TIDMSGI
RNS Number : 5773L
Stanley Gibbons Group PLC
27 December 2018
THE STANLEY GIBBONS GROUP PLC
(the "Company" or the "Group")
Interim Results for the six months ended 30 September 2018
The Stanley Gibbons Group plc today announces its interim
results for the six months ended 30 September 2018, the full text
of which is set out below.
Enquiries:
The Stanley Gibbons Group
plc
Harry Wilson
Graham Shircore
Andrew Cook +44 (0)207 836 8444
finnCap Ltd (Nomad and Broker)
Stuart Andrews / Christopher
Raggett / Anthony Adams (corporate
finance) +44 (0)20 7220 0500
Chairman's Statement
This report covers the first six months since the refinancing in
March earlier this year. The previous 2 years have been mostly
about fixing things and plugging holes - this work is largely
complete now as one-off costs diminish and we start to rebuild from
a cleaner slate. It would be nice to say that our problems are
behind us but as the results show we still have a lot of work to do
to achieve sustainable profitability. However, the more rewarding
rebuilding phase has commenced, and some exciting work-streams have
been initiated which it is hoped will unlock the full potential of
our business. Technology improvements are high on that list.
The Group is now considerably smaller following the divestment
of non-core activities and a substantial reduction in the
head-count. Fortunately, we have been able to retain most of the
specialists who enable Stanley Gibbons to offer a service to our
clients which is second to none. We will look to build these teams
as we move forward.
As we move into the next phase of the strategic plan the
requirements of the Group are changing and in line with this, Clive
Whiley is stepping down as a director with effect from today. Clive
was the first of the new directors to be appointed in March 2016
and his contribution has been outstanding. It is largely as a
result of his hard work that the Group has been able to overcome
the issues it faced. I would like to thank him on behalf of all the
stakeholders and wish him well in his new endeavours. I would also
like to welcome Mark West who has just joined our Board. Mark has
skills in digital innovation which we expect will make a
significant contribution to our future success.
The collectibles business for stamps & coins remains solid
and our brands are highly regarded. Our plan is to make our
business more attractive to both existing and new clients through
the investment and initiatives which we have instigated. We
recognise that this will take time to show through to the
bottom-line but in the meantime, I would like to thank all our
stakeholders and in particular our staff for their ongoing support
as we work through our rejuvenation programme.
Harry Wilson
Chairman
27 December 2018
Chief Executive's Report
Introduction
This interim report is the first set of financial reports which
pertain to a period post the recapitalisation of the Group in March
2018. While the recapitalisation did not solve the Group's ongoing
challenges overnight, it did allow us to begin the process of
rebuilding the business and laying the foundations for a future
based around growth as opposed to the necessary downsizing of the
preceding 18 months.
A significant part of the restructuring of the Group involved
the sale of the brands and businesses previously within our
Interiors division. Additionally, following the granting of the
administration order in relation to Stanley Gibbons (Guernsey)
Limited, a wholly owned subsidiary through which our Investment
division activities were conducted, the Group lost control of this
entity. Both of these divisions have therefore been included as
discontinued activities within our results and therefore not
included in the individual figures for the continuing operations of
the Group. The statement of comprehensive income for the 6 months
ended 30 September 2018 has been disclosed accordingly and the
comparative figures for 30 September 2017 have been restated.
