TIDMSGI
RNS Number : 0404V
Stanley Gibbons Group PLC
09 December 2021
THE STANLEY GIBBONS GROUP PLC
(the "Company" or the "Group")
Interim Results for the six months ended 30 September 2021
The Company has today published its Interim Results for the six
months to 30 September 2021 which are available on the Company's
website and are set out in full below.
For further information, contact:
The Stanley Gibbons Group plc +44 (0)207 836 8444
Harry Wilson (Chairman)
Graham Shircore (Chief Executive Officer)
Kevin Fitzpatrick (Chief Finance Officer)
Liberum Capital Limited (Nomad and Broker) +44 (0)203 100
2000
Andrew Godber
Edward Thomas
Directors and Advisers
Directors H G Wilson Non-Executive Chairman
G E Shircore Chief Executive Officer
K Fitzpatrick Chief Finance Officer
L E Castro Non-Executive Director*
M West Non-Executive Director*
* Independent
Company Secretary K Fitzpatrick
Registered Office 22 Grenville Street
St. Helier
Jersey JE4 8PX
Tel: +44(0)20 7836 8444
Company Registration Registered in Jersey
Number 13177
Legal Form Public Limited Company limited by shares
Nominated Adviser and Broker Liberum Capital Limited
25 Ropemaker Street
London EC2Y 9LY
Auditors Jeffreys Henry LLP
Finnsgate
5-7 Cranwood Street
London EC1V 9EE
Legal Advisers Mourant Ozannes
22 Grenville Street
St Helier
Jersey JE4 8PX
Bird & Bird LLP
12 New Fetter Lane
London EC4A 1JP
Bankers Barclays Bank PLC
1 Churchill Place
London E14 5HP
Registrars Link Market Services (Jersey) Limited
Shareholder Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Tel: 0871 664 0300; from overseas +44(0)37 1664
0300
Website Further financial, corporate and shareholder
information is available in the investor relations
section of the Group's website: www.stanleygibbonsplc.com.
Chairman's Statement
The last 6 months have seen a slow but steady improvement in the
trading environment as the impact of Covid-19 has lessened and
mobility has started to increase. We are however not yet back to
pre-pandemic conditions.
Over the last 20 months we have had to adapt our working
practices to limit the disruption to our business and I am pleased
to say that our staff have risen to the challenges. While all our
efforts are aimed at achieving sustainable profitability in the
near term, we are fortunate in having shareholder support to invest
in the Group and take on new business. The purchase of the unique
1c Magenta for GBP6.3m and the return of Baldwin's auctions are
exciting developments described more fully in the Chief Executive's
report. Day-to-day we continue to improve our communications with
customers both for buying and selling material together with
significant enhancements to our websites and data base which have
resulted in online sales now representing 18% of total sales.
The results are again affected by several extraordinary items in
the period but encouragingly, sales are up 8% to GBP4.81m for the
period (2020: GBP4.46m) including an impressive 34% increase in
Philatelic sales. This has contributed to a decreased total loss
for the period of GBP0.43m (2020: GBP2.22m). An increase in loss
per share from continuing operations to 0.35p (2020: 0.30p) was
offset by earnings per share from discontinued operations of 0.23p
(2020: 0.30p. Cash at the end of the period was GBP1.4m (2020:
GBP2.5m) with an additional GBP1.00m remaining under our loan
facility with Phoenix.
Corporate overheads have increased by 7% to GBP1.13m this period
(2020: GBP1.06m) largely as a result of various government
incentives (furlough, rates) falling away together with the
reversal of salary waivers and deferments generously taken by staff
during the worst of the pandemic. Additional professional costs
have also been incurred during the period particularly in relation
to the purchase of the 1c Magenta. Staff numbers have remained
largely unchanged, and we continue to benefit from the highly
regarded stamp and coin specialists who are key to our future
plans. I am pleased to welcome Kevin Fitzpatrick who recently
joined the Board as Chief Financial Officer, replacing Anthony Gee
who is taking on a new corporate role within the Group.
External events have delayed the recovery plan we began
implementing 3 years ago but our strategy of developing and
investing in the business and our brands remains unchanged. The
market for stamps and coins remains strong, particularly so for
rarer items where our specialists add significant value, and we
continue to see a growing interest from returning and new
collectors. We have a number of good things to look forward to,
starting with the shop where we have still to see the full benefits
of last year's extensive refurbishment. As travel restrictions ease
and footfall increases, particularly with foreign visitors, we can
expect a strong increase in sales across the counter. Following the
successful relaunch of Baldwin's auctions, we look forward to an
increasing schedule of auctions and the rebuilding of the Baldwin's
brand. I shall also be keenly following our joint venture with
Showpiece where the recent launch of fractional ownership of the 1c
Magenta generated huge publicity, attracting interest from both
collectors and the general public. This innovative technology is
particularly appealing to younger collectors who we look forward to
welcoming as new customers to Stanley Gibbons.
I would like to thank all our stakeholders for their continued
support during this uniquely difficult period. In particular, our
staff deserve thanks for their continuing hard work and commitment
in a challenging environment. We have set ourselves an ambitious
target for next year - I look forward to being able to report that
this has been met. Meanwhile, I wish you all a very happy Christmas
and a Covid free New Year.
Harry Wilson
Chairman
8 December 2021
Chief Executive's Report
Introduction
This report covers what has once again been an eventful 6 months
in the history of our two wonderful brands.
Throughout the pandemic we reiterated our intentions not to
postpone or slow down the development of and investment in those
things which we felt were necessary to give us the best opportunity
to get this business back to sustained, significant and profitable
long-term growth.
With the worst impacts of the pandemic hopefully behind us and
many of the necessary foundations in place, we now move into a
period where the time, effort and investment of previous years
needs to be justified.
With this in mind, there are two specific developments on which
I wish to focus, not only due to their importance in their own
right but also for what they represent in terms of where we are and
the ongoing long-term commitment of all concerned.
The first of these was the return to full control of our
Baldwin's auction business following the early termination of the
joint venture agreement we were previously in. While it did not
come in this fiscal half, the first auction back at 399 Strand was
a major success and needs to be a building block from which we can
re-establish this part of the business alongside our dealing
business.
