TIDMSGI
RNS Number : 2957R
Stanley Gibbons Group PLC
26 June 2015
THE STANLEY GIBBONS GROUP PLC
FOR IMMEDIATE RELEASE 26 June 2015
THE STANLEY GIBBONS GROUP PLC ("the Company" or "the Group")
Audited Results for the year ended 31 March 2015
The Stanley Gibbons Group plc today announced its audited
results for the year ended 31 March 2015.
Key Financial Highlights
-- Sales of GBP56.9m for the year ended 31 March 2015 (fifteen
months ended 31 March 2014: GBP51.8m)
-- Online Gross Merchandise Value ("GMV") in the year ended 31
March 2015 up 22% to GBP13.9m (fifteen months ended 31 March 2014:
GBP11.5m)
-- Gross margin for the year ended 31 March 2015 of 56.7%
(fifteen months ended 31 March 2014: 44.1%)
-- Trading profits* for the year ended 31 March 2015 of GBP8.8m
(fifteen months ended 31 March 2014: GBP7.0m)
-- Adjusted profit before tax** for the year ended 31 March 2015
of GBP7.5m (fifteen months ended 31 March 2014: GBP5.2m)
-- Adjusted earnings per share for the year ended 31 March 2015
of 12.91p (fifteen months ended 31 March 2014: 13.30p)
-- Total dividend for the year ended 31 March 2015 of 5.00p per
share (fifteen months ended 31 March 2014: 7.00p)
-- Net debt of GBP11.7m at 31 March 2015 (31 March 2014: net cash balances of GBP8.7m)
-- Stock at 31 March 2015 stated at carrying value of GBP53.8m (31 March 2014: GBP42.1m)
*Excludes investment on internet development, exceptional
operating charges, pension service and share option charges and
amortisation of customer lists
**Excludes exceptional operating charges, pension service and
share option charges and amortisation of customer lists
Key Operational Highlights
-- Successful launch of the Stanley Gibbons Online Marketplace
on 21 May 2015. With the launch of the Stanley Gibbons Marketplace,
our flagship website: www.stanleygibbons.com now offers over 5m
collectibles for sale, representing c.GBP120m in retail value from
Stanley Gibbons and over 400 trusted Marketplace vendors
-- Contribution from the recent acquisitions of Noble
Investments (UK) plc ("Noble") and Mallett plc ("Mallett") in line
with expectations
-- Trading in core philatelic dealing affected by a number of
anticipated high value sales failing to complete within the
financial year
-- Progress made in the past financial year in restructuring and
rationalisation of recent acquisitions resulting in a reduced
overall cost base to increase future profitability of combined
businesses
-- Auction business benefited from some strong realisations
being achieved from a number of single owner estate properties in
the year. Auction sales transacted exclusively online increased in
the year by 33% to over GBP8m, in line with plan
-- Advantage taken in the past financial year from a number of
exceptional opportunities to purchase high value quality
collections
Outlook
-- The quality of our stockholding provides the opportunity to
deliver growth in sales and profits in the current year
-- One of the high value sales, which failed to complete by the
year end, was completed in April 2015
-- Following the launch of the Stanley Gibbons Online
Marketplace on 21 May 2015 growth in visitor numbers and GMV has
been encouraging. We are focussed on delivering material growth in
GMV and will be in a better position to report on the performance
of our new website when our interim results are announced in
November
-- The market for rare collectibles and fine and decorative arts
remains buoyant evidenced by some high profile realisations, which
included the highest price realised for the sale of a single stamp
in June 2014, the 1c magenta from British Guiana, for $9.5m
Martin Bralsford, Chairman, commented:
"The successful launch of the Stanley Gibbons Online Marketplace
in May this year represented a key milestone towards delivery of
the Group's long term strategy. The launch marks the beginning of
our mission to provide people with the best marketplace for
collectibles, built on a community of honest and knowledgeable
collectors.
Our recent acquisitions provide the Group with a breadth and
depth of internal expert knowledge and trusted brands in their
respective fields providing the base from which to deliver on our
stated strategy to become a global auction house supported by a
professional online auction platform.
The Board therefore remains confident that the strength of the
market twinned with the expected return from the delivery of our
strategy, particularly from the commercialisation of our recently
launched Online Marketplace, provides material profit growth
potential in the current financial year and beyond."
For further information, contact:
The Stanley Gibbons Group
plc +44 (0) 1534 766711
Michael Hall, Chief Executive
Donal Duff, Chief Finance
Officer
Peel Hunt LLP, NOMAD/Broker
Dan Webster/Richard Brown/George
Sellar +44 (0) 20 7418 8900
Tavistock
Lulu Bridges/Niall Walsh/Lucia
Caprani +44 (0) 20 7920 3150
Chairman's Statement
Introduction
This Annual Report includes the audited results for the year
ended 31 March 2015. As a result of last year's change in the
Company's financial period end from 31 December to 31 March, the
prior period comparative figures relate to the audited results for
the fifteen months ended 31 March 2014.
Trading
Turnover for the twelve months ended 31 March 2015 was GBP56.9m
compared to GBP51.8m for the fifteen months ended 31 March 2014.