Operating Review
Continuing Operations
6 months 6 months 6 months 6 months 12 months 12 months
to 30 to 30 to 30 to 30 to 31 to 31
Sep Sep Sep Sep Mar Mar
2018 2018 2017 2017 2018 2018
Sales Profit Sales Profit Sales Profit
Restated Restated
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Philatelic 1,841 (381) 3,549 (388) 6,796 (2,101)
Publishing 936 (50) 988 (89) 2,213 (29)
Coins & medals 1,633 218 2,068 380 3,213 502
Legacy
Interiors 616 9 532 67 1,136 33
Other &
corporate
overheads - (1,534) - (1,785) - (3,332)
Finance
charges - (300) - (311) - (444)
-------------- --------------- ---------------- ---------------- --------------- ----------------- ----------------
Trading sales
and losses 5,026 (2,038) 7,137 (2,126) 13,358 (5,371)
Amortisation
of
customer
lists - (120) - (182) - (237)
Pension
service
and share
option
charges - (90) - (150) - (200)
Finance
charges
related to
pensions - - - - - (152)
Gain on loan
restructuring - - - - - 4,250
Exceptional
operating
charges - (118) - (474) - (6,332)
-------------- --------------- ---------------- ---------------- --------------- ----------------- ----------------
Group total
sales
and loss
before
tax 5,026 (2,366) 7,137 (2,932) 13,358 (8,042)
-------------- --------------- ---------------- ---------------- --------------- ----------------- ----------------
Overview
The business remained both cash and profit negative through the
period, while underlying trading was volatile in several areas.
The significant potential of the Group however was reflected in
the strong gross margins generated across the board. This, combined
with the scope to increase the scale of most of our business areas
without commensurately increasing our underlying cost base gives us
cause for optimism. If, through the strategy currently being
implemented, we are able to generate growth, we will create a
sustainably profitable, cash generative business.
Delivering the scale of growth we desire requires a degree of
initial investment. This has already begun and is likely to
continue for some time as we position the Group to take full
advantage of the two exceptional brands which it incorporates.
Coins & Medals
During the period, Baldwin's operated both profitably generating
GBP218,000 profit and efficiently, consistently demonstrating the
highest level of inventory turnover of the Group's main dealing
businesses.
Having come through a period of significant upheaval, while less
profitable than in the past, the underlying business is now far
more sustainable. Our aim is to regrow profitability back towards
the levels of the past whilst ensuring that this long-term
sustainability is not sacrificed. This is likely to involve growth
in the areas where Baldwin's has maintained a strong presence in
recent years as well as building on the offering over time.
Philatelic Dealing
As with Baldwin's both of the Philatelic dealing teams, GB and
Commonwealth, experienced volatile trading during the period,
albeit with improvement being seen in the latter months.
Following a time prior to the recapitalisation where inventory
balances were reduced, the period in question also saw a reversal
of this with both of the dealing teams investing. While the two
departments have different challenges with regard to their
inventory, both are heavily focused on taking explicit action to
make further progress in this regard. Our operational practices and
processes also need to be improved and made more efficient and we
are taking steps to ensure that this happens.
At the start of the financial year, our retail offering did not
do justice to either our brands or the prime location which we
enjoy. With a little investment in both inventory and staffing as
well as a significant amount of effort, it is now a far more
appealing place to shop. While there is undoubtedly more progress
to be made, this has been reflected in an improved operational
performance and increasing levels of customer satisfaction.
Philatelic Auctions
We have made strong progress in our Auctions business, operating
increasingly efficiently with an improved experience for vendors
and purchasers alike which is mirrored by better quality catalogues
and other public facing material.
Realisations have been strong with the proportion of items
selling improving towards our medium term target of 80%.
The quality of material being consigned to us is also starting
to improve. With a natural lag between material being consigned and
actually going under the hammer, the benefits of this should be
more clearly seen over the next six months.
Publications
Publications revenue is less volatile, with sales down GBP52,000
which generated an operating loss of GBP50,000. Within this, there
is a full allocation of costs for our customer services team.
The catalogues which make up the largest part of the division
remain the cornerstone of the Stanley Gibbons franchise and we are
working on several initiatives which will allow us to operate more
efficiently and in turn potentially produce more catalogues on an
increasingly regular basis.
Corporate Overheads
While a lot of work has been done to simplify the business, the
benefits from this will not be fully felt until next financial year
and it is undeniable that the cost base remains too high for a
business of this size. A significant proportion of this is not
easily reduced, particularly without limiting our future potential,
however we are working hard to bring it down as much as possible
and further improvements should become visible over the coming
months.