It is also reflective of an increasing focus on the auction
business for Stanley Gibbons, an area where our competitive
strengths give us a significant advantage over the majority of our
peers but for reasons which I find hard to explain, had been
neglected and not given the focus it deserved for many, many
years.
The second was of course our purchase of the world's most
valuable stamp which is now exhibited at our store on the Strand.
Ever since my first days here, I have heard from almost everybody
involved with the hobby about the need to try and raise its profile
and appeal to new collectors, yet collectively there seems to have
been very little done to try and achieve this.
In combination with the first of its kind offering of fractional
ownership of this iconic item, the level of publicity around the
hobby in recent months in mainstream channels has dwarfed anything
we have seen in recent years, something which we believe can only
be a good thing.
It is also representative of an increasing belief that the use
of modern technology and changing collector behaviour more broadly
provides us with a wonderful opportunity with which we can make
fundamental strides in attracting new collectors while
simultaneously improving the experience of existing hobbyists.
Our underlying desire to make rapid and meaningful advances in
terms of both the business and the hobbies which we serve will
require a significant level of dedication and hard work just as
getting us to this point has done and I wish to thank everybody
within the Group for their efforts so far.
Operating Review
The Covid-19 pandemic continued to impact the results for the 6
months to 30 September 2021. Although restrictions were lifted in
July, the first quarter of the year was still impacted from the
restrictions that were put in place in early 2021. The Group's
performance has benefited from the looser operating restrictions
but there is still a lingering impact on the Group's performance.
The table below summarised the performance of the operating
divisions for the period.
Continuing Operations
6 months 6 months 12 months
6 months to 30 Sep 6 months to 30 Sep 12 months to 31 Mar
to 30
Sep 2021 to 30 Sep 2020 to 31 Mar 2021
2021 Profit/ 2020 Profit/ 2021 Profit/
Sales (Loss) Sales (Loss) Sales (Loss)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------------- -------- --------- --------- --------- --------- ---------
Philatelic 2,397 44 1,783 (60) 4,791 (71)
Publishing 789 (71) 868 (50) 1,989 102
Coins & medals 1,560 104 1,747 167 3,335 321
Legacy interiors property 63 (46) 64 (47) 119 84
Other & corporate overheads - (1,129) - (1,059) - (2,193)
Net finance charges on
borrowings* - (467) - (109) - (462)
--------------------------------------- -------- --------- --------- --------- --------- ---------
Trading sales and losses 4,809 (1,565) 4,462 (1,158) 10,234 (2,219)
Amortisation of customer
lists - (94) - (120) - (240)
Finance charges related
to pensions - - - - - (135)
Exceptional operating income/(charges) - 178 - - - (21)
--------------------------------------- -------- --------- --------- --------- --------- ---------
Group sales and loss from
continuing operations 4,809 (1,481) 4,462 (1,278) 10,234 (2,615)
--------------------------------------- -------- --------- --------- --------- --------- ---------
* excludes IFRS16 interest costs.
Philatelic
The Philatelic division reflects the results for our stamp
dealing, retail and auctions business. Total sales for the division
were 34% up at GBP2,397,000 compared to GBP1,783,000. The auction
commissions were 61% ahead of the prior year and dealing division
sales were 26% ahead of 2020. The number of auctions held was
higher than last year and the hammer achieved and sell through
rates were better. The Philatelic business has benefitted the most
from the easing of the Covid-19 restrictions. Margins at 44% (2020:
51%) were lower than those achieved in prior year. However the
division generated a profit of GBP44,000 (2020: loss
GBP60,000).
Publishing
The publications division benefited from customers who began to
return to the hobby during the "lockdown" period in spring 2020.
Therefore it was always anticipated that the same period in 2021
would not be as strong. Revenue for the 6 months to 30 September
2021 was GBP789,000 (2020: GBP868,000), 9% lower. The loss in the
period was GBP71,000 compared to GBP50,000. We continue to populate
the stamp database and will produce all four of our main catalogue
titles and release some of our country titles in the financial
year. There are also new stamp album and accessory products which
will be released in the second half of the year to enhance our
product range.
Coins & Medals
Sales at GBP1,560,000 (2020: GBP1,747,000) were11% down on the
prior year. This was a result of fewer fixed price list during the
first half year as the business geared up to hold its first auction
in October 2021. The margin was stronger in the first six months of
the year at 30% compared to 26% in the prior period. Overheads are
higher as they include the development costs of the auctions and
some of the early marketing costs relating to the launch. As a
result profit has fallen from GBP167,000 to GBP104,000.
Legacy interiors
The property lease at Pall Mall, that the Group sub-let was
surrendered on 3 September 2021. At 31 March 2021 the Group carried
a right of use asset of GBP1,352,000 and a lease liability of
GBP1,500,000. On surrender of the lease an exceptional gain was
released to the income statement of GBP170,000.
Corporate Overheads
Corporate overheads in the six months to 30 September 2021
increased to GBP1,129,000 compared to GBP1,059,000 in the previous
period. Some of the increase was a result of the reversal of some
of the cost benefits that were provided in 2020 to ease the burden
of the pandemic on businesses. Furlough receipts were lower and
rates higher in the current year and the prior year also saw salary
waivers and deferments taken by the Groups employees. In 2021 there
were additional professional fees as a result of the corporate
activity related to the purchase of the 1c Magenta and some other
corporate matters.
Exceptional operating income
Exceptional income in the six months to 30 September 2021 of
GBP178,000 comprised of GBP170,000 relating to the surrender of the
Pall Mall lease, GBP54,000 relating to the amendments to the lease
in 399 Strand offset by GBP46,000 of costs relating to litigation
and other legal and corporate matters.
Net finance charges on borrowings
The cost of borrowing, excluding IFRS 16 lease interest, in the
six months to 30 September 2021 was GBP467,000 (2020: GBP109,000).
Due to the impact of the COVID-19 pandemic on the Group's cashflow,
Phoenix S.G. Limited waived the interest cost on the loan for the 4
months from April to July 2020. The six months to 30 September 2021
also includes an additional amount of GBP93,000 relating to
interest required to be calculated by IFRS 9 on the interest-free
1c Magenta loan (see note 8).
