12th Jan 2010 07:00
For release at 7am on 12 January 2010
The Stanley Gibbons Group plc
("Stanley Gibbons" or the "Company")
Trading Update
As it enters its close period, the Board of Stanley Gibbons wishes to provide an update to the market on its estimated results for the year ended 31 December 2009 and trading outlook in the current year.
2009 trading results
Overall, the results for the year are encouraging and reflect the continuing acceptance of the Company's stamp and collectibles-related investment products as an alternative investment asset class.
Turnover for the year is expected to be approximately 20 per cent. ahead of that reported in 2008 and slightly ahead of market expectations. However, although profits before tax are also expected to be above those reported in 2008, they are likely to be below market expectations, principally as a consequence of factors set out below. Nevertheless, operating cash generation during the year was strong with cash at the year end of approximately £3 million (December 2008: £0.5 million) after payment of approximately £2 million in dividends and tax in the year.
During 2009, management put into effect a deliberate shift in sales of investment products away from those offering future guarantees to others from which the Company earns a lower initial gross margin but with the long term benefit of not taking on the risk of any associated guarantee. The Directors believe this change in focus is in the best long term interests of the Company's performance.
Deferred sales from 2008 did not crystallise in 2009 validating that the Board was correct in exercising prudence in not booking those sales last year.
The Company continued to invest in high quality management to develop the Company's strategy and, in the latter part of the year, substantially restructured the team employed to progress and exploit the Company's internet strategy.
Increased marketing expenditure resulted in the recruitment of new high net worth clients during the year who are expected to contribute to the Company's performance and profitability in future years.
The launch of the rare stamp investment fund, originally scheduled for 2009, is progressing well and planned to launch in 2010. A further update will be provided in the Company's final results statement in March.
Current trading and outlook
Trading in the early days of 2010 remains strong and the Company is optimistic that several opportunities to grow the business will come to fruition. The Company opened a Jersey office in accordance with planned timescales at the end of the year and looks forward to developing the opportunities this new location presents in due course. The refurbishment of the Company's flagship premises on the Strand in London is expected to provide a timely boost to the Company when completed in April ahead of the London International Stamp Exhibition in May 2010.
Consequently, the Board remains confident in the long term prospects for the Company's businesses and in the ability for sales and profits to continue to grow in 2010 and beyond.
Martin Bralsford, Non-Executive Chairman commented:
"I am very pleased with the Company's progress and performance during 2009. Not only have we substantially grown revenues and profits in a difficult economic climate, but have converted profits into a strong cash flow and a healthy financial position at the year end. More importantly, we have achieved this at the same time as investing in our longer term strategy and repositioning the businesses attitude to risk by moving away from investment products offering future guarantees.
Overall, the Company is very well placed to deliver continued growth to Shareholders in the future."
For further information, contact:
The Stanley Gibbons Group plc
Michael Hall, Chief Executive +44 (0) 1481 708 273
www.stanleygibbons.com
Seymour Pierce Ltd, NOMAD/Broker
Jonathan Wright/John Cowie +44 (0) 20 7107 8000
Related Shares:
SGI.L