Exceptional Operating Charges
Similar to our corporate overheads, ongoing progress and
simplification of the Group should result in these charges coming
down over time. Many of the legacy issues which have contributed to
these costs have now been resolved or are close to being so. Others
will undoubtedly arise, but we would hope and expect that these
will be of a smaller scale than in the past.
Exceptional operating charges can be further analysed as
follows:
6 months to 30 Sep 2018 6 months 12 months
to 30 to 31
Sep 2017 Mar 2018
Restated
GBP000 GBP000 GBP000
Impairment of intangible
assets - - 541
Stock provisions - 244 4,202
Impairment of receivables - - 288
Reorganisation & restructuring
costs - 42 119
Professional fees for corporate
activity 118 188 1,235
Loss on disposal of tangible
fixed assets - - 392
Release of other payables
provision - - (616)
Loss on disposal of subsidiary - - 171
--------------------------------------------------------------------- ------------ ------------ ------------
118 474 6,332
--------------------------------------------------------------------- ------------ ------------ ------------
Funding & Cash Flow
In its simplest form, our strategy revolves around improving and
investing in the business with the ambition of creating a larger,
sustainably profitable entity which better reflects the strength of
our two main brands.
To do this most effectively, while also accepting that it will
take some time to become cash profitable, the business needs to
have access to an appropriate amount of capital.
We were therefore very pleased to announce last week, that we
have secured an additional GBP5m of funding in the form of an
extension to the existing loan facility with Phoenix S. G. Limited.
The terms of the extension are the same as the existing facility
and the intention is that it will be drawn down by the Group in
several tranches as needed.
As at the balance sheet date the Group had cash balances of
GBP1.8m and a loan of GBP10.25m repayable in March 2023, provided
there is no event of default in the meantime. This loan is due to
Phoenix S. G. Limited, the Group's controlling shareholder.
Subsequent to the balance sheet date the Group has agreed a further
facility of up to GBP5m as detailed above.
As detailed in the financial statements for the year ended 31
March 2018, the Group is currently in default on its loan
facilities. Although during periods of default the facilities are
repayable on demand, Phoenix S. G. Limited has not requested
repayment.
Cash outflows from operating activities for the six months ended
30 September 2018 were GBP2.8m (2017; GBP3.3m).
As at 20 December 2018 the Group had net cash balances of
GBP1.6m and had not drawn down any amount from the new GBP5m
facility.
Litigation
The Group had been in dialogue with the U.S. Securities and
Exchange Commission (the "SEC"), following the conclusion of the
Department of Justice's ("DOJ") criminal prosecution against a
former client, (arising in part out of his dealings with Mallett,
Inc) and a New York based former director of Mallett plc. Both the
SEC and DOJ are aware that Mallett's new owners were not involved
in the events underlying the investigation.
No criminal or civil charges have been filed against Mallett
Inc. or any Mallett group company and our offer to the SEC that
resolves all outstanding issues has been accepted and approved by
the court.
Given the former director's admitted criminal conduct, the Group
is pursuing civil action against certain former directors of
Mallett plc in respect of losses it has incurred as a result of
these matters.
The legal costs in relation to the above together with the
agreed settlement with the SEC are estimated, as at 30 September
2018, to be GBP0.4m, which excludes any potential recovery from the
former directors of Mallett. This amount is the accrual at the
period end.
Dividend
The Directors do not recommend an interim dividend for the six
months ended 30 September 2018.
Outlook
During the period in question, a lot of work was done to prepare
the ground for more tangible progress over the following months and
years which will make us both more efficient and better positioned
to grow the business.
All of these are consistent with the strategy which we
previously laid out in the most recent annual report and over the
next year we expect to be able to demonstrate more tangible
developments including:
- Clarity around and development of our flagship, London location.