Discontinued operations
The Company's wholly owned subsidiary Mallett Inc (Mallett) has
been involved in a legal dispute regarding a leasehold property in
New York which it sub-let as described in the Company's Annual
Report announced on 10 August 2021. In August 2021 Mallett reached
a settlement agreement with the tenant which terminated their
tenancy. Mallett has been unable to negotiate a settlement with the
landlord for the outstanding rental arrears and has been unable to
negotiate early termination of the lease. On 15 September,
following advice from its US attorneys, the Directors of Mallett
agreed to enter Mallett into a Chapter 11 bankruptcy process in the
United States.
On 15 September Mallett had approximately $3.5m in cash and owed
approximately $1.4m to the landlord, as well as owing large amounts
to other Group companies. The bankruptcy process will allow Mallett
to liquidate the assets in order of priority required by the US
federal bankruptcy code, with timing and amounts paid to creditors
approved by the New York Bankruptcy Court before distributions are
made. There is no update as to when this will be completed.
As a result of the filing for Chapter 11 the Directors consider
they have lost control of the subsidiary and have accounted for
Mallett as a discontinued operation. In the period ended 30
September 2021 profit from discontinued operations was GBP1.0m
(2020: loss GBP0.9m). See note 9 for further details.
Funding & Cash Flow
As at the balance sheet date the Group had cash balances of
GBP1.4m and a loan of GBP16.0m repayable in March 2023. Mallett Inc
is a cross-guarantor of the loan and as a result of Mallett
entering a Chapter 11 bankruptcy the Group is in default of this
loan. This loan is due to Phoenix S. G. Limited, the Group's
controlling shareholder. The Group's Directors requested and have
received from Phoenix S.G. Limited a signed letter of intent
stating their intention not to call in the loans and to continue to
support the Group. This letter is consistent with the support that
Phoenix have offered throughout their involvement as lender to the
Group but is not a waiver of the default and the loan facility is
payable on demand. At 30 September 2021 there was GBP1m headroom
remaining on the facility.
The Group has a further loan which was taken out by the
Company's subsidiary, Stanley Gibbons Limited. This loan was used
to purchase the 1c Magenta and the stamp acts as security for this
loan. The amount outstanding at 30 September 2021 is GBP6.6m
Net cash outflows from operating activities for the six months
ended 30 September 2021 were GBP5.9m (2020: GBP0.2m inflow). The
majority of this outflow related to the GBP6.3m purchase of the 1c
Magenta. The purchase of the stamp was funded by a GBP6.5m loan
from Phoenix S.G. Limited.
As a result of the Chapter 11 process entered by Mallett Inc the
Group has lost control of GBP2.5m of cash relating to that
subsidiary (see note 9). Depending on the agreed liability position
some of this cash should be returned to the Group through the
Chapter 11 process.
As at 26 November 2021 the Group had net cash balances of
GBP0.8m and GBP1.0m of headroom remaining on the facility, although
GBP0.5m of the facility had been requested by the Group. Repayments
on the loan for the purchase of the 1c Magenta to 26 November 2021
amounted to GBP0.99m.
Going Concern
The Group's forecasts shows that it will remain within current
loan facility limits for the foreseeable future, although this will
exhaust the headroom in the Group's current lending facilities. The
Directors have built the forecasts based on current trading trends,
including loosening of restrictions related to the Covid-19
pandemic, and historical knowledge of the business, the Directors
recognise that its forecasts are dependent on the underlying
assumptions and that trading conditions can always be affected by
unforeseen events.
The Covid-19 pandemic has increased the uncertainty of the
assumptions that the Directors use to forecast future liquidity.
The impact of the pandemic and particularly the restrictions
imposed by governments have over the past 12 months impacted the
financial performance of parts of the Group's operations and could
do so again if restrictions are re-imposed. The Directors have
mitigating courses of actions which are available to them to limit
the impact of the restrictions including operating cost
initiatives, the faster sell down of Group's large inventory
holding and approaching lenders for further short term funding.
The Directors are also fully aware of the potential impacts on
the business from potential unsuccessful defense of the litigation
in the Guernsey courts. The Directors are also aware of the
uncertainty surrounding the outcome of the Mallett Inc Chapter 11
process. The Directors have gathered information from the Group's
advisors to understand the risk and uncertainties arising as a
result of these matters. These matters are not directly in the
control of the Directors and the Directors have therefore made
their judgment based on the evidence provided to them when
assessing the impact on the going concern assumption.
The Group's loan facilities are provided by the Group's
controlling party Phoenix S. G. Limited and the loans, excluding
the loan for the 1c Magenta, fall due for repayment in March 2023.
The Group is currently in default of the loans due to Mallett Inc,
a cross-guarantor of the facility, being in Chapter 11 bankruptcy
proceedings, and therefore the loan is repayable on demand. The
Group would have been in default of the financial covenants at 31
March 2021, which would result in the loan becoming payable on
demand. On 24 March 2021, the Group sought and was granted a waiver
from Phoenix S.G. Limited for the above defaults. The forecast,
taking into account the implications on the Group's demand of the
Covid-19 pandemic, shows the Group will fail to meet its financial
covenants in March 2022.
The Directors recognise that Phoenix S. G. Limited has granted
the waiver of the defaults, stating that it intends to be a long
term investor. Phoenix S.G. Limited is the Group's controlling
party with an interest of just over 58%, has granted a waiver of
interest for the period April to July 2020 and has provided
GBP6,500,000 of funds for the purchase of the British Guiana 1c
Magenta. The Director's were provided with a letter of support by
Phoenix S.G. Limited when Mallett Inc entered Chapter 11 and also a
further letter of support was provided on 6 December 2021 to the
Directors giving an undertaking that Phoenix S.G. Limited would
continue to support the Group whilst the refinance negotiations
continue. From this the Director's have drawn the conclusion that
Phoenix S.G. Limited has given no indication that it would withdraw
its support before March 2023 when the loan facility is
repayable.
The Directors have commenced discussion with its long term
creditors, including pension trustees and Phoenix S.G. Limited.
This will include discussions to review its long term capital
requirements and reduce its longer term liabilities and will be
actively engaging with its lenders and pension trustees over the
next 6 months. The Director's realise that the discussions are
reliant on agreement with third parties and outcomes are uncertain.
However, the longer term creditors have been supportive of the
Group during the past 12 months and there is no indication that
they will not continue to do so.
In view of all of the above, the Directors believe there is a
material uncertainty relating to the Group's position as a going
concern. However, having regard to all of the matters above, and
after making all reasonable enquiries, the Directors currently have
a reasonable expectation that the Company and the Group will 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.
