RNS Number:8973V
Stanley Gibbons Group Limited
27 February 2004
THE STANLEY GIBBONS GROUP LIMITED
Audited Results for the year ended 31 December 2003
The Stanley Gibbons Group Limited, incorporating Stanley Gibbons, Fraser's
Autographs, Collector Cafe and other collectible-related Internet sites, today
announced its audited results for the year ended 31 December 2003.
Highlights
*Record profit before tax of #1,227,000 (2002: #537,000), up 128%.
*Earnings per share of 3.61p (2002: 1.96p) up 84%, and up 119% excluding
deferred taxation.
*#1,885,000 bank and cash balances at year end.
*Market value of holding in Provide Commerce, Inc. #2,469,000 at 25
February 2004 (book value:#223,000)
*Plans in progress to return surplus cash and proceeds of holding in
Provide Commerce, Inc. through the payment of a special dividend or a share
buyback.
*Sales #8,622,000 (2002: #8,121,000), up 6.2%.
*Sales overseas represented 29% of total sales (2002: 27%)
*Net assets per share 30p (37p including interest in Provide Commerce,
Inc. at year end market value) compared to 26p at 31 December 2002.
*9 million hits per month to Internet sites (2002: 6 million).
*Great Britain stamp price index up 20% over twelve months.
*New Investment Department selling portfolios in stamps, autographs and
coins.
Commenting on current trading, Paul Fraser, Chairman said:
"The strong performance in the last quarter of 2003 has continued into the first
two months of 2004. Current trading is ahead of the same period last year in
both turnover and profitability. I am becoming increasingly excited about the
future of Stanley Gibbons as we enjoy strong philatelic market conditions and a
heightening interest in alternative investments at the same time as beginning to
reap the rewards from the successful implementation of our strategy in building
the number one stamp community in the world."
For further information, contact:
The Stanley Gibbons Group Limited
Paul Fraser, Chairman, Tel: 020 7836 8444
Michael Hall, Chief Executive, Tel: 01425 472363
Seymour Pierce Limited
Louise Carpenter) 020 7648 8700
Jonathan Wright)
Chairman's Statement
Financials
I am very pleased to report a record net profit before tax of #1,227,000 (2002:
#537,000) up 128%, being the highest profit figure achieved in the fifteen years
I have been involved with the Company!
Turnover increased to #8,622,000 (2002: #8,121,000) up 6.2%.
Earnings per Ordinary Share for the year ended 31 December 2003 were 3.61p
compared with 1.96p for the previous year, representing an increase of 84%.
Net assets per share have increased to 30p (37p including our interest in
Provide Commerce, Inc at the year end market value) compared to 26p at 31
December 2002.
The year-end cash figure stood at #1,885,000 which, once again, shows how cash
generative the business is and the conversion of profit into cash.
Dividend
Permission has been granted from the Channel Island authorities to pay dividends
in 2004. We are intending to return surplus cash through the payment of a
special dividend or share buyback and the implementation of a progressive
dividend policy.
Outlook
The 'SG 100' Stamp Index was up 15% in 2003, with Great Britain stamps up 20%.
We have also introduced indices for autographs and coins which helps us to be
seen as the core facilitator in the marketplace, which is our key strategy.
Stamps as an alternative investment have received excellent positive comment and
we have tailored many portfolios for our clients. We have recently set up a
designated Investment Department to cope with the increasing interest. The
Investment Department will also offer portfolios of rare autograph material and
coins. Recognition of the rarity value and scarcity of supply is giving both
liquidity and momentum to the international markets.
As more collectors and investors have more disposable income, particularly in
China and India, we should see further increases in stamp values and an especial
appreciation for the portability and value by weight of the stamps themselves.
We have redesigned our online magazine Internet site and will soon be
integrating our various other sites, which we believe will drive more visitors
and make it easier both to navigate and make best use of our valuable
intellectual property. This should result in greater sales and reach of our
brand name in the stamp collecting world.
Our active customer database has increased substantially in 2003 both offline
and online and we have been able to personalise our communications for more
effective and profitable results. We are making more direct sales, with a
reduction in lower margin sales through market intermediaries.
The release of our major stamp catalogues in colour in 2003 is providing a boost
to publication sales and should persuade a further uplift in 2004, with a larger
programme of catalogues scheduled.
Our investment in Provide Commerce, Inc (formerly Proflowers, Inc) has shown a
substantial gain. It went ahead with an IPO on 17 December 2003 and the market
value at 25 February 2004 was $4,631,000 (#2,469,000). We are locked into the
shareholding until 14 June 2004.
It will be our intention to return any surplus funds to shareholders this year
and we hope to be in a position by June to confirm the exact amount.
