors: amounts falling due after more 296 330 - -
than one year
Debtors: amounts falling due within one 831 908 316 395
year
Cash at bank and in hand 709 331 - -
6,383 6,202 316 395
Creditors: amounts falling due within one (1,486) (1,831) - -
year
Net current assets 4,897 4,371 316 395
Total assets less current liabilities 6,575 6,147 6,127 6,206
Creditors: amounts falling due after more
than one year (118) (134) - -
Provision for liabilities and charges (39) - - -
Net assets 6,418 6,013 6,127 6,206
Capital and reserves
Called up share capital 244 248 244 248
Share premium account 5,834 5,909 5,834 5,909
Capital redemption reserve 25 21 25 21
Revaluation reserve 169 169 - -
Profit and loss account 146 (334) 24 28
Equity shareholders' funds 6,418 6,013 6,127 6,206
Consolidated Cash Flow Statement
For the year ended 31 December 2002
Year ended Year ended
31 December 2002 31 December 2001
#'000 #'000
Net cash inflow from operating activities 936 737
Returns on investment and servicing of
finance
Interest received 5 8
Interest paid (3) (40)
Finance lease interest paid (7) (11)
(5) (43)
Taxation
UK corporation tax paid - (19)
Group relief received - 145
- 126
Capital expenditure and financial
investments
Payments to acquire tangible fixed assets (230) (614)
Receipts from sales of tangible fixed 3 900
assets
(227) 286
Acquisitions and disposals
Purchase of business (175) (175)
Payment of demerger costs - (81)
(175) (256)
Net cash inflow before financing 529 850
Financing
Purchase of own ordinary shares (79) (404)
Capital element of finance leases (56) (91)
Loan note repayments (16) (15)
Net cash outflow from financing (151) (510)
Increase in cash 378 340
Reconciliation of operating profit/(loss) to net cash inflow from operating
activities
Year ended Year ended
31 December 2002 31 December 2001
#'000 #'000
Operating profit/(loss) 542 (31)
Depreciation 327 294
Gain on sale of fixed assets (2) -
Decrease in stocks 86 350
Decrease in debtors 97 335
Decrease in creditors (114) (211)
Net cash inflow from operating activities 936 737
Notes to Accounts
1. Basis of preparation
The financial information set out in this announcement does not constitute
the Group's statutory financial statements for the years ended 31 December
2002 and 31 December 2001.
The financial information for the year ended 31 December 2001 has been
extracted from the audited statutory financial statements for that year
which include an unqualified audit report and have been filed with the
Registrar of Companies in Jersey. The financial information for the year
ended 31 December 2002 has been extracted from the audited financial
statements of the Group for the year ended 31 December 2002 which were
approved by the Board of Directors on 5 March 2003.
2. 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 year.
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 year.
Year ended Year ended
31 December 2002 31 December 2001
Weighted average number of ordinary shares in issue (No.) 24,672,626 25,762,555
Dilutive potential ordinary shares: Employee share options 138,620 -
Profit after tax (#) 484,000 291,000
Basic earnings per share - pence per share (p) 1.96p 1.13p
Diluted earnings per share - pence per share (p) 1.95p 1.13p
3. Annual report
Copies of this announcement are available from the Company Secretary. Copies of
the Annual Report for the year ended 31 December 2002 will be posted to
shareholders in the week commencing 10 March 2003 and will be available at the
registered office of the Company, Pirouet House, Union Street, St Helier, Jersey
JE1 3WF or alternatively on our website www.stanleygibbons.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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