LONDON (Alliance News) - Stanley Gibbons Group PLC Tuesday issued a profit warning for the first half of its financial year, saying that gross margin and profit are expected to be substantially below the first half of the previous year, which will result in it missing market forecasts for the full year.
Shares in Stanley Gibbons were trading down 26% at 105.50 pence early Tuesday following the announcement.
The rare stamp and collectibles retailer said that while it completed some high value sales in September, the overall revenue for the six months ended September 30 was only at a similar level to the first half of the prior year.
Gross margin and profit for the first half are therefore expected to be substantially below last year, which benefited from high margin sales of material sold from exceptional purchases of major collections.
However, Stanley Gibbons said it expects to deliver materially higher revenue and profit in the second half of the year as its auction calendar is more heavily weighted towards the second half.
It added that it is also working on a number of initiatives to deliver substantial sales from its strong stockholding of rare collectibles, and that it will benefit from a reduced fixed cost base and better cross-selling of products and services across its customer base in the second half following the integration of recent acquisitions.
Nethertheless, the company said it is unlikely that this will be enough to help it achieve market forecasts for the full year.
"On the basis of the performance in the first half, the board now believes that, as a result of the weakness being experienced in our Asian operations and the continued illiquidity in high value stock items, it is unlikely that the group will achieve the market forecast for the full year," Stanley Gibbons said in a statement.
"The group continues to embark on its strategy to evolve and diversify business operations to an online and auction business model with more predictable revenues streams and profits. The directors believe that the opportunity to materially grow shareholder value through the continued implementation of our online marketplace and global auction business remains a positive proposition," it added.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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