I feel very positive about the future for stamp collecting and with Stanley
Gibbons in particular, and that many actions we have taken in 2003 will yield
further benefits in 2004.
Employees
All staff have worked tirelessly to support the strategy and deliver the
results, and the positive environmentis driving the momentum that we need to
attain the projected profit that we all believe to be achievable in 2004.
Paul Fraser
Chairman
26 February 2004
Operating Review
Operating results for the year
2003 2003 2002 2002 2001 2001
Sales Profit Sales Profit Sales Profit
#000 #000 #000 #000 #000 #000
Philatelic trading
and 5,391 1,362 4,742 814 4,591 406
retail operations
Publishing and
philatelic 2,481 659 2,605 679 2,641 598
accessories
Dealing in
autographs, 739 239 765 189 824 230
records and
Related memorabilia
------------------ ------ ------ ------ ------ ------ ------
8,611 2,260 8,112 1,682 8,056 1,234
Sale of property - - 388
Corporate overheads (799) (847) (934)
New business 11 (254) 9 (293) 23 (296)
development
Interest 20 (5) (43)
------------------ ------ ------ ------ ------------ ------
Before exceptional
operating costs 8,622 1,227 8,121 537 8,079 349
------------------ ------ ------ ------ ------ ------ ------
Exceptional operating
costs - - (35)
------------------ ------ ------ ------ ------ ------ ------
8,622 1,227 8,121 537 8,079 314
------------------ ------ ------ ------ ------ ------ ------
Sales
Overall Group turnover increased by 6.2% to #8.6m (2002: #8.1m). Despite a
challenging trading environment in the first four months of the year, the
benefits from the implementation of our business plan have come to fruition as
the year progressed cumulating in the best two months trade during November and
December that the Group has experienced in its recent history.
We have continued to recruit new customers to the business including a number of
higher value collectors and investors instamps resulting in a 10% increase in
the value of spend from new customers compared to the prior year.
Philatelic trading and retail sales were 13.7% higher than last year
attributable mainly to sales growth in philatelic dealing and auction
activities. Philatelic dealing has benefited from the sale of stamps as an
alternative investment fuelled by wide media coverage, increased marketing
activity and the strong performance of the SG100 Stamp Price Index which has
shown an increase of 15% in 2003. A strong market in philately during the year
resulting in high demand led to a scarcity of supply forcing stamp prices
upwards. Through more aggressive buying, we increased our stockholding in key
rarities and high value philatelic items in the second half of the year which
puts us in a strong position to continue to benefit from the strong market
conditions and interest in stamps as an alternative investment.
Auction activities included commission income from the public auction held at
399 Strand in November which exceeded our expectations. Our return to public
auctions has been achieved with a reduced level of associated overheads,
enabling such activities to be conducted profitably. As a result, we intend to
hold two public auctions in 2004.
Publishing and philatelic accessories sales were 4.8% lower than the previous
year. Sales made to our wholesale customers were 17% down on the prior year
which was partly compensated by increased mail order and online sales, producing
higher margins on lower sales. We have reduced our dependence on wholesalers as
we grow new worldwide customers through our internet site. Our major catalogue
title, "Stamps of the World", was produced in full colour for the first time at
the endof November resulting in mail order sales being 71% above the same
period last year. Due to an increased print run to meet demand we still had a
sufficient stockholding at the end of the year to service demand during 2004.
Autographs and memorabilia sales were 3.4% below those in the previous year. The
lower sales performance is attributed mainly to a reduced stockholding of key
rarities and higher value stock items which we are now taking measures to
rectify. Reduced sales have been more than offset by reduced overheads
particularly in salary and marketing costs, resulting in an increased profit
contribution of #48,000 compared to last year.
Gross Margins
We have achieved sales growth on consistent gross margins to the previous year
representing 60.6% of sales, (2002: 60.8%) through concentration of activities
on the sale of quality material at full retail prices. Margin control is being
achieved through tight stock control procedures with all key stock areas being
subject to perpetual counting.
Profitability
The profit before tax for the year of #1,227,000 compares to a profit last year
of #537,000, representing an increase of 128%. The increase in profitability
from the previous year was achieved through growth in turnover at consistent
gross margins, together with further reductions in fixed overheads particularly
in salaries and establishment costs.
Salary overhead reduced by #153,000, (6.9%) compared to last year, as a result
of a reduction in staff numbers. The staff headcount at 31 December 2003 was 99
compared to 106 at 31 December 2002. We have progressively reduced fixed salary
overheads over the past two years in a controlled manner through cost centre
accountability, implementation of operational efficiencies and improved use of
technology. As a result, salary costs represent 23% of turnover in 2003 compared
to 30% two years ago.
