TIDMSGI
RNS Number : 2087L
Stanley Gibbons Group PLC
29 April 2020
COVID-19 Update
The Stanley Gibbons Group provides an update on the impact of
the Covid-19 pandemic on the business:
Graham Shircore, Group Chief Executive said:
'I'd particularly like to thank all of my colleagues who have
shown resilience, flexibility and dedication in our collective
battle to mitigate the impact of COVID-19. I am very proud of how
everybody has responded and it is undeniable that this has had a
material positive impact on our performance.
I would also like to thank all of our customers, old and new,
for their understanding, continued engagement with us and the many
messages of goodwill that we have received, I hope that we can
continue to do more for you at this difficult time'.
Operational Update
The unprecedented situation in which the whole world now finds
itself has unsurprisingly had a profound impact on the operating
practices of the Group but we adapted rapidly and all areas of the
business continue to function:
Our shop at 399 Strand was in the final stages of redevelopment
at the start of the upheaval and building work was stopped on
Friday March 20th. At the same time, in order to protect both staff
and customers, we decided to close our temporary shop at 370
Strand. Following the introduction of the 'lockdown' the following
week, we began to put in place the contingency measures which we
had previously worked on and quickly moved to an operating model
which is essentially consistent with how we are operating
today:
-- All areas of the business remain open and functioning other than the physical shop.
-- Along with our Publications Department, Customer Services
team, Rare Stamp and Baldwin's businesses, the shop remains open
for telephone and email enquiries and orders.
-- We did not have any auctions planned for late March or April.
We have delayed our planned auction in May but will shortly be
launching an online only auction with a view to potentially doing
more of these hereafter.
-- All phone and email lines across the business remain manned
throughout normal business hours.
Other than the redevelopment work at 399 Strand we have not
cancelled or paused any longer term projects or initiatives. This
will be of significant benefit as and when things begin to return
to some semblance of normality.
The coin market has remained quite robust in recent weeks and we
have seen evidence of more people showing an interest in both coin
and stamp collecting. The higher end of the stamp market has
however seen a more pronounced impact from the current
situation.
We have used this period to work on proactively engaging with
new and existing customers both online and through phone and video
based contact. Combined with further work on driving online
traffic, this has resulted in a material increase in users of our
websites and social media platforms.
We have seen a gratifying increase in both new and 'lapsed'
customers coming back to the hobbies, and believe we are taking
some market share from those who are unable to operate as
effectively through this period.
Our Colleagues
Man hours on site have been reduced by approximately 96% with
our office in Ringwood closed and the Strand open two days per week
with a skeleton workforce. Almost 20% of our workforce has been
furloughed. The business is making up the shortfall in salaries for
those members of staff who are now on furlough.
The Non-Executive directors have temporarily reduced their
remuneration by 25%, as has one senior employee. Another has
volunteered to temporarily reduce their working hours to three days
per week. Across the rest of the senior team, collectively they
have volunteered to defer approximately 15% of their salary three
months.
We have done all we can to protect our colleagues and minimise
the impact the situation has had on them while adapting to
significantly reduced levels of trading activity. Their response
has been extremely gratifying with people working constructively
together and many 'going the extra mile'.
Financial Update
Cash generation has unsurprisingly been a key focus and we have
significantly reduced the level of outstanding debtors while doing
our best to bring costs down where possible and defer as many of
those which can't be taken out completely. We have deferred cash
outflows of approximately GBP450,000 and have saved costs of
approximately GBP300,000.*
Although we have traded better than we initially planned for and
cash generation has been stronger, there is no denying the huge
impact COVID-19 has had on our business. While in aggregate the
impact on the fiscal year to end of March is immaterial, revenue
since the penultimate week of March is down approximately 45%
versus budget.
The mitigating actions we have taken mean that our cash balance
is currently down only slightly compared to our expectations for
this point prior to COVID-19.
This is gratifying but it is not sustainable without an
improvement in trading and further actions on costs. In particular,
the benefit of pushing harder on our trade debtors will not repeat
to the same extent and we are conscious of the need to consider the
reversal of deferred costs.
Based on current trading levels, we anticipate that our cash
balances give us liquidity for approximately another 3 to 4 months
without any further mitigating steps. In addition, we continue to
have access to a further GBP2m through our debt facility.
This period has also highlighted a number of areas where we
believe we may be able to operate more efficiently in future than
we have done in the past. The extent of this remains to be seen but
there is always something which can be done on costs and this
period has allowed us to identify what some of these things
are.
We have had constructive and mutually beneficial conversations
with many of the people we work in conjunction with and we are
grateful for the ongoing support we have received. The attitude of
everybody doing what they can and an appreciation of the scale of
the upheaval has frequently been in evidence.
We have also remained in regular dialogue with Phoenix, our
majority shareholder and lender, and they remain supportive of the
Group and the actions which we are taking.
The duration and longer-term effects of COVID-19 are unknown.
Therefore we are not able to forecast in more detail the impact on
the business at the current time. Our aim is to come out of this
period relatively far stronger than we went into it and our efforts
are having an effect. We will be relentless in continuing to push
harder to ensure that they do not go to waste.
* Based on an assumption of a 3-month period before we return to
more normal operating practices but including our expectation of
rates relief for the full year.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
Enquiries
The Stanley Gibbons Group plc +44(0)207 836 8444
Graham Shircore (Chief Executive Officer)
Anthony Gee (Chief Finance Officer)
Liberum Capital Limited (Nomad and Broker) +44(0)20 3100 2000
Andrew Godber
Edward Thomas
Laura Hamilton
ENDS
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END
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