- Significant improvement in our technological capability,
including our Publishing processes and offering and improved
websites for both Baldwin's and Stanley Gibbons.
- A rebranding exercise for both brands which will make us more
up to date and bring much needed consistency to what our customers
see and experience when they come into contact with us.
- A range of initiatives aimed at increasing the addressable market.
While the Group remains in a challenging position and will
continue to be so for some time, every indication is that both
brands have huge potential if given a stable platform from which to
grow and it is delivery of this on which we are all focused.
Your ongoing support, that of our customers and in particular
the hard work of everybody within the Group is recognised and very
much appreciated by everybody on the Board.
Graham Shircore
Chief Executive Officer
27 December 2018
Condensed statement of comprehensive income
for the 6 months ended 30 September 2018
6 months 6 months 12 months
to 30 Sep to 30 Sep to 31 Mar
2018 2017 2018
(unaudited) (unaudited) (audited)
Restated
Notes GBP'000 GBP'000 GBP'000
-------------------------------------- -------- ------- --------
Revenue 3 5,026 7,137 13,358
Cost of sales (2,474) (4,064) (8,011)
---------------------------------- -------- ------- --------
Gross Profit 2,552 3,073 5,347
Administrative expenses
before defined benefit pension
service costs and exceptional
operating costs (2,012) (2,005) (5,517)
Defined benefit pension
service cost - - (171)
Exceptional operating charges (118) (474) (6,332)
---------------------------------- -------- ------- --------
Total administrative expenses (2,130) (2,479) (12,020)
Selling and distribution
expenses (2,488) (3,215) (5,288)
---------------------------------- -------- ------- --------
Operating Loss (2,066) (2,621) (11,961)
Finance income 19 22 45
Finance costs (319) (333) (489)
Gain on loan restructuring - - 4,250
Share of net profits of
joint venture - - 113
Loss before tax (2,366) (2,932) (8,042)
Taxation 4 - - 133
---------------------------------- -------- ------- --------
Loss from continuing operations (2,366) (2,932) (7,909)
Loss from discontinued operations (30) (158) (4,260)
---------------------------------- -------- ------- --------
Loss for the financial year (2,396) (3,090) (12,169)
Other comprehensive income:
Exchange differences on
translation of
foreign operations 46 18 24
Actuarial gains recognised
in
the pension scheme - - 448
Tax on actuarial gains recognised
in the pension scheme - - (146)
Other comprehensive income
for the period/year, net
of tax 46 18 326
---------------------------------- -------- ------- --------
Total comprehensive loss
for the period/year (2,350)
10,066) (3,072) (11,843)
---------------------------------- -------- ------- --------
Basic earnings per Ordinary
Share 5 (0.55)p (1.64)p (4.21)p
Diluted earnings per Ordinary
Share 5 (0.55)p (1.64)p (4.21)p
---------------------------------- -------- ------- --------
Total comprehensive income is attributable to the owners of the
parent.
