Troubled stamps, coins and antiques dealer Stanley Gibbons' (SGI:AIM) woeful full year results reveal a swing to a near £29m loss as the collectables specialist flags 'fundamental errors' in its accounts and shelves the dividend.

Overseeing a major restructuring of the business whose future remains in some doubt, new chairman Harry Wilson reports a savage 43% reduction in net assets per share to 81.5p and an enormous £28.9m loss for the year to March.

This is a result of restating prior years' results and writing down the value of 2013's £46m acquisition of rare coins-to-fine art dealer Noble Investments and the capitalised IT costs involved with developing online trading platform The Marketplace, closed last month after being deemed 'not economically viable'. Bombed-out Stanley Gibbons gives up another 9.6% to 11.75p on the news.


Wilson joined Stanley Gibbons in May of this year during a very difficult period which 'encompassed the appointment of corporate restructuring specialists to undertake a comprehensive review of all operational aspects of the group, a subsequent profit warning and a fundraising designed to nurse the group through a liquidity squeeze.'

Stanley Gibbons attributes its net assets slump to 'a combination of both the inadequately integrated and managed acquisitions and internet development activities of recent years' alongside the 'more pervasive impact of the reinvestment profile of the group's investment contracts which had an element of contractual buy-back'. In plain English, auditor BDO has uncovered major mistakes made in the way the retailer banked revenue from the sale of investment plans in its stamp trading business.

A completely new management team believes the integration process following the acquisitions of Noble and fine and decorative art and antique dealer Mallett was 'poorly managed and as a result failed to instil a cohesive, UK based management structure with adequate challenge and competition for capital'.

Alarmingly, BDO's Philip Braun highlights 'a material uncertainty which may cast significant doubt about the group's ability to continue as a going concern', though Wilson insists his major restructuring drive will deliver the full cash benefit of £10m of cost savings in the year to March 2018.

Stanley Gibbons - Oct 2016

Stanley Gibbons remains encumbered by £18m of debt, though Wilson plans to reduce gearing through a focus on growing sales and reduce the level of stock held 'which has grown disproportionately in recent years.'

Though sales of high value stamps to high net worth clients fell sharply last year, Wilson sounds an optimistic note in his outlook statement: 'The market for rare collectables and fine art remains buoyant for collectors and given the low interest rate environment continues to offer an attractive alternative for investment. The Brexit vote has added a degree of uncertainty over the macro environment but quality collectables have traditionally maintained their value and appeal over the long-term and particularly in times of uncertainty.'

Issue Date: 03 Oct 2016