Establishment costs were #130,000 lower than last year, benefiting from rental
income now being received fromsub-letting of the 2nd and 3rd floors of 399
Strand together with the favourable settlement of a dispute relating to a
previous rental agreement. Our vacant unit in Ringwood was sub-let at the end of
the year, the benefits of which will be enjoyed in following years.
New Business Development
Direct sales generated through our web sites increased by 25%. The internet has
proved to be a valuable medium for attracting new investment customers during
the year and we intend to improve the editorial content and functionality of our
"Invest in Stamps" section to further promote what is proving to be a lucrative
proposition for both the Company and investors in stamps alike.
All catalogue data is now held electronically enabling the production of our
major catalogue titles in full colour without an increase in production costs.
We continue to enhance the editorial aspects of the catalogue database
management system which will enable its integration into our websites in 2004,
resulting in real-time catalogue pricing information being available online.
Our internet sites are currently being redesigned to integrate allworldstamps,
gibbonsstampmonthly and stampcafe as sections of our main site,
stanleygibbons.com. Based on customer feedback, we expect a significant increase
in traffic following the integration as we hinge all activity off our
established brand name. The increased site traffic and visitors to our site will
provide increased opportunities to secure online advertising and affiliate
relationships during 2004.
We intend to introduce functionality in our online catalogues to record 'stamps
for sale' against each unique stamp listing. This will enable the stamp
collecting community to use our internet site to service their information,
pricing and purchasing needs in one place.
Corporate Overheads
Corporate overheads of #799,000 have reduced by #48,000 against last year. The
reduction experienced is mainly from the reduced costs of finance staff, as
systems and processes become more self supportive, and lower depreciation
charges, due to the Sage accounting system purchased in 1999 being fully
depreciated by July 2003.
Consolidated Profit and Loss account
For the year ended 31 December 2003
Year ended Year ended
31 December 31 December
2003 2002
Notes #'000 #'000
------------- -------------
Turnover 8,622 8,121
Cost of sales (3,398) (3,184)
------------------- ----- ------- -------- --- ------- --------
Gross profit 5,224 4,937
Administration expenses (1,183) (1,242)
Selling and distribution (2,834) (3,153)
expenses
------------------- ----- ------- -------- --- ------- --------
Operating profit 1,207 542
Interest receivable and
similar 27 5
income
Interest payable and
similar (7) (10)
charges
------------------- ----- ------- -------- --- ------- --------
Profit on ordinary
activities 1,227 537
before taxation
Tax on profit on ordinary
activities (346) (53)
------------------- ----- ------- -------- --- ------- --------
Profit for the financial 881 484
year
------------------- ----- ------- -------- --- ------- --------
Earnings per Ordinary share 2 3.61p 1.96p
Diluted earnings per Ordinary share 2 3.49p 1.95p
Continuing operations: all items dealt with in arriving at the operating profit
for 2003 and 2002 relate to continuing operations.
There is no material difference between the profit on ordinary activities before
taxation and the retained profit for the year stated above and their historical
cost equivalents.
There are no recognised gains and losses other than those included in the
operating profit above, and therefore no separate statement of total recognised
gains and losses has been presented.
Reconciliation of movements in equity shareholders' funds for the year ended 31
December 2003
Year ended Year ended
31 December 31 December
2003 2002
#'000#'000
Profit for the financial year 881 484
Purchase of own shares - (79)
----------------------------- ----------- -----------
Net increasein shareholders' funds 881 405
Opening equity shareholders' funds 6,418 6,013
----------------------------- ----------- -----------
Closing equity shareholders' funds 7,299 6,418
----------------------------- ----------- -----------
Balance sheets
at 31 December 2003
Group Group Company Company
------- ------- -------- ---------
31 December 31 December 31 December 31 December
2003 2002 2003 2002
------- ------- -------- ---------
#'000 #'000 #'000 #'000
Fixed Assets
Tangible assets 1,307 1,455 - -
Investments 223 223 5,811 5,811
-------------------- ------- ------- -------- ---------
1,530 1,678 5,811 5,811
-------------------- ------- ------- -------- ---------
Current assets
Stocks 4,878 4,547 - -
Debtors: amounts
falling due after
more than one
year 259 296 - -
Debtors: amounts
falling due
within one year 1,079 831 316 316
Cash at bank and
in hand 1,885 709 - -
-------------------- ------- ------- -------- ---------
8,101 6,383 316 316
Creditors:
amounts falling
due within one