Litigation
As previously reported in the Annual Report and Accounts 31
March 2021, the Group received a letter before action from a
previous investor of Stanley Gibbons (Guernsey) Limited (In
liquidation). The Group sought counsel opinion which stated the
claim was without merit, and the Group responded to the investor
rejecting the claims in the letter.
On 24 September 2021 this matter was filed as a claim by the
investor against the Company in the courts of Guernsey. The Group
has opted to defend this claim. The value of the claim is
approximately GBP1.1m plus interest and costs. The Group has sought
counsel opinion in Guernsey which supports the opinion of the UK
counsel and agrees there are good prospects of successfully
defending the claim. Therefore, based on these opinions the
Directors have concluded not to make any provision for settlement
at the balance sheet date.
Dividend
The Directors do not recommend an interim dividend for the six
months ended 30 September 2021 (2020: GBPnil).
Outlook
Someone once gave me a valuable piece of advice, 'if you give a
target, don't give a timeframe and if you give a timeframe, don't
give a target'.
In talking about a business which is constantly developing and
is as variable as ours, we should almost certainly heed this
advice.
However, at the risk of not learning from the mistakes of others
- our favourite type of mistakes as they cost us nothing - and
having ignored it last year, I will do so once again: For the first
time in many years, we aim to become a sustainably cash positive
business within the next six months.
In one sense this merely represents another waypoint on our
journey. Our focus on continuing to invest in and grow the business
over the long term will be unchanged, however, in the context of
the last 5-10 years, it is an important milestone and we will be
working extremely hard towards it.
Graham Shircore
Chief Executive Officer
8 December 2021
Condensed statement of comprehensive income
for the 6 months ended 30 September 2021
6 months
to 30 Sep 2020
6 months 12 months
to to 31 Mar 2021
30 Sep 2021 (unaudited) (audited)
(unaudited) restated restated
Notes GBP'000 GBP'000 GBP'000
--------------------------------------------- ----- ----------- ----------- -----------
Revenue 3 4,809 4,462 10,234
Cost of sales (2,742) (2,481) (6,044)
--------------------------------------------- ----- ----------- ----------- -----------
Gross Profit 2,067 1,981 4,190
Administrative expenses before defined
benefit pension service costs and
exceptional operating costs (1,545) (1,534) (3,242)
Defined benefit pension service cost - - (135)
Exceptional operating income/(charges) 3 178 - (21)
--------------------------------------------- ----- ----------- ----------- -----------
Total administrative expenses (1,367) (1,534) (3,398)
Selling and distribution expenses (1,621) (1,513) (2,774)
--------------------------------------------- ----- ----------- ----------- -----------
Operating Loss (921) (1,066) (1,982)
Finance income - 9 10
Finance costs (560) (221) (678)
Share of net profits of joint venture - - 35
--------------------------------------------- ----- ----------- ----------- -----------
Loss before tax (1,481) (1,278) (2,615)
Taxation 4 - - 78
--------------------------------------------- ----- ----------- ----------- -----------
Loss from continuing operations (1,481) (1,278) (2,537)
Profit/(loss) from discontinued operations 9 1,000 (931) (1,380)
--------------------------------------------- ----- ----------- ----------- -----------
Loss for the financial period/year (481) (2,209) (3,917)
Other comprehensive income:
Exchange differences on translation
of foreign operations 49 (8) (30)
Actuarial gains recognised in the
pension scheme - - (741)
--------------------------------------------- ----- ----------- ----------- -----------
Other comprehensive income/(loss)
for the period/year, net of tax 49 (8) (771)
--------------------------------------------- ----- ----------- ----------- -----------
Total comprehensive loss for the period/year (432) (2,217) (4,688)
--------------------------------------------- ----- ----------- ----------- -----------
Earnings per share - continuing operations
Basic loss per Ordinary Share 5 (0.35)p (0.30)p (0.59)p
Diluted loss per Ordinary Share 5 (0.35)p (0.30)p (0.59)p
Earnings per share - discontinued
operations
Basic earnings per Ordinary Share 5 0.23p (0.22)p (0.32)p
Diluted earnings per Ordinary Share 5 0.23p (0.22)p (0.32)p
--------------------------------------------- ----- ----------- ----------- -----------
Total comprehensive income is attributable to the owners of the
parent.
Condensed statement of financial position
as at 30 September 2021
30 Sep 2021 30 Sep 2020 31 Mar 2021
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
------------------------------------- ----- ----------- ----------- -----------
Non-current assets
Intangible assets 4,931 5,056 4,985
Property, plant and equipment 1,549 1,639 1,600
Right-of-use assets 2,221 7,279 6,796
Deferred tax asset 216 158 216
Investments 37 39 37
------------------------------------- ----- ----------- ----------- -----------
8,954 14,171 13,634
------------------------------------- ----- ----------- ----------- -----------
Current assets
Inventories 8 22,543 17,043 15,963
Trade and other receivables 1,382 1,601 2,045
Cash and cash equivalents 1,394 2,524 2,090
------------------------------------- ----- ----------- ----------- -----------
25,319 21,168 20,098
------------------------------------- ----- ----------- ----------- -----------
Total assets 34,273 35,339 33,732
------------------------------------- ----- ----------- ----------- -----------
Current liabilities
Trade and other payables 4,221 4,532 4,666
Lease liability 238 1,225 1,780
Borrowings 9 16,012 - -
------------------------------------- ----- ----------- ----------- -----------
20,471 5,757 6,446
------------------------------------- ----- ----------- ----------- -----------
Non-current liabilities
Borrowings 8 6,593 14,284 14,638
Lease liability 2,242 7,333 6,932
Retirement benefit obligations 10 6,370 6,202 6,687
Trade and other payables - 263 -
------------------------------------- ----- ----------- ----------- -----------
15,205 28,082 28,257
------------------------------------- ----- ----------- ----------- -----------
Total liabilities 35,676 33,839 34,703
------------------------------------- ----- ----------- ----------- -----------
Net (liabilities)/assets (1,403) 1,500 (971)
------------------------------------- ----- ----------- ----------- -----------
Equity
Called up share capital 4,269 4,269 4,269
Share premium account 78,217 78,217 78,217
Share compensation reserve 225 2,122 225
Capital redemption reserve 38 38 38
Revaluation reserve 346 346 346
Retained earnings (84,498) (83,492) (84,066)
