Stanley Gibbons Suffers Hefty Losses Because of Market Slowdown

[Bimat]

Stanley Gibbons sees one third wiped off its value after the 160-year-old stamp and coins business reveals hefty losses

By ALEX WRIGHT FOR THISISMONEY.CO.UK
PUBLISHED: 14:29 GMT, 29 December 2017 | UPDATED: 14:36 GMT, 29 December 2017

Shares in the world's oldest stamp business Stanley Gibbons plummeted more than 30 per cent to just 3.8p after reporting half-year losses and saying it could sell more assets to bolster its finances.

In a trading update, the 162-year old company that deals in stamps, coins, antiques and fine wine, revealed a £3.5million trading loss in the six months to September 30, down from £3.9m in the same period last year.

On a pre-tax basis, losses narrowed from £6.4m to £3.1m.

Revenue also fell four per cent to £16.6m as Stanley Gibbons bemoaned 'another difficult year' for the group.

The troubled firm has been hit by a slowdown in the stamps and collectables market and hampered by a string of failed historic acquisitions.

It is now trying to dump non-core assets and slash costs in an effort to raise cash.

To this end, the company said it has exceeded its original target of achieving £10m of annual cost reductions, with monthly employment costs falling by 75 per cent, while banking over £6m from asset sales.

Stanley Gibbons confirmed in October that it was in default on its loans and is 'dependent on the bank's ongoing support'.

Today the firm said that it will need to refinance its debt before May and requires a £5m cash injection to fund growth and to 'normalise' working capital requirements.

Chairman Harry Wilson added: 'Whilst discussions with the bank remain constructive there is a risk that the quantum of debt which needs to be refinanced, together with the investment and working capital requirement cannot be obtained within the current capital structure.

'The board will consider raising further equity or asset sales, however the board is of the view that whilst alternative finance will be available it is likely to require restructuring of the current indebtedness as part of the solution.'

He said that the board has received offers of finance from existing and new investors, including an offer of equity conditional on the restructuring of the existing debt.

Earlier this year, Stanley Gibbons put itself up for sale as part of a review being led by finnCap, with private equity firm Disruptive Capital thought to be interested.

Source: This is Money

[Pellinore]

Ominous. Is this a symptom of Brexit?
Will there be a sale?
-- Paul

[chrisild]

Is this a symptom of Brexit?

Rather a symptom of poor management. This article for example was published more than a year ago ...
https://www.theguardian.com/business/2016/oct/03/stamp-collecting-firm-stanley-gibbons-annual-pre-tax-loss

Christian

[Bimat]

Rather a symptom of poor management. This article for example was published more than a year ago ...
https://www.theguardian.com/business/2016/oct/03/stamp-collecting-firm-stanley-gibbons-annual-pre-tax-loss

Thanks for the link. It also has a reference to Brexit vote:

"The Brexit vote has added a degree of uncertainty over the macro environment but quality collectibles have traditionally maintained their value and appeal over the long term and particularly in times of uncertainty."

Aditya

[Pellinore]

Drifting into the newspaper, I found a nice article about a statue of Queen Victoria 'loaned' by the Irish Government to the city of Sydney, Australia, to adorn the square before the Queen Victoria Building. When this happened, in 1987, there were telephonic threats by an Irish terrorist group to bomb the unveiling. It will take a long time before I understand how reason works in some parts of the British Isles. By the way, it must have taken ten cannons or 250.000 beautiful bronze sestertii at the least to cast that bronze statue.

-- Paul

[chrisild]

It also has a reference to Brexit vote

Hehe, that is how I found that article.   But it seems that the failed attempt at establishing an eBay-style platform, and a few acquisitions that did not work out well, were more relevant reasons ...

Christian

[Figleaf]

Whatever the case may be, the market still thinks Stanly Gibbons is dead.

Peter