Condensed statement of financial position
as at 30 September 2018
30 Sep 31 Mar
2018 2018 (audited)
30 Sep 2017
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
------------------------------- ------------ ------------- ------------------------
Non-current assets
Intangible assets 5,707 6,906 5,977
Property, plant and
equipment 2,385 3,318 2,535
Deferred tax asset 1,190 1,344 1,190
Investments 113 - 113
------------------------------- ------------ ------------- ------------------------
9,395 11,568 9,815
------------------------------- ------------ ------------- ------------------------
Current assets
Inventories 18,142 52,011 18,303
Trade and other receivables 2,860 4,221 3,610
Assets held for sale - 951 -
Cash and cash equivalents 1,789 1,081 4,596
------------------------------- ------------ ------------- ------------------------
22,791 58,264 26,509
------------------------------- ------------ ------------- ------------------------
Total assets 32,186 69,832 36,324
------------------------------- ------------ ------------- ------------------------
Current liabilities
Trade and other payables 6,378 27,846 8,404
Borrowings 10,250 17,369 10,000
16,628 45,215 18,404
------------------------------- ------------ ------------- ------------------------
Non-current liabilities
Trade and other payables - 2,904 -
Retirement benefit obligations 5,227 6,086 5,329
Deferred tax liabilities 408 554 408
------------------------------- ------------ ------------- ------------------------
5,635 9,544 5,737
------------------------------- ------------ ------------- ------------------------
Total liabilities 22,263 54,759 24,141
------------------------------- ------------ ------------- ------------------------
Net assets 9,923 15,073 12,183
------------------------------- ------------ ------------- ------------------------
Equity
Called up share capital 4,269 1,789 4,269
Share premium account 78,217 74,847 78,217
Share compensation reserve 2,154 2,033 2,064
Capital redemption reserve 38 38 38
Revaluation reserve 346 346 346
Retained earnings (75,101) (63,980) (72,751)
------------------------------- ------------ ------------- ------------------------
Equity shareholders'
funds 9,923 15,073 12,183
------------------------------- ------------ ------------- ------------------------
Condensed statement of changes in equity
for the 6 months ended 30 September 2018
Called Share Share Capital
up premium compensation Revaluation redemption Retained
share account reserve reserve reserve earnings Total
capital GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
At April
2018 4,269 78,217 2,064 346 38 (72,751) 12,183
Loss for
the financial
year - - - - - (2,396) (2,396)
Exchange
differences
on translation
of foreign
operations - - - - - 46 46
---------------------- --------- --------- -------------- ------------- ------------ ---------- ---------
Total Comprehensive
loss - - - - - (2,350) (2,350)
Cost of share
options - - 90 - - - 90
---------------------- --------- --------- -------------- ------------- ------------ ---------- ---------
At 30 September
2018 4,269 78,217 2,154 346 38 (75,101) 9,923
---------------------- --------- --------- -------------- ------------- ------------ ---------- ---------
At 1 April
2017 1,789 74,847 1,883 346 38 (60,908) 17,995
Profit for
the period - - - - - (3,090) (3,090)
Exchange
differences
on translation
of foreign
operations - - - - - 18 18
---------------------- --------- --------- -------------- ------------- ------------ ---------- ---------
Total Comprehensive
loss - - - - - (3,072) (3,072)
Cost of share
options - - 150 - - - 150
---------------------- --------- --------- -------------- ------------- ------------ ---------- ---------
At 30 September
2017 1,789 74,847 2,033 346 38 (63,980) 15,073
---------------------- --------- --------- -------------- ------------- ------------ ---------- ---------
At April
2017 1,789 74,847 1,883 346 38 (60,908) 17,995
Loss for
the financial
year - - - - - (12,169) (12,169)
Amounts which
may be subsequently
reclassified
to profit
& loss
Exchange
differences
on translation
of foreign
operations - - - - - 24 24
Amounts which
will not
be subsequently
reclassified
to profit
& loss
Remeasurement
of pension
scheme net
of deferred
tax - - - - - 302 302
---------------------- --------- --------- -------------- ------------- ------------ ---------- ---------
Total comprehensive
loss - - - - - (11,843) (11,843)
Share issue 2,480 3,370 - - - - 5,850
Cost of share
options - - 181 - - - 181
---------------------- --------- --------- -------------- ------------- ------------ ---------- ---------
At 31 March
