TIDMSGI
RNS Number : 2104L
Stanley Gibbons Group PLC
08 August 2013
THE STANLEY GIBBONS GROUP PLC
FOR IMMEDIATE RELEASE 8 August 2013
THE STANLEY GIBBONS GROUP PLC ("the Company" or "the Group")
Interim Results for the six months ended 30 June 2013
The Company today announces its interim results for the six
months ended 30 June 2013.
Key Financial Highlights
-- Sales up 17% to GBP17.2m (2012: GBP14.7m)
-- Total revenues generated online of GBP1.2m, up 16%
-- Trading profits* up 9% to GBP2.3m (2012: GBP2.1m)
-- Investment in online developments expensed to the profit and
loss account in the period of GBP0.56m (2012: GBP0.13m)
-- Adjusted profit before tax** of GBP1.8m (2012: GBP2.0m)
-- Adjusted earnings per share of 5.58p (2012: 7.23p)
-- Revenue derived from outside of UK represented 61% of total revenue in period (2012: 47%)
-- Interim dividend declared of 3.00p per share (2012: 2.75p),
up 9%, (payable on 30 September 2013 to all holders on the Register
at the close of business on 16 August 2013)
-- Cash balances increased by GBP1m in the six months ended 30 June 2013 to GBP7.7m
-- Stock at 30 June 2013 stated at historic cost of GBP21.5m (30
June 2012: GBP24.5m) sufficient to deliver future organic growth
from core trading activities
*Excludes investment on internet development, exceptional
operating costs and actuarial accounting adjustments
**Excludes exceptional operating costs and actuarial accounting
adjustments
Key Operational Highlights
-- The work to integrate our existing online services with the
bidStart platform to create a global online collectibles trading
platform is progressing in line with plan
-- Substantial progress in achieving our primary objective for
the first half of the year in building the team and expertise
required to deliver on our technical software development projects
and online marketing plans
-- New office in Singapore opened at the end of April and
trading profitably only 3 months after opening
-- Auction business delivered an improved performance with
revenues up by 13% as we continue to make solid progress in
developing the Stanley Gibbons auction services to their full
potential
-- Secured another seven-figure highly prestigious and
internationally recognised collection of early Great Britain postal
history in the first half, which will assist in supporting the
demand we are currently experiencing from both our investment
clients and the rising number of high net worth collectors
Outlook
-- Primary focus for the second half is to deliver on the Group's online strategy
-- Immediate opportunity to deliver short term growth from core
trading operations through converting into sales the investment
made in recent years to build an exceptional stockholding of rare
collectibles
-- Continued interest from investors seeking diversification
with rare collectibles representing an attractive option as a
tangible asset and a track record of delivering long term stable
growth
-- Increased focus on the international development of our
brand, which has delivered positive returns to date and has the
added benefit of ensuring that our profitability is not dependent
on any one geographical region
-- Commemorative products celebrating the birth of the "Royal
Baby" will assist performance in the second half of the year
Martin Bralsford, Chairman, commented:
"Group trading performance was strong in the first half of 2013,
with a 17% increase in revenues and a 9% increase in trading
profits.
The net investment in our online developments expensed to the
profit and loss account in the period of GBP0.56m was financed by
the fundraising of GBP6m completed in November last year and hence
does not have any impact on the underlying trading performance of
the Group. Consequently, the increase of 9% in the interim dividend
declared is in line with the growth in underlying earnings and
reflects the continued confidence your Board has in the Group's
future prospects.
This is an exciting time for the Stanley Gibbons Group as we
embark on a strategy that seeks to transform a traditional
respected brand into an exciting online business, whilst retaining
and building on our core brand strengths and competitive
advantages."
For further information, contact:
The Stanley Gibbons Group plc
Michael Hall, Chief Executive +44 (0) 1534 766711
Donal Duff, Chief Operating Officer and Finance Director
Peel Hunt LLP, NOMAD/Broker
Dan Webster/Matthew Armitt/Richard Brown +44 (0) 20 7418 8900
Chairman's Statement
Introduction
The Group delivered a strong trading performance for the first
half of the year, showing a 17% increase in turnover and a 9%
increase in trading profits. In line with plan, we have increased
our investment in the development of our websites towards building
a global online collectibles trading community. This investment,
which is expected to deliver substantial returns in future
accounting periods, means that reported profit before tax was lower
than the prior period.
The Balance Sheet of the Group at 30 June 2013 shows
considerable strength with cash balances of GBP7.7m, representing
an increase of GBP1m in net cash in the first six months despite
the considerable investment in our online development strategy
during this period. In addition, the Group holds inventories of
rare collectibles stated at a historic cost of GBP21.5m (31
December 2012: GBP20.7m). Our inventory levels provide the base
from which to enable the delivery of continued growth in core
trading activities in the second half of the year.
Financials
Turnover for the half year to 30 June 2013 was GBP17.2m, up 17%
on the prior period.