year (2,097) (1,486) - -
-------------------- ------- ------- -------- ---------
Net current
assets 6,004 4,897 316 316
-------------------- ------- ------- -------- ---------
Total assets less
current
liabilities 7,534 6,575 6,127 6,127
Creditors: amounts
falling due after
more than
one year (47) (118) - -
Provision for
liabilities and
charges (188) (39) - -
-------------------- -------------- -------- ---------
Net assets 7,299 6,418 6,127 6,127
-------------------- ------- ------- -------- ---------
Capital and
reserves
Called up share
capital 244 244 244 244
Share premium
account 5,834 5,834 5,834 5,834
Capital
redemption
reserve 25 25 25 25
Revaluation
reserve 169 169 - -
Profit and loss
account 1,027 146 24 24
-------------------- ------- ------- -------- ---------
Equity
shareholders'
funds 7,299 6,418 6,127 6,127
-------------------- ------- ------- -------- ---------
Consolidated Cash Flow Statement
For the year ended 31 December 2003
Year ended Year ended
31 December 31 December
2003 2002
#'000 #'000
------------- -------------
Net cash inflow from operating
activities 1,373 936
-------------------- ------- -------- --- ------- --------
Returns on investment and
servicing of finance
Interest received 27 5
Interest paid (7) (3)
Finance lease interest paid - (7)
-------------------- ------- -------- --- ------- --------
20 (5)
Taxation
UK corporation tax paid (12) -
Capital expenditure and financial
investments
Payments to acquire tangible fixed
assets (134) (230)
Receipts from sales of tangible
fixed assets - 3
-------------------- ------- -------- --- ------- --------
(134) (227)
Acquisitions and disposals
Purchase of business - (175)
-------------------- ------- -------- --- ------- --------
Net cash inflow before financing 1,247 529
-------------------- ------- -------- --- ------- --------
Financing
Purchase of own ordinary shares - (79)
Capital element of finance leases - (56)
Repayment of Eagle Star Mortgage (55) -
Repayment of Loan notes (16) (16)
-------------------- ------- -------- --- ------- --------
Net cash outflow from financing (71) (151)
-------------------- ------- -------- --- ------- --------
Increase in cash 1,176 378
-------------------- ------- -------- --- ------- --------
Reconciliation of operating profit to net cash inflow from operating activities
Year ended Year ended
31 December 31 December
2003 2002
#'000 #'000
Operating profit 1,207 542
Depreciation 282 327
Gain on sale of fixed assets - (2)
(Increase)/decrease in stocks (331) 86
(Increase)/decrease in debtors (228) 97
Increase/(decrease) in creditors 443 (114)
----------------------------- ----------- -----------
Net cash inflow from operating
activities 1,373 936
----------------------------- ----------- -----------
Notes to Accounts
1. Basis of preparation
The financial information set out in this announcement does not constitute
the Group's statutory financial statements for the years ended 31 December
2003 and 31 December 2002.
The financial information for the year ended 31 December 2002 has been
extracted from the audited statutory financial statements for that year
which include an unqualified audit report and have been filed with the
Registrar of Companies in Jersey. The financial information for the year
ended 31 December 2003 has been extracted from the audited financial
statements of the Group for the year ended 31 December 2003 which were
approved by the Board of Directors on 26 February 2004.
2. Earnings per ordinary share
The calculation of basic earnings per ordinary share is based on the
weighted average number of shares in issue during the year.
For diluted earnings per share, the weighted average number of ordinary
shares in issue is adjusted to assume conversion of all dilutive potential
ordinary shares. The Group has only one category of dilutive ordinary
shares: those share options granted to employees where the exercise price is
less than the average market price of the Company's ordinary shares during
the year.
Year ended Year ended
31 December 31 December
2003 2002
Weighted average number of ordinary
shares in issue (No.) 24,376,736 24,672,626
Dilutive potential ordinary shares:
Employee share options 865,251 138,620
Profit after tax (#) 881,000 484,000
Basic earnings per share - pence per
share (p) 3.61p 1.96p
Diluted earnings per share - pence per
share (p) 3.49p 1.95p
------------------------- ----------- ----------
3. Annual report
Copies of this announcement are available from the Company Secretary. Copies of
the Annual Report for the year ended 31 December 2003 will be posted to
shareholders in the week commencing 8 March 2004 and will be available at the
registered office of the Company, Pirouet House, Union Street, St Helier, Jersey
JE1 3WF or alternatively on our website www.stanleygibbons.com.
This information is provided by RNS
The companynews service from the London Stock Exchange
END
FR QKAKBFBKDDBB
Stanley Gibbons (LSE:SGI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Stanley Gibbons (LSE:SGI)
Historical Stock Chart
From Jul 2023 to Jul 2024