2018 4,269 78,217 2,064 346 38 (72,751) 12,183
---------------------- --------- --------- -------------- ------------- ------------ ---------- ---------
Condensed statement of cash flows
for the 6 months ended 30 September 2018
6 months 6 months 12 months
to 30 Sep to 30 Sep to 31 Mar
2018 2017 2018
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
------------------------------------- ------- ------- -------
Cash outflow from operating
activities 6(2,755) (3,295) (2,168)
Interest paid (300) (311) (489)
Taxes paid - - 22
------------------------------------ ------- ------- -------
Net cash outflows from operating
activities (3,055) (3,606) (2,635)
------------------------------------ ------- ------- -------
Investing activities
Purchase of property, plant
and equipment (2) (6) (35)
Purchase of intangible assets - (24) (30)
Investment in joint venture - - (113)
Disposal proceeds from discontinued
operations - - 2,681
Sale of property, plant
and equipment - - 236
Sale of financial asset - 1,400 -
Disposal of subsidiary - 100 -
Interest received - - 44
------------------------------------ ------- ------- -------
Net cash (used in)/generated
from investing activities (2) 1,470 2,783
------------------------------------ ------- ------- -------
Financing activities
Net proceeds from issue
of ordinary share capital - - 5,850
Net borrowings 250 (700) 4,450
------------------------------------ ------- ------- -------
Net cash generated from/(used
in) financing activities 250 (700) 10,300
------------------------------------ ------- ------- -------
Net decrease in cash and
cash equivalents (2,807) (2,836) 10,448
------------------------------------ ------- ------- -------
Cash and cash equivalents
at start of period 4,596 (5,852) (5,852)
------------------------------------ ------- ------- -------
Cash and cash equivalents
at end of period 1,789 (8,688) 4,596
------------------------------------ ------- ------- -------
Notes to the Condensed Financial Statements
for the 6 months ended 30 September 2018
1 Basis of preparation
The interim financial information in this report has been
prepared using accounting policies consistent with IFRS as approved
for use in the European Union applied in accordance with the
provisions of Jersey Companies Law 1991 on a historical basis
except where otherwise indicated.
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chief Executive's Report above. The Group's
forecasts show that it will remain within current loan facility
limits for the foreseeable future. However as highlighted above,
the Group is currently in default on its borrowing facilities, due
to Stanley Gibbons (Guernsey) Limited (in administration) being in
administration and the qualified audit report in the March 2018
financial statements. During periods of default the loan is
repayable on demand. The loan is from the Group's controlling
shareholder Phoenix S. G. Limited and due for repayment in March
2023. Phoenix S. G. Limited was aware of the default at the time it
acquired its interest in the Group and the Directors do not believe
it will seek repayment of the loan within the foreseeable future,
although there can be no certainty of this fact. The Directors'
view is further supported by the fact that Phoenix S. G. has
recently agreed an as yet undrawn facility for a further GBP5m,
however in the event that Phoenix S. G. Limited requests repayment
of the loan or trading deteriorates below forecasted levels, the
Group would require access to additional liquidity.
The Directors acknowledge that the above risks cast doubt on the
Group's ability to continue as a going concern. They recognise that
Phoenix S. G. Limited has stated that it intends to be a long term
investor, is the controlling shareholder with an interest of just
over 58% and has given no indication that it would withdraw its
support.
As such, having regard to the matters above, and after making
reasonable enquiries and taking account of uncertainties discussed
above, the Directors have a reasonable expectation that the Company
and the Group have access to adequate resources to continue
operations and to meet its liabilities, as and when they fall due,
for the foreseeable future. For that reason, they continue to adopt
the going concern basis in the preparation of the accounts.
2 Significant accounting policies
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 March
2018.
Notes to the Condensed Financial Statements
3 Segmental analysis
As outlined in the Operating Review the company has four main
business segments, as shown below. 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.