Trading profits were GBP2.3m for the half year (2012: GBP2.1m),
up 9%. The net investment in our online developments expensed to
the profit and loss account in the period of GBP0.56m (2012:
GBP0.13m), was financed by the fundraising of GBP6m in November
last year and hence does not have any impact on the underlying
trading performance of the Group.
Profit before tax, after charging internet development costs,
but before exceptional charges and actuarial accounting
adjustments, was GBP1.8m (2012: GBP2m) reflecting the increased
investment in the development of our online strategy in the
period.
Adjusted earnings per share, excluding exceptional costs and
actuarial accounting adjustments, were 5.58 pence (2012: 7.23
pence). Basic earnings per share were 3.59 pence (2012: 6.07
pence).
Dividend
Your Board is pleased to declare an increase in the interim
dividend, in line with the growth in underlying earnings, of 9% to
3.00p (2012: 2.75p) per share. The interim dividend is payable on
30 September 2013 to holders of Ordinary Shares on the Register at
the close of business on the record date of 16 August 2013.
The Company paid a final dividend of 3.75p per share in respect
of the year ended 31 December 2012, on 20 May 2013 with a cash
outflow of GBP1.1m.
Key Operational Highlights and Outlook
Online
Total online sales for the first half of the year were GBP1.2m,
representing 7% of total revenue. A significant reorganisation of
our e-commerce team was completed in the first half resulting in
the creation of a dedicated e-commerce and online marketing team
working from our new offices in Jersey, Channel Islands.
The work to integrate our existing online services with the
bidStart platform to create a global online collectibles trading
platform is progressing in line with plan. We have made substantial
progress in achieving our primary objective for the first half of
the year in building the team and expertise required to deliver on
our technical software development projects and online marketing
plans.
We are currently replacing most of our existing IT support
systems in the business to create a fully integrated solution
required to enable us to deliver an exceptional customer service
online.
Overseas development
Our office in Hong Kong contributed sales of GBP1.1m (2012:
GBP1.3m) and profits of GBP0.2m (2012: GBP0.3m) in the first half.
Trading in the prior period however included one exceptional sale
and overall the Hong Kong office continues to deliver a positive
contribution in line with our expectations.
We opened a new office in Singapore at the end of April this
year enhancing our presence in the emerging collectibles market in
the Far East. The Singapore office did not generate any revenues in
the first half as it takes time to build new client relationships.
Sales in the month of July were very encouraging with the new
office trading profitably only 3 months after opening.
After extensive market research and testing in Brazil, we have
decided not to proceed at this time with opening an office in Rio
de Janeiro. We have, however, made some useful contacts in this
region and built an increased awareness of the Stanley Gibbons
brand and services as a result of our efforts, which we expect will
deliver future benefits. The associated costs of GBP0.1m have been
expensed in the current accounting period.
We proceed cautiously in developing opportunities within the US
stamp market and generated our first sales of US rare stamps in the
period contributing new revenue of GBP0.2m. The US market remains a
large and important geographical region and we will continue with
our efforts to develop expertise and finding suitable trading
partners to work with in the US.
Auctions
Our auction business delivered an improved performance with
revenues up by 13% as we continue to make solid progress in
developing the Stanley Gibbons auction services to their full
potential.
Our focus remains on developing partnerships internationally to
increase acquisitions of high profile collections at the same time
as delivering the best possible realisations for those clients
choosing Stanley Gibbons as their preferred partner.
We expect our auction brand and services to continue to obtain
increased recognition as prospective clients become increasingly
aware of the value that Stanley Gibbons can bring to their
collection in light of our international reach and database of high
net worth clients, which have grown considerably as a result of the
promotion of our investment services in recent years.
Other collectibles
Sales of rare coins and military medals in the period were
slightly down at GBP0.6m (2012: GBP0.8m). The market for rare
coins, in particular, is a key one for us because, although we
currently only trade at modest levels, overall it is a large
collectibles market. Our ability to develop into the rare coin
market is restricted by the need to possess specialist expertise
and, as such, we will look to add expertise over time to develop
our offering further.
The Benham Group contributed sales of GBP1.2m (2012: GBP1.6m) in
the first half. Sales in the prior period benefited from
commemorative collectibles related to the Queen's Diamond Jubilee
and the London 2012 Olympics. Despite lower sales, profit
contribution was at a similar level to the prior period as a result
of improved gross margins and tight control over costs.
Commemorative products celebrating the birth of the "Royal Baby"
will assist performance in the second half of the year.
Investment services
The demand for premium quality rare collectibles remains strong
with new client recruitment predominantly coming from the results
of our international marketing and PR campaigns, together with
networking through appropriate philatelic and alternative
investment events. Rare collectibles are increasingly being seen as
legitimate additions to traditional asset classes for those looking
to diversify their wealth.
We secured another seven-figure, highly prestigious and
internationally recognised collection of early Great Britain postal
history in the first half, which will assist in supporting the
demand we are currently experiencing from both our investment
clients and the rising number of high net worth collectors,
particularly from new emerging overseas markets.