Trading profits, as detailed in the Operating Review, were GBP8.8m
for the year ended 31 March 2015 compared to GBP7.0m in the fifteen
months ended 31 March 2014.
The Group delivered strong growth in sales and profits as a
result of the contribution from recent acquisitions. However,
trading in core philatelic dealing was affected by a number of
anticipated high value sales failing to complete within the
financial year. Consequently, adjusted earnings per share did not
achieve the growth planned for the year.
Significant progress was made in delivering our strategic
objectives to underpin the Group's future growth potential. This
included the successful completion of the acquisition of Mallett
plc ("Mallett") on 20 October 2014 for a total cash consideration
of GBP8.6m, excluding deal costs, together with net debt in the
Mallett business of GBP1.2m.
A number of restructuring and rationalisation initiatives to
integrate our recent acquisitions should increase the future
profits of the enlarged Group. We intend to focus on our customer
database management in the current financial year to gain
cross-selling benefits across our combined total of almost 500,000
clients worldwide.
We now have breadth and depth of in-house expert knowledge and
trusted brands in their respective fields to deliver our aspiration
to become a global auction house supported by a professional online
auction platform.
The Group now has direct access to a much larger international
client base of high net worth individuals and can provide a
comprehensive service to sellers of high value estates of
decorative arts and collectibles. Our auction business benefited
from some strong realisations being achieved from a number of
single owner estate properties in the year. It was also very
encouraging to see auction sales transacted exclusively online grow
within the year by 33% to over GBP8m, in line with our plan.
A long anticipated milestone in the history of Stanley Gibbons
was reached soon after the year end on 21 May 2015 with the
successful launch of the Stanley Gibbons Online Marketplace. Our
flagship website: www.stanleygibbons.com now offers over five
million collectible items for sale, representing c.GBP120 million
in retail value from both in-house and over 400 trusted, third
party Online Marketplace vendors.
Dividend
The Board recommends a final dividend for the year ended 31
March 2015 of 1.75p per share. Together with the interim dividend
of 3.25p per share paid on 12 January 2015, the total dividend for
the year will be 5.00p per share (fifteen months ended 31 March
2014: 7.00p). The dividend is covered 2.6 times by adjusted
earnings for the year. The dividend level recommended reflects the
Board's continued commitment to returning an element of earnings to
shareholders whilst taking into account the substantial opportunity
to reinvest earnings into future growth, particularly in our online
marketplace. Subject to receiving shareholder approval at the
Annual General Meeting on 29 July 2015, the final dividend will be
paid on 17 August 2015 to shareholders on the register at the close
of business on 10 July 2015 (ex dividend date: 9 July 2015).
Our People
We are committed to providing the best service possible within
our industry, based principally on the extensive expert knowledge
of our dedicated professionals delivering customer service levels
that exceed our clients' expectations and supported by our teams of
passionate people. Our brand names, which continue to command
respect and recognition worldwide, are backed up by our growing
team of specialists and senior management, further augmenting the
quality and range of services we can offer.
I would like to thank all our employees for their hard work in
the past year and for their understanding during the recent
restructuring process.
Board Change
Ian Goldbart, executive Director stepped down from the Board on
3 February 2015. Ian was CEO of Noble Investments (UK) plc
("Noble") which was acquired by Stanley Gibbons in 2013. Noble has
subsequently been successfully integrated into Stanley Gibbons,
with the consolidation of the Baldwin's team into 399 Strand,
London, completing in late 2014. The Board is grateful to Ian for
his contribution to its deliberations during that time.
Outlook
We have taken advantage of a number of exceptional opportunities
to purchase high value quality collections, resulting in the Group
holding significant unrealised profit within its stockholding of
rare collectibles as at the year end. The quality of our
stockholding provides the opportunity to deliver growth in sales
and profits in the current year ahead.
One of the high value sales, which failed to complete by the
year end, was completed in April 2015. This, along with a strong
auction pipeline, provides some impetus for the first half
performance this year.
Following the launch of the Stanley Gibbons Online Marketplace
on 21 May 2015, we are focussed on delivering material growth in
Gross Merchandise Value ("GMV"). We will be in a better position to
report on the performance of our new website in more detail when
our interim results are announced in November.
The market for rare collectibles and fine and decorative arts
remains buoyant evidenced by some high profile realisations, which
included the highest price realised for the sale of a single stamp
in June 2014, the 1c magenta from British Guiana, for $9.5m. The
Board therefore remains confident that, given the continuing
strength of the market twinned with the expected return from the
sound execution of our strategy, material profit growth is
achievable in the current financial year and beyond.
