Stanley Gibbons Group PLC Trading Update (2534J)

TIDMSGI

RNS Number : 2534J

Stanley Gibbons Group PLC

02 April 2015

For release at 7am on Thursday 2 April 2015

The Stanley Gibbons Group plc

("Stanley Gibbons" or the "Group")

Trading Update

Before entering its close period, the Board of Stanley Gibbons provides an update to the market on its estimated results for the preceding financial year ended 31 March 2015, and a trading outlook for the current year.

Year ended 31 March 2015 trading results

The Board expects that the Group's sales and profitability for the year ended 31 March 2015 will show significant growth compared to the prior year as a result of the contribution from recent acquisitions. However, it is expected that results will be materially below current market expectations because a number of anticipated high value sales within the Group's retail business were not completed in the run up to the year end. The Board now expects a number of these sales to progress to completion within the first half of the current financial year.

Online developments

Our online technical development projects, which are focused on launching a global collectibles online trading platform, have progressed in line with plan in the second half of the financial year. The "hard launch" of the new website is scheduled for launch in May 2015, slightly behind our original scheduled date of March 2015.

Following launch of the online marketplace in May, the implementation of our detailed marketing and commercialisation plan is aimed to deliver material growth in Gross Merchandise Value ("GMV") in the current financial year and beyond.

Mallett acquisition

The Company successfully completed the acquisition of Mallett plc ("Mallett") on 20 October 2014 for a total cash consideration of GBP8.8 million, excluding deal costs, together with net debt in the Mallett business of GBP1.4m.

The contribution from Mallett since acquisition has been in line with expectations. In particular, we have made strong progress in delivering on the short term strategy to reduce its stock levels and generate cash.

The integration of Mallett within our Interiors business has already resulted in the delivery of some material rationalisation cost saving benefits and enabled us to secure a number of major auction consignments including three "single owner" properties and "The Pete Waterman collection of Historic Model Locomotives", which goes under the hammer on 16 April 2015.

Balance Sheet

As a result of the advantage taken in 2015 from a number of exceptional opportunities to purchase high value quality collections, the Group has a significant unrealised profit within its stockholding of rare collectibles at the year end.

The quality of our stockholding provides the opportunity to deliver growth in sales and profits in the current year.

Current trading and outlook

The Board believe that the Group has opportunities to grow revenues and profits materially in the current financial year with focus principally on the following areas:

1. Launch of online marketplace and implementation of marketing and commercialisation plan to achieve material growth in online GMV

2. Focus on realising returns from the sale of existing stock of high value rarities to new and existing high net worth clients

3. Continue to integrate our recent acquisitions with improved Group customer database management to more fully realise cross selling benefits

4. Progression of principal strategic opportunity behind recent acquisitions to become a global auction house with online auction platform for fine and decorative arts, collectibles and other valuables

The Group has made two key Senior Executive appointments towards the end of the financial year to support the implementation of the business plan being a Group Marketing Director and Group Commercial Director. These Group level appointments will bolster the team in managing the on-going integration work, identifying operational efficiency improvements with relevant cost synergies and the commercialisation of our online marketplace.

The market for rare collectibles and fine and decorative arts remains buoyant and our outlook on the future of the market remains positive. As a result, and together with the clear and tangible benefits from the successful implementation of our strategy, the Directors remain confident in the long term profit growth potential of the Group.

Martin Bralsford, Chairman commented:

"Although disappointed by our failure to deliver the high value sales in 2014/15 necessary to meet market expectations, the Board is satisfied with the progress which has been made in the past year. We are delivering on our long term strategic objectives, which have the potential to transform both the business and the collectibles market as a whole.

Following two years of substantial investment, our long anticipated online development plans are finally reaching fruition in May.

The Board looks forward to realising continued value from recent acquisitions made together with generating substantial growth in online revenues in the current year."

For further information, contact:

 
 The Stanley Gibbons Group plc 
 Michael Hall, Chief Executive    +44 (0) 1534 766711 
 
 Peel Hunt LLP, NOMAD/Broker 
 Dan Webster/Richard Brown        +44 (0) 20 7418 8900 
 
 Tavistock 
 Lulu Bridges/Niall Walsh         +44 (0) 20 7920 3150

This information is provided by RNS

The company news service from the London Stock Exchange

END

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