------------------------------------- ----- ----------- ----------- -----------
Equity shareholders' (deficit)/funds (1,403) 1,500 (971)
------------------------------------- ----- ----------- ----------- -----------
Condensed statement of changes in equity
for the 6 months ended 30 September 2021
Called Share Capital
up share premium Share compensation Revaluation redemption Retained
capital account reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- -------- ------------------ ----------- ----------- -------- -------
At 1 April 2021 4,269 78,217 225 346 38 (84,066) (971)
Loss for the period - - - - - (481) (481)
Amounts which may be
subsequently reclassified
to profit & loss
Exchange differences
on translation of foreign
operations - - - - - 49 49
--------------------------- --------- -------- ------------------ ----------- ----------- -------- -------
Total Comprehensive
loss - - - - - (432) (432)
--------------------------- --------- -------- ------------------ ----------- ----------- -------- -------
At 30 September 2021 4,269 78,217 225 346 38 (84,498) (1,403)
--------------------------- --------- -------- ------------------ ----------- ----------- -------- -------
At 1 April 2020 4,269 78,217 2,122 346 38 (81,275) 3,717
Loss for the period - - - - - (2,209) (2,209)
Amounts which may be
subsequently reclassified
to profit & loss
Exchange differences
on translation of foreign
operations - - - - - (8) (8)
--------------------------- --------- -------- ------------------ ----------- ----------- -------- -------
Total Comprehensive
loss - - - - - (2,217) (2,217)
--------------------------- --------- -------- ------------------ ----------- ----------- -------- -------
At 30 September 2020 4,269 78,217 2,122 346 38 (83,492) 1,500
--------------------------- --------- -------- ------------------ ----------- ----------- -------- -------
At 1 April 2020 4,269 78,217 2,122 346 38 (81,275) 3,717
Loss for the financial
year - - - - - (3,917) (3,917)
Amounts which may be
subsequently reclassified
to profit & loss
Exchange differences
on translation of foreign
operations - - - - - (30) (30)
Amounts which will
not be subsequently
reclassified to profit
& loss
Remeasurement of pension
scheme net of deferred
tax - - - - - (741) (741)
--------------------------- --------- -------- ------------------ ----------- ----------- -------- -------
Total comprehensive
loss - - - - - (4,688) (4,688)
Share option transfer (1,882) 1,882 -
Cost of share options - - (15) - - 15 -
--------------------------- --------- -------- ------------------ ----------- ----------- -------- -------
At 31 March 2021 4,269 78,217 225 346 38 (84,066) (971)
--------------------------- --------- -------- ------------------ ----------- ----------- -------- -------
Condensed statement of cash flows
for the 6 months ended 30 September 2021
6 months 6 months 12 months
to 30 Sep to 30 Sep to 31 Mar
2021 2020 2021
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
-------------------------------------------- ----- ----------- ----------- ---------
Cash (outflow)/inflow from operating
activities 6 (5,389) 560 259
Interest paid (560) (320) (877)
Taxes paid - - 19
-------------------------------------------- ----- ----------- ----------- ---------
Net cash (outflows)/inflows from operating
activities (5,949) 240 (599)
-------------------------------------------- ----- ----------- ----------- ---------
Investing activities
Purchase of property, plant and equipment (2) (285) (299)
Purchase of intangible assets (79) (59) (150)
Investment in joint venture - - 2
Cash outflow on loss of control of
discontinued operation (2,520) - -
Interest received - 9 10
-------------------------------------------- ----- ----------- ----------- ---------
Net cash used in investing activities (2,601) (335) (437)
-------------------------------------------- ----- ----------- ----------- ---------
Financing activities
Principal elements of lease elements (113) 18 171
Net borrowings 7,967 118 472
-------------------------------------------- ----- ----------- ----------- ---------
Net cash generated from financing
activities 7,854 136 643
-------------------------------------------- ----- ----------- ----------- ---------
Net (decrease)/increase in cash and cash
equivalents (696) 41 (393)
--------------------------------------------------- ----------- ----------- ---------
Cash and cash equivalents at start
of period 2,090 2,483 2,483
-------------------------------------------- ----- ----------- ----------- ---------
Cash and cash equivalents at end of
period 1,394 2,524 2,090
-------------------------------------------- ----- ----------- ----------- ---------
Notes to the Condensed Financial Statements
for the 6 months ended 30 September 2021
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 Companies (Jersey) Law 1991 on a historical basis
except where otherwise indicated.
Going concern assumption
The Group's forecasts shows that it will remain within current
loan facility limits for the foreseeable future, although this will
exhaust the headroom in the Group's current lending facilities. The
Directors have built the forecasts based on current trading trends,
including loosening of restrictions related to the Covid-19
pandemic, and historical knowledge of the business, the Directors
recognise that its forecasts are dependent on the underlying
assumptions and that trading conditions can always be affected by
unforeseen events.
The Covid-19 pandemic has increased the uncertainty of the
assumptions that the Directors use to forecast future liquidity.
The impact of the pandemic and particularly the restrictions
imposed by governments have over the past 12 months impacted the
financial performance of parts of the Group's operations and could
do so again if restrictions are re-imposed. The Directors have
mitigating courses of actions which are available to them to limit
the impact of the restrictions including operating cost
initiatives, the faster sell down of Group's large inventory
holding and approaching lenders for further short term funding.
The Directors are also fully aware of the potential impacts on
the business from potential unsuccessful defence of the litigation
in the Guernsey courts. The Directors are also aware of the
uncertainty surrounding the outcome of the Mallett Inc Chapter 11
process. The Directors have gathered information from the Group's
advisors to understand the risk and uncertainties arising as a
result of these matters. These matters are not directly in the
control of the Directors and the Directors have therefore made
their judgment based on the evidence provided to them when
assessing the impact on the going concern assumption.
The Group's loan facilities are provided by the Group's
controlling party Phoenix S. G. Limited and the loans, excluding
the loan for the 1c Magenta, fall due for repayment in March 2023.