Martin Bralsford, Chairman
25 June 2015
Operating Review
12 months 15 months 12 months
to to to
31 March 31 March 31 December
2015 2015 2014 2014 2012 2012
Sales Profit Sales Profit Sales Profit
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
restated
Philatelic trading
and retail operations 23,866 6,679 33,413 7,628 26,341 7,099
Publishing and philatelic
accessories 2,976 795 3,617 764 3,148 782
Coins and military
medals 11,882 3,073 6,981 1,225 1,045 239
Dealing in other collectibles 17,949 1,707 7,480 982 4,987 877
Corporate overheads - (3,228) - (3,653) - (2,615)
Finance charges - (254) - 33 - (38)
------------------------------- -------- -------- -------- -------- -------- ---------
Trading sales and
profits 56,673 8,772 51,491 6,979 35,521 6,344
Internet development 192 (1,321) 281 (1,822) 78 (302)
------------------------------- -------- -------- -------- -------- -------- ---------
Adjusted sales and
profit before tax 56,865 7,451 51,772 5,157 35,599 6,042
Amortisation of customer
lists and brands - (360) - (127) - -
Pension service and
share option charges - (518) - (563) - (368)
Finance charges related
to pensions - (170) - (173) - (170)
Exceptional operating
charges - (3,255) - (2,081) - (349)
Group total sales
and profit before
tax 56,865 3,148 51,772 2,213 35,599 5,155
------------------------------- -------- -------- -------- -------- -------- ---------
Overview
Group turnover for the year ended 31 March 2015 was GBP56.9m
(fifteen months ended 31 March 2014: GBP51.8m). Turnover, excluding
acquisitions in the current and prior period, was GBP30.2m for the
year ended 31 March 2015 compared to GBP45.5m for the fifteen
months ended 31 March 2014.
The gross margin percentage for the year ended 31 March 2015 was
56.7% compared to 44.1% for the fifteen months ended 31 March 2014.
The change in gross margin percentage is affected by a large
proportion of turnover from acquisitions relating to auction
commissions with no cost of sales attached. Like-for-like gross
margin, excluding acquisitions in the current and prior period, was
51.5% (fifteen months ended 31 March 2014: 41.3%). The underlying
gross margin benefited substantially from high margin sales of
material sold from purchases of major collections in the year.
Underlying trading profits, before internet development costs,
were GBP8.8m for the year ended 31 March 2015 (fifteen months ended
31 March 2014: GBP7.0m). Recent acquisitions contributed trading
profits of GBP4.5m in the year ended 31 March 2015 (fifteen months
ended 31 March 2014: GBP0.6m). The valuable contribution from these
acquisitions in the year was unfortunately accompanied by lower
than expected profits from philatelic trading, principally the
result of a substantial reduction in high value sales made in the
year to top spending clients.
Adjusted profit before tax for the year ended 31 March 2015,
after charging internet development costs, but before exceptional
operating charges, actuarial accounting charges and amortisation of
customer lists, was GBP7.5m (fifteen months ended 31 March 2014:
GBP5.2m). Profit before tax for the year ended 31 March 2015 was
GBP3.1m (fifteen months ended 31 March 2014: GBP2.2m).
Adjusted earnings per share for the year ended 31 March 2015
were 12.91p (fifteen months ended 31 March 2014: 13.30p).
Philatelic Trading and Retail Operations
Philatelic trading and retail sales for the year ended 31 March
2015 were GBP23.9m (fifteen months ended 31 March 2014: GBP33.4m)
with profit contribution of GBP6.7m (2014: GBP7.6m). Acquisitions
contributed GBP0.2m to profits from philatelic trading and retail
operations in the year.
Philatelic trading achieved a strong performance in the first
half of the year with a profit contribution of GBP4.9m. Profit
contribution in the second half of the year fell to GBP1.8m.
Trading performance in philatelic dealing is largely influenced by
high value sales made to key high net worth clients. A number of
high value sales, which were expected to complete in the second
half of the year, failed to materialise. The largest client in the
year ended 31 March 2015 accounted for sales of GBP3.0m, all of
which were conducted in the first half of the year, compared to
GBP5.3m in the fifteen months ended 31 March 2014.
Our offices in Asia (Hong Kong and Singapore) contributed sales
in the year of GBP2.3m and profits of GBP0.6m.
Publishing and Philatelic Accessories
Publishing and philatelic accessory sales for the year ended 31
March 2015 were GBP3.0m (fifteen months ended 31 March 2014:
GBP3.6m) with profit contribution of GBP0.8m (2014: GBP0.8m).
Sales of our printed publishing titles, associated advertising
revenue, stamp albums and accessories remain consistent with good
progress being made on stock clearance to continue to reduce
inventory levels and increase return on capital employed. At the
same time, we continued to exert tight control over costs with
further overhead savings of GBP0.1m being made in the year.
The distribution of our stamp catalogues worldwide represents
the most important element of the Stanley Gibbons brand,
contributing to the respect and recognition our name commands. The
ability to access our catalogue data online through our new online
marketplace will further enhance the Group's respected reputation
and improve the ease of access to our catalogue information to the
worldwide audience of stamp collectors and traders.
Coins and military medals
Sales of coins and military medals for the year ended 31 March
2015 were GBP11.9m (fifteen months ended 31 March 2014: GBP7.0m)
with profit contribution of GBP3.1m (2014: GBP1.2m). The increase
in sales and profits from coins and military medals relates to a
full year's contribution from Baldwin's, following the acquisition
of Noble in November 2013. Baldwin's contributed sales of GBP9.5m
in the year (2014: GBP2.5m) and profits of GBP2.4m (2014:
GBP0.2m).