Board
I am delighted to welcome Simon Perree to the Board as an
independent non-executive director, who joined us at the AGM on 1
May 2013. Simon co-founded Play.com in 1998 and this business
subsequently became the largest private online retailer in the UK
with over 7 million customers and a catalogue of over 8 million
products. After selling Play.com in 2011, Simon invested in several
online businesses and he brings to the Board a wealth of experience
to support our online strategy. Following this appointment, the
Board is now composed of a majority of non-executive directors in
line with best practice.
Martin Bralsford, Chairman
7 August 2013
Operating Review
6 months 6 months 6 months 6 months Year ended Year ended
to 30 June to 30 to 30 to 30 31 December 31 December
2013 June 2013 June 2012 June 2012 2012 2012
(restated)
Sales Profit Sales Profit Sales Profit
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Philatelic trading and
retail operations 13,211 3,108 10,302 2,552 26,341 7,099
Publishing and philatelic
accessories 1,506 353 1,416 305 3,148 782
Dealing in other collectibles 2,401 354 2,967 464 6,032 1,116
Corporate overheads - (1,492) - (1,184) - (2,615)
Net finance income/(charges) - 5 - (11) - (38)
Trading sales and profits 17,118 2,328 14,685 2,126 35,521 6,344
------------------------------ ----------- ---------- ---------- ----------- -------------- ------------
Internet development 124 (559) 27 (134) 78 (302)
------------------------------ ----------- ---------- ---------- ----------- -------------- ------------
Adjusted sales and profit
before tax 17,242 1,769 14,712 1,992 35,599 6,042
Actuarial accounting
adjustments - (205) - (183) - (368)
Finance charges related
to pensions - (27) - (27) - (53)
Exceptional operating
costs - (410) - (110) - (349)
------------------------------ ----------- ---------- ---------- ----------- -------------- ------------
Group total sales and
profit before tax 17,242 1,127 14,712 1,672 35,599 5,272
------------------------------ ----------- ---------- ---------- ----------- -------------- ------------
Overview
Group turnover for the six months ended 30 June 2013 was GBP2.5m
(17%) higher than the same period last year. Underlying trading
profits were GBP2.3m, excluding investment on internet development,
actuarial accounting adjustments and exceptional costs, and were up
9% on the same period last year.
Profit before tax for the six months ended 30 June 2013 was
GBP1.1m (2012: GBP1.7m). The reduction in statutory profits
reflects the increased net investment in online developments of
GBP0.4m, which was in line with plan, together with an increase of
GBP0.3m in exceptional charges incurred in the period.
Adjusted earnings per share were 5.58p (2012: 7.23p), lower by
23%. Basic earnings per share were 3.59p (2012: 6.07p).
The gross margin percentage for the six months ended 30 June
2013 was 42.7% compared to 44.5% in the same period last year. The
gross margin in the prior period benefited from a write back made
against the provision for investment products sold in previous
accounting periods with guaranteed minimum returns that remained
outstanding of GBP0.2m. Excluding the impact of the movement on the
contract provision in both accounting periods, the gross margin was
consistent at 43%.
Overheads were GBP1.1m (23%) higher than the prior period. The
most significant increases in overheads included:
-- Increased expenditure in development of online opportunities (GBP0.5m)
-- Costs incurred in development of new overseas offices (GBP0.1m)
-- Increased marketing and PR costs in support of revenue growth achieved (GBP0.1m)
-- Costs of enlarged senior management team to support future
expansion plans and higher performance related bonuses paid in the
period (GBP0.3m)
Philatelic Trading and Retail Operations
Philatelic trading and retail sales were GBP2.9m (28%) higher
than the same period last year with profit contribution up by
GBP0.6m (22%). Philatelic trading performance in each accounting
period is generally most influenced by the value of sales made to
key high net worth clients. The largest client in the six months
ended 30 June 2013 accounted for sales of GBP2.8m (2012:
GBP2m).
Sales and profit growth in philatelic trading, together with the
recruitment of new high net worth clients, came predominantly from
our expansion into overseas markets supported by our shift in
marketing and sales focus into those more lucrative markets. Sales
derived from outside of the United Kingdom in the six months ended
30 June 2013 represented 61% of total sales compared to 47% in the
prior period.
Demand for Chinese rare stamps remains strong, although sales in
the first half of this year were restricted by a lack of available
supply of material of the right quality. Sales of Chinese rare
stamps in the six months ended 30 June 2013 were GBP0.9m (2012:
GBP1.4m). A recent study undertaken reported that the values of a
sample of 200 rare, 'investment grade' Chinese stamps increased in
value by 36% in the year passed and have shown a compound annual
growth rate of 11.6% between 1989 and 2012.
Sales in the current period included GBP0.2m of rare US stamps
representing our first entry into this market. We continue to
develop our product offering internationally whilst never straying
from our core buying principles, which is to focus on collectibles,
which:
1. Are of sufficient rarity
2. In "premium grade" condition
3. With clear recorded provenance and authenticity
4. In liquid areas of the market (i.e. where there are a healthy
number of potentially interested collectors)
5. At the right price, seeking to incorporate a significant
margin of safety in the price paid against market value
This buying model protects both our shareholders in terms of the
potential risks of holding inventory and our investment clients in
ensuring that they acquire only the right quality of collectibles
at a fair price.