Segmental income statement
Coins Legacy
&
Philatelic Publishing Medals Interiors Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------------- ---------- ------- --------- --------------- --------
6 months to
30 September
2018
Revenue 1,841 936 1,633 616 - 5,026
Operating
costs (2,222) (986) (1,415) (607) (1,744) (6,974)
Exceptional
costs (2) - (17) - (99) (118)
Net finance
costs - - - - (300) (300)
------------------ --------------- ---------- ------- --------- --------------- --------
Profit/(loss)
before tax (383) (50) 201 9 (2,143) (2,366)
Tax - - - - - -
----------------- --------------- ---------- ------- --------- --------------- --------
Profit/(loss)
for the period
from continuing
operations (383) (50) 201 9 (2,143) (2,366)
------------------ --------------- ---------- ------- --------- --------------- --------
6 months to 30 September
2017
Restated
Revenue 3,549 988 2,068 532 - 7,137
Operating
costs (3,937) (1,077) (1,688) (465) (2,117) (9,284)
Exceptional
costs (210) - (72) - (192) (474)
Net finance
costs - - (1) - (310) (311)
------------------ --------------- ---------- ------- --------- --------------- --------
Profit/(loss)
before tax (598) (89) 307 67 (2,619) (2,932)
Tax - - - - - -
----------------- --------------- ---------- ------- --------- --------------- --------
Profit/(loss)
for the period
from continuing
operations (598) (89) 307 67 (2,619) (2,932)
------------------ --------------- ---------- ------- --------- --------------- --------
12 months to 31
March 2018
Revenue 6,796 2,213 3,213 1,136 - 13,358
Operating
costs (8,897) (2,242) (2,711) (1,103) (3,921) (18,874)
Exceptional
costs (4,017) 29 (582) (37) 2,525 (2,082)
Net finance
costs - - - (126) (318) (444)
------------------ --------------- ---------- ------- --------- --------------- --------
Profit/(loss)
before tax (6,118) - (80) (130) (1,714) (8,042)
Tax (3) - 166 - (30) 133
------------------ --------------- ---------- ------- --------- --------------- --------
Profit/(loss)
for the period
from continuing
operations (6,121) - 86 (130) (1,744) (7,909)
------------------ --------------- ---------- ------- --------- --------------- --------
Notes to the Condensed Financial Statements
continued
3 Segmental analysis continued
Geographical Information
Analysis of revenue by origin and destination
6 months 6 months 6 months 6 months 12 months 12 months
to 30 to 30 Sep to 30 to 30 to 31 to 31
Sep 2018 2018 Sales Sep 2017 Sep 2017 Mar 2018 Mar 2018
Sales by origin Sales Sales Sales Sales
by destination by destination by origin by destination by origin
Restated Restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------------- ----------- ---------------- ----------- ---------------- -----------
United Kingdom 3,202 4,459 4,726 6,606 9,178 12,222
Channel
Islands 59 - 288 - 364 -
Europe 287 - 285 - 522 -
North America 1,018 567 1,310 531 2,209 1,136
Asia 302 - 136 - 519 -
Rest of
the World 158 - 392 - 566 -
--------------- --------------- ----------- ---------------- ----------- ---------------- -----------
5,026 5,026 7,137 7,137 13,358 13,358
--------------- --------------- ----------- ---------------- ----------- ---------------- -----------
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.
4 Taxation
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual earnings.
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.
.