Baldwin's auctions showed a strong performance in the year that
included the final part of the Ake Linden collection of world
coins. Another auction highlight, during the year, was the sale in
May 2014, of an excessively rare Edward VIII, 1937 Sovereign for
GBP533,000 that was part of The Hemisphere Sovereign Collection,
setting an auction record for an English coin.
Retail sales benefitted from the sale of the 13th century Henry
III, Brussels Hoard of silver pennies, included within the
Baldwin's inventory in the Noble acquisition and the sale of two
Victoria Cross medals. Retail sales further benefitted from cross
selling to Stanley Gibbons clients in the year.
Dealing in Other Collectibles
Dealing in other collectibles can be further analysed as
follows:
12 months 15 months 12 months
to to to
31 March 31 March 31 December
2015 2015 2014 2014 2012 2012
Sales Profit Sales Profit Sales Profit
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Dealing in autographs,
historical documents,
memorabilia, rare books
and records 5,009 436 3,135 154 1,615 150
Dealing in antiques,
watches, fine wine,
jewellery and other
collectibles 11,354 1,122 1,535 255 - -
Benham first day covers 1,586 149 2,810 573 3,372 727
Total sales and profit
contribution 17,949 1,707 7,480 982 4,987 877
------------------------- ------ ------ ------ ------ ------ ------
Sales of other collectibles for the year ended 31 March 2015
were GBP17.9m (fifteen months ended 31 March 2014: GBP7.5m) with
profit contribution of GBP1.7m (2014: GBP1.0m). The increase in
sales and profits from other collectibles relates to the
contribution from Dreweatts & Bloomsbury auctions and Mallett
Antiques.
Autographs, historical documents, memorabilia, rare books and
record sales for the year ended 31 March 2015 were GBP5.0m (fifteen
months ended 31 March 2014: GBP3.1m) with profit contribution of
GBP0.4m (2014: GBP0.2m). The integration of Fraser's autographs
with Bloomsbury auctions has proved successful resulting in an
increase in auction revenues at the same time as reducing historic
inventories of autographs and memorabilia within the Fraser's
business.
Sales of antiques, watches, fine wine, jewellery and other
collectibles include auction commission revenue from Dreweatts as
part of the Noble acquisition in November 2013 and sales of
antiques from Mallett since acquisition in October 2014. The
Dreweatts business delivered a sound performance in line with
expectations in the year including some high profile sales of rare
Beatles and NASA photographs, significant pieces of 20(th) century
signed jewellery and antique clocks.
Mallett delivered a strong return in the short period since
acquisition contributing sales of GBP6.4m and profits of GBP0.5m,
despite the restructuring costs incurred in the period as a result
of the integration with the Dreweatts & Bloomsbury business.
Stock levels have been reduced in line with our original plans on
acquisition and further integration cost savings are expected in
the current financial year. In the current year we expect to
continue to benefit from the stronger auction proposition the
combined businesses offer and the respect the Mallett brand carries
in antiques enabling the securement of further valuable single
owner estates.
Benham first day covers and other collectibles sales for the
year ended 31 March 2015 were GBP1.6m (fifteen months ended 31
March 2014: GBP2.8m) with profit contribution of GBP0.1m (2014:
GBP0.6m). Performance suffered in the year from an absence of any
lucrative commemorative events. Furthermore, as the decision was
taken in the second half of the year to dispose of the Benham first
day covers business, the distractions in preparing the business for
sale resulted in a reduced performance.
Corporate Overheads
Corporate overheads for the year ended 31 March 2015 were
GBP3.2m (fifteen months ended 31 March 2014: GBP3.7m). Corporate
overheads relate mainly to the necessary support functions in
managing the Group including Finance, HR and Group Marketing.
Internet Development
Sales reported within this division relate solely to commissions
generated from third party sales through our online marketplace
www.bidstart.com and online subscription revenues. Online
e-commerce retail and auction revenues through our trading websites
are reported within the respective trading departments.
To provide a better understanding of performance in the year,
the table below provides a comparison of website visitor numbers
and GMV for the years ended 31 March 2015 and 31 March 2014:
Year Year Year Year
ended ended % ended ended %
31-Mar-15 31-Mar-14 change 31-Mar-15 31-Mar-14 Change
Visitors Visitors GMV GMV
No. No. GBP000 GBP000
Stanley Gibbons 1,259,611 1,100,463 14% 1,206 1,248 -3%
bidStart 2,533,599 3,509,025 -28% 1,234 1,615 -24%
See
Stanley Gibbons note
Investments 47,614 29,225 63% - - below
Dreweatts &
Bloomsbury 715,324 350,612 104% 8,264 6,236 33%
Baldwin's 341,319 272,045 25% 2,815 2,374 19%
Mallett 68,309 - 100% 421 - 100%
Total 4,965,776 5,261,370 -6% 13,940 11,473 22%
---------- ---------- ------- ---------- ---------- -------
Visitor numbers across all our websites were down 6% to just
under 5 million in the year due to the 28% reduction in visitors to
bidStart. The fall in visitor numbers was expected due to the
absence of any marketing spend or promotional work in the year as
this website is to be replaced by the Stanley Gibbons Online
Marketplace, which was launched after the year end, in May 2015.