Publishing and Philatelic Accessories
Publishing and philatelic accessory sales were GBP0.1m (6%)
higher than the prior period with profit contribution up by 16%.
Sales growth achieved in our printed publications, albums and
accessories included increased sales made from our website and
improvements to the product range.
As a lower growth area of the Group, we continue to concentrate
on improving gross margins, reducing inventory levels and
exercising tight controls over costs. We thus ensure that our
return on capital improves in this area of the business, whilst we
see the key growth opportunities in the future coming from the
monetising of our catalogue information online.
Dealing in Other Collectibles
Sales of other collectibles were GBP0.6m (19%) lower than the
prior period with profit contribution down by GBP0.1m (24%).
Dealing in other collectibles can be further analysed as
follows:
6 months 6 months 6 months 6 months Year ended Year ended
to 30 June to 30 June to to 31 December 31 December
2013 2013 30 June 30 June 2012 2012
2012 2012
Sales Profit Sales Profit Sales Profit
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Dealing in autographs,
historical documents,
memorabilia and records 594 22 593 65 1,615 150
Dealing in rare coins
and military medals 633 91 799 146 1,045 239
Benham first day covers
and other collectibles 1,174 241 1,575 253 3,372 727
------------------------- ----------- ----------- -------- -------- -------------- ------------
Total sales and profit
contribution 2,401 354 2,967 464 6,032 1,116
------------------------- ----------- ----------- -------- -------- -------------- ------------
Autographs, historical documents, memorabilia and record sales
were unchanged from the prior period at GBP0.6m, with profit
contribution remaining immaterial. This part of our business is
currently undergoing a period of change and future anticipated
growth is dependent on the technical developments scheduled for
completion by the end of this year to deliver a professional online
auction service where we see the most significant growth
potential.
Sales of rare coins and military medals were down 21% at GBP0.6m
with a profit contribution of GBP0.1m. The lower sales reflect
reduced buying activity in this area rather than demand, which
remains strong, as we focus on other growth opportunities. The
market for rare coins, however, is an important strategic area of
growth for the Group in the future and is dependent on developing
the necessary internal specialist expertise, which in itself is a
scarce commodity.
Benham first day covers and other collectibles sales were down
GBP0.4m (25%) although profit contribution was only 5% lower
compared to the prior period. Sales in the prior period included
GBP0.4m of London 2012 Olympics commemorative products to our trade
distributor in China. Prior period sales also benefited from
commemorative products in respect of the Queen's Diamond
Jubilee.
Despite lower sales levels, profit contribution from the Benham
Group remained consistent, benefiting from improved gross margins
and reduced overheads. Opportunities exist in the second half to
develop increased sales from commemorative products around the
birth of the "Royal Baby".
Corporate Overheads
Corporate overheads were GBP0.3m (26%) higher than the same
period last year. The higher corporate overheads reflect higher
performance related bonuses paid to the executive and senior
management team, together with the investment in growing the
necessary support teams in the Group Marketing department and
Finance function to support the successful implementation of our
growth strategy.
Internet Development
Sales reported within this division relate to online commissions
from third parties through our new website following the
acquisition of bidStart and online subscription revenues. Online
e-commerce sales, managed by the new dedicated team in our offices
in Jersey, Channel Islands, are reported within the respective
trading departments. Total revenues derived from online activities
can be summarised as follows:
6 months 6 months % change
to 30 June to 30 June
2013 2012
Sales Sales
GBP000 GBP000 %
E-commerce - trading
of own products 594 634 (6%)
Sales of rare collectibles
to investment clients 488 375 30%
Online commissions and
subscription revenue 124 27 359%
--------------------------- ----------- ----------- --------
Total online revenues 1,206 1,036 16%
--------------------------- ----------- ----------- --------
Sales of our own products through www.stanleygibbons.com and
www.frasersautographs.com were slightly down on the same period
last year. This reflects the short term impact of the significant
restructuring of our e-commerce team, which took place in the first
half, resulting in the development of a new dedicated e-commerce
centre in our offices in Jersey. It is expected that the benefits
of the restructuring will become evident later in the year.
We recruited new investment clients, sourced directly from the
investment section of our website, generating revenue of GBP0.5m in
the first half of the year. Our e-commerce team are currently
working on a substantial re-build of this part of the website,
scheduled for re-launch later this year with the aim of increasing
new high net worth client recruitment from this source through a
more professional presentation online of our investment
services.
Online commissions and subscription revenue predominantly relate
to third party commissions received through our recently acquired
online collectibles trading platform, www.bidStart.com. The work to
integrate our existing online services with the bidStart platform
creating a global online collectibles trading platform, together
with completion of the technical developments to improve online
services, will provide opportunities to substantially grow revenues
from this source during the course of next year.