The Group is currently in default of the loans due to Mallett Inc,
a cross-guarantor of the facility, being in Chapter 11 bankruptcy
proceedings, and therefore the loan is repayable on demand. The
Group would have been in default of the financial covenants at 31
March 2021, which would result in the loan becoming payable on
demand. On 24 March 2021, the Group sought and was granted a waiver
from Phoenix S.G. Limited for the above defaults. The forecast,
taking into account the implications on the Group's demand of the
Covid-19 pandemic, shows the Group will fail to meet its financial
covenants in March 2022.
The Directors recognise that Phoenix S. G. Limited has granted
the waiver of the defaults, stating that it intends to be a long
term investor, it is the Group's controlling party with an interest
of just over 58%, has granted a waiver of interest for the period
April to July 2020 and has provided GBP6,500,000 of funds for the
purchase of the British Guiana 1c Magenta. The Director's were
provided with a letter of support by Phoenix S.G. Limited when
Mallett Inc entered Chapter 11 and also a further letter of support
was provided on 6 December 2021 to the Directors giving an
undertaking that Phoenix S.G. Limited would continue to support the
Group whilst the refinance negotiations continue. From this the
Director's have drawn the conclusion that Phoenix S.G. Limited has
given no indication that it would withdraw its support before March
2023 when the loan facility is repayable.
The Directors have commenced discussion with its long term
creditors, including pension trustees and Phoenix S.G. Limited.
This will include discussions to review its long term capital
requirements and reduce its longer term liabilities and will be
actively engaging with its lenders and pension trustees over the
next 6 months. The Director's realise that the discussions are
reliant on agreement with third parties and outcomes are uncertain.
However, the longer term creditors have been supportive of the
Group during the past 12 months and there is no indication that
they will not continue to do so.
In view of all of the above, the Directors believe there is a
material uncertainty relating to the Group's position as a going
concern. However, having regard to all of the matters above, and
after making all reasonable enquiries, the Directors currently have
a reasonable expectation that the Company and the Group will 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.
Discontinued operations
As a result of Mallett Inc entering a Chapter 11 process in the
United States the Directors consider they have lost control of the
subsidiary and have accounted for Mallett Inc as a discontinued
operation. As a result of this the prior year comparative income
statement for the period ended 30 September 2020 and for the year
ended 31 March 2021 have been restated.
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
2021.
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.
Coins
& Legacy
Philatelic Publishing Medals Interiors Unallocated Total
Segmental income statement GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
6 months to 30 September 2021
Sale of goods 1,947 612 1,560 - - 4,119
Sale of services (inc Commissions) 428 139 - - - 567
Other income 22 38 - 63 - 123
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
Revenue 2,397 789 1,560 63 - 4,809
Operating costs (2,353) (860) (1,456) (77) (1,162) (5,908)
Exceptional costs - - - 170 8 178
Net finance costs - - - (32) (528) (560)
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
Profit/(loss) before tax 44 (71) 104 124 (1,682) (1,481)
Tax - - - - - -
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
Profit/(loss) for the period from
continuing operations 44 (71) 104 124 (1,682) (1,481)
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
6 months to 30 September 2020
(restated)
Sale of goods 1,488 714 1,747 - - 3,949
Sale of services (inc Commissions) 293 154 - - - 447
Other income 2 - - 64 - 66
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
Revenue 1,783 868 1,747 64 - 4,462
Operating costs (1,843) (918) (1,580) (75) (1,112) (5,528)
Exceptional costs - - - - - -
Net finance costs - - - (36) (176) (212)
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
Profit/(loss) before tax (60) (50) 167 (47) (1,288) (1,278)
Tax - - - - - -
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
Profit/(loss) for the period from
continuing operations (60) (50) 167 (47) (1,288) (1,278)
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
12 months to 31 March 2021 (restated)
(restated)
Sale of goods 4,046 1,566 3,292 - - 8,904
Sale of services (inc Commissions) 713 354 - - - 1,067
Other income 32 69 43 119 - 263
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
Revenue 4,791 1,989 3,335 119 - 10,234
Operating costs (4,862) (1,887) (3,014) 39 (2,436) (12,160)
Exceptional costs - (21) - - - (21)
Net finance costs - - - (352) (316) (668)
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
Profit/(loss) before tax (71) 81 321 (194) (2,752) (2,615)
Tax (13) - 91 - - 78
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
Profit/(loss) for the period from
continuing operations (84) 81 412 (194) (2,752) (2,537)
-------------------------------------- ---------- ---------- ------- --------- ----------- --------
Geographical Information
Analysis of revenue by origin and destination
6 months 6 months 6 months 12 months 12 months
to 6 months to to to to to
30 Sep 2021 30 Sep 2021 30 Sep 2020 30 Sep 2020 31 Mar 2021 31 Mar 2021
Sales by Sales by Sales by Sales by Sales by Sales by
destination origin destination origin destination origin
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ----------- ----------- ----------- ----------- ----------- -----------
United Kingdom 3,602 4,809 3,253 4,462 6,701 10,234
Channel Islands 2 - 8 - 893 -
Europe 234 - 255 - 518 -
North America 465 - 534 - 1,304 -
Asia 368 - 320 - 568 -
Rest of the
World 138 - 92 - 250 -
---------------- ----------- ----------- ----------- ----------- ----------- -----------
4,809 4,809 4,462 4,462 10,234 10,234
---------------- ----------- ----------- ----------- ----------- ----------- -----------
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.
During the six months to 30 September 2021 there was a
GBP178,000 of exceptional income. The surrender of the Pall Mall
lease to the Group's sub-tenant at GBPnil cost to the Group,
created a GBP170,000 credit to the income statement. At 31 March
2021 the Group carried a right of use asset of GBP1,352,000 and a
lease liability of GBP1,500,000.
The Group agreed with its landlord a revised rental agreement
for the period to 31 March 2022 based on an element of fixed rent
and turnover rent which resulted in a GBP54,000 credit to the
profit and loss as a result of the revised lease terms.
GBP46,000 of exceptional costs relating to legal &
professional costs for both litigation and corporate matters
regarding to the stamp purchase were incurred in the period to 30
September 2021.
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.