Growth in visitor numbers and GMV has been encouraging in the short
period since launch of the new online marketplace.
Total GMV through our websites was up 22% in the year to
GBP13.9m benefitting mainly from the 33% increase in online auction
revenues from Dreweatts & Bloomsbury auctions. We have recently
successfully launched an in-house bidding platform with encouraging
early indications providing us with confidence that online auction
revenues will form a fundamental element of future growth in this
part of the business.
It was also encouraging to see visitor numbers to the Stanley
Gibbons Investment website up by 63% since being redesigned and the
implementation of improved online marketing techniques to drive
traffic to the site in the second half of the year. No sales are
reported due to the high value nature of such clients meaning that
such sales are not transacted online. However, it is clear that our
investment website represents the most important means of
recruiting new high net worth clients, many of whom progress to
becoming specialised collectors.
Overheads expensed in the year ended 31 March 2015 were GBP1.5m
(fifteen months ended 31 March 2014: GBP2.1m) relating mainly to
the on-going salary costs of software engineers making up our
internet development team in Raleigh, US and the online marketing
and customer services team in Jersey, CI and London, UK.
The Stanley Gibbons Online Marketplace was soft launched in
November 2014, with the intention to move to hard launch by March
2015. However, based on continued feedback both from internal and
external users, additional features were worked on and completed
before releasing the Marketplace to the general public in May
2015.
The key features of the Stanley Gibbons Marketplace at launch,
which were developed over the past financial year, include:
-- Advanced browsing and searching built upon Stanley Gibbons catalogue data
-- Streamlined and unified checkout process across all sellers
-- Local currency support for buyers (currently supporting 10 currencies)
-- Stanley Gibbons Marketplace "Buyer Guarantee"
-- Customisable stores for third-party sellers, including "Pro Stores"
-- Bulk Lister and Ebay Sync (powered through bidStart)
-- 4 Million stamp listings automatically linked to catalogue data
-- Buyer and seller dashboards
-- Blogs and community forums
Further exciting features will be developed over the current
financial year in furtherance of our online mission to provide the
best marketplace for collectibles, built on a community of honest
and knowledgeable collectors. Focus on growing GMV in the current
year is based on a combination of such features being launched, an
increase in marketing investment and from an increased number of
sellers recruited by our seller account management team.
Other Accounting Adjustments & Finance Charges related to
pensions
Other accounting charges, totalling GBP1.0m (fifteen months
ended 31 March 2014: GBP0.9m) include pension service and share
option charges, amortisation of customer lists and finance charges
related to pensions. In the opinion of the Directors, such
accounting charges do not form part of the operating performance of
the Group.
Exceptional Operating Charges
Exceptional operating charges can be further analysed as
follows:
12 months 15 months
to to
31 March 31 March
2015 2014
GBP000 GBP000
Loss on sale of business 2,331 -
Legal costs in respect of defined
benefit pension scheme 895 820
Acquisition costs 939 503
Impairment provision against receivable 500 -
Sale of freehold property (1,543) -
Creation of long term incentive
plans 140 -
Deferred consideration (363) -
Aborted IT system development costs - 139
Aborted overseas offices opening
costs - 121
Re-organisation and restructuring
costs - 290
Stock rationalisation 225 208
Other 131 -
Total exceptional operating charges 3,255 2,081
---------------------------------------- --------- ---------
The senior management team carried out a review of all areas of
the Group's business during the year and concluded that some of its
current activities were no longer core to its long term strategy.
As a result, it was decided to dispose of a number of business
activities and to outsource some services that can be provided in a
more cost effective manner by third parties.
To focus on the Group's core strengths and to become more cost
effective, efficient and reduce the number of disparate functions
and locations, the Group disposed of the Benham first day cover and
other general collectibles business, the Plastic Wax retail
business and the general auction business of Dreweatts, based in
Bristol. The sale was completed after the financial year end on 7
May 2015.
The loss on the sale of business of GBP2.3m relates to the write
down of assets to fair value, which at the balance sheet date of 31
March 2015 were awaiting sale. The write down reflects the
difference between the net asset value and the sales consideration
of GBP2.0m, comprising GBP1.8m in capital payments over a five year
period and interest payments of GBP0.2m. The disposal streamlines
our operations and achieved a significant reduction in the fixed
cost base of the Group.
Legal costs in respect of the defined benefit pension scheme
incurred in the year ended 31 March 2015 of GBP0.9m (fifteen months
ended 31 March 2014: GBP0.8m) relate to legal action for recovery
against the professional advisers in respect of the Company's
defined benefit pension scheme.
Acquisition costs incurred in the year ended 31 March 2015 of
GBP0.9m relate to legal and professional fees in respect of the
acquisition of Mallett plc. Acquisition costs in the fifteen months
ended 31 March 2014 of GBP0.5m related to the acquisition of
Noble.
The impairment provision against receivable of GBP0.5m relates
to a prudent assessment of the recoverability of an overdue debt,
which is dependent on our ability to sell stamps owned by the
client, the proceeds of which are to be used to settle the
outstanding amount.