Overheads of GBP0.7m (2012: GBP0.2m) were expensed in the period
with the increase relating predominantly to the salary costs of our
enlarged development team in Raleigh, US and e-commerce and online
marketing team in Jersey, Channel Islands.
Actuarial Accounting Adjustments
Actuarial accounting adjustments relate to accounting charges in
respect of our defined benefit pension scheme and IFRS share option
charges totalling GBP0.2m (2012: GBP0.2m).
Exceptional Operating Costs
Exceptional operating costs incurred in the period of GBP0.4m
(2012: GBP0.1m) included GBP0.2m in respect of restructuring and
redundancy costs and GBP0.2m in respect of legal costs incurred in
connection with the Company's defined benefit pension scheme as
detailed in note 8.
Cashflow
Cash generated from operating activities of GBP2.2m (2012: cash
used of GBP1.0m) is after an increase in the investment in our
inventories of rare collectibles of GBP0.8m (2012: GBP3.9m). The
increase in the level of inventories held at the end of the half
year relates principally to the purchase of an exceptional
collection of early Great Britain postal history, which will
support anticipated demand and sales in the second half of the
year.
The increase in cash during the period of GBP1.0m (2012:
decrease of GBP5.0m) is after dividends paid in the period of
GBP1.1m (2012: GBP0.9m).
Strategic Focus and Opportunities
Our primary focus for the second half is to deliver on the key
aspect of the Group's online strategy, where we see exceptional
growth opportunities for the Group based on the size of the market
and the obvious need for the emergence of a market leader to
consolidate the online collectibles market.
The objective for the remainder of the year is therefore in
delivering the technical developments required to develop the
global online collectibles trading platform, together with the
introduction of other exceptional online services for the
collecting community. During 2014, focus will move towards the roll
out of our online services through the implementation of an
international marketing and PR programme, during which time we
would expect to begin to see more significant returns from our
investment.
Our immediate opportunity to deliver short term growth from core
trading operations will be to convert into sales the investment
made in recent years to build an exceptional stockholding of rare
collectibles. Demand for premium quality rare collectibles remains
strong supported by the rising number of high net worth collectors,
particularly from emerging overseas markets. Furthermore, we expect
to see continued interest from investors seeking diversification
with rare collectibles representing an attractive option as a
tangible asset and a track record of delivering long term stable
growth.
We intend to continue to focus on the international development
of our brand, which has delivered positive returns to date and has
the added benefit of ensuring that our profitability is not
dependent on any one geographical region. In the short term, we aim
to ensure that our new office in Singapore delivers returns similar
to that already achieved from our office in Hong Kong. At the same
time, we continue to investigate and promote our services in other
overseas markets, the performance of which will dictate whether we
would benefit from the opening of new international offices where
opportunities exist.
Michael Hall
Chief Executive
7 August 2013
Condensed statement of comprehensive income
6 months to 6 months Year ended
to
30 June 30 June 31 December
2013 2012 2012
(restated)
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
----------- ----------- -----------
Revenue 3 17,242 14,712 35,599
Cost of sales (9,875) (8,161) (20,031)
----------------------------------- ----- ----------- ----------- -----------
Gross Profit 7,367 6,551 15,568
Administrative expenses before
defined benefit pension service
costs and exceptional operating
costs (2,094) (1,611) (3,072)
Defined benefit pension service
cost (130) (130) (260)
Exceptional operating costs (410) (110) (349)
----------------------------------- ----- ----------- ----------- -----------
Total administrative expenses (2,634) (1,851) (3,681)
----------------------------------- ----- ----------- ----------- -----------
Selling and distribution expenses (3,584) (2,990) (6,524)
----------------------------------- ----- ----------- ----------- -----------
Operating Profit 1,149 1,710 5,363
Finance income 8 1 3
Finance costs (30) (39) (94)
----------------------------------- ----- ----------- ----------- -----------
Profit before tax 1,127 1,672 5,272
Taxation 4 (97) (138) (389)
----------------------------------- ----- ----------- ----------- -----------
Profit for the period 1,030 1,534 4,883
Other comprehensive income:
Items that will not be classified
subsequently to profit or loss
Actuarial losses recognised
in the pension scheme - - (237)
Tax on actuarial losses recognised
in the pension scheme - - 21
Other comprehensive income for
the period, net of tax - - (216)
----------------------------------- ----- ----------- ----------- -----------
Total comprehensive income for
the period 1,030 1,534 4,667
----------------------------------- ----- ----------- ----------- -----------
Basic earnings per Ordinary
Share 5 3.59p 6.07p 18.94p
Diluted earnings per Ordinary
Share 5 3.52p 5.95p 18.55p
----------------------------------- ----- ----------- ----------- -----------
All profit and total comprehensive income is attributable to the
owners of the parent; there are no non-controlling interests.
