TIDMSGI
RNS Number : 4679I
Stanley Gibbons Group PLC
19 April 2022
The Stanley Gibbons Group plc
Trading Statement and Corporate Update
The Stanley Gibbons Group plc ("Stanley Gibbons" or the
"Company") today issues an update on trading and other business
developments.
Trading update for the year to 31 March 2022
Trading during the second half of the year continued to improve
across all areas of the business and revenue for the year ended 31
March 2022 is expected to be approximately GBP12m. While the
reduced impact of COVID related restrictions and resultant consumer
behaviour has undoubtedly played a part, there are a variety of
internal elements which have also influenced this:
The Philatelic division has performed well in both the auction
and dealing side with turnover and profitability significantly
improved. Both parts of the business have shown good momentum in
recent months with the second half being significantly ahead of the
first half and we expect further progress to be made in the coming
year.
The Numismatic division, which traded strongly through COVID,
has benefitted from the return of the auction business, holding two
successful auctions in the second half of the year and growing
momentum in receiving consignments. The dealing side has suffered
slightly as a result of capacity constraints around the time of our
auctions but we are taking steps to ensure that this is much
reduced going forward. The underlying business continues to trade
well.
After a much reduced catalogue production schedule in recent
years, the Publishing division is once again regularly producing
stamp catalogues. Combined with increased efficiency in this part
of the business, market share gains in magazines and further
progress on the digital product side, we expect to see continued
improvement in performance here.
For much of the year the shop was noticeably quieter as a result
of COVID, however in recent months this has abated and we are
hopeful of seeing a continued improvement.
Through our partner Showpiece Technologies, in which we own a
20% stake, fractional ownership of the 1c Magenta, was made
available in November 2021. This attracted over 1,000 customers
within the first couple of weeks and led to significant publicity
and interest not only in this venture but in the hobby as a whole.
Since then Showpiece has also offered a second item, an Edward VIII
penny coin, which sold out in less than four days. They continue to
look across a broad range of categories for further items which
will interest and appeal to collectors.
Having hopefully seen the back of the most pronounced impacts of
COVID, all businesses are now having to deal with the prospects of
levels of inflation not seen in this country for several decades.
We have begun working on mitigating actions and are hopeful that
the impact can be minimised. There is also some evidence to suggest
that both coins and stamps do well during periods of heightened
inflation but we are by no means taking this for granted.
Corporate Developments
Our primary creditor and majority shareholder (Phoenix S.G.
Limited) has remained extremely supportive and engaged. They have,
as in previous years, once again formally waived the loan covenants
which we are in default of. Further evidence of their support is
through their provision of loan finance for the purchase of the
British Guiana 1c Magenta as announced on 8 June 2021.
Additionally, Phoenix S.G. Ltd has today agreed to extend the
previously agreed (2018) secured loan facility to the Company, by a
further GBP1.3m (the "Loan Extension"). The Loan Extension has been
agreed on the same terms as those entered into in the Debt Facility
Restatement Agreement on 19 March 2018, namely that interest will
accrue at a rate of 5.0 per cent. per annum but will not be payable
as to principal and interest until 20 March 2023.
The Loan Extension will be drawn down over the term of the Loan
and will be used to provide ongoing support to deliver the Group's
sustainable growth strategy.
We continue to be in active dialogue with the trustees of our
defined benefit pension schemes. While tangible progress is yet to
be made, the relationship remains a collaborative one and we are
hopeful of being able to structure an agreement which would give
the Group greater flexibility while we continue the job of
rebuilding and more aggressively growing the business.
As previously reported in the Interim Report and Accounts, the
Group's wholly owned subsidiary, Mallett Inc, entered Chapter 11 in
September 2021 following a protracted dispute with the landlord of
our leasehold property in the US. The Chapter 11 process is
expected to conclude during the summer.
Also as previously reported in the Interim Report and Accounts,
in September 2021 a previous investor of Stanley Gibbons (Guernsey)
Ltd (In Liquidation) has lodged a claim against The Stanley Gibbons
Group plc in Guernsey. The Board has sought counsel opinion in both
the UK and Guernsey and continues to believe that the Group is in a
good position to successfully defend the claim.
Stanley Gibbons have partnered with Rawnet Ltd ("Rawnet"), a
software development and digital marketing agency to develop the
digital offering of the Group. Rawnet is a subsidiary of the
Castelnau Group Limited which is itself part of the Phoenix Asset
Management Group, making them a related party of the Company.
Graham Shircore, Group CEO said;
'We are encouraged by elements of progress we have made in each
of the operating businesses however it is clear that in order to
really make the most of our wonderful brands and the rebuilding
work of the past few years, we are going to have to work harder,
faster and more aggressively. Our ambitions go far beyond
delivering continued incremental improvement.'
Related Party Transaction
Phoenix S.G. Limited ("Phoenix SG") is currently interested in
58.09 per cent. of the issued share capital of the Company. The
provision of the Loan Extension constitutes a related party
transaction for the purposes of AIM Rule 13. The Directors of the
Company (excluding Graham Shircore who is the CEO of the Company, a
Partner of Phoenix Asset Management Partners and an appointee of
Phoenix SG) consider, having consulted with its nominated adviser,
Liberum Capital Limited, that the terms of the Loan Extension are
fair and reasonable insofar as the Company's shareholders are
concerned.
Enquiries
The Stanley Gibbons Group plc +44(0)207 836 8444
Graham Shircore (Chief Executive Officer)
Kevin Fitzpatrick (Chief Finance Officer)
Liberum Capital Limited (Nomad and Broker) +44(0)20 3100
2000
Andrew Godber
Edward Thomas
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