The profit on the sale of freehold property in the year of
GBP1.5m relates to the disposal of the Group's freehold property,
Adelphi Terrace, London following the relocation of the Baldwin's
team to the Stanley Gibbons premises at 399 Strand, London.
Michael Hall, Chief Executive
25 June 2015
Financial Review
Statement of Financial Position
Net assets at the year end were GBP82.4m equating to 174.9p per
share of which GBP37.8m or 80p per share relates to intangible
assets.
The Group's inventories, which are carried at the lower of cost
and net realisable value, represented 65% of net assets at 31 March
2015 (31 March 2014: 50%), details of which are summarised
below:
At 31 March At 31 March
2015 2014
GBP000 GBP000
Philatelic rarities 32,569 19,891
Philatelic (general) 4,226 4,212
Coins and medals 6,626 7,888
Autographs, historical documents
and related memorabilia 4,946 5,341
Antiques 4,229 -
First day covers & other collectibles - 3,379
Publications, albums and accessories 1,226 1,407
------------ ------------
53,822 42,118
------------ ------------
The Group has continued to take advantage of opportunities to
acquire key collections of philatelic rarities providing an
excellent platform from which to deliver future growth in sales and
profits. The antiques inventory was acquired through the
acquisition of Mallett in October 2014. First day covers and other
collectibles are included within "Assets in disposal group held for
sale" in the consolidated statement of financial position.
The acquisition of Mallett was funded entirely by debt finance
from The Royal Bank of Scotland plc. As a result, together with the
investment in major purchases of key philatelic collections, the
Group has borrowings at 31 March 2015 of GBP11.7m (31 March 2014
net cash: GBP8.7m).
Cash Flow
EBITDA and exceptionals for the year ended 31 March 2015 was up
GBP3.0m to GBP9.1m. A summary is given below:
12 months 15 months
to to
31 March 31 March
2015 2014
GBP000 GBP000
Operating profit 3,572 2,354
Exceptional items 3,255 2,081
Depreciation/amortisation/asset
writeoffs 1,795 1,121
IAS 19 employee benefit costs 368 375
IFRS2 accounting charge for
share options 150 188
--------------------------------- ---------- ----------
EBITDA and exceptionals 9,140 6,119
--------------------------------- ---------- ----------
Included within borrowings is a net bank overdraft of GBP1.2m at
31 March 2015, compared to net cash of GBP9.5m at 31 March 2014.
The Board is satisfied that the Group has sufficient funds to meet
its forecast working capital and capital expenditure plans over the
next 12 months.
The reduction in cash during the year ended 31 March 2015 of
GBP10.7m (fifteen months ended 31 March 2014: increase of GBP2.7m)
is net of dividends paid of GBP3.4m (2014: GBP1.9m), tax paid of
GBP0.4m (2014: GBP0.4m) and a net drawdown of borrowings in respect
of Mallett of GBP9.7m (2014: GBP0.6m). Cash was reduced in the year
as a result of the overdraft balances acquired on the acquisition
of Mallett of GBP1.2m and benefited from net funds raised from the
disposal of the Group's freehold property at Adelphi Terrace,
London for GBP4.4m in November 2014.
It is Group policy to re-invest cash funds into business assets,
which deliver a higher return on capital including its inventory of
rare collectibles, IT systems and value enhancing acquisitions. It
is not Group policy to engage in speculative activity using
financial derivatives or other complex financial instruments.
The Group invested GBP4.1m (2014: GBP2.1m) in capital
expenditure, excluding assets acquired as part of the Mallett
acquisition during the period, and this can be analysed as
follows:
12 months 15 months
ended ended
31 March 31 March
2015 2014
GBP000 GBP000
System upgrades 522 489
Refurbishment of offices 1,128 235
Website development costs 2,170 1,047
Reference collection 38 74
Other tangible and intangible
capital expenditure 276 219
Total capital expenditure
in the year/period 4,134 2,064
------------------------------- ---------- ----------
Such capital investment is expected to increase the long-term
value of the business and to generate substantial cash flows in
future accounting periods.
Finance costs
Finance costs comprise loan interest and charges on the finance
facilities with Natwest of GBP258,000 (period ended 31 March 2014:
GBPnil) plus a cost of GBP170,000 (period ended 31 March 2014:
GBP173,000), representing the interest on net defined benefit
liabilities under IAS19 (Amendment) "Employee Benefits".
Taxation
The tax charge for the year to 31 March 2015 (excluding deferred
taxation & capital gains tax) was GBP0.4m (period ended 31
March 2014: GBP0.2m) incurred on UK and overseas profits, resulting
in an effective rate of 13.3% (31 March 2014: 8.2%). A capital
gains tax charge of GBP0.5m arose from the sale of Adelphi Terrace
in November 2014. Profits from Channel Island trading companies are
currently subject to tax at 0%.
Dividend
The Board has declared total dividends of 5.00p for the twelve
months to 31 March 2015 (fifteen months ended 31 March 2014: 7.00p)
which is covered 2.6 times by adjusted earnings for the year.