Condensed statement of financial position
30 June 30 June 31 December
2013 2012 2012
(restated)
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
----------- ----------- -----------
Non-current assets
Intangible assets 1,622 1,117 1,723
Property, plant and equipment 2,256 2,074 2,145
Deferred tax asset 735 732 735
Trade and other receivables 262 862 229
4,875 4,785 4,832
------------------------------- ----------- ----------- -----------
Current assets
Inventories 21,489 24,463 20,728
Trade and other receivables 8,005 8,298 11,668
Cash and cash equivalents 7,742 - 6,766
------------------------------- ----------- ----------- -----------
37,236 32,761 39,162
------------------------------- ----------- ----------- -----------
Total assets 42,111 37,546 43,994
------------------------------- ----------- ----------- -----------
Current liabilities
Trade and other payables 5,906 6,867 8,179
Bank overdraft - 1,808 -
Borrowings 63 250 188
Current tax payable 135 287 169
------------------------------- ----------- ----------- -----------
6,104 9,212 8,536
------------------------------- ----------- ----------- -----------
Non-current liabilities
Trade and other payables - 1,628 -
Retirement benefit obligations 3,242 2,843 3,161
Borrowings - 63 -
Deferred tax liabilities 225 200 233
Provisions 402 456 360
------------------------------- ----------- ----------- -----------
3,869 5,190 3,754
------------------------------- ----------- ----------- -----------
Total liabilities 9,973 14,402 12,290
------------------------------- ----------- ----------- -----------
Net assets 32,138 23,144 31,704
------------------------------- ----------- ----------- -----------
Equity
Called up share capital 287 253 284
Share premium account 11,541 5,307 11,137
Shares to be issued 209 - 209
Share compensation reserve 535 406 460
Capital redemption reserve 38 38 38
Revaluation reserve 254 254 254
Retained earnings 19,274 16,886 19,322
------------------------------- ----------- ----------- -----------
Equity shareholders' funds 32,138 23,144 31,704
------------------------------- ----------- ----------- -----------
Condensed statement of changes in equity
Called Share Shares Capital
up share premium to be Share compensation Revaluation redemption Retained
capital account issued reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2013 284 11,137 209 460 254 38 19,322 31,704
Profit and
total
comprehensive
income for
the period - - - - - - 1,030 1,030
Dividends - - - - - - (1,078) (1,078)
Share options
exercised 3 404 - - - - - 407
Cost of share
options - - - 75 - - - 75
At 30 June
2013 287 11,541 209 535 254 38 19,274 32,138
-------------- ------------------- --------------- ------- -------------------- ------------------ ------------------- ------------------- -------
At 1 January
2012
(restated) 253 5,285 - 352 254 38 16,236 22,418
Profit and
total
comprehensive
income for
the period - - - - - - 1,534 1,534
Dividends - - - - - - (884) (884)
Share options
exercised - 22 - - - - - 22
Cost of share
options - - - 54 - - - 54
At 30 June
2012
(restated) 253 5,307 - 406 254 38 16,886 23,144
-------------- ------------------- --------------- ------- -------------------- ------------------ ------------------- ------------------- -------
At 1 January
2012
(restated) 253 5,285 - 352 254 38 16,236 22,418
Profit for the
year - - - - - - 4,883 4,883
Actuarial loss
on
pension
scheme net
of deferred
tax - - - - - - (216) (216)
Total
comprehensive
income for
the year - - - - - - 4,667 4,667
Dividends - - - - - - (1,581) (1,581)
Cost of share
options - - - 108 - - - 108
Share options
exercised - 78 - - - - - 78
Deferred
consideration - - 209 - - - - 209
Net proceeds
from
issue of
ordinary
share capital 31 5,774 - - - - - 5,805
At 31 December
2012 284 11,137 209 460 254 38 19,322 31,704
-------------- ------------------- --------------- ------- -------------------- ------------------ ------------------- ------------------- -------
Condensed statement of cash flows
6 months 6 months Year ended
to to
30 June 30 June 31 December
2013 2012 2012
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
------------- ------------- -----------
Cash generated from/(used
in) operations 6 2,209 (3,556) 1,007
Interest paid (3) (12) (41)
Taxes paid (140) (234) (552)
------------------------------- ----- ------------- ------------- -----------
Net cash generated from/(used
in) operating activities 2,066 (3,802) 414
------------------------------- ----- ------------- ------------- -----------
Investing activities
Purchase of property, plant
and equipment (253) (176) (368)
Purchase of intangible assets (49) (74) (138)
Acquisition of business assets - - (382)
Interest received 8 1 3
------------------------------- ----- ------------- ------------- -----------
Net cash used in investing
activities (294) (249) (885)
------------------------------- ----- ------------- ------------- -----------
Financing activities
Dividends paid to company
shareholders 7 (1,078) (884) (1,581)
Repayment of borrowings (125) (125) (250)
Net proceeds from issue of
ordinary share capital 407 22 5,838
Net cash (used in)/generated
from financing activities (796) (987) 4,007
------------------------------- ----- ------------- ------------- -----------
Net increase/(decrease) in
cash and cash equivalents 976 (5,038) 3,536
------------------------------- ----- ------------- ------------- -----------
Cash and cash equivalents
at start of period 6,766 3,230 3,230
------------------------------- ----- ------------- ------------- -----------
Cash and cash equivalents
at end of period 7,742 (1,808) 6,766
------------------------------- ----- ------------- ------------- -----------
Notes to the condensed financial statements
1 Basis of preparation
The interim financial information in this report has been
prepared using accounting policies consistent with IFRS as adopted
by the European Union. IFRS is subject to amendment and
interpretation by the International Accounting Standards Board
(IASB) and the IFRS Interpretations Committee and there is an
ongoing process of review and endorsement by the European
Commission. The financial information has been prepared on the
basis of IFRS that the Directors expect to be adopted by the
European Union and applicable as at 31 December 2013.