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 6 months to 12 months to
30 Sep 2021 30 Sep 2020 31 Mar 2021
(unaudited) (unaudited) (audited)
Restated Restated
----------------------------------------- ----------- ----------- ------------
Weighted average number of
ordinary shares in issue (No.) 426,916,643 426,916,643 426,916,643
Dilutive potential ordinary shares:
Employee share options (No.) - - -
----------------------------------------- ----------- ----------- ------------
Continuing operations
Loss after tax (GBP'000) (1,481) (1,278) (2,537)
Pension service costs (net of tax) - - 109
Amortisation of customer lists (net
of tax) 94 120 194
Exceptional operating costs (net of
tax) (178) - 17
----------------------------------------- ----------- ----------- ------------
Adjusted loss after tax (GBP'000) (1,565) (1,158) (2,217)
----------------------------------------- ----------- ----------- ------------
Basic loss per share - pence per share (0.35)p (0.30)p (0.59)p
Diluted loss per share - pence per share (0.35)p (0.30)p (0.59)p
Adjusted loss per share - pence per
share (0.37)p (0.27)p (0.52)p
Adjusted diluted loss per share - pence
per share (0.37)p (0.27)p (0.52)p
----------------------------------------- ----------- ----------- ------------
Discontinued operations
Profit/(loss) after tax (GBP'000) 1,000 (931) (1,380)
Profit/(loss) per share - pence per
share 0.23p (0.22)p (0.32)p
Diluted profit/(loss) per share - pence
per share 0.23p (0.22)p (0.32)p
----------------------------------------- ----------- ----------- ------------
6 Cash outflows from operating activities
6 months 6 months 12 months
to to to
30 Sep 2021 30 Sep 2020 31 Mar 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------------------------------------------- ----------- ----------- -------------
Operating loss (including discontinued operations) 80 (1,898) (3,163)
Depreciation of tangible assets 53 91 145
Depreciation of right of use assets 423 483 966
Amortisation of intangible assets 134 173 335
Impairment of property, plant and equipment - 930 930
Income from joint venture - - 35
Loss on sale of discontinued operations 875 - -
Gain on surrender of lease (169) - -
IFRS16 lease amendments gain (55) - -
Decrease in provisions (317) (87) (343)
Net exchange differences (38) (8) (29)
(Increase)/Decrease in inventories (6,580) 471 1,550
Decrease/(increase) in trade and other receivables 644 356 (88)
(Decrease)/Increase in trade and other payables (439) 49 (79)
--------------------------------------------------- ----------- ----------- -----------
Cash inflows/(outflows) from operating activities (5,389) 560 259
--------------------------------------------------- ----------- ----------- -----------
At 30 September 2021 the cash balance includes GBP384,000 (2020:
GBP434,000) of funds held on behalf of third party clients and
auction vendors for amounts that are due on items sold by the Group
on their behalf.
7 Agreement with Phoenix S. G. Limited ("Phoenix SG")
On 10 September 2018 the Group announced that its subsidiary,
Stanley Gibbons Limited ("SGL") had entered into an agreement with
Phoenix S. G. Limited to acquire approximately 1,900 items, for an
initial consideration of GBP5.20m, which is payable in cash to
Phoenix S. G. Limited 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 S. G. Limited 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 S. G. Limited.
To the extent that all of the inventory is sold and the appropriate
payments have been made by SGL to Phoenix S. G. Limited 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 S. G. Limited and no further consideration will
be due.
Notwithstanding the fact that the agreement was written as a
sale from Phoenix S.G. Limited 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 S.G. Limited 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 2021 of the
initial items totalling GBP5.20m, GBP4.02m (2020: GBP4.29m)
remained unsold.
On 21 February 2020 the Group announced that its subsidiary,
Stanley Gibbons Limited ("SGL") had entered into an agreement with
Phoenix S. G. Limited to acquire approximately 780 items, for an
initial consideration of GBP1.07m, which is payable in cash to
Phoenix S. G. Limited 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. 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 S. G. Limited. To the extent that all of the inventory is
sold and the appropriate payments have been made by SGL to Phoenix
S. G. Limited 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 S. G. Limited and no
further consideration will be due.
Notwithstanding the fact that the agreement was written as a
sale from Phoenix S.G. Limited 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 S.G. Limited 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 2021 of the
initial items totalling GBP1.07m, GBP0.84m (2020: GBP1.07m)
remained unsold.
8 Purchase of 1c Magenta
On 8 June 2021, Stanley Gibbons Limited purchased the world's
most famous and valuable stamp - the 1856 1c Magenta from British
Guiana - the only one in existence. The 1c Magenta was purchased at
auction in the USA for a total consideration of $8.3m (GBP6.3m -
including buyer's premium and overhead fee).
On 29 June 2021, the Group agreed a loan of GBP6.5m with Phoenix
S.G. Limited, the Group's majority shareholder and lender, to
finance the purchase through an interest free loan from Phoenix
S.G. Ltd (PSG). The material terms of the loan are as follows:
-- Interest free with 50% of any profit made on the sale of the item due to PSG
-- Secured solely against the item with no further recourse to any group companies (see note 12)
-- An initial 5-year term, which can be extended by agreement between the parties
-- If the item is unsold at maturity, the loan can be settled through return of the item to PSG
-- If the item is sold for less than the outstanding value of
the loan, the net proceeds of the sale will be deemed to be
sufficient consideration to satisfy the loan obligation in full
-- Sale of the item requires PSG approval.
As required under IFRS9 - Financial Instruments the profit
element of the future sales requires interest on the loan to be
calculated on assumptions regarding future sales over the life of
the loan. The calculated finance costs has been based on sales
assumptions calculated by the management which results in an
estimated interest rate for the loan of 5.88%. This has resulted in
a finance charge of GBP93,000 being charge in the period to 30
September 2021. The loan balance outstanding at 30 September 2021
is GBP6,593,000. Loan repayments to 26 November 2021 amounted to
GBP0.99m
9 Discontinued operations - Mallett Inc
The Company's wholly owned subsidiary Mallett Inc (Mallett) has
been involved in a legal dispute regarding a leasehold property in
New York which it sub-let. In April 2020 Mallett's tenant ceased
paying the rent, which in turn meant that Mallett was unable to pay
the landlord. In August 2021 Mallett reached a settlement agreement
with the tenant which terminated their tenancy. Mallett has been
unable to negotiate a settlement with the landlord for the
outstanding rental arrears and has been unable to negotiate early
termination of the lease. On 15 September 2021, following advice
from its US attorneys, the Directors of Mallett agreed to enter
Mallett into a Chapter 11 process in the United States.