Donal Duff, Chief Finance Officer
25 June 2015
Consolidated statement of comprehensive income
for the year ended 31 March 2015
Year ended 15 months
ended
31 March 2015 31 March
2014
Notes GBP'000 GBP'000
-------------- ---------
Revenue 56,865 51,772
Cost of sales (24,600) (28,937)
------------------------------------------- ------------- ---------
Gross Profit 32,265 22,835
Administrative expenses
before defined benefit
pension service costs
and exceptional operating
costs (3,768) (7,404)
Defined benefit pension
service costs (368) (375)
Exceptional operating
charges (3,255) (2,081)
------------------------------------------- ------------- ---------
Total administrative
expenses (7,391) (9,860)
------------------------------------------- ------------- ---------
Selling and distribution
expenses (21,302) (10,621)
------------------------------------------- ------------- ---------
Operating Profit 3,572 2,354
Finance income 4 32
Finance costs (428) (173)
------------------------------------------- ------------- ---------
Profit before tax 3,148 2,213
Taxation (1,197) (78)
------------------------------------------- ------------- ---------
Profit for the financial
year/period 1,951 2,135
Other comprehensive income:
Exchange differences
on translation of foreign
operations (165) -
Actuarial (losses)/gains
recognised in the pension
scheme (1,074) 247
Tax on actuarial (losses)/gains
recognised in the pension
scheme 178 (98)
Revaluation of financial
assets for sale (109) 99
Other comprehensive (loss)/income
for the year/period,
net of tax (1,170) 248
------------------------------------------- ------------- ---------
Total comprehensive income
for the year/period 781 2,383
------------------------------------------- ------------- ---------
Basic earnings per Ordinary
share 34.17p 6.32p
Diluted earnings per
Ordinary share 33.98p 6.25p
---------------------------- ----- -----
Consolidated statement of financial position
as at 31 March 2015
31 March 31 March
2015 2014
GBP'000 GBP'000
-------- --------
Non-current assets
Intangible assets 37,846 32,571
Property, plant and equipment 6,528 6,294
Deferred tax asset 4,063 1,016
Available for sale financial assets 1,364 1,473
------------------------------------ -------- --------
49,801 41,354
------------------------------------ -------- --------
Current Assets
Inventories 53,822 42,118
Trade and other receivables 19,604 14,144
Assets in disposal group held
for sale 1,800 -
Current tax receivable - 135
Cash and cash equivalents - 9,499
------------------------------------ -------- --------
75,226 65,896
------------------------------------ -------- --------
Total assets 125,027 107,250
------------------------------------ -------- --------
Current liabilities
Trade and other payables 22,363 15,928
Deferred consideration - 2,153
Borrowings 2,522 276
Current tax payable 569 -
------------------------------------ -------- --------
25,454 18,357
------------------------------------ -------- --------
Non-current liabilities
Trade and other payables 450 -
Retirement benefit obligations 5,816 3,285
Borrowings 9,173 528
Deferred tax liabilities 1,424 760
Provisions 306 375
17,169 4,948
------------------------------------ -------- --------
Total liabilities 42,623 23,305
------------------------------------ -------- --------
Net assets 82,404 83,945
------------------------------------ -------- --------
Equity
Called up share capital 471 466
Share premium account 63,682 62,565
Shares to be issued - 209
Share compensation reserve 798 648
Capital redemption reserve 38 38
Revaluation reserve 244 353
Retained earnings 17,171 19,666
------------------------------------ -------- --------
Equity shareholders' funds 82,404 83,945
------------------------------------ -------- --------
Consolidated statement of changes in equity
for the year ended 31 March 2015
Called Share Shares Share Capital
up Premium to compensation Revaluation redemption Retained
share account be issued reserve reserve reserve earnings Total
capital
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April
2014 466 62,565 209 648 353 38 19,666 83,945
Profit for
the financial
year - - - - - - 1,951 1,951
Amounts which
may be
subsequently
reclassified
to profit &
loss
Exchange
differences
on translation
of foreign
operations - - - - - - (165) (165)
Revaluation
of financial
asset - - - - (109) - - (109)
Amounts which
will not be
subsequently
reclassified
to profit &
loss
Remeasurement
of pension
scheme net
of deferred
tax - - - - - - (896) (896)
Total
comprehensive
income - - - - (109) - 890 781
Dividends - - - - - - (3,385) (3,385)
Cost of share
options - - - 150 - - - 150
Share options
exercised 3 541 - - - - - 544
Shares issued
as deferred
consideration 2 576 (209) - - - - 369
At 31 March
2015 471 63,682 - 798 244 38 17,171 82,404
------------------ --------- --------- ---------- ------------- ------------- ----------- ---------- ---------
At 1 January
2013 284 11,137 209 460 254 38 19,322 31,704
Profit for
the financial
period/year - - - - - - 2,135 2,135
Amounts which
may be
subsequently
reclassified
to profit &
loss
Revaluation
of financial
asset - - - - 99 - - 99
Amounts which
will not be
subsequently
reclassified
to profit &
loss
Remeasurement
of pension
scheme net
of deferred
tax - - - - - - 149 149
------------------ --------- --------- ---------- ------------- ------------- ----------- ---------- ---------
Total
comprehensive
income - - - - 99 - 2,284 2,383
Dividends - - - - - - (1,940) (1,940)
Cost of share
options - - - 188 - - - 188
Share options
exercised 8 937 - - - - - 945
Issue of ordinary