2 Significant accounting policies
Except as described below, the accounting policies applied by
the Group in this interim report are the same as those applied by
the Group in the consolidated financial statements for the year
ended 31 December 2012.
Income tax
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
3 Segmental analysis
As outlined in the Operating Review the company has four main
business segments, operations being split between Philatelic
trading, Publishing and philatelic accessories, Other collectibles
and Internet development. This is based upon the Group's internal
organisation and management structure and is the primary way in
which the Board of Directors is provided with financial
information.
Philatelic Publishing Other Internet Unallocated Group
trading and philatelic collectibles development
accessories
Segmental GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
income statement
6 months to
30 June 2013
Revenue 13,211 1,506 2,401 124 - 17,242
Operating
costs (10,103) (1,153) (2,047) (683) (1,697) (15,683)
Exceptional
costs - - - - (410) (410)
Net finance
costs - - - - (22) (22)
------------------- ----------- ---------------- -------------- ------------- ------------ ---------
Profit/(loss)
before tax 3,108 353 354 (559) (2,129) 1,127
Tax - - - - (97) (97)
------------------- ----------- ---------------- -------------- ------------- ------------ ---------
Profit/(loss)
for the period 3,108 353 354 (559) (2,226) 1,030
------------------- ----------- ---------------- -------------- ------------- ------------ ---------
6 months to
30 June 2012
(restated)
Revenue 10,302 1,416 2,967 27 - 14,712
Operating
costs (7,750) (1,111) (2,503) (161) (1,367) (12,892)
Exceptional
costs - - - - (110) (110)
Net finance
costs - - - - (38) (38)
------------------- ----------- ---------------- -------------- ------------- ------------ ---------
Profit/(loss)
before tax 2,552 305 464 (134) (1,515) 1,672
Tax - - - - (138) (138)
------------------- ----------- ---------------- -------------- ------------- ------------ ---------
Profit/(loss)
for the period 2,552 305 464 (134) (1,653) 1,534
------------------- ----------- ---------------- -------------- ------------- ------------ ---------
Year ended
31 December
2012
Revenue 26,341 3,148 6,032 78 - 35,599
Operating
costs (19,242) (2,366) (4,916) (380) (2,983) (29,887)
Exceptional
costs - - - - (349) (349)
Net finance
cost - - - - (91) (91)
------------------- ----------- ---------------- -------------- ------------- ------------ ---------
Profit/(loss)
before tax 7,099 782 1,116 (302) (3,423) 5,272
Tax - - - - (389) (389)
------------------- ----------- ---------------- -------------- ------------- ------------ ---------
Profit/(loss)
for the year 7,099 782 1,116 (302) (3,812) 4,883
------------------- ----------- ---------------- -------------- ------------- ------------ ---------
Notes to the condensed financial statements
3 Segmental analysis (continued)
Geographical information
Analysis of revenue by origin and destination
Period ended Period ended Period ended Period ended Year ended Year ended
30 June 2013 30 June 30 June 2012 30 June 2012 31 December 31 December
Sales by destination 2013 Sales Sales by destination Sales by origin 2012 Sales 2012
by origin by destination Sales by
origin
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Channel
Islands 3,625 9,778 797 6,187 2,213 18,655
United
Kingdom 6,667 6,391 7,784 7,232 17,734 13,795
Hong Kong 939 1,073 240 1,293 1,986 3,149
Europe 906 - 799 - 2,028 -
Singapore 2,603 - 1,093 - 2,058 -
Rest of
Asia 899 - 595 - 4,913 -
North
America 788 - 768 - 1,159 -
Rest of
the
World 815 - 2,636 - 3,508 -
---------- ---------------------------------- -------------------------- ------------------------------- -------------------------------- -------------------------------- --------------------------------
17,242 17,242 14,712 14,712 35,599 35,599
---------- ---------------------------------- -------------------------- ------------------------------- -------------------------------- -------------------------------- --------------------------------
Destination is defined as the location of the customer. Origin
is defined as the country of domicile of the Group company making
the sale. All of the sales relate to external customers.
Channel Islands sales in the period ended 30 June 2013 include
GBP2,782,000 to one individual customer and Singapore sales include
GBP2,546,000 to one individual customer. Rest of the World sales in
the period ended 30 June 2012 include GBP1,987,000 to one
individual customer.