On 15 September 2021 Mallet had approximately $3,500,000 in cash
and owed approximately $1,400,000 to the landlord. The landlord
continues to pursue litigation to recover the outstanding rent but
discussions continue to agree a settlement. Mallett also owed
significant amounts to other Group companies. The bankruptcy
process will allow Mallett to liquidate the assets in order of
priority required by the US federal bankruptcy code, with timing
and amounts paid to creditors approved by the New York Bankruptcy
Court before distributions are made.
As a result of the filing for Chapter 11 the Directors consider
they have lost control of the subsidiary and have accounted for
Mallett as a discontinued operation. As a result of this the prior
year comparative income statement for the period ended 30 September
2020 and for the year ended 31 March 2021 have been restated.
Financial performance and cash flow information
6 months 12 months
6 months to to to
31 March
30 Sep 2021 30 Sep 2020 2021
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------- ----------- ---------
Revenue* 2,220 543 587
Expenses (345) (1,474) (1,967)
--------------------------------------------- ----------- ----------- ---------
Profit/(loss) before and after tax 1,875 (931) (1,380)
Loss on change of control of subsidiary (875) - -
--------------------------------------------- ----------- ----------- ---------
Profit/(loss) from discontinued operations** 1,000 (931) (1,380)
--------------------------------------------- ----------- ----------- ---------
Net cash flow from operations 2,092 413 319
Net cash on disposal (2,520) - -
--------------------------------------------- ----------- ----------- ---------
Net cash flow from discontinued operations (428) 413 319
--------------------------------------------- ----------- ----------- ---------
* includes lease settlement proceeds
** 30 September 2020 includes GBP10,000 profit from legacy
disposal and GBP87,000 for the year to 31 March 2021
Details of the sale of assets
Details of the assets disposed of and the detail of the balance
sheet at 15 September 2021 are shown below
30 Sep 2021
GBP'000
---------------------------------------- -----------
Consideration received
Cash consideration (2,520)
---------------------------------------- -----------
Amount of net (assets)/liabilities sold 1,645
---------------------------------------- -----------
Loss on sale (875)
---------------------------------------- -----------
30 Sep 2021
GBP'000
------------------------- -----------
Right of use asset 2,623
Debtors 41
------------------------- -----------
Total assets 2,664
Trade and other payables (27)
Lease liabilities (4,282)
------------------------- -----------
Total liabilities (4,309)
------------------------- -----------
Net liabilities (1,645)
------------------------- -----------
Impact on the Group's Borrowings
Mallett is a cross guarantor of the Group's finance facilities
with Phoenix S.G. Limited, the Group's 58.09% majority shareholder
and principal lender. As a result of Mallett entering Chapter 11
bankruptcy proceedings in the United States, the Group is in
technical default of its loan facility. As a result of this the
loan facility would become immediately due if called by Phoenix and
these loans have been shown as current liabilities in the balance
sheet at 30 September 2021. The Group's Directors requested and
have received from Phoenix S.G. Limited, a signed letter of support
stating their intention not to demand immediate repayment of the
loans as a result of the Chapter 11 process and to continue to
support the Group. This letter is consistent with the support that
Phoenix have offered throughout their involvement as lender to the
Group but is not a waiver of the default and the loan facility is
therefore payable on demand.
10 Pension liabilities
The Group's defined benefit pension liabilities are assessed
annually under IAS19 by the actuaries of the scheme. This is
performed at the year end date, 31 March 2022.
11 Contingent liabilities
On 5 May 2021 the Group received a letter before action from a
previous investor of Stanley Gibbons (Guernsey) Limited (In
liquidation). The letter alleged that the Group, in the form of an
investment adviser employed by various Group companies had given
advice that caused the investor to suffer a loss. The Group
responded with a robust defence of the claim. On 24 September 2021
this matter was filed as a claim against the Company in Guernsey.
The value of the claim is approximately GBP1.1m plus interest and
costs.
The Group has sought counsel opinion in Guernsey on this and is
defending the case. In the Directors' opinion, based on the
conclusion reached by counsel, at the balance sheet date there is
no requirement for a provision for the amount claimed to be
provided for.
12 Post balance sheet events
On 8 November 2021 the Group launched with its technology
partner, Showpiece Technologies Limited ("Showpiece") fractional
ownership of the 1c Magenta (see note 8). In order to facilitate
fractional ownership, the previous chattel mortgage held over the
1c Magenta by the Group's majority shareholder, Phoenix S.G. Ltd
was replaced by a fixed charge security over the proportion of the
Stamp in which the Company has beneficial interest and any proceeds
of sales of fractional entitlements not remitted by the Company to
PSG to pay down the loan. The headline terms are however unchanged
(see note 8). The loan was amended in order to create the required
flexibility and protect purchasers of fractions in the Stamp. The
proceeds from the sale of fractions of the Stamp will initially be
used to pay down the loan, with any outstanding balance on the loan
at the end of the term now able to be satisfied by the pro-rata
transfer of any unsold fractions of the Stamp from Stanley Gibbons
to the lender.
As part of the process to provide fractional ownership, Stanley
Gibbons has also entered into a commercial agreement with
Showpiece. Showpiece will provide its services to Stanley Gibbons
completely free of charge throughout the life of the agreement.
As part of the agreement with Showpiece and included in the
terms and conditions, should the legal and beneficial title to the
item be sold in its entirety at some point in the future through a
process managed by Showpiece, Showpiece would receive a fee of 2.5%
of the gross proceeds payable by the beneficial owners of the Stamp
at that time.
On 15 November 2021, Stanley Gibbons Limited, a subsidiary of
the Company purchased 20% of the share capital of Showpiece
Technologies limited for GBP2,000 from Phoenix Asset Management
(PAMP). The other 80% is contemporaneously being purchased by
Castelnau Group plc, a Company controlled by PAMP, for
GBP8,000.
13 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.stanleygibbonsplc.com.
Further copies are available on request from: The Company
Secretary, The Stanley Gibbons Group plc, 399 Strand, London WC2R
0LX.
The Stanley Gibbons Group plc
22 Grenville Street, St Helier,
Jersey JE4 8PX, Channel Islands
and
399 Strand,
London WC2R 0LX
Tel: 020 7836 8444
Email: info@stanleygibbons.com
www.stanleygibbons.com
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