share capital
for acquisition 38 12,082 - - - - - 12,120
Gross proceeds
from issue
of ordinary
share capital 136 39,864 - - - - - 40,000
Placement costs - (1,455) - - - - - (1,455)
At 31 March
2014 466 62,565 209 648 353 38 19,666 83,945
------------------ --------- --------- ---------- ------------- ------------- ----------- ---------- ---------
Consolidated statement of cash flows
for the year ended 31 March 2015
Year ended Fifteen
31 March months
2015 ended
31 March
2014
Notes GBP'000 GBP'000
----- ---------- ---------
Cash consumed from operations 4 (7,400) (3,904)
Interest paid (258) (4)
Taxes paid (367) (433)
-------------------------------------------------- ----- ---------- ---------
Net cash consumed from operating activities (8,025) (4,341)
-------------------------------------------------- ----- ---------- ---------
Investing activities
Purchase of property, plant and equipment (1,442) (536)
Purchase of intangible assets (2,692) (1,528)
Overdraft acquired with subsidiary (1,190) -
Acquisition of business (8,615) (29,036)
Sale of freehold property 4,411 -
Interest received 4 36
Net cash used in investing activities (9,524) (31,064)
-------------------------------------------------- ----- ---------- ---------
Financing activities
Proceeds from issue of ordinary share capital 544 39,490
Dividends paid to company shareholders (3,385) (1,940)
Net borrowings 9,652 588
Net cash generated from financing activities 6,811 38,138
-------------------------------------------------- ----- ---------- ---------
Net (decrease)/increase in cash and cash
equivalents (10,738) 2,733
-------------------------------------------------- ----- ---------- ---------
Cash and cash equivalents at start of year/period 9,499 6,766
-------------------------------------------------- ----- ---------- ---------
Cash and cash equivalents at end of year/period (1,239) 9,499
-------------------------------------------------- ----- ---------- ---------
1. Basis of preparation
The financial information set out in this announcement does not
comprise the Group's statutory financial statements for the year
ended 31 March 2015 or the period ended 31 March 2014.
The preliminary financial information has been extracted from
the Annual Report and audited financial statements for the year
ended 31 March 2015, which will be posted to shareholders in due
course and will be delivered to the Registrar of Companies
following the Annual General Meeting of the Company. These audited
Financial Statements include the auditors' report which, whilst
unqualified, contains reference to the disclosures concerning the
realisations of receivables.
2. Accounting policies
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
("IFRSs") as approved for use in the European Union and IFRS
Interpretations Committee interpretations. There have been no
changes to the accounting policies adopted since the last
consolidated financial statements were published.
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 exceptional operating costs, pension service costs, share
option charges and the amortisation of customer lists. 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.
Year ended Fifteen
months ended
31 March 31 March
2015 2014
Weighted average number of ordinary
shares in issue (No.) 46,774,755 33,769,106
Dilutive potential ordinary shares:
Employee share options (No.) 2,293,308 398,334
------------------------------------ ---------- -------------
Profit after tax (GBP) 1,951,000 2,134,700
Pension service cost (net of tax) 425,020 420,864
Cost of share options (net of tax) 150,000 188,000
Amortisation of customer lists 360,000 -
Exceptional operating costs (net
of tax) 3,152,014 1,746,668
------------------------------------ ---------- -------------
Adjusted profit after tax (GBP) 6,038,034 4,490,232
------------------------------------ ---------- -------------
Basic earnings per share - pence
per share (p) 4.17p 6.32p
------------------------------------ ---------- -------------
Diluted earnings per share - pence
per share (p) 3.98p 6.25p
Adjusted earnings per share - pence
per share (p) 12.91p 13.30p
------------------------------------ ---------- -------------
Adjusted diluted earnings per share
- pence per share (p) 12.31p 13.14p
------------------------------------ ---------- -------------
4. Cash consumed from operations
Year ended 15 months ended
31 March 31 March
2015 2014
GBP'000 GBP'000
Operating profit 3,572 2,354
Profit on sale of property (1,613) -
Impairment of tangibles assets 70 -
Depreciation 778 475
Amortisation 761 507
Writeoff of intangibles 156 139
Increase/(decrease) in provisions (69) 139
Cost of share options 150 188
Increase in inventories (7,887) (10,280)
(Increase)/decrease in trade and
other receivables (4,166) 5,774
Increase/(decrease) in trade and
other payables (less deferred consideration) 848 (3,200)
---------------------------------------------- ---------- ---------------
Cash consumed from operations (7,400) (3,904)
---------------------------------------------- ---------- ---------------
5. Annual report and accounts
The Annual Report and Accounts for the year ended 31 March 2015
will be posted to shareholders shortly. Further copies can be
obtained from the Company Secretary at 2(nd) Floor, Minden House,
Minden Place, St Helier, Jersey, JE2 4WQ, or the Company's Broker,
Peel Hunt LLP at Moor House, 120 London Wall, London EC2Y 5ET or
can be viewed on the Company's website at
www.stanleygibbons.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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