4 Taxation
The charge for taxation is based on the results for the period
and takes into account taxation deferred because of timing
differences between the treatment of certain items for taxation and
accounting purposes. Deferred tax is recognised on a full provision
basis in respect of all temporary differences which have
originated, but not reversed at the balance sheet date.
5 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.
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 6 months Year ended
to to
30 June 2013 30 June 31 December
2012 (restated) 2012
(unaudited) (unaudited) (audited)
Weighted average number of ordinary
shares in issue (No.) 28,712,342 25,269,514 25,788,461
Dilutive potential ordinary shares:
Employee share options (No.) 557,189 524,525 539,804
------------------------------------ ------------ ---------------- -----------
Profit after tax (GBP) 1,029,600 1,533,500 4,883,600
Pension service costs & finance
charge (net of tax) 157,000 157,000 236,300
Cost of share options (net of tax) 75,000 54,000 108,000
Exceptional operating costs (net
of tax) 340,000 82,000 300,200
Adjusted profit after tax (GBP) 1,601,600 1,826,500 5,528,100
------------------------------------ ------------ ---------------- -----------
Basic earnings per share - pence
per share (p) 3.59p 6.07p 18.94p
Diluted earnings per share - pence
per share (p) 3.52p 5.95p 18.55p
Adjusted earnings per share - pence
per share (p) 5.58p 7.23p 21.44p
Adjusted diluted earnings per share
- pence per share (p) 5.47p 7.08p 21.00p
------------------------------------ ------------ ---------------- -----------
304,702 shares were issued on 14 January 2013 following the
exercise of Directors and employees share options. A further 5,135
and 10,931 shares were issued following the exercise of former
employee share options on 11 February and 28 March 2013.
Notes to the condensed financial statements
6 Cash generated from operations
6 months 6 months Year ended
to to
30 June 2013 30 June 2012 31 December
2012
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Operating profit 1,149 1,710 5,363
Depreciation 142 134 255
Amortisation 150 90 184
Increase / (decrease) in provisions 97 (174) (216)
Cost of share options 75 54 108
Increase in inventories (761) (7,662) (3,927)
Decrease/ (increase) in trade
and other receivables 3,630 438 (2,299)
(Decrease) / increase in trade
and other payables (2,273) 1,854 1,539
------------------------------------ ------------ ------------ -----------
Cash generated from/(used in)
operations 2,209 (3,556) 1,007
------------------------------------ ------------ ------------ -----------
7 Dividends
6 months 6 months Year ended
to to 31 December
30 June 30 June 2012
2013 2012
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Amounts recognised as distribution
to equity holders in period:
Dividend paid 1,078 884 1,581
------------------------------------ ------------ ------------ -------------
Dividend paid per share 3.75p 3.50p 6.25p
------------------------------------ ------------ ------------ -------------
Dividend proposed but not
paid 862 695 1,066
------------------------------------ ------------ ------------ -------------
Dividend proposed per share 3.00p 2.75p 3.75p
------------------------------------ ------------ ------------ -------------
8 Prior year adjustment
During 2012 the Company instigated a process to redraft and
consolidate the Trust Deed and Rules which govern the Stanley
Gibbons Holdings PLC Pension and Assurance Scheme. This exercise
carried out by the Legal and Documentation Services Practice of the
Scheme's actuaries, Aon Hewitt and reviewed by solicitors Jones
Day, highlighted five administration issues which required
resolution.
The Company has appointed solicitors Lawrence Graham to
investigate the five issues. They have sought advice from Counsel
who has provided an opinion which concluded that there were serious
issues with two of the areas identified, (namely equalisation of
normal retiring dates and the reduction in the accrual rate) and in
their view the Company and the Trustees had good prospects of
success in claims for negligence against the Scheme's advisers for
the cost of additional Scheme liabilities.
The Company and the Trustees and their respective advisers are
still investigating the circumstances and details of the five areas
and are currently carrying out an analysis of the benefit structure
under the Scheme and how members may have been affected.
Despite the fact that the investigation and analysis is still
not completed the Company has taken a prudent view of potential
liabilities. The impact of this is that there is an increase in the
pension deficit (net of deferred tax) at 1 January 2012 of
GBP1,411,000 and a reduction in profit before tax in the period
ended 30 June 2012 of GBP115,000, reducing basic earnings per share
by 0.54p.
In terms of the legitimacy of the changes that has given rise to
this additional potential liability, the Company is pursuing a
legal action for recovery against the professional advisers
involved.
The impact of the change in assumptions at 30 June 2012 on the
statement of comprehensive income was as follows:
Comprehensive
income
GBP'000
Increase in service charges
- administration expenses (70)
Adjustment to interest cost
and return on assets (45)
Profit before tax adjustment (115)
Current year tax adjustment -
- deferred tax pensions
------------------------------ --------------
9 Further copies of this statement
Copies of this statement are being sent to shareholders and can
be viewed on the Company's website at www.stanleygibbons.com.
Further copies are available on request from: The Company
Secretary, The Stanley Gibbons Group plc, 2(nd) Floor, Minden
House, Minden Place, Jersey JE2 4WQ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GMGGRVNNGFZM
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