Notes to the Condensed Financial Statements
continued
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 to 30 Sep 2018 12 months
to 31
Mar 2018
(audited)
(unaudited) 6 months
to 30 Sep
2017 (unaudited)
Restated
------------------------------------------ ----------------------- -----------
Weighted average number
of ordinary shares in
issue (No.) 426,916,643 178,916,643 187,749,520
Dilutive potential ordinary
shares: Employee share
options (No.) 931,956 323,959 931,956
----------------------------- ----------- ----------------------- -----------
Continuing operations
Loss after tax (GBP) (2,366,000) (2,932,000) (7,909,000)
Pension service costs
(net of tax) - 150,000 139,000
Cost of share options
(net of tax) 90,000 150,000 147,000
Amortisation of customer
lists (net of tax) 120,000 180,000 192,000
Exceptional operating
costs (net of tax) 118,000 474,000 708,000
----------------------------- ----------- ----------------------- -----------
Adjusted loss after tax
(GBP) (2,038,000) (1,978,000) (6,723,000)
----------------------------- ----------- ----------------------- -----------
Basic loss per share -
pence per share (0.55)p (1.64)p (4.21)p
Diluted loss per share
- pence per share (0.55)p (1.64)p (4.21)p
Adjusted loss per share
- pence per share (0.48)p (1.11)p (3.58)p
Adjusted diluted loss
per share - pence per
share (0.48)p (1.11)p (3.58)p
----------------------------- ----------- ----------------------- -----------
Discontinued operations
Loss after tax (GBP) (30,000) (158,000) (4,260,000)
Basic loss per share -
pence per share (p) (0.01)p (0.09)p (2.27)p
Diluted loss per share
- pence per share (p) (0.01)p (0.09)p (2.27)p
Notes to the Condensed Financial Statements
continued
6 Cash outflows from operating
activities
6 months
to
30 Sep 6 months
2018 to
12 months
30 Sep to 31
2017 (unaudited) Mar 2018
(unaudited) Restated (audited)
GBP'000 GBP'000 GBP'000
--------------------------------- ------------- ------------------ ----------
Operating loss (including
discontinued operations) (2,096) (2,779) (11,998)
Profit on sale of discontinued
operations - - (2,139)
Loss on sale of property,
plant and equipment - - 392
Profit on disposal of investment - (1,394) -
Impairment of tangible assets - - 153
Depreciation of tangible assets 231 201 678
Amortisation of intangible
assets 270 340 544
Impairment of intangibles - 150 541
Decrease in provisions (102) - (308)
Income from joint venture - - 113
Net exchange differences (32) 18 183
Cost of share options 90 150 181
Decrease in inventories 161 3,214 14,522
Decrease/(increase) in trade
and other receivables 750 (177) (487)
Decrease in trade and other
payables (2,027) (3,018) (4,543)
--------------------------------- ------------- ------------------ ----------
Cash outflows from operating
activities (2,755) (3,295) (2,168)
--------------------------------- ------------- ------------------ ----------
7 Agreement with Phoenix S. G. Limited ("Phoenix SG")
On 10th September the Company announced that its subsidiary,
Stanley Gibbons Limited ("SGL") had entered in to an agreement with
Phoenix SG to acquire approximately 1,900 items, for an initial
consideration of GBP5.20m, which is payable in cash to Phoenix SG
over the term of the agreement, as and when sales of the items are
made to third parties and will be the net proceeds, after deduction
of a commission payment to be made to SGL, on completed sales.
Phoenix SG had acquired the items from the administrators of
Stanley Gibbons (Guernsey) Limited. The agreement is for a total
term of 10 years and any sale at a value that is less than the base
cost of an inventory item can only be made with the specific
permission of Phoenix SG. To the extent that all of the inventory
is sold and the appropriate payments have been made by SGL to
Phoenix SG no further consideration will be due. To the extent that
items remain to be sold at the end of the agreement the relevant
items will be returned to Phoenix SG and no further consideration
will be due.
Notwithstanding the fact that the agreement was written as a
sale from Phoenix SG to SGL, the substance of the transaction is
that of a consignment stock arrangement and so has been accounted
for as such. The acquired items have therefore not been included
within inventories and there is no related creditor due to Phoenix
SG within the balance sheet. The commission due to SGL is
recognised as revenue in the accounting period of the sale to a
third party. As at 30 September 2018 of the initial items totalling
GBP5.20m, GBP5.18m remained unsold.
Notes to the Condensed Financial Statements
continued
8 Post Balance Sheet Event
On the 21 December the Group announced it had agreed an
additional GBP5m of funding in the form of an extension to the
existing loan facility with Phoenix SG. The terms of the extension
are the same as the existing facility and the intention is that it
will be drawn down by the Group in several tranches as needed.
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, 18 Hill Street, St
Helier, Jersey JE2 4UA.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFLLFSLDFIT
(END) Dow Jones Newswires
December 27, 2018 07:00 ET (